6 unchanged sentences
The Company performed an evaluation under the supervision and with the participation of management, including the Company’s principal executive officer and principal financial officer, to assess the effectiveness of the design and operation of our disclosure controls and procedures under the Exchange Act.
−Removed: Based on that evaluation, our management, including our
−Removed: principal executive officer and principal financial officer, concluded that our disclosure controls and procedures were effective as of December 31, 2020.
+Added: Based on that evaluation, our management, including our principal executive officer and principal financial officer, concluded that our disclosure controls and procedures were effective as of December 31, 2021.
Report of Management's Assessment of Internal Control Over Financial Reporting
7 unchanged sentences
Other Information
+Added: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
+Added: Not Applicable.
Certain information required by Part III is incorporated by reference from our definitive Proxy Statement for our 2022 Annual Meeting of Shareholders (the “Proxy Statement”), which we intend to file with the SEC pursuant to Regulation 14A within 120 days after December 31, 2021.
4 unchanged sentences
Name Age Position
−Removed: Becker 67 Chairman, President, Chief Executive Officer and Director
+Added: Becker 68 Chairman, Chief Executive Officer and Director
+Added: Lorch 47 President and Chief Operating Officer
Lovik 52 Executive Vice President and Chief Financial Officer
−Removed: Lorch 46 Executive Vice President and Chief Operating Officer
Charles Perfetti 77 Executive Vice President and Secretary
−Removed: Becker has served as our Chairman of the Board since 2006 and as our President and Chief Executive Officer since 2007.
+Added: Becker has served as our Chairman of the Board since 2006, as our Chief Executive Officer since 2007, and as our President from 2007 to June 2021.
Becker is the founder of the Bank and has served as an officer and director of the Bank since 1998.
+Added: Lorch has served as President and Chief Operating Officer since June 2021.
+Added: Previously, she served as Executive Vice President and Chief Operating Officer since January 2017.
+Added: Lorch joined the Company as Director of Marketing in 1999 and served as Vice President, Marketing & Technology from 2003 to 2011 and Senior Vice President, Retail Banking from 2011 to January 2017.
+Added: She previously served as Director of Marketing at Virtual Financial Services, an online banking services provider, from 1996 to 1999.
Lovik has served as Executive Vice President and Chief Financial Officer of the Company since January 2017.
2 unchanged sentences
Prior to that, he served as its Vice President, Investor Relations and Corporate Development, from 2010 to February 2013.
−Removed: Before First Financial Bancorp, he served as Vice President – Investment Banking at Milestone Advisors, LLC from October 2008 to September 2009 and in the same position at Howe Barnes Hoefer & Arnett, Inc.
−Removed: from 2004 to 2008.
−Removed: Lorch has served as Executive Vice President and Chief Operating Officer since January 2017.
−Removed: Lorch joined the Company as Director of Marketing in 1999 and served as Vice President, Marketing & Technology from 2003 to 2011 and Senior Vice President, Retail Banking from 2011 to January 2017.
−Removed: She previously served as Director of Marketing at Virtual Financial Services, an online banking services provider, from 1996 to 1999.
+Added: Before First Financial Bancorp, he was an investment banker at Milestone Advisors, LLC, Howe Barnes Hoefer & Arnett, Inc.
+Added: Edwards & Sons, Inc.
Charles Perfetti has served as Executive Vice President since January 2017 and Secretary since May 2014.
17 unchanged sentences
Principal Accountant Fees and Services
−Removed: Incorporated into this Item by reference is the information in the Proxy Statement under the heading “Audit-Related Matters.”
+Added: Incorporated into this Item by reference is the information in the Proxy Statement under the heading “Audit-Related Matters.” The independent registered public accounting firm is BKD, LLP (Public Company Accounting Oversight Board Firm ID No.
+Added: 686 ) located in Indianapolis, Indiana.
Exhibits and Financial Statement Schedules
11 unchanged sentences
Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to current report on Form 8-K filed June 12, 2019
−Removed: T hird Supplemental Indenture, dated as of October 26, 2020, between First Internet Banc orp and U.S.
−Removed: Bank National Association , as trustee (including form of 6.0% Fixed-to-Floating Rate Subordinated Notes due 2030) (in corporated by reference to Exhibit 4.2 to current report on Form 8-K filed October 26, 2020)
+Added: Third Supplemental Indenture, dated as of October 26, 2020, between First Internet Bancorp and U.S.
+Added: Bank National Association, as trustee (including form of 6.0% Fixed-to-Floating Rate Subordinated Notes due 2030) (incorporated by reference to Exhibit 4.2 to current report on Form 8-K filed October 26, 2020)
+Added: Fourth Supplemental Indenture, dated as of August 16, 2021, between First Internet Bancorp and U.S.
+Added: Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to current report on Form 8-K filed August 16, 2021)
Form of Global Note representing 6.0% Subordinated Notes due 2026 (incorporated by reference to Exhibit A included in Exhibit 4.2 to current report on Form 8-K filed on September 30, 2016)
3 unchanged sentences
333-219841) filed August 9, 2017)
+Added: Forms of 3.75% Fixed-to-Floating Rate Subordinated Note due September 1, 2031 (included as Exhibit A-1 and Exhibit A-2 to the Fourth Supplemental Indenture filed as Exhibit 4.2 hereto)
+Added: Form of Registration Rights Agreement, dated August 16, 2021, by and among First Internet Bancorp and the Purchasers (incorporated by reference to Exhibit 10.2 to current report on Form 8-K filed August 16, 2021)
First Internet Bancorp 2013 Equity Incentive Plan (incorporated by reference to Appendix A to the definitive proxy statement on Schedule 14A filed April 9, 2013)*
−Removed: Form of Restricted Stock Agreement under 2013 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to current report on Form 8-K filed July 26, 2013)*
−Removed: Form of Management Incentive Award Agreement - Restricted Stock Units under 2013 Equity Incentive Plan for awards on or before January 21, 2019 (incorporated by reference to Exhibit 10.2 to quarterly report on form 10-Q for the fiscal quarter ended March 31, 2017)*
−Removed: Form of Management Incentive Award Agreement - Restricted Stock Units under 2013 Equity Incentive Plan for awards after January 21, 2019 (incorporated by reference to Exhibit 10.1 to quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2019)*
First Internet Bancorp 2011 Directors’ Deferred Stock Plan (incorporated by reference to Exhibit 10.2 to registration statement on Form 10 filed November 30, 2012)*
5 unchanged sentences
Form of Subordinated Note Purchase Agreement, dated as of October 26, 2020, between First Internet Bancorp and the purchaser thereunder (incorporated by reference to Exhibit 10.1 to current report on Form 8-K filed October 26, 2020)
−Removed: List of Subsidiaries (incorporated by reference to Exhibit 21.1 to annual report on Form 10-K for the fiscal year ended December 31, 2018)
+Added: Form of Management Incentive Award Agreement - Restricted Stock Units (time based) under 2013 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2021)*
+Added: Form of Management Incentive Award Agreement - Restricted Stock units (performance based) under 2013 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2021)*
+Added: Form of Subordinated Note Purchase Agreement, dated August 16,2021, by and among First Internet Bancorp and the Purchasers* (incorporated by reference to Exhibit 10.1 to current report on Form 8-K filed August 15, 2021)
+Added: Form of Registration Rights Agreement, dated August 16, 2021, by and among First Internet Bancorp and the Purchasers (incorporated by reference to Exhibit 10.2 to current report on Form 8-K filed August 16, 2021)
+Added: Agreement and Plan of Merger dated November 1, 2021, by and among First Internet Bancorp, FC Subsidiary, Inc., and First Century Bancorp (incorporated by reference to Exhibit 2.1 to current report on Form 8-K filed November 2, 2021)**
+Added: List of Subsidiaries
Consent of Independent Registered Public Accounting Firm
4 unchanged sentences
101 Financial statements from the Annual Report on Form 10-K of First Internet Bancorp for the period ended December 31, 2021, filed with the SEC on March 15, 2022, formatted in inline extensible Business Reporting Language (XBRL):
−Removed: (i) the Consolidated Balance Sheets at December 31, 2020 and 2019, (ii) the Consolidated Statements of Income for the fiscal years ended December 31, 2020, 2019, and 2018, (iii) the Consolidated Statements of Comprehensive Income for the fiscal years ended December, 2020, 2019, and 2018, (iv) the Consolidated Statements of Shareholders’ Equity for the fiscal years ended December 31, 2020, 2019, and 2018, (v) Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2020, 2019, and 2018, and (iv) Notes to Consolidated Financial Statements.
+Added: (i) the Consolidated Balance Sheets at December 31, 2021 and 2020, (ii) the Consolidated Statements of Income for the fiscal years ended December 31, 2021, 2020, and 2019, (iii) the Consolidated Statements of Comprehensive Income for the fiscal years ended December 31, 2021, 2020, and 2019, (iv) the Consolidated Statements of Shareholders’ Equity for the fiscal years ended December 31, 2021, 2020, and 2019, (v) Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2021, 2020, and 2019, and (vi) Notes to Consolidated Financial Statements.
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
1 unchanged sentence
*Management contract, compensatory plan or arrangement required to be filed as an exhibit.
+Added: **Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
+Added: A copy of any omitted schedule or exhibit will be furnished to the SEC upon request;
+Added: provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished.
Form 10-K Summary.
1 unchanged sentence
FIRST INTERNET BANCORP
−Removed: Chairman, President and Chief Executive Officer
+Added: Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March 15, 2022.
Becker /s/ Kenneth J.
−Removed: Chairman, President,
−Removed: Chief Executive Officer and Director
+Added: Chairman and Chief Executive Officer
(Principal Executive Officer)
2 unchanged sentences
(Principal Financial Officer and Principal Accounting Officer)
−Removed: Ana Dutra, Director
−Removed: Keach, Jr., Director
+Added: Bade, Director
Lovejoy, Director
−Removed: Smith, Director
+Added: Christian, Director
Whitney, Jr., Director
+Added: Ann Colussi Dee, Director
Jerry Williams, Director
+Added: Ana Dutra., Director
Wojtowicz, Director
+Added: Keach, Jr., Director
Becker, by signing his name hereto, does hereby sign this document on behalf of each of the above-named directors of the Registrant pursuant to powers of attorney duly executed by such persons.
5 unchanged sentences
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheets of First Internet Bancorp (Company) as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively referred to as the "financial statements").
