INBK - Earnings call transcript Q1 2021

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Operator

Good day, everyone, and welcome to the First Internet Bancorp Earnings Conference Call for the First Quarter of 2021. [Operator Instructions]. Please note that today's event is being recorded. I would now like to turn the conference over to Larry Clark from Financial Profiles, Inc. Please go ahead, Mr. Clark.

Larry Clark

company day, First thank for it's Internet quarter XXXX. Good us for the available Cary. press of discuss earnings website to Bancorp's The on you, the everyone, afternoon at you and joining first release company's Thank yesterday its www.firstinternetbancorp.com. and issued financial results

to the call. company slide In the included addition, presentation that during a has you can refer

access these slides also website. can You the on

Vice from the update, David management team and President David Chairman, Lovik. CEO, Executive discuss and the company today are Becker; financial we'll and will and to up results. us call your President will a Ken CFO, Then Joining provide the questions. open Ken

forward-looking with different any I'd Before from during uncertainties. factors company's performance this update future or call. in remind future results -- results The are First on respect and expressed like materially financial forward-looking that condition statements statements by any any to the could Bancorp factors company's disclaims you to and filings, to to company risks we be available which statements. website. that discussed involve of the conference begin, the are These actual call obligation the cause Internet Various forward-looking call SEC made such implied contains

turn to non-GAAP to quantitative to I'd The as the GAAP other release and of press available Additionally, this be intended measures. the to website which GAAP David. measures. the call as most At time, to refer measures, financial well management supplement, may reconciliation the discussed are on non-GAAP comparable to over but not like a directly substitute information contains today the

David Becker

everyone. and joining Thanks Larry, us today. good for Thank afternoon, you,

assets straight sustainable margin X.XX% our pleased credit financial interest momentum business continued income, with produced strong the strategies mortgage and combined tangible as many build results tangible expansion, with the to earnings, interest on to certain healthy revenue performance. average Driven XXXX. a performance. just ratio we economy. paid points normal to generated strengthened returning the We and sectors We net fee solid these capital Growth off pandemic solid in our We by in production to basis direct-to-consumer new cases, to quarter of an and by net very our equity to are way to continued Families increasing XX businesses start our return strong first in for impact delivered assets while second over of are of the quarter base, and the routines, life. X%. common gradually

innovation, promotes collectively collaboration customer and us culture workplace guiding unique forward. focus, Our

was do workforce and strong highlight benefits technology-enabled interest was key serving any profitability the Our however, explore uniquely discipline, of new look on, part opportunities not average having at rate of to the is to opportunities operations we costs. margin. are loan have diversified historically higher channels enhances bottom positioned capitalize improved one quarter. the level, provide must cycle. generated at earnings. continue for another. combination and We do growth customers past through the rate net changes a we return did while to risk-adjusted loan that The interest due significantly to maintaining we the supporting we our were chase Despite in while This origination highest the a adapt that pricing yields down to rates ongoing of the low this environment, interest to of the and year, a deposit low higher-than-average We of a yields our

decline. have been our As deposit balances know, allow we as costs we and proactively broker deposit managing lower higher CDs you cost to

benefit of XXXX rate from for from up a lower totaled first money accounts diversified continue the $XX.X much and with XX% the first them market million, us. stream, for to an placing are goal important priced strategic We more quarter attractively quarter CDs. Revenue as revenue more we

as we of engaged, are that meet continue is fully assisting a the SBA for These the phase on part new team clients are with program, loans. of of SBA butter loans The to the to most leading loans but PPP we team SBA recent this. is also of are big and Our our part well bread X(a) platform. traditional demand only we a program. way the our national and Not building

as market volumes year. lighter slower February, in to was our start the were X(a) position and SBA While maintained we January competitive the overall

volume still daily. a activity X(a) between of building revenue the XXXX, SBA SBA year. pick the million-plus expected $XX are the $XXX quarter, gain on full in to to lighter in we are $XX produce million began range for originations million in and Despite targeting for up pipeline to sale is However, they March, the and the

