0001562463-26-000046
SEC filingStrong profitability turnaround driven by deposit mix shift toward lower-cost fintech partnership deposits, enabling paydown of higher-cost funding and delivering exceptional cash generation.
First Internet Bancorp delivered a marked profitability improvement in Q1 2026, with net income of $2.5 million representing a 166.1% increase over the prior year quarter's $943 thousand. This turnaround reflects the company's strategic shift in deposit composition, where growth in interest-bearing demand deposits from fintech partnerships enabled the paydown of higher-cost brokered deposits and certificates of deposit. As noted in management discussion, this deposit remix lowered overall funding costs, contributing to the expansion in net interest margin and fully tax-equivalent net interest margin compared to Q1 2025 through higher loan yields and deposit cost improvements.
Operationally, the company navigated a decrease in gain on sale of loans, primarily from lower SBA loan sale volumes, partially offset by improved net premiums. Fintech partnerships continue to provide competitive advantages through robust digital offerings unburdened by legacy systems, aligning with evolving customer expectations and supporting deposit growth. Overall, these factors drove the profitability surge and cash flow resilience, setting a foundation for sustained performance.