+Added: We have audited the accompanying consolidated balance sheets of First Internet Bancorp (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2021 and the related notes (collectively referred to as the “financial statements”).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2020, based on criteria and established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) our report dated March 15, 2021, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting .
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 15, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
11 unchanged sentences
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
−Removed: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which it relates.
−Removed: As described in Note 4 to the consolidated financial statements, the Company’s consolidated allowance for loan losses (ALLL) was $29.48 million at December 31, 2020.
−Removed: The Company also describes in Note 1 of the consolidated financial statements the "Allowance for Loan Losses Methodology" accounting policy around this estimate.
+Added: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Allowances for Loan Losses
+Added: Description of the Matter
+Added: As described in Note 4 to the financial statements, the Company’s consolidated allowance for loan losses (ALLL) was $27.84 million at December 31, 2021.
+Added: The Company also describes in Note 1 of the financial statements the “Allowance for Loan Losses Methodology” accounting policy around this estimate.
The ALLL is an estimate of losses inherent in the loan portfolio.
12 unchanged sentences
There is a high degree of subjectivity in evaluating management’s estimate, such as evaluating management’s assessment of economic conditions and other environmental factors, including the impact of the COVID-19 pandemic on the loan portfolio, evaluating the adequacy of specific allowances associated with impaired loans and assessing the appropriateness of loan grades.
+Added: How We Addressed the Matter in Our Audit
Our audit procedures related to the estimated allowance for loan losses included:
109 unchanged sentences
Gain (loss) on sale of securities — 139 ( 458 )
+Added: Gain on sale of premises and equipment 2,523 — —
Other 1,694 1,655 2,581
28 unchanged sentences
Net income $ 48,114 $ 29,453 $ 25,239
−Removed: Other comprehensive (loss) income
−Removed: Net unrealized holding gains (losses) on securities available-for-sale recorded within other comprehensive income before income tax 6,551 12,072 ( 10,466 )
+Added: Other comprehensive income (loss)
+Added: Net unrealized holding (losses) gains on securities available-for-sale recorded within other comprehensive income before income tax ( 4,087 ) 6,551 12,072
Reclassification adjustment for (gains) losses realized — ( 139 ) 458
−Removed: Net unrealized holding losses on cash flow hedging derivatives recorded within other comprehensive income before income tax ( 10,248 ) ( 9,071 ) ( 4,358 )
−Removed: Other comprehensive (loss) income before tax ( 3,836 ) 3,459 ( 14,824 )
−Removed: Income tax (benefit) provision ( 831 ) 1,109 ( 4,365 )
−Removed: Other comprehensive (loss) income - net of tax ( 3,005 ) 2,350 ( 10,459 )
+Added: Net unrealized holding gains (losses) on cash flow hedging derivatives recorded within other comprehensive income before income tax 11,138 ( 10,248 ) ( 9,071 )
+Added: Other comprehensive income (loss) before tax 7,051 ( 3,836 ) 3,459
+Added: Income tax provision (benefit) 894 ( 831 ) 1,109
+Added: Other comprehensive income (loss) - net of tax 6,157 ( 3,005 ) 2,350
Comprehensive income $ 54,271 $ 26,448 $ 27,589
11 unchanged sentences
Net income — 25,239 — 25,239
−Removed: Other comprehensive loss — — ( 10,459 ) ( 10,459 )
+Added: Other comprehensive income — — 2,350 2,350
Dividends declared ($0.24 per share) — ( 2,426 ) ( 2,426 )
−Removed: Net cash proceeds from common stock issuance 54,334 — — 54,334
Repurchase of common stock ( 9,784 ) — — ( 9,784 )
3 unchanged sentences
Balance, December 31, 2019 $ 219,423 $ 99,681 $ ( 14,191 ) $ 304,913
−Removed: Impact of adoption of new accounting standards (2)
−Removed: — ( 821 ) — ( 821 )
Net income — 29,453 — 29,453
−Removed: Other comprehensive income — — 2,350 2,350
+Added: Other comprehensive loss — — ( 3,005 ) ( 3,005 )
Dividends declared ($0.24 per share) — ( 2,402 ) — ( 2,402 )
−Removed: Repurchase of common stock ( 9,784 ) — — ( 9,784 )
Recognition of the fair value of share-based compensation 2,110 — — 2,110
3 unchanged sentences
Net income — 48,114 — 48,114
−Removed: Other comprehensive loss — — ( 3,005 ) ( 3,005 )
+Added: Other comprehensive income — — 6,157 6,157
Dividends declared ($0.24 per share) — ( 2,415 ) — ( 2,415 )
+Added: Repurchase of common stock ( 4,436 ) — — ( 4,436 )
Recognition of the fair value of share-based compensation 2,393 — — 2,393
2 unchanged sentences
Balance, December 31, 2021 $ 218,946 $ 172,431 $ ( 11,039 ) $ 380,338
−Removed: (1) Represents the impact of adopting Accounting Standards Update ("ASU") 2018-02 and ASU 2016-01.
−Removed: ASU 2018-02 increased retained earnings and accumulated other comprehensive loss by $ 1.1 million.
−Removed: ASU 2016-01 decreased retained earnings and accumulated other comprehensive loss by $ 0.1 million.
(1) Represents the impact of adopting ASU 2017-08 .
7 unchanged sentences
Net income $ 48,114 $ 29,453 $ 25,239
−Removed: Adjustments to reconcile net income to net cash (used in) provided by operating activities:
+Added: Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization 8,775 7,831 6,926
8 unchanged sentences
Decrease (increase) in fair value of loans held-for-sale 718 94 ( 538 )
−Removed: (Gain) loss on derivatives ( 2,069 ) ( 671 ) 501
+Added: Loss (gain) on derivatives 1,513 ( 2,069 ) ( 671 )
Settlement of derivatives ( 1,859 ) ( 46,109 ) —
−Removed: Net change in servicing assets ( 1,088 ) ( 2,481 ) —
+Added: Gain on sale of premises and equipment ( 2,523 ) — —
+Added: Net change in servicing asset 1,069 ( 1,088 ) ( 2,481 )
Deferred income tax 2,434 ( 4,118 ) ( 4,402 )
9 unchanged sentences
Purchase of securities available-for-sale ( 282,226 ) ( 144,091 ) ( 171,997 )
+Added: Maturities and calls of securities held-to-maturity 8,525 — —
Purchase of securities held-to-maturity — ( 2,000 ) ( 39,208 )
+Added: Net proceeds from sale of premises and equipment 8,116 — —
Purchase of Federal Home Loan Bank of Indianapolis stock — — ( 2,025 )
2 unchanged sentences
Other investing activities 4,434 — 11,068
−Removed: Net cash used in investing activities ( 44,809 ) ( 313,273 ) ( 638,713 )
+Added: Net cash provided by (used in) investing activities 43,874 ( 44,809 ) ( 313,273 )
Financing activities
−Removed: Net increase in deposits 116,922 482,612 586,410
+Added: Net change in deposits ( 91,926 ) 116,922 482,612
Cash dividends paid ( 2,415 ) ( 2,349 ) ( 2,418 )
1 unchanged sentence
Repayment of subordinated debt ( 35,000 ) — —
−Removed: Net proceeds from common stock issuance — — 54,334
Repurchase of common stock ( 4,436 ) — ( 9,784 )
2 unchanged sentences
Other, net ( 441 ) ( 152 ) ( 329 )
−Removed: Net cash provided by financing activities 124,186 495,499 750,088
+Added: Net cash (used in) provided by financing activities (75,560) 124,186 495,499
Net increase in cash and cash equivalents 23,154 92,445 138,649
9 unchanged sentences
Cash dividends declared, not paid 585 588 585
−Removed: Security purchases settled in subsequent period 5,547 — —
−Removed: Transfer of mutual fund securities to other assets — — 2,932
+Added: Securities purchases settled in subsequent period — 5,547 —
Transfer of available-for-sale municipal securities to held-to-maturity municipal securities — 4,479 —
8 unchanged sentences
The Company was incorporated on September 15, 2005 , and consummated a plan of exchange on March 21, 2006, by which the Company became a bank holding company and 100 % owner of First Internet Bank of Indiana (the “Bank”).
−Removed: The Bank provides commercial and retail banking services, with operations conducted on the Internet at www.firstib.com and primarily through its corporate office located in Fishers, Indiana as well as a loan production office in Tempe, Arizona.
−Removed: The majority of the Bank’s income is derived from commercial lending, retail lending, and mortgage banking activities.
+Added: The Bank offers a wide range of commercial, small business, consumer and municipal banking products and services.
+Added: The Bank conducts its consumer and small business deposit operations primarily through digital channels on a nationwide basis and has no traditional branch offices.
+Added: Residential mortgage products are offered nationwide primarily through a digital direct-to-consumer platform and are supplemented with Central Indiana-based mortgage and construction lending.
+Added: Consumer lending products are primarily originated on a nationwide basis through relationships with dealerships and financing partners.
The Bank is subject to competition from other financial institutions.
The Bank is regulated by certain state and federal agencies and undergoes periodic examinations by those regulatory authorities.
+Added: The Bank has three wholly owned subsidiaries.
JKH Realty Services, LLC was established on August 20, 2012 as a single member limited liability company wholly owned by the Bank to manage other real estate owned properties as needed.
20 unchanged sentences
Purchases and sales of securities are recorded in the consolidated balance sheets on the trade date.
−Removed: Gains and losses from security sales or disposals are recognized as of the trade date in the consolidated statements of income for the period in which securities are sold or otherwise disposed of.
+Added: Gains and losses from the sale or disposal of securities are recognized as of the trade date in the consolidated statements of income for the period in which securities are sold or otherwise disposed of.
Gains and losses on sales of securities are determined using the specific-identification method.
16 unchanged sentences
In certain circumstances, noninterest income is reported net of associated expenses.
−Removed: Loans that management intends to hold until maturity are reported at their outstanding principal balance adjusted for unearned income, charge-offs, the allowance for loan losses (“ALLL”), any unamortized deferred fees or costs on originated loans, unamortized premiums or discounts on purchased loans and carrying value adjustments related to interest rate swaps associated with loans.
−Removed: For loans recorded at cost, interest income is accrued based on the unpaid principal balance.
−Removed: Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized as a level yield adjustment over the respective term of the loan.