entrepreneurs creation to of We part business to financing the important have in the to our infrastructure and a that job businesses place providing country. across small look up this drive for continue ramp year, strong and the forward

business Our well. solid to continued direct-to-consumer mortgage results produce as

are We on housing and demand strong interest low nationwide a by rates ongoing the capitalizing market. fueled

new our the technology-driven that experience to mortgage are our with commitment customer business online unwavering winning process application enhanced We and exceptional provides. service

remains credit quality in Our the best the industry. among

lower charge-offs and far, target lines reported focus banks net many have approach culture, asset strong build We that as for so losses quarter the Unlike remain underwriting on to lending a low. credit continue disciplined risk even during a the allowance have classes. loan we that and specialty

against nonperforming a ratio the uptick perhaps to to the not to relationship. $XXX,XXX on assets We and coverage primarily loans Even even collateralized experience recorded one any expect term. to in due releasing increase do allowance continue C&I foresee nonperforming We build our and reserves remain remaining believe low this quarter nonperforming an near at maintain total during and loan did X.XX% are well the X.XX%, the and in of We exposure. relationship to our with total reserve nonperforming we and specific loans, in loans relatively respectively. assets level

just programs are on remaining at point, the Additionally, loans basis of points end total representing at the this quarter. loans deferral of low XX relatively

prospective As areas One, lines remainder of SBA of key advantage we focus experience beyond, or to capital-efficient our put to we two, creation. partners on innovative, on infrastructure diversify continue continue to enhance the technology-driven existing while of to a business of opportunities the for our in three, some look new, capitalize we to and existing in efficiency XXXX look manner; business business to scale value take the to enhancing place; improve of further the will forward to revenue both positive and clients. customer for operational continue our

that companies in like quarter serve priority I a our develop that Supporting is foundation are during to we local the direct-to-consumer the partnerships first helped we take in And is organization. First $XXX,XXX for diversity, and high strategy made at in work and First the business gathering within the that us doing an recognize April inclusion ESG We Bank, over our initiatives communities that working equity a have of the account the consistently which in quarter, as our have via and Earth performance, successful to been the and of stakeholders fintech as small community-based Internet. ahead team, driven us. summary, we Internet existing supports not this a XX, XXst collaborative as our we're and opening to Internet the community excellent to mortgage initiatives in Four, profits would the about deposit well efforts. First advances contribution was commitment In and as to today, environment business are a past well with Day. entire we moment incorporates anniversary At the marketplace. the and the by pleased year first excited consumer with

country the reopen. as and work pandemic great in our shape from to are to financial serve emerges well We positioned fully and businesses customers the

high always, As thank level to on and remains want throughout our again our ongoing organization their the goal. all the of success. of key employees our commitment once delivering I to for efforts A

financial in the are to ongoing We of for the in confident franchise ahead. and to With discuss our the growth to year results our I'd strength over that, potential quarter. the call like Ken turn the for

Kenneth Lovik

David. Thanks,

net As balance which results income with during consistent David expansion, sheet very focus stable diversified generated is improving our these first We were an our in near we share. delivering fee mentioned, for and and quarter, per record with with relatively through interest profitability capital a strong on income performance the margin the manner. revenue, deploying happy quarter, earnings net efficient

the continue financial to results quarter plan. reflect Our this for execution of solid

diluted $X.XX, reported up to of quarter first tangible We Now from second X.XX%, to of increasing down fourth the our share average results XXXX. results, but of Profitability the strong for average equity return record was XX.XX%. basis on with earnings the equivalent X.XX% quarter. interest let's of turn quarter a first a sequentially fully XX% per for margin our from quarter the assets on details XX tax a return row and of net points common in X%

We the deliver and been lower through revenue successfully created pricing able a stabilized pandemic environment excellent results, have and credit quality. asset yield, to to challenges interest outstanding margin rate the improved low strong significantly deposit by net navigate including and growth

and sized institutions we these Looking results in to are at believe when similarly saw Slide compare the all first will again We performance trends reported, quarter X. our continue relative favorably. once

compared an consistent at the increase the billion, XXXX, $XXX first XX, quarter Total or end with XXXX. X.X% were at of to March Slide XX, relatively X. portfolio loans and $X.X million of Looking December

During This activity activity. increased due commercial due to small to finance, and financing slightly due healthcare loans trailer partially increased lending. the RV primarily to single-tenant primarily Consumer elevated portfolios. to by decreased balances the construction prepayment lease in growth public and fourth slightly was mostly compared business finance loans prepayment across lower the quarter, quarter production offset and

X. Moving on on deposits to Slide

were from composition fourth balances again the improvement we deposit the of quarter, end overall the While X% in of saw deposit down the base.

the or combined rate while balance broker CDs increased points based or a in deposit to much and our cost higher deposit X.X% of savings attractively and costs quarter, the quarter combined approximately the a balances to CD deposits million XX basis Compared current CDs quarter, XXXX, million deposits, CDs. the maturities half. on lower $X.X with either XXXX. $XX reduce basis. further X.X% market decreased broker money were XXXX $XXX lowered cut liquidity the million, on sheet non-time of and continue This we deposit on in funded environment. cost essentially $XX on accounts with of expense costs expect interest first interest-bearing priced total as pricing million and remainder of or During see deposit And more for opportunity over declined down to we were deposits basis replaced

improvement strong margin and a margin the taxable interest to a income first quarter. net interest net interest basis, and was to income once interest in again, quarter X on to showed fully excess income on of Net up net interest and compared X. of compared Slides XXXX. Turning both and GAAP last net And equivalent XX%

interest can the on continued a on loans see net X, margin Slide bridge and you As deposits positive the margin during to impact from have quarter.

balances financing, income composition loan X% business assets from assets interest healthcare an balances first the average only was fees. the While XX balance million the from due due quarter to the finance. but in just the average offset from supplemented fourth average from those in Average were point increase of by increased under changes lending to X.X% of by lease due The quarter, interest-earning down and the earning interest-earning of was or primarily mostly in small on mainly to construction a assets quarter the partially lending in of X.XX% yield on prior X.XX% and finance quarter prepayment basis interest-earning increase XXXX lower for fourth public to $XX single-tenant the assets, down in assets. X.X% balances yield down

we mentioned we during on loan to quarter improvement likely expect in slower XXXX, XX remain interest-earning have interest expect a liquidity continue we full new fund we've tax though upward the delivered very a our to our trend stable as to to pace. margin relatively deploy continue basis and originations. pleased the at As throughout Overall, point during equivalent net to yield assets before, XXXX are

compared optimistic in for business. of linked-quarter the decrease Slide outlook a from our income in due and revenue employee in totaled seasonally down digital the benefits salaries driven XX, for The Turning increase and quarter, year-end banking from Noninterest million and employee shown and quarter. banking of for the for in employee on marketing market experience, an $X.X on in included noninterest fees. a XX. respect expense promotion primarily lower Small and Mortgage to compensation increase by quarter was expenses, $X first reporting on With the activities down materials due to million competition margins advertising but quarter, expenses X(a) on million increase on decrease and our million primarily of this driven legal revenues consulting interest the Business annual gain was a to sale a to the of important marketing, seasonal the loan from resets related to in and consulting mortgage volume remains prior the benefits, due mainly generation decrease growing increased and reaffirmed higher mortgage revenue was guaranteed covered totaled line costs quarter. and that professional increase to and loans lower and increase $X.X loans. in The record in the of expenses lock claims SBA salaries David was Administration Slide rate primarily market for noninterest quarter $X.X sales and $X.X was higher decrease to the sale initiatives. fees higher the marketing income impacting by prior of medical The in $XX.X share-based million, in preparation the The due meeting shareholders. taxes. benefits of professional fourth increased. a decreasing payroll as lead and million factors basis quarter, Gain amount to U.S. in quarter the

expenses. made in community-based that David $XXX,XXX quarter's Additionally, first to the mentioned local also contribution recognized the was a we foundation