+Added: Loans that management intends to hold until maturity are reported at their outstanding principal balance adjusted for unearned income, charge-offs, the allowance for loan losses (“ALLL”), any unamortized deferred fees or costs on originated loans, unamortized premiums or discounts on purchased loans and any carrying value adjustments related to terminated interest rate swaps associated with loans.
First Internet Bancorp
1 unchanged sentence
(Tabular dollar amounts in thousands except per share data)
+Added: For loans recorded at cost, interest income is accrued based on the unpaid principal balance.
+Added: Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized as a level yield adjustment over the respective term of the loan.
Allowance for Loan Losses Methodology
26 unchanged sentences
The levels of and trends in charge-offs and recoveries;
−Removed: The levels of and trends in delinquencies, nonaccrual loans, and impaired loans;
First Internet Bancorp
1 unchanged sentence
(Tabular dollar amounts in thousands except per share data)
+Added: The levels of and trends in delinquencies, nonaccrual loans, and impaired loans;
Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices.
22 unchanged sentences
When loans are modified in a TDR, any possible impairment similar to other impaired loans is evaluated based on either the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, or the current fair value of the collateral, less selling costs for collateral-dependent loans.
−Removed: If it is determined that the value of the modified loan is less than the recorded balance of the loan, impairment is recognized through a specific ALLL or charge-off to the ALLL.
−Removed: In periods subsequent to modification, all TDRs, including those that have payment defaults, are evaluated for possible impairment, and impairment is recognized through the ALLL.
First Internet Bancorp
1 unchanged sentence
(Tabular dollar amounts in thousands except per share data)
+Added: determined that the value of the modified loan is less than the recorded balance of the loan, impairment is recognized through a specific ALLL or charge-off to the ALLL.
+Added: In periods subsequent to modification, all TDRs, including those that have payment defaults, are evaluated for possible impairment, and impairment is recognized through the ALLL.
Policy for Charging Off Loans
24 unchanged sentences
The IRLCs and forward contracts are not designated as accounting hedges, and are recorded at fair value with changes in fair value reflected in noninterest income in the consolidated statements of income.
−Removed: The fair value of derivative instruments with a positive fair value are reported in accrued income and other assets in the consolidated balance sheets, while derivative instruments with a negative fair value are reported in accrued expenses and other liabilities in the consolidated balance sheets.
+Added: The fair value of derivative instruments with a positive fair value are reported in accrued income and other assets in the consolidated balance
First Internet Bancorp
1 unchanged sentence
(Tabular dollar amounts in thousands except per share data)
+Added: sheets, while derivative instruments with a negative fair value are reported in accrued expenses and other liabilities in the consolidated balance sheets.
Fair Value Measurements
61 unchanged sentences
Servicing Asset
−Removed: Servicing assets are related to small business lending loans sold and are recognized at the time of sale when servicing is retained with the income statement effect recorded in loan servicing revenue.
+Added: The servicing asset is related to small business lending loans sold.
+Added: The servicing asset is recognized at the time of sale when servicing is retained and the income statement effect is recorded in loan servicing revenue.
Servicing assets are recorded at fair value in accordance with ASC 860.
3 unchanged sentences
These reclassifications had no effect on net income.
+Added: Revision of Previously Issued Financial Statements
+Added: The Company has revised amounts reported in previously issued notes to financial statements for the periods presented
+Added: in this Annual Report on Form 10-K due to immaterial clerical errors.
+Added: The clerical errors caused the fair value associated with interest rate swap liabilities to be understated in the notes to financial statements for the period ended December 31, 2020 and had no impact on the consolidated balance sheet, income statement or statement of cash flows.
+Added: The Company evaluated the impact of the clerical errors to our previously issued financial statements in accordance with SEC Staff Accounting Bulletins No.
+Added: 108 and, based upon quantitative and qualitative factors, determined that the clerical errors were not material to the previously issued financial statements and disclosures included in our Annual Report on Form 10-K for the year ended December 31, 2020.
Cash and Cash Equivalents
At December 31, 2021, the Company’s interest-bearing and noninterest-bearing cash accounts at other institutions exceeded the limits for full FDIC insurance coverage by $ 56.1 million.
−Removed: In addition, approximately $ 15.5 million and $ 246.7 million of cash was held by the FHLB of Indianapolis and Federal Reserve Bank of Chicago, respectively, which are not federally insured.
+Added: In addition, approximately $ 361.8 million and $ 18.7 million of cash was held by the Federal Reserve Bank of Chicago and the FHLB of Indianapolis, respectively, which are not federally insured.
The Federal Reserve Act authorizes the Federal Reserve Board to establish reserve requirements within specified ranges for the purpose of implementing monetary policy on certain types of deposits and other liabilities of depository institutions.
2 unchanged sentences
The following tables summarize securities available-for-sale and securities held-to-maturity as of December 31, 2021 and 2020.
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
December 31, 2021
4 unchanged sentences
Municipal securities 75,158 1,940 ( 65 ) 77,033
−Removed: Agency mortgage-backed securities
−Removed: 241,795 4,591 ( 2,465 ) 243,921
−Removed: Private label mortgage-backed securities
+Added: Agency mortgage-backed securities - residential (1)
377,928 960 ( 5,652 ) 373,236
+Added: Agency mortgage-backed securities - commercial 36,024 441 ( 139 ) 36,326
+Added: Private label mortgage-backed securities - residential 15,902 122 ( 3 ) 16,021
Asset-backed securities
9 unchanged sentences
Total held-to-maturity $ 59,565 $ 1,903 $ — $ 61,468
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
+Added: (1) Includes $ 0.8 million of additional premium related to terminated interest rate swaps associated with agency mortgage-backed securities - residential as of December 31, 2021.
December 31, 2020
4 unchanged sentences
Municipal securities 82,757 463 ( 731 ) 82,489
−Removed: Agency mortgage-backed securities
−Removed: 264,142 1,304 ( 4,006 ) 261,440
−Removed: Private label mortgage-backed securities
−Removed: 63,704 97 ( 188 ) 63,613
+Added: Agency mortgage-backed securities - residential 213,408 3,387 ( 2,465 ) 214,330
+Added: Agency mortgage-backed securities - commercial 28,387 1,204 — 29,591
+Added: Private label mortgage-backed securities - residential 57,268 850 ( 2 ) 58,116
Asset-backed securities
9 unchanged sentences
Total held-to-maturity $ 68,223 $ 1,356 $ ( 127 ) $ 69,452
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
The carrying value of securities at December 31, 2021 is shown below by their contractual maturity date.
6 unchanged sentences
171,653 172,457
−Removed: Agency mortgage-backed securities 241,795 243,921
−Removed: Private label mortgage-backed securities 57,268 58,116
+Added: Agency mortgage-backed securities - residential 377,928 373,236
+Added: Agency mortgage-backed securities - commercial 36,024 36,326
+Added: Private label mortgage-backed securities - residential 15,902 16,021
Asset-backed securities 5,000 5,004
5 unchanged sentences
Total $ 59,565 $ 61,468
−Removed: There were gross realized gains of $ 0.1 million and gross realized losses of $ 0.5 million resulting from sales of available-for-sale securities recognized during the twelve months ended December 31, 2020 and 2019, respectively.
There were no gross realized gains or losses resulting from the sale of available-for-sale securities recognized during the twelve months ended December 31, 2021.
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
+Added: There were gross realized gains of $ 0.1 million resulting from sales of available-for-sale securities recognized during the twelve months ended December 31, 2020 and there were gross realized losses of $ 0.5 million resulting from sales of available-for-sale securities recognized during the twelve months ended December 31, 2019.
As of December 31, 2021, the fair value of available-for-sale investment securities pledged as collateral was $ 475.1 million.
−Removed: The Company pledged the securities for various types of transactions, including FHLB advances, derivative financial instruments and to collateralize municipal deposits.
+Added: The Company pledged the securities for various types of transactions, including FHLB advances and derivative financial instruments.
Certain investments in debt securities are reported in the consolidated financial statements at an amount less than their historical cost.
−Removed: Total fair value of these investments at December 31, 2020 and 2019 was $ 226.5 million and $ 317.5 million, which is approximately 40 % and 53 %, respectively, of the Company’s available-for-sale and held-to-maturity securities portfolio.
−Removed: These declines primarily resulted from fluctuations in market interest rates after purchase.
+Added: As of December 31, 2021 and 2020, the Company had 179 and 121 securities, respectively, with market values below their cost basis.
+Added: The total fair value of these investments at December 31, 2021 and 2020 was $ 403.2 million and $ 226.5 million, which is approximately 61 % and 40 %, respectively, of the Company’s available-for-sale and held-to-maturity securities portfolio.
+Added: These declines resulted primarily from fluctuations in market interest rates after purchase.
Management believes the declines in fair value for these securities are temporary.
5 unchanged sentences
Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost bases, which may not be until maturity, the Company does not consider those investments to be other-than-temporarily impaired at December 31, 2021.
−Removed: Agency Mortgage-Backed, Private-Label Mortgage-Backed and Asset-Backed Securities
−Removed: The unrealized losses on the Company’s investments in agency mortgage-backed, private-label mortgage-backed and asset-backed securities were caused by interest rate changes.
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
+Added: Agency Mortgage-Backed and Private Label Mortgage-Backed Securities
+Added: The unrealized losses on the Company’s investments in agency mortgage-backed and private label mortgage-backed were caused by interest rate changes.
The Company expects to recover the amortized cost bases over the term of the securities.
9 unchanged sentences
Municipal securities 5,721 ( 65 ) — — 5,721 ( 65 )
−Removed: Agency mortgage-backed securities
−Removed: 38,987 ( 276 ) 45,297 ( 2,189 ) 84,284 ( 2,465 )
−Removed: Private label mortgage-backed securities
−Removed: 1,277 ( 1 ) 558 ( 1 ) 1,835 ( 2 )
−Removed: Asset-backed securities
+Added: Agency mortgage-backed securities - residential (1)
287,820 ( 3,694 ) 40,840 ( 1,958 ) 328,660 ( 5,652 )
−Removed: Corporate securities — — 20,406 ( 1,594 ) 20,406 ( 1,594 )
−Removed: Total $ 58,995 $ ( 391 ) $ 147,092 $ ( 6,092 ) $ 206,087 $ ( 6,483 )
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
−Removed: December 31, 2020
−Removed: Less Than 12 Months 12 Months or Longer Total
−Removed: Value Unrealized
−Removed: Value Unrealized
−Removed: Value Unrealized
−Removed: Securities held-to-maturity
+Added: Agency mortgage-backed securities - commercial 3,944 ( 139 ) — — 3,944 ( 139 )
+Added: Private label mortgage-backed securities - residential 374 ( 3 ) — — 374 ( 3 )
Corporate securities 11,813 ( 187 ) 9,491 ( 508 ) 21,304 ( 695 )
8 unchanged sentences
Municipals 18,731 ( 114 ) 23,519 ( 617 ) 42,250 ( 731 )
−Removed: Agency mortgage-backed securities
−Removed: 91,159 ( 829 ) 83,212 ( 3,177 ) 174,371 ( 4,006 )
−Removed: Private label mortgage-backed securities 30,077 ( 180 ) 2,884 ( 8 ) 32,961 ( 188 )
+Added: Agency mortgage-backed securities - residential 38,987 ( 276 ) 45,297 ( 2,189 ) 84,284 ( 2,465 )
+Added: Private label mortgage-backed securities - residential 1,277 ( 1 ) 558 ( 1 ) 1,835 ( 2 )
Asset-backed securities
8 unchanged sentences
Securities held-to-maturity
−Removed: Municipal securities $ — $ — $ — $ — $ — $ —
Corporate securities $ 17,456 $ ( 126 ) $ 2,999 $ ( 1 ) $ 20,455 $ ( 127 )
Total $ 17,456 $ ( 126 ) $ 2,999 $ ( 1 ) $ 20,455 $ ( 127 )
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
Amounts reclassified from accumulated other comprehensive loss and the affected line items in the consolidated statements of income during the years ended December 31, 2021, 2020 and 2019 were as follows:
23 unchanged sentences
Small business lending 108,666 125,589
+Added: Franchise finance 81,448 —
Total commercial loans 2,363,863 2,515,631
5 unchanged sentences
Total commercial and consumer loans 2,833,776 2,997,967
−Removed: Net deferred loan origination costs and premiums and discounts on purchased loans and other (1)
+Added: Net deferred loan origination costs, premiums and discounts on purchased loans, and other (1)
53,886 61,264
2 unchanged sentences
Net loans $ 2,859,821 $ 3,029,747
−Removed: (1) Includes carrying value adjustments of $ 42.7 million related to terminated interest rate swaps associated with public finance loans as of December 31, 2020 and $ 21.4 million as of December 31, 2019 related to interest rate swaps associated with public finance loans.
+Added: (1) Includes carrying value adjustments of $ 37.5 million and $ 42.7 million related to terminated interest rate swaps associated with public finance loans as of December 31, 2021 and 2020, respectively.
The risk characteristics of each loan portfolio segment are as follows:
4 unchanged sentences
Most commercial and industrial loans are secured by the assets being financed and may incorporate a personal guarantee.
−Removed: This portfolio segment is generally concentrated in Central Indiana and adjacent markets and the greater Phoenix, Arizona market.
+Added: This portfolio segment is generally concentrated in the Midwest and Southwest regions of the United States.
Owner-Occupied Commercial Real Estate:
The primary source of repayment is the cash flow from the ongoing operations and activities conducted by the borrower, or an affiliate of the borrower, who owns the property.
−Removed: This portfolio segment is generally concentrated in Central Indiana and adjacent markets and the greater Phoenix, Arizona market and its loans are often secured by manufacturing and service facilities, as well as office buildings.
+Added: This portfolio segment is generally concentrated in the Midwest and Southwest regions of the United States and its loans are often secured by manufacturing and service facilities, as well as office buildings.
First Internet Bancorp
6 unchanged sentences
Investor commercial real estate loans may be more adversely affected by changing economic conditions in the real estate markets, industry dynamics or the overall health of the local economy where the property is located.
−Removed: The properties securing the Company’s investor commercial real estate portfolio tend to be diverse in terms of property type and are generally located in the state of Indiana or markets immediately adjacent to Indiana.
+Added: The properties securing the Company’s investor commercial real estate portfolio tend to be diverse in terms of property type and are generally located in the Midwest and Southwest region of the United States.
Management monitors and evaluates commercial real estate loans based on property financial performance, collateral value, guarantor strength, economic and industry conditions together with other risk grade criteria.
−Removed: As a general rule, the Company avoids financing special use projects or properties outside of its designated market areas unless other underwriting factors are present to mitigate these additional risks.
+Added: As a general rule, the Company avoids financing special use projects unless other underwriting factors are present to mitigate these additional risks.
Construction:
−Removed: Construction loans are secured by land and related improvements and are made to assist in the construction of new structures, which may include commercial (retail, industrial, office, multi-family) properties or single family residential properties offered for sale by the builder.
+Added: Construction loans are secured by land and related improvements and are made to assist in the construction of new structures, which may include commercial (retail, industrial, office, and multi-family) properties or single family residential properties offered for sale by the builder.
These loans generally finance a variety of project costs, including land, site preparation, architectural services, construction, closing and soft costs and interim financing needs.
The cash flows of builders, while initially predictable, may fluctuate with market conditions, and the value of the collateral securing these loans may be subject to fluctuations based on general economic changes.
−Removed: This portfolio segment is generally concentrated in Central Indiana.
+Added: This portfolio segment is generally concentrated in the Midwest and Southwest region of the United States.
Single Tenant Lease Financing:
4 unchanged sentences
Public Finance:
−Removed: These loans are made to governmental and not-for-profit entities to provide both tax-exempt and taxable loans for a variety of purposes including:
+Added: These loans are made on a nationwide basis to governmental and not-for-profit entities to provide both tax-exempt and taxable loans for a variety of purposes including:
short-term cash-flow needs;
3 unchanged sentences
infrastructure improvements;
−Removed: energy conservation;
−Removed: renewable energy and equipment financing.
+Added: renewable energy projects;
+Added: and equipment financing.
The primary sources of repayment for public finance loans include pledged revenue sources including but not limited to:
7 unchanged sentences
Certain loans may also include an additional collateral pledge of mortgaged property or a security interest in financed equipment.
−Removed: Public finance lending has been conducted primarily in the Midwest, but continues to expand nationwide.
Healthcare Finance:
−Removed: These loans are made to healthcare providers, primarily dentists, for practice acquisition financing or refinancing that occasionally includes owner-occupied commercial real estate and equipment purchases.
−Removed: The sources of repayment are primarily based on the identified cash flows from operations of the borrower and related entities if the real estate is held in a separate entity and secondarily on the underlying collateral provided by the borrower and guarantor resources.
−Removed: This portfolio segment was initially concentrated in the Western United States but has been growing rapidly throughout the rest of the country with the addition of a growing sales force located in Eastern and Midwestern markets.
+Added: These loans are made on a nationwide basis to healthcare providers, primarily dentists, for practice acquisition financing or refinancing that occasionally includes owner-occupied commercial real estate and equipment purchases.
+Added: The sources of repayment are primarily based on the identified cash flows from operations of the borrower and related entities and secondarily on the underlying collateral provided by the borrower.
First Internet Bancorp
2 unchanged sentences
Small Business Lending:
−Removed: These loans are to small businesses and generally carry a partial guaranty from the U.S.
+Added: These loans are made on a nationwide basis to small businesses and generally carry a partial guaranty from the U.S.
Small Business Administration (“SBA”) under its 7(a) loan program.
6 unchanged sentences
These loans also include loans originated by the Bank under the SBA’s Paycheck Protection Program, which are fully guaranteed by the SBA.
−Removed: This portfolio segment has an emerging geography, with a nationwide focus.
+Added: Franchise Finance:
+Added: These loans are made on a nationwide basis through our partnership with ApplePie Capital, which through their deep relationships with franchise brands provides franchisees with financing options for new franchise units, recapitalization, expansion, equipment and working capital.
+Added: The sources of repayment are either based on identified cash flows from existing operations of the borrower or pro forma cash flow for new franchise locations.
Residential Mortgage:
12 unchanged sentences
Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers in geographically diverse locations throughout the country.
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
The following tables present changes in the balance of the ALLL during the twelve months ended December 31, 2021, 2020, and 2019
10 unchanged sentences
Small business lending 628 901 ( 222 ) 80 1,387
+Added: Franchise finance — 1,083 — — 1,083
Residential mortgage 519 67 ( 6 ) 63 643
2 unchanged sentences
Total $ 29,484 $ 1,030 $ ( 3,227 ) $ 554 $ 27,841
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
Twelve Months Ended December 31, 2020
13 unchanged sentences
Total $ 21,840 $ 9,325 $ ( 2,162 ) $ 481 $ 29,484
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
Twelve Months Ended December 31, 2019
14 unchanged sentences
The following tables present the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of December 31, 2021 and 2020.
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
Loans Allowance for Loan Losses
12 unchanged sentences
Small business lending 106,682 1,984 108,666 994 393 1,387
+Added: Franchise finance 81,448 — 81,448 1,083 — 1,083
Residential mortgage 183,852 2,918 186,770 643 — 643
2 unchanged sentences
Total $ 2,822,836 $ 10,940 $ 2,833,776 $ 26,380 $ 1,461 $ 27,841
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
Loans Allowance for Loan Losses
20 unchanged sentences
• “Special Mention” - Loans that possess some credit deficiency or potential weakness which deserve close attention.
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
• “Substandard” - Loans that possess a defined weakness or weaknesses that jeopardize the liquidation of the debt.
5 unchanged sentences
• “Loss” - Loans that are considered uncollectible and of such little value that continuing to carry them as assets is not warranted.
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
The following tables present the credit risk profile of the Company’s commercial and consumer loan portfolios based on rating category and payment activity as of December 31, 2021 and 2020.
9 unchanged sentences
Small business lending 99,250 7,432 1,983 108,666
+Added: Franchise finance 81,448 — — 81,448
Total commercial loans $ 2,312,655 $ 43,209 $ 7,998 $ 2,363,863
16 unchanged sentences
Total commercial loans 2,481,795 17,962 15,874 2,515,631
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
December 31, 2020
4 unchanged sentences
Total $ 481,107 $ 1,229 $ 482,336
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
The following tables present the Company’s loan portfolio delinquency analysis as of December 31, 2021 and 2020.