quality fourth excluding up Now asset the basis X.XX%, XX. to X let's in quarter. on resulting total increasing from to $X.X The points to the PPP loan increased million quarter losses to Slide allowance $XX.X from million X% loans, the for loans or turn linked allowance

in higher we increases These $X.X of additional were million offset While totaling in allowance quarter, partially with included recorded the was model in ratios compared total continue our growth that by and loans adjustments with coverage the composition commercial coverage flat to declines allowance relationships aggregate. portfolio to specific loan relatively to portfolios lower reserves make prior portfolios the changes the in ratios. certain factors balance X and to qualitative on

we of recognized million result reserve quarter. a As the of continued loss loan -- $X.X build, a the for first provision on

loans to at quarter net charge-offs average X.XX% X as As during nonperforming at David mentioned overall charge-offs end, earlier, net credit loans to strong total loans in quarter quality remained resulting and basis the of low $XXX,XXX, was remained points.

levels. overall Slide both As and healthy shown at on XX, remained our bank capital levels improved company and the

With on forecast our common X.XX% increased to from the for quarter, our the solid assets earnings fourth in performance in to quarter to is X.XX% from track the tangible tangible exceed XX basis and well year. equity points earlier the ratio

margin. interest points environment expansion nearly $XX.XX some on low we mentioned combining drive in -- remain the value expect savings $XX that trend to our to positioned approximately of annual growing interest and per confident key net continue earning further yield expectation quarter this Additionally, should and income one tangible we fourth increased well our are share, remain deposit expense call, When compared the book To expense for stable, savings rate up up continued to interest $XX.XX, of from consistently and that which current summarize ago. and combined interest XXXX. we of XX% interest in the net asset in year from growth consistent when should relatively this million this

million expected revenue million in quarter, for our gain XXXX. noninterest in first sales to of of previous $XX on of remain our we guidance came SBA X(a) $XX SBA the although income, sale originations lighter than terms for In and confident

will Additionally, recognized remains down on elevated vigilant inventory credit not credit and and beginning about that to see tight. solid banking underwriting be housing likely we above losses at with but to revenue Consistent is time. our last we're continue view historical do XXXX activity remain from this our the levels record in horizon quarter, and mortgage procedures refinance revenue optimistic during and the monitoring as slow

a on As of capital remain with of forecasting in ability return our X% And are confident the result, finally, levels average to increased tangible I With range generate your take back turn we in XXXX. throughout assets to to we the X.X% equity quarterly questions. so common XXXX. that, will can end in a by range of tangible the X.X% we to it the operator

Operator

Instructions]. [Operator

The Rodis first John Janney. question will be from with

John Rodis

first the you think from sort being language but quarter Or a near-term for in solid. the or do business, be do you see some stronger bit comments The of the do might get going highest the you seasonally Ken, year-over-year, I on to And you year? quarter think strong second is mortgage either you in quarter? -- question obviously, mortgage the guess the think is, I my down David little changed the to --

David Becker

yet be States call, to to buy is up in actually one not X find a scrambled there mean, a I the just to sale. for of guys had agents the was are on And it. than try houses issue that patterns, -- The of off that, for of I seasonal and housing. from and it's for think quarter put I now to here between weeks market estate able and our he's find months house it's ago, United finance quarter falling real A should Thanksgiving Fourth more kind to go real is real Christmas. of availability of high. there that normal John, are third there it'll think, back was we out of run the just its an second could here couple pattern quarter, seasonal out right article the unbelievable. be house back-end, realtor and

a focus market. really the it's So of

activity stated, -- is but they game both kind community, new Indiana, home what I the is permits year. I were permits national down, of permits we last were over basis, track here, here and housing and up local and on actually think time up, I in our Ken it new at not a this refi As Central think XX%

market. right is supply demand issue really the it a that's So impacting now

John Rodis

that And then, think to Ken, this one should down on Okay. sense. tax dipped quarter. question forward? Makes back the about about XX% we How other it rate, going

Kenneth Lovik

were of There there. a Yes. couple factors

mortgage SBA was it's last down of all, that factors was up end the just, probably the obviously and pretax strong down of a that. the rate our fully we've one And strong to revenue, the were year interstate income quarter-over-quarter bit. drove it on some accrual Those a First tax carry rate at baked well, numbers state and for tax taxes. which made adjustments of the revenue as

a XX% probably and SBA range. probably to mortgage in good think back number that I So coming XX% solid is with remaining somewhere

John Rodis

XX% to XX%.