14 unchanged sentences
Small business lending — — 657 657 108,009 108,666 959 —
+Added: Franchise Finance — — — — 81,448 81,448 — —
Residential mortgage 51 226 106 383 186,387 186,770 1,226 —
35 unchanged sentences
Healthcare finance $ — $ — $ — $ 1,010 $ 1,010 $ —
+Added: Small business lending 959 1,193 — — —
Residential mortgage 2,918 3,063 — 1,546 1,652 —
+Added: Home equity 14 15 — — — —
Other consumer 9 44 — 50 120 —
2 unchanged sentences
Commercial and industrial $ 644 $ 677 $ 450 $ — $ — $ —
+Added: Construction — — — — — —
Single tenant lease financing 1,100 1,123 95 6,009 6,036 3,090
−Removed: Residential mortgage — — — — — —
+Added: Healthcare finance 926 926 523 — — —
+Added: Small business lending 1,025 1,025 393 — — —
Total 3,695 3,751 1,461 6,009 6,036 3,090
11 unchanged sentences
Owner-occupied commercial real estate 3,324 — 3,790 60 3,292 170
+Added: Single tenant lease financing 75 5 — — — —
Healthcare finance 252 — 386 16 — —
6 unchanged sentences
Commercial and industrial 675 — 169 3 1,077 —
+Added: Owner-occupied commercial real estate 355 — — — — —
Single tenant lease financing 3,931 — 5,671 4 1,464 —
+Added: Healthcare finance 841 131 — — — —
+Added: Small business lending 644 — — — — —
Total 6,446 131 5,840 7 2,541 —
Total impaired loans $ 13,812 $ 212 $ 12,443 $ 140 $ 11,800 $ 554
−Removed: The Company had no residential mortgage other real estate owned as of December 31, 2020 and December 31, 2019.
−Removed: There were no loans in the process of foreclosure at December 31, 2020 and December 31, 2019.
+Added: The Company had $ 1.2 million in other real estate owned (“OREO”) as of December 31, 2021, which consisted of one commercial property.
+Added: The Company did not have any OREO as of December 31, 2020.
+Added: There was one loan for $ 0.1 million and no loans in the process of foreclosure at December 31, 2021 and December 31, 2020, respectively.
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
Troubled Debt Restructurings
2 unchanged sentences
Certain TDRs are classified as nonperforming at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally not less than six consecutive months.
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
When loans are modified in a TDR, any possible impairment similar to other impaired loans is evaluated based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, or using the current fair value of the collateral, less selling costs, for collateral-dependent loans.
4 unchanged sentences
Terms may be modified to fit the ability of the borrower to repay in line with its current financial status or the loan may be restructured to secure additional collateral and/or guarantees to support the debt, or a combination of the two.
−Removed: There were three commercial and industrial loan classified as new TDRs during the twelve months ended December 31, 2020 with a pre-modification and post-modification outstanding recorded investment of $ 2.6 million.
+Added: There were two new portfolio residential mortgage loans classified as a new TDRs during the twelve months ended December 31, 2021 with a pre-modification and post-modification outstanding recorded investment of $ 1.6 million.
+Added: The Company did not allocate a specific allowance for these loans as of December 31, 2021.
+Added: The modifications consisted of interest-only payments for a period of time.
+Added: There were three commercial and industrial loans classified as new TDRs during the twelve months ended December 31, 2020 with a pre-modification and post-modification outstanding recorded investment of $ 2.6 million.
The Company did not allocate a specific allowance for these loans as of December 31, 2020 and the modifications consisted of interest only payments for a period of time and an extension of the maturity date.
1 unchanged sentence
The Company did not allocate a specific allowance for these loans as of December 31, 2019 and the modifications consisted of interest only payments for a period of time.
−Removed: There were no loans classified as new TDRs during the twelve months ended December 31, 2018.
There were no performing TDRs which had payment defaults within the twelve months following modification during the years ended December 31, 2021, 2020 and 2019.
3 unchanged sentences
Additionally, Section 4013 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) provides that loan modifications due to the impact of COVID-19 that would otherwise be classified as TDRs under GAAP will not be so classified.
−Removed: Modifications within the scope of this relief are in effect from the period beginning March 1, 2020 until January 1, 2022 or 60 days after the date on which the national emergency related to the COVID-19 pandemic formally terminates.
−Removed: As of December 31, 2020, the Company had $ 11.9 million in non-TDR loan modifications due to COVID-19.
−Removed: Small Business Administration Paycheck Protection Program
−Removed: Section 1102 of the CARES Act created the PPP, which is jointly administered by the SBA and the Department of the Treasury.
−Removed: The PPP is designed to provide economic relief to small businesses nationwide adversely impacted by COVID-19.
−Removed: On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act was enacted, extending the Authority to continue to make PPP loans, including a provision for second draw PPP loans, through March 31, 2021.
−Removed: These loans may be 100% forgiven if certain conditions, including predefined SBA approved use of the funds and certain borrower certifications, are satisfied and are fully guaranteed by the SBA.
−Removed: As a preferred SBA lender, we assisted our clients in participating in the PPP to help them maintain their workforces in an uncertain and challenging environment.
−Removed: The loans bear an interest rate of 1.00 % and we received weighted average origination fees of 3.86 % of the amount funded, or approximately $ 2.3 million in total.
−Removed: The Company received this fee revenue from the SBA in late June and it will be deferred over the life of the PPP loans and recognized as interest income.
−Removed: As of December 31, 2020, we had 376 PPP loans totaling $ 50.6 million outstanding.
+Added: Modifications within the scope of this relief were in effect from the period beginning March 1, 2020 until January 1, 2022.
+Added: As of December 31, 2021, the Company had eleven loans totaling $ 10.5 million in non-TDR loan modifications due to COVID-19.
First Internet Bancorp
2 unchanged sentences
Premises and Equipment
−Removed: The following table summarizes p remises and equipment at December 31, 2020 and 2019.
+Added: The following table summarizes premises and equipment at December 31, 2021 and 2020.
Land $ — $ 2,500
5 unchanged sentences
$ 59,842 $ 37,590
−Removed: During 2018, the Bank's subsidiary, SPF15, Inc., (“SPF15”) acquired several parcels of land consisting of approximately 3.3 acres located in Fishers, Indiana for approximately $ 10.2 million, inclusive of acquisition costs.
−Removed: Pursuant to a Land Acquisition Agreement with the City of Fishers, Indiana (the “City”), and its Redevelopment Commission, among others, the City agreed to reimburse SPF15 for the purchase price and other specified land acquisition costs.
−Removed: The Land Acquisition Agreement was replaced by a Project Agreement in December 2018, which extended the reimbursement deadline to October 31, 2019 and made additional financial incentives available to the Company for constructing an office building and associated parking garage on the property.
−Removed: As contemplated under the Project Agreement, the City transferred to SPF15 two additional parcels of land consisting of approximately 0.75 acres and SPF15 transferred to the Fishers Town Hall Building Corporation and third parties a certain parcel of land consisting of approximately 1.65 acres in connection with the development of the property.
−Removed: On October 25, 2019, the City satisfied its reimbursement obligation, resulting in the payment of SPF15 of an aggregate of $ 11.1 million for purchase prices and other specified land acquisition costs.
−Removed: Site demolition has been completed and construction of a multi-use development, to include the Company's future headquarters, began on October 7, 2019.
−Removed: Development of the site is estimated to be substantially completed by the fourth quarter 2021.
−Removed: Subsequent to the end of fiscal 2020, on February 16, 2021, the Company entered into an agreement to sell its current headquarters and certain equipment currently located in the building to a third party.
−Removed: The sale price is $8.9 million in cash payable in full at closing.
−Removed: The closing remains subject to customary conditions.
−Removed: At December 31, 2020 the net book value of the land, building and improvements was $5.4 million.
−Removed: As a part of the sale agreement, the buyer has agreed to lease the office building back to the Company through December 31, 2021, with an option to extend up to 90 days beyond that date.
−Removed: The Bank is expected to continue to sublease substantially all of the office space for the duration of the leaseback arrangement.
−Removed: A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration.
−Removed: On January 1, 2019, the Company adopted ASU 2016-02 - Leases (Topic 842) and elected the optional transition method, which allows the Company to not separate non-lease components from the associated lease component if certain conditions are met.
−Removed: In addition, the Company elected not to adjust prior comparative periods.
−Removed: Refer to Note 22 for further information regarding transition guidance related to the new standard.
−Removed: The Company has three operating leases that are used for general office operations with remaining lease terms of two to three years .
−Removed: With the adoption of ASU 2016-02, operating lease agreements are required to be recognized on the consolidated balance sheets as a right-of-use asset and a corresponding lease liability.
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
−Removed: The following table shows the components of lease expense.
−Removed: (in thousands) Twelve Months Ended
−Removed: December 31, 2020 December 31, 2019 December 31, 2018
−Removed: Operating lease cost $ 913 $ 758 $ 724
−Removed: The following table shows supplemental cash flow information related to leases.
−Removed: (in thousands) Twelve Months Ended
−Removed: December 31, 2020 December 31, 2019
−Removed: Cash paid for amounts included in the measurement of lease liabilities:
−Removed: Operating cash flows from operating leases 982 814
−Removed: The following table shows the operating leases’ impact on the consolidated balance sheets.
−Removed: The Company elected not to include short-term leases (leases with original terms of 12 months or less) or equipment leases, as those amounts are insignificant.
−Removed: The Company’s leases do not provide an implicit rate.
−Removed: The discount rate utilized to determine the present value of lease payments is the Company’s incremental borrowing rate based on the information available at the lease inception date.
−Removed: The incremental borrowing rate is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment.
−Removed: (dollars in thousands)
−Removed: December 31, 2020 December 31, 2019
−Removed: Operating lease right-of-use assets $ 819 $ 1,602
−Removed: Operating lease liabilities 819 1,602
−Removed: Weighted-average remaining lease term (years)
−Removed: Operating leases 2 2.4
−Removed: Weighted-average discount rate
−Removed: Operating leases 2.0 % 2.0 %
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
−Removed: The following table shows the future minimum payments of operating leases with initial or remaining terms of one year or more as of December 31, 2020.
−Removed: (in thousands)
−Removed: Twelve months ended December 31, 2020
−Removed: Total lease payments 777
−Removed: Less imputed interest ( 17 )
+Added: In December 2018, the Bank’s subsidiary, SPF15, Inc., entered into a project agreement with the City of Fishers, Indiana, and it’s Redevelopment Commission, among others, to construct an office building to include the Company’s future headquarters and associated parking garage on property the Bank had acquired.