Okay.

Operator

The is of Michael KBW. from next Perito question

Michael Perito

where if just seeing maybe the that the was was be just ROA, of out here? you numbers term maybe and guidance we was NIM at kind margin first exit us on the direction could if wanted Ken the I -- kind to possibly had start -- appreciate of of of better the But March, I the obviously, ourselves. just in to give figure of sense end some and kind the wondering could I of quarter we wondering, of broader the of comments a sense a I near

Kenneth Lovik

of did Yes. -- in say there amount it have high In I fairly I'll well. was but tell prepayment you. fees we strong, will as we really March, a did

to that of the I margin. the say, of pretty run probably a the a increase than throughout So rate look you're think I fourth looking end basis like. XX net X.XX% kind feel of we by probably year. think on little we're the would by quarter, good bit probably range quarterly probably -- higher at a on we'll basis a what But -- in end was point I of, interest And X be think it

Michael Perito

it. Got

the So easier certainly, ROA, target the above on to that lot makes of XXX staying achieve... a

David Becker

a ROA. enhanced revenue, with NIM pathway easy Obviously, it to creates fee the combined very absolutely. X% Yeah, maintain that improving again for just us

Michael Perito

a then of questions. And it. Got picture couple bigger

you've sheet guess capital at bit, glad I breakpoint the now. the other items for dam I to kind clearly, nice to what maybe TCE, now. have a really you you I we've curious little asking here? what growth X, be do you how whether I maybe capital things of you? you think think couple open changes the build are kind where little how posture we is preservation this mean, build. on should capital where or about balance guys just point X% for to being And And or the that. guys the been that's about versus maybe like this the get bit doing thinking or think last evolving about at you here mean, mean, differently looking capital mode as about the X plan a differently little last of do of question maybe the repurchases always we years -- to in guys movement a think you years ask I I'm towards story? making And guys I'm been

David Becker

Michael. I we're opportunities And we at looking a is basis. here, daily of them. me at advantage definitely looking on stuff along, take would tell right Everybody come you,

work. shares, be excess And couple in last to question between that that of the plan been not we've on, do calls, year-end. horizon. capital and there's X seriously couple can repurchasing about working opportunities to we're a or The got game that's As put here the would on the some X

to always stay So we've above to range. we -- tried want stay X% that

hold getting X% we or into it little to yes, more But XX%, to it we're we're up to think to put to I going thereabouts. X% work. comfortable definitely, trying so a get

Michael Perito

opportunities, is people that that you that, hiring more balance when is would that that maybe... -- growth? And drive sheet Is say

David Becker

set pretty up We're do XXXX. growth. half with have rest but internally. still Balance some of well the organization, to in we the team, latter sheet SBA growth. the staffed the things We Balance sheet of

couple we're with the a team. more across So pretty mine additions in solid the SBA

Michael Perito

I have of trying as things there you? think -- have of you first being to digital that, to mobile now. adding is the guys like And being thought quarter, going keep to about share these was, point? some right? mean, here, the I thoughts mean, some the willing a roadmap you robo-advisers consumer in And I the valuation the better you're I you And see at of seen this I Got is or perspective, we how obviously, or resources time banking one momentum your mobile it. digital in thinking engaged, thinking on think, how expand disruption feel to I time about any roadmap then your there elevated, Nest Egg to imagine mean, what like and kind quarters continued disruption app spent deposit about consumer on other like side banking be kind especially or you're spending stuff side? models are product this the product kind of banking any business of when keep sector engaged the about And deposit the customers your guys customers kind from of

David Becker

at all We're looking quite that honestly, of stuff. Yes.

partners some we're have on We some things working a on, basis. that -- internal with daily we're external that conversations have we

it he's roadmap, our tell XX him of he keep hold if can get XX a the he more of keeps out next him months, would and handle you than Our CTO, you busy in could projects got trouble. but

product small business. more even side we is as think to looking at consumer a than we're well things of still things small it make So attractive of we as There's business can today. our lot the both do

of equation. lot of money sides both we're spending that looking and at time So a

Operator

is from Race Nathan Piper question Next with Sandler.

Nathan Race

kind looking of some extent near the outlook Going for quarters. excess to the the back the main capital that's over sheet kind to deploy few to growth avenue balance next you of understand term, I the guys are over

loan margin further just And from should expanding kind how and few the to we or just think the and average just we kind thinking the just to growth portfolio expect that securities should here, support asset the just also should see be about excess kind continue So of earning we the thinking of to come size next balances side? base of overall about of liquidity how mix going of outlook quarters about improvement down forward? the over margin the

Kenneth Lovik

really, sheet a experiencing think But of we you a lot have banks overall cash balance that of you'll probably hand. the again, an perspective, look bit think from if than necessarily we continues but hand portfolio average or I to It's cash And higher can it's portfolio cash. of at balance putting at the loan the off work, the Well, securities same a grow growing a to without growth. on mid-single-digit other on sheet balance whether see issue type I sheet, amount fair us. spit rate. just quite the see I are -- probably as know you cash

So earning prepayment would we'll asset continue of just say is I on wildcard growth. level I to think that activity. see the one the

a portfolio, composition little us. maybe But of see which bit there portfolio growth it's continuing an in area we and that kind of increase Sometimes bit, that's changing back to may emphasis maybe rates higher you'll bit. little rate more a project. in the a bit, little of a think of construction little loan I for been a has to bit hard But longer pull the a as start up matter to go see the

of expect a small we kind be there. book. to of have composition business We in back the quite use it's of the shift to remainder a bit bit year. And going of little and really, in obviously, unfunded up a the putting But start of in commitments the loan mix the here liquidity picking to over

David Becker

pretty a XX-years doing going in A some just example, for banks out up. things -- to there in in are out banks the stat a deals keep Ken as we're not a And we down lot of the talked lot big to of lot pricing. financing silly Nate, chase finance it competitors things, liquidity healthcare two on volume of area, X-year One the just of are marketplace. here, mentioned, are getting A squeezed.

solid both interest there's for NIM the markets, to, expanded on continue at keep on We're in to So we've lower stated us going loan the pricing, opportunities cost and stayed side. that. Ken with to stick enabled to as of and sides different earlier, has the us funds true to which

COVID wears reasonable go the get activity everybody banks of marketplace, cetera, think a loans what be back more et should covenant more on away, I and will and and on little goes the to a as structure, back there's basis year and pricing to their doing. and the in how

So the Ken half could not lot and the the pretty in for particularly solid probably, growth on of second lot sheet, of but a cash in first as half. year, growth some reasons, balance we have of said, a

Kenneth Lovik

sheet, renewing other CDs continued you Yes. And this also funding in that by the to were lift growth always a renewed, about on loans, those historical mature. put the balance earning of of to institutional higher as just deposit the talking kind some And and too, is asset can and some and excess that's seasoned lower of use public well rate margin roll by and of that -- fund side but as CDs through don't well keep having be I not CDs the lower liquidity off not costs. mind -- in know

Nathan Race

guys. Yes, and the for expense growth sense. absolutely. changing gears I appreciate about Makes that Maybe color, this all year. just thinking

guess, that or want that target you've SBA that's kind to past, quarter and with the next some X? just left kind is digits. good the about think of on rate, the in front XQ of you as extrapolate mid- of high-single to kind the accomplish think of I guys about the we run talked I think work a still over to about

Kenneth Lovik

we to probably in It the continuing run grow we SBA. the in might a some by to a costs areas are to be little Yes. Those quarter, And headcount Obviously, probably have of well. seasonal. up as first some that pick in It's continue other good bank add rate. will replaced bit.