+Added: The City agreed to reimburse SPF15, Inc.
+Added: a total of $ 11.2 million for the cost of the land and $ 15.0 million for the construction of the parking garage.
+Added: On February 16, 2021, the Company entered into an agreement to sell its headquarters and certain equipment currently located in the building to a third party.
+Added: The sale was completed on April 16, 2021 and the company recorded a gain on sale of $ 2.5 million.
+Added: As a part of the sale agreement, the buyer agreed to lease the office building back to the Company through December 31, 2021 .
As of December 31, 2021 and 2020, the carrying amount of goodwill was $ 4.7 million.
7 unchanged sentences
Activity for the servicing asset and the related changes in fair value for the twelve months ended December 31, 2021, 2020 and 2019 are shown in the table below.
−Removed: (in thousands) Twelve Months Ended
−Removed: December 31, 2020 December 31, 2019
+Added: Twelve Months Ended
+Added: December 31, 2021 December 31, 2020 December 31, 2019
Beginning balance $ 3,569 $ 2,481 $ —
−Removed: Additions 1,520 2,481
−Removed: Changes in fair value ( 432 ) —
+Added: Originated and purchased servicing 2,202 1,520 2,481
+Added: Subtractions:
+Added: Paydowns ( 820 ) ( 524 ) —
+Added: Changes in fair value due to changes in valuation inputs
+Added: or assumptions used in the valuation model ( 249 ) 92 —
+Added: Loan servicing asset revaluation ( 1,069 ) ( 432 ) —
Ending balance $ 4,702 $ 3,569 $ 2,481
1 unchanged sentence
The unpaid principal balances of these loans serviced for others as of December 31, 2021 and December 31, 2020 are shown in the table below.
−Removed: (in thousands)
December 31, 2021 December 31, 2020
2 unchanged sentences
Total $ 230,514 $ 165,961
−Removed: Loan servicing revenue totaled $ 1.2 million during the twelve months ended December 31, 2020.
−Removed: There was $ 0.2 million of loan servicing revenue during the twelve months ended December 31, 2019.
−Removed: Loan servicing asset revaluation, which represents the change in fair value of the servicing asset, resulted in a $ 0.4 million downward valuation for twelve months ended December 31, 2020.
−Removed: There was no loan servicing asset revaluation during the twelve months ended December 31, 2019.
+Added: Loan servicing revenue totaled $ 1.9 million during the twelve months ended December 31, 2021 and $ 1.2 million during the twelve months ended December 31, 2020.
+Added: Loan servicing asset revaluation, which represents paydowns and the change in fair value of the servicing asset, resulted in a $ 1.1 million and $ 0.4 million downward valuation for twelve months ended December 31, 2021 and December 31, 2020, respectively.
The fair value of servicing rights is highly sensitive to changes in underlying assumptions.
9 unchanged sentences
Interest-bearing demand deposit accounts 247,967 188,645
−Removed: Regular savings accounts 43,200 29,616
+Added: Savings accounts 59,998 43,200
Money market accounts 1,483,936 1,350,566
2 unchanged sentences
Total deposits $ 3,178,959 $ 3,270,885
−Removed: Time deposits (in the amount of $250 or more) $ 403,253 $ 536,028
+Added: Time deposits greater than $250 $ 327,490 $ 403,253
The following table presents time deposit maturities by year as of December 31, 2021.
+Added: Certificates of Deposits Brokered Certificates of Deposits
2022 $ 618,091 $ 129,461
−Removed: Thereafter 250
+Added: 2023 190,045 18,628
+Added: 2024 97,940 1,490
+Added: 2025 29,452 —
+Added: 2026 34,579 —
+Added: $ 970,107 $ 149,579
FHLB Advances
14 unchanged sentences
In October 2015, the Company entered into a term loan in the principal amount of $ 10.0 million, evidenced by a term note due 2025 (the “2025 Note”).
−Removed: The 2025 Note bore a fixed interest rate of 6.4375 % per year, payable quarterly, and was scheduled to mature on October 1, 2025.
−Removed: The 2025 Note was an unsecured subordinated obligation of the Company and could be repaid, without penalty, on any interest payment date on or after October 15, 2020.
−Removed: The 2025 Note is intended to qualify as Tier 2 capital under regulatory guidelines.
−Removed: Subsequent to the end of the fiscal year, the Company redeemed the 2025 Note on January 4, 2021.
+Added: The 2025 Note had a fixed interest rate of 6.4375 % per year, payable quarterly, and was scheduled to mature on October 1, 2025.
+Added: The 2025 Note was an unsecured subordinated obligation of the Company and was eligible to be repaid, without penalty, on any interest payment date on or after October 15, 2020.
+Added: The 2025 Note was intended to qualify as Tier 2 capital under regulatory guidelines.
+Added: The Company redeemed the 2025 Note in full on January 4, 2021.
In September 2016, the Company issued $ 25.0 million aggregate principal amount of 6.0 % Fixed-to-Floating Rate Subordinated Notes due 2026 (the “2026 Notes”) in a public offering.
−Removed: The 2026 Notes initially bear a fixed interest rate of 6.00 % per year to, but excluding, September 30, 2021, and thereafter a floating rate equal to the then-current three-month London Interbank Offered Rate (“LIBOR”) plus 485 basis points.
−Removed: LIBOR will be phased-out after 2021 and the transition to another benchmark rate could have an adverse effect on the 2026 Notes.
−Removed: Refer to Part I Item 1A.
−Removed: Risk Factors for more information on the LIBOR phase out.
−Removed: All interest on the 2026 Notes is payable quarterly.
−Removed: The 2026 Notes are scheduled to mature on September 30, 2026.
−Removed: The 2026 Notes are unsecured subordinated obligations of the Company and may be repaid, without penalty, on any interest payment date on or after September 30, 2021.
−Removed: The 2026 Notes are intended to qualify as Tier 2 capital under regulatory guidelines.
+Added: The 2026 Notes initially bear a fixed interest rate of 6.00 % per year to, but excluding, September 30, 2021, and thereafter a floating rate equal to the then-current three-month London Interbank Offered Rate (“LIBOR”) plus 4.85 %.
+Added: All interest on the 2026 Notes was payable quarterly.
+Added: The 2026 Notes were scheduled to mature on September 30, 2026.
+Added: The 2026 Notes were unsecured subordinated obligations of the Company eligible to be repaid, without penalty, on any interest payment date on or after September 30, 2021.
+Added: The 2026 Notes were intended to qualify as Tier 2 capital under regulatory guidelines.
+Added: The Company redeemed the 2026 Notes in full on September 30, 2021.
In June 2019, the Company issued $ 37.0 million aggregate principal amount of 6.0 % Fixed-to-Floating Rate Subordinated Notes due 2029 (the “2029 Notes”) in a public offering.
−Removed: The 2029 Notes initially bear a fixed interest rate of 6.0 % per year to, but excluding, June 30, 2024, and thereafter a floating rate equal to the then-current benchmark rate (initially three-month LIBOR rate) plus 411 basis points.
+Added: The 2029 Notes initially bear a fixed interest rate of 6.0 % per year to, but excluding, June 30, 2024, and thereafter a floating rate equal to the then-current benchmark rate (initially three-month LIBOR rate) plus 4.11 %.
All interest on the 2029 Notes is payable quarterly.
4 unchanged sentences
The 2030 Note initially bears a fixed interest rate of 6.0 % per year to, but excluding, November 1, 2025 and thereafter at a floating rate equal to the then-current benchmark rate (initially three-month Term SOFR plus 5.795 %).
+Added: The 2030 Note is scheduled to mature on November 1, 2030.
The 2030 Note is an unsecured subordinated obligation of the Company and may be repaid, without penalty, on any interest payment date on or after November 1, 2025.
1 unchanged sentence
The Company used the net proceeds from the issuance of the 2030 Note to redeem the 2025 Note as discussed above.
−Removed: The following table presents the principal balance and unamortized discount and debt issuance costs for the 2025 Note, the 2026 Notes, the 2029 Note and the 2030 Notes as of December 31, 2020 and 2019.
+Added: In August 2021, the Company issued $ 60.0 million aggregate principal amount of 3.75 % Fixed-to-Floating Rate Subordinated Notes due 2031 (the “2031 Notes”) in a private placement.
+Added: The 2031 Notes initially bear a fixed interest rate of 3.75 % per year to, but excluding, September 1, 2026, and thereafter a floating rate equal to the then-current benchmark rate (initially three-month Term SOFR plus 3.11 %).
+Added: The 2031 Notes are scheduled to mature on September 1, 2031.
+Added: The 2031 Notes are unsecured subordinated obligations of the Company and may be repaid, without penalty, on any interest payment date on or after September 1, 2026.
+Added: The 2031 Notes are intended to qualify as Tier 2 capital under regulatory guidelines.
+Added: The Company used a portion of the net proceeds from the issuance of the 2031 Notes to redeem the 2026 Notes.
+Added: Pursuant to the terms of a Registration Rights Agreement between the Company and the initial purchasers of the 2031 Notes, the Company offered to exchange the 2031 Notes for subordinated notes that are registered under the Securities Act of 1933, as amended, and have substantially the same terms as the 2031 Notes.
+Added: The offering period to exchange the unregistered 2031 Notes for registered 2031 Notes expired on December 30, 2021.
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
+Added: The following table presents the principal balance and unamortized discount and debt issuance costs for the 2025 Note, the 2026 Notes, the 2029 Notes, the 2030 Note, and the 2031 Notes as of December 31, 2021 and 2020.
December 31, 2021 December 31, 2020
3 unchanged sentences
2029 Notes 37,000 ( 1,178 ) 37,000 ( 1,337 )
+Added: 2030 Note 10,000 ( 208 ) 10,000 ( 231 )
2031 Notes 60,000 ( 1,383 ) — —
3 unchanged sentences
Employee contributions are limited to the maximum established by the Internal Revenue Service on an annual basis.
−Removed: The Company has elected to match contributions equal to 100 % of the first 1 % of employee deferrals and then 50 % on
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
−Removed: deferrals over 1 % up to a maximum of 6 % of an individual’s total eligible salary, as defined in the plan, which vests immediately.
+Added: The Company has elected to match contributions equal to 100 % of the first 1 % of employee deferrals and then 50 % on deferrals over 1 % up to a maximum of 6 % of an individual’s total eligible salary, as defined in the plan, which vests immediately.