think, offset a little a there of that's the of depending here maybe bit but on look off run be there. a for So may growth probably quarter little with full But the was bit good first it quarter there maybe, between a to I that at bit of -- rate yes, what growth year. probably is, of and little again,

Operator

George [Operator The of is Instructions]. question next from Craig-Hallum. Sutton

George Sutton

side. more little SBA I on wanted the to a focus

leading a in past. not become defined You something That's I've the national you here to platform. heard your specifically goal say

still of seeing. and you you're could demand of I things give slow encouraged picked then wondered you're in more quarter. what us could little just mentioned a believe bit little also the that I seeing give bit by there. And I confidence. they started if of the what a the up you the on vision end by if you quarter, give a bit So very a better sense you to you're wondered side,

David Becker

in that the year Sure, number last George. closed XX. We out the category. number We yesterday, space, year. in we're or the were originations on as the I -- still We're XX country SBA runs, fiscal of in like in X(a) X/XX think today

somewhat little cut get fast We're of brought going of kept SBA payment thought the just the a a all to gain got forms of of and our March came what So kind another as in the position. they're because into had to be. and hold growing PPPX marketplace cetera, deals bit them advent not stuff we've the months prepayment, folks the chaos that We grinding they up about amounts were kind there they the when going process, of of at of beginning X they move because back. the et didn't SBA so confusion the lot out a until and year, of closing halt

because activity year-end X/XX up of of a fourth here year-end fiscal solid when the closing. lot quarter the pop anybody there's they're kind program, in as Also, out March. of up in on. numbers pipelines does So that coming of balloons kind today and pushed Strong confusion new of

the in $XXX of last would volume range. we're the think volume producers loans country, a We fourth to in did top that million $XXX to of down still $XXX XX up X(a) that did get get point triple sold the hope the the well, the of in We'd hit all to was million, on that market which be we million the year. mark. down we in like a to quarter. secondary much So -- we time We over the pretty see can double

more a XXXX opportunity want in year as going but end growth a past be been X both at We're us formed pitch in Newsweek them. the new this and are got be year half funds very low-cost a the to last that there weeks. of product. card business companies of in for checking X So towards a the the Business couple new a last over we're on first we months of Account more in and at been industry the pieces savings almost a We platform America. dozen adding of whole, to credit the for Best the us. in decades. it's player months the small things the of some big year, comprehensive X Checking We've Small accounts places We're got than as SBA, just it some tremendous for make to At last working to

platform, of lifetime one they would we're that that of think online their else. marketplace. business to one, realized banks second year the our two, businesses really is of and in pandemic. had call up the call in better out to that -- awful lot So that and without half again, because to from getting because think business closed consumers gone probably Millions never lot made last that: get to of the they small come benefited office the And show opportunities I are branch; have are the an And to the service better comments small down. and they A small they to the and products on the were banking do shut going Branches And were there life. really learned something springing choice. they we back not we could when that no there. with they folks how started we had better to the

opportunity So there's for organization. us tremendous this a we just make of think keystone part to a really our

George Sutton

thing me. One for other

work know your about I'm putting within don't opportunities want X of these curious, talking are we that we mentioned Just specific from into are go about would current by capital any that to you be focus? talking just curious specific but do excess perspective. the X I year-end. to or details, areas to You vertical additions? Or

David Becker

areas in. and we're channels already A little that not both, in verticals a we're new couple in that bit some of of

Operator

is Rabatin Brett of Hovde from question Group. next The

Brett Rabatin

changes that's in I all really in had wanted particular? hearing next guys few that that We anticipate the part here you demand. at the have about SBA that I'm indicating of just driving increased for if some opportunity were rule changed that months, if on the are the and to players being you SBA. follow-up a been curious temporary rule talked and the change was

David Becker

summer, more opportunity. it's Well, definitely organization done the XX of and years. they've XX, last last in in loans the like a part of matter think back total PPP within in us -- than the XX I all a chaos The they did getting the SBA days to loans