Discretionary employer-matching contributions begin vesting immediately at a rate of 50 % per year of employment and are fully vested after the completion of two years of employment.
10 unchanged sentences
The Company recorded $ 2.4 million, $ 2.1 million, and $ 1.7 million of share-based compensation expense for the years ended December 31, 2021, 2020, and 2019, respectively, related to awards made under the 2013 Plan.
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
The following table summarizes the status of the 2013 Plan awards as of December 31, 2021, and activity for the year ended December 31, 2021:
11 unchanged sentences
Deferred stock rights were to be settled in common stock following the end of the deferral period payable on the basis of one share of common stock for each deferred stock right.
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
The following table summarizes the status of deferred stock rights related to the Directors Deferred Stock Plan for the year ended December 31, 2021.
8 unchanged sentences
Total $ 8,458 $ 4,445 $ 1,917
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
Income tax provision is reconciled to the statutory 21% rate applied to pre-tax income.
−Removed: The statutory rate was 21 %, 21 % and 21 % at December 31, 2020, 2019 and 2018, respectively.
2021 2020 2019
18 unchanged sentences
Total deferred tax assets, net $ 11,408 $ 14,807
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
Related Party Transactions
8 unchanged sentences
Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors.
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
The Basel III Capital Rules became effective for the Company and the Bank on January 1, 2015, subject to a phase-in period for certain provisions.
5 unchanged sentences
and 4) a minimum Leverage Ratio of 4.0 %.
−Removed: The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625 % level and was phased in over a four -year period, increasing by increments of that amount on each subsequent January 1 until it reached 2.5 % on January 1, 2019 and was fully phased in.
The capital conservation buffer is designed to absorb losses during periods of economic stress.
42 unchanged sentences
(Tabular dollar amounts in thousands except per share data)
−Removed: In addition, the Company is a limited partner in a Small Business Investment Company fund (the “SBIC Fund”).
−Removed: The Company's total commitment to the SBIC Fund is $ 4.0 million.
−Removed: As of December 31, 2020, the Company had contributed $ 2.5 million of capital, leaving a remaining commitment of $ 1.5 million.
Capital Commitments
−Removed: Capital expenditures contracted for at the balance sheet date but not yet recognized in the financial statements are associated with the construction of premises intended to house our future corporate headquarters.
+Added: Capital expenditures contracted for at the balance sheet date but not yet recognized in the financial statements are associated with the construction of premises intended to house our corporate headquarters.
The Company has entered into construction-related contracts in the amount of $ 68.3 million.
As of December 31, 2021, $ 14.8 million of such contract commitments had not yet been incurred.
−Removed: These commitments are due within 2 years.
+Added: These commitments are due within one year .
Fair Value of Financial Instruments
26 unchanged sentences
Servicing Asset
−Removed: Fair value is based on a loan-by-loan basis taking into consideration the original to maturity of the loans, the current age of the loans and the remaining term to maturity.
−Removed: The valuation methodology utilized for the servicing assets begins with generating estimated future cash flows for each servicing asset, based on their unique characteristics and market-based assumptions for prepayment speeds and costs to service.
+Added: Fair value is based on a loan-by-loan basis taking into consideration the origination to maturity dates of the loans, the current age of the loans and the remaining term to maturity.
+Added: The valuation methodology utilized for the servicing asset begins with generating estimated future cash flows for each servicing asset, based on their unique characteristics and market-based assumptions for prepayment speeds and costs to service.
The present value of the future cash flows is then calculated utilizing market-based discount rate assumptions (Level 3).
5 unchanged sentences
The fair values of IRLCs are determined using the projected sale price of individual loans based on changes in market interest rates, projected pull-through rates (the probability that an IRLC will ultimately result in an originated loan), the reduction in the value of the applicant’s option due to the passage of time, and the remaining origination costs to be incurred based on management’s estimate of market costs (Level 3).
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
The following tables present the fair value measurements of assets and liabilities recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2021 and 2020.
6 unchanged sentences
Municipal securities 77,033 — 77,033 —
−Removed: Agency mortgage-backed securities
−Removed: 243,921 — 243,921 —
−Removed: Private-label mortgage-backed securities 58,116 — 58,116 —
+Added: Agency mortgage-backed securities - residential 373,236 — 373,236 —
+Added: Agency mortgage-backed securities - commercial 36,326 — 36,326
+Added: Private label mortgage-backed securities - residential 16,021 — 16,021 —
Asset-backed securities
7 unchanged sentences
IRLCs 718 — — 718
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
December 31, 2020
5 unchanged sentences
Municipal securities 82,489 — 82,489 —
−Removed: Agency mortgage-backed securities
−Removed: 261,440 — 261,440 —
−Removed: Private-label mortgage-backed securities 63,613 — 63,613 —
+Added: Agency mortgage-backed securities - residential 214,330 — 214,330 —
+Added: Agency mortgage-backed securities - commercial 29,591 — 29,591 —
+Added: Private label mortgage-backed securities - residential 58,116 — 58,116 —
Asset-backed securities
7 unchanged sentences
IRLCs 3,361 — — 3,361
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
The following table reconciles the beginning and ending balances of recurring fair value measurements recognized in the accompanying consolidated balance sheets using significant unobservable (Level 3) inputs.
1 unchanged sentence
Balance as of January 1, 2019 $ — $ 389
−Removed: Total realized losses
+Added: Total realized gains
Additions 2,481 —
+Added: Change in fair value — 521
Balance, December 31, 2019 2,481 910
1 unchanged sentence
Additions 1,520 —
+Added: Paydowns ( 524 ) —
+Added: Changes in fair value 92 2,451
Balance, December 31, 2020 3,569 3,361
1 unchanged sentence
Additions 2,202 —
−Removed: Change in fair value ( 432 ) —
+Added: Paydowns ( 820 ) —
+Added: Changes in fair value ( 249 ) ( 2,643 )
Balance, December 31, 2021 $ 4,702 $ 718
6 unchanged sentences
If the impaired loan is not collateral dependent, the Company utilizes a discounted cash flow analysis to measure impairment.
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
Impaired loans with a specific valuation allowance based on the value of the underlying collateral or a discounted cash flow analysis are classified as Level 3 assets.
4 unchanged sentences
Impaired loans 1,228 — — 1,228
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
Fair Value Measurements Using
22 unchanged sentences
Inputs Range Weighted - Average Range
−Removed: Impaired loans $ 3,019 Fair value of collateral Discount to reflect current market conditions 10 % 10 %
+Added: Impaired loans $ 4,026 Fair value of collateral Discount for type of property and current market conditions 10 % 10 %
IRLCs 3,361 Discounted cash flow Loan closing rates 44 % - 100 %
Servicing asset 3,569 Discounted cash flow Prepayment speeds
+Added: Discount rate 0 % - 25 %
The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying consolidated balance sheets at amounts other than fair value:
1 unchanged sentence
For these instruments, the carrying amount is a reasonable estimate of fair value.
+Added: Securities Held-to-Maturity
+Added: Where quoted market prices are available in an active market, securities are classified within Level 1 of the
+Added: valuation hierarchy.
+Added: Level 1 securities include highly liquid mutual funds.
+Added: If quoted market prices are not available,
+Added: then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or
+Added: discounted cash flows.
+Added: Level 2 securities include municipal securities and corporate securities.
+Added: Matrix pricing is a mathematical technique
+Added: widely used in the banking industry to value investment securities without relying exclusively on quoted prices for
+Added: specific investment securities but also on the investment securities’ relationship to other benchmark quoted
+Added: investment securities.
+Added: In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the
First Internet Bancorp
1 unchanged sentence
(Tabular dollar amounts in thousands except per share data)
−Removed: Held-to-Maturity Securities
−Removed: Fair values are determined by using models that are based on security-specific details, as well as relevant industry and economic factors.
−Removed: The most significant of these inputs are quoted market prices, and interest rate spreads on relevant benchmark securities.
−Removed: Loans Held-For-Sale (best efforts pricing agreements)
−Removed: The fair value of these loans approximates carrying value.
+Added: Fair values are calculated using discounted cash flows.
+Added: Discounted cash flows are calculated based off of
+Added: the anticipated future cash flows updated to incorporate loss severities.
+Added: Rating agency and industry research reports
+Added: as well as default and deferral activity are reviewed and incorporated into the calculation.
+Added: The Company did not
+Added: own any securities classified within Level 3 of the hierarchy as of December 31, 2021 or December 31, 2020.
The fair value of loans is estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors.
18 unchanged sentences
(Tabular dollar amounts in thousands except per share data)
−Removed: The following tables summarize the carrying value and estimated fair value of all financial assets and liabilities at December 31, 2020 and 2019:
+Added: The following tables provide the carrying amounts and estimated fair values of the Company's financial instruments at December 31, 2021 and 2020:
December 31, 2021
20 unchanged sentences
Securities held-to-maturity 68,223 69,452 — 69,452 —
+Added: Loans held-for-sale (best efforts pricing agreements) 13,243 13,243 — 13,243 —
Net loans 3,029,747 3,084,375 — — 3,084,375
20 unchanged sentences
(Loss) gain resulting from the change in fair value of loans held-for-sale ( 718 ) ( 94 ) 538
−Removed: Gain (loss) resulting from the change in fair value of derivatives 1,961 728 ( 441 )
+Added: (Loss) gain resulting from the change in fair value of derivatives ( 2,035 ) 1,961 728
Net revenue from mortgage banking activities $ 15,050 $ 24,693 $ 11,541
18 unchanged sentences
December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020
−Removed: Loans $ — $ 474,957 $ — $ 21,440
Securities available-for-sale 1
14 unchanged sentences
Notional Value Fair Value Receive Pay
−Removed: Loans $ 427,446 5.5 $ ( 21,551 ) 3 month LIBOR 2.86 %
Securities available-for-sale 88,200 3.1 ( 6,072 ) 3 month LIBOR 2.54 %
Total swap portfolio at December 31, 2020 $ 88,200 3.1 $ ( 6,072 ) 3 month LIBOR 2.54 %
+Added: In March 2021, the Company terminated the last layer of interest rate swaps associated with available-for-sale agency mortgage-backed securities - residential, which resulted in swap termination payments to counterparties totaling $ 1.9 million.
+Added: The corresponding fair value hedging adjustment was allocated pro-rata to the underlying hedged securities and is being amortized over the remaining lives of the designated securities.