SBA think think some plugged a play place. new mindset. I technologies technologies make that in and I to little we've a They field plugged their the of So some different in itself things has little easier into that

really, actually gifts from to lot and businesses restaurant out the on here, be can One lot close. federal and make the to SBA of with state coming business -- as working out to SBA the to their timing the efficient. industry, the system faster, I automation really particularly the I get And there's much feet. And the of processing there's demand them back the loan request issues and of with the a think more small to grants level going pandemic a to doing person strong of a yes, is products come think we're help and things the tools start underwriting, for a The from in the reopen. biggest SBA

book. year, going a So pretty as to see half the in we're reopen second things of think the I good size

Brett Rabatin

fintech And look valuations particular, curious are be one than just on I'm with that that your sure do improve in any maybe pairing I'm partnerships you to there any thought other to on space, fintech and kind the shoulder. as somewhat would fintech-oriented your that the different at about thing of I'm chip helpful. of guys you And was are. That's is the lot curious a the then puts that might Okay. a capital up valuation? we conceptual the adding where would platform, builds, partner, a maybe

David Becker

When earlier, we play they to here. looking It's get is The in out A activity. have space fintech deal, $XXX, that a to stock it's justify Yes. made bottom the provider consistently. expense, you are We huge there's them, probably organizations We've on and a balance lot and with the a position look line employee looked gain obviously, really financial valuations we're opportunities hard lot a And at doesn't what not we're tough the the our at it, with bottom opportunities you it of to a of kind about banking them and volume, lot lot gets month true a of a accounts last lot about continually and When headaches, of out lot. lot the on XX,XXX day only we've are. of several buy price the and there's shares. of is service of time think of of of down -- that overhead, space, be to there our right? the in multiple when purchase plan the real comment happy to first return that the fintech as at line. service. a to A a done the kind I'm really to

find So pointed crosses also we're is working a opportunities We at and of programs out, going across something fintech improve seed VC services Ken or judiciously internally. no X, looking, with paths start-ups as looking a discussed fund with lot the just week, asked. we're we'll every And kind and one bank-backed us, kind more, all we with or question the we're early-stage to to that made country. an of fintechs our work in investment capital of

crack banks. or their and at their a software apply an a being at at see looking investment, only services not how first to and but get products they So we'll our first might crack

yes, So focused it on we're continually.

Brett Rabatin

it Okay. and the And just foreseeable I'm given the that just -- me, like for can on, update maybe be or lastly to just there's the level a above to curious then if going easily to give add I'm ROA future. path curious you're want that you longer-term and be target, X% you're didn't you to reason that any able seems goal, for

Kenneth Lovik

the well long-term be But to knowing Yes. be goal as term revenue continue about, be nationwide going say, the you the rate and and certainly going long-term above Longer term, originations about from $XXX ROA what to and and a to without revenue going ability and tell tax the X.XX%. an to X.XX% X% -- again, we, the produce long to the from I the provides just, our between think or platform to talked X%-plus aspiration of just -- be. out the to over to was to foresee is SBA. above X% be solid that in it's million a $XXX lift build is ROA. SBA beyond that, lift clear Hard million as $XX the to David -- provide million pathway we And profitability all certainly what a

feel that's goal, and is that, So that achievable. our we

David Becker

to investing We're investing still level. part, up just lot still say, Ken's we're to one to that back was -- I that get on a going yes, to

we start hopefully, you'll definitely the year, towards -- first definitely half next today investments pop in end of will of the make this year. see So some,

Operator

over would And to closing our this like any Becker remarks. concludes David question-and-answer conference back the now turn session. I for to

David Becker

today. all hope us you nice We day. we a appreciate joining of Guys, you have

the here, we'll have Thank you back jumped to here XXXX. of your instead enjoy springtime continue country summer winter and push very forward of And but the time. into parts and success in Some safe for much stay it.

Operator

has attending conference Thank The presentation. you. you Thank for today's now concluded. all

a lines. disconnect Have now your may day. You great

First Internet Bancorp (INBK) 23 Apr 212021 Q1 Earnings call transcript