+Added: During the year ended December 31, 2021, amortization expense totaling $ 1.1 million was recognized as a reduction to interest income on securities.
In June 2020, the Company terminated all fair value hedging relationships associated with loans, which resulted in swap termination payments to counterparties totaling $ 46.1 million.
The corresponding loan fair value hedging adjustment as of the date of termination is being amortized over the remaining lives of the designated loans, which have a weighted average term to maturity of 12.2 years as of December 31, 2021.
+Added: During the years ended December 31, 2021 and 2020, amortization expense totaling $ 5.2 million and $ 3.4 million, respectively, related to these previously terminated fair value hedges was recognized as a reduction to interest income on loans.
The following tables present a summary of interest rate swap derivatives designated as cash flow accounting hedges of variable-rate liabilities used in the Company's asset/liability management activities at December 31, 2021 and December 31, 2020.
12 unchanged sentences
Collateral posted and received is dependent on the market valuation of the underlying hedges.
−Removed: The following table presents the notional amount and fair value of interest rate swaps, IRLCs and forward contracts utilized by the Company at December 31, 2020 and 2019.
First Internet Bancorp
1 unchanged sentence
(Tabular dollar amounts in thousands except per share data)
+Added: The following table presents the notional amount and fair value of interest rate swaps, IRLCs and forward contracts utilized by the Company at December 31, 2021 and 2020.
December 31, 2021 December 31, 2020
6 unchanged sentences
Derivatives designated as hedging instruments
−Removed: Interest rate swaps associated with loans $ — $ — $ 427,446 $ ( 21,551 )
Interest rate swaps associated with securities available-for-sale 50,000 ( 1,731 ) 88,200 ( 6,072 )
36 unchanged sentences
Shareholders’ Equity
−Removed: In June 2018, the Company completed an underwritten public offering of 1,730,750 shares of its common stock at a price of $ 33.25 per share.
−Removed: The Company received net proceeds of approximately $ 54.3 million after deducting underwriting discounts and commissions and offering expenses.
+Added: On October 20, 2021, the Company's Board of Directors approved a stock repurchase program authorizing the repurchase of up to $ 30.0 million of its outstanding common stock from time to time on the open market or in privately negotiated transactions.
+Added: The Company repurchased 100,000 shares under this program during the fourth quarter 2021.
+Added: The stock repurchase authorization is scheduled to expire on December 31, 2022.
First Internet Bancorp
5 unchanged sentences
Balance, January 1, 2019 $ ( 13,359 ) $ ( 3,182 ) $ ( 16,541 )
−Removed: Reclassification of certain tax effects 1
−Removed: ( 1,063 ) — ( 1,063 )
−Removed: Net unrealized holding losses recorded within other comprehensive income before income tax ( 10,466 ) ( 4,358 ) ( 14,824 )
−Removed: Other comprehensive loss before tax ( 10,466 ) ( 4,358 ) ( 14,824 )
−Removed: Income tax benefit ( 3,189 ) ( 1,176 ) ( 4,365 )
−Removed: Other comprehensive loss - net of tax ( 7,277 ) ( 3,182 ) ( 10,459 )
−Removed: Balance, December 31, 2018 $ ( 13,359 ) $ ( 3,182 ) $ ( 16,541 )
Net unrealized holding gains (losses) recorded within other comprehensive income before income tax 12,072 ( 9,071 ) 3,001
5 unchanged sentences
Net unrealized holding gains (losses) recorded within other comprehensive income before income tax 6,551 ( 10,248 ) ( 3,697 )
−Removed: Reclassification of adjustment for gains realized ( 139 ) — ( 139 )
−Removed: Other comprehensive income (loss) before income tax 6,412 ( 10,248 ) ( 3,836 )
+Added: Reclassification of net gain realized and included in earnings ( 139 ) — ( 139 )
+Added: Other comprehensive income (loss) before tax 6,412 ( 10,248 ) ( 3,836 )
Income tax provision (benefit) 1,556 ( 2,387 ) ( 831 )
1 unchanged sentence
Balance, December 31, 2020 $ 468 $ ( 17,664 ) $ ( 17,196 )
−Removed: 1 Represents the reclassification of stranded income tax effects to Retained Earnings upon adoption of ASU 2018-02 and ASU 2016-01.
+Added: Net unrealized holding (gains) losses recorded within other comprehensive income before income tax ( 4,087 ) 11,138 7,051
+Added: Other comprehensive (loss) income before income tax ( 4,087 ) 11,138 7,051
+Added: Income tax (benefit) provision ( 1,064 ) 1,958 894
+Added: Other comprehensive (loss) income - net of tax ( 3,023 ) 9,180 6,157
+Added: Balance, December 31, 2021 $ ( 2,555 ) $ ( 8,484 ) $ ( 11,039 )
+Added: Condensed Financial Information (Parent Company Only)
+Added: Presented below is condensed financial information as to financial position, results of operations, and cash flows of the Company on a non-consolidated basis:
First Internet Bancorp
1 unchanged sentence
(Tabular dollar amounts in thousands except per share data)
−Removed: Condensed Financial Information (Parent Company Only)
−Removed: Presented below is condensed financial information as to financial position, results of operations, and cash flows of the Company on a non-consolidated basis:
Condensed Balance Sheets
15 unchanged sentences
2021 2020 2019
+Added: Gain on sale of premises and equipment $ 2,523 $ — $ —
+Added: Total income 2,598 — —
Interest on borrowings $ 5,892 $ 4,924 $ 3,804
16 unchanged sentences
Net income $ 48,114 $ 29,453 $ 25,239
−Removed: Other comprehensive (loss) income
−Removed: Net unrealized holding gains (losses) on securities available-for-sale recorded within other comprehensive income before income tax 6,551 12,072 ( 10,466 )
+Added: Other comprehensive income (loss)
+Added: Net unrealized holding (losses) gains on securities available-for-sale recorded within other comprehensive income before income tax ( 4,087 ) 6,551 12,072
Reclassification adjustment for (gains) losses realized — ( 139 ) 458
Net unrealized holding losses on cash flow hedging derivatives recorded within other comprehensive income before income tax 11,138 ( 10,248 ) ( 9,071 )
−Removed: Other comprehensive (loss) income before tax ( 3,836 ) 3,459 ( 14,824 )
−Removed: Income tax (benefit) provision ( 831 ) 1,109 ( 4,365 )
−Removed: Other comprehensive (loss) income - net of tax ( 3,005 ) 2,350 ( 10,459 )
+Added: Other comprehensive income (loss) before tax 7,051 ( 3,836 ) 3,459
+Added: Income tax provision (benefit) 894 ( 831 ) 1,109
+Added: Other comprehensive income (loss) - net of tax 6,157 ( 3,005 ) 2,350
Comprehensive income $ 54,271 $ 26,448 $ 27,589
11 unchanged sentences
Share-based compensation expense 835 518 288
+Added: Gain on sale of premises and equipment ( 2,523 ) — —
Net change in other assets ( 31 ) ( 502 ) ( 508 )
4 unchanged sentences
Purchase of premises and equipment — — ( 13 )
−Removed: Net cash used in investing activities — ( 25,013 ) ( 35,000 )
+Added: Net proceeds from sale of premises and equipment 8,116 — —
+Added: Other investing activities ( 3,561 ) — —
+Added: Net cash provided by (used in) investing activities 4,555 — ( 25,013 )
Financing activities
2 unchanged sentences
Repayment of subordinated debt ( 35,000 ) — —
−Removed: Principal payment on loan from the Bank — ( 300 ) ( 300 )
−Removed: Net proceeds from common stock issuance — — 54,334
+Added: Repayment of Bank loan ( 3,000 ) — ( 300 )
Repurchase of common stock ( 4,436 ) — ( 9,784 )
7 unchanged sentences
(Tabular dollar amounts in thousands except per share data)
−Removed: Quarterly Financial Data (unaudited)
−Removed: Three Months Ended
−Removed: 2020 September 30,
−Removed: 2020 June 30,
−Removed: 2020 March 31,
−Removed: Income Statement Data:
−Removed: Interest income $ 33,643 $ 32,750 $ 34,222 $ 36,244
−Removed: Interest expense 14,778 16,518 19,796 21,226
−Removed: Net interest income 18,865 16,232 14,426 15,018
−Removed: Provision for loan losses 2,864 2,509 2,491 1,461
−Removed: Net interest income after provision for loan losses 16,001 13,723 11,935 13,557
−Removed: Noninterest income 12,657 12,495 4,973 6,211
−Removed: Noninterest expense 14,513 16,412 13,244 13,486
−Removed: Income before income taxes 14,145 9,806 3,664 6,282
−Removed: Income tax provision 3,055 1,395 ( 268 ) 263
−Removed: Net income $ 11,090 $ 8,411 $ 3,932 $ 6,019
−Removed: Per Share Data:
−Removed: Basic $ 1.12 $ 0.86 $ 0.40 $ 0.62
−Removed: Diluted $ 1.12 $ 0.86 $ 0.40 $ 0.62
−Removed: Weighted average common shares outstanding
−Removed: Basic 9,883,609 9,773,175 9,768,227 9,721,485
−Removed: Diluted 9,914,022 9,773,224 9,768,227 9,750,528
−Removed: Three Months Ended
−Removed: 2019 September 30,
−Removed: 2019 June 30,
−Removed: 2019 March 31,
−Removed: Income Statement Data:
−Removed: Interest income $ 37,877 $ 37,694 $ 36,844 $ 34,999
−Removed: Interest expense 22,503 22,450 20,739 18,755
−Removed: Net interest income 15,374 15,244 16,105 16,244
−Removed: Provision for loan losses 468 2,824 1,389 1,285
−Removed: Net interest income after provision for loan losses 14,906 12,420 14,716 14,959
−Removed: Noninterest income 5,405 5,558 3,454 2,372
−Removed: Noninterest expense 12,613 11,203 11,709 11,109
−Removed: Income before income taxes 7,698 6,775 6,461 6,222
−Removed: Income tax (benefit) provision 602 449 340 526
−Removed: Net income $ 7,096 $ 6,326 $ 6,121 $ 5,696
−Removed: Per Share Data:
−Removed: Basic $ 0.72 $ 0.63 $ 0.60 $ 0.56
−Removed: Diluted $ 0.72 $ 0.63 $ 0.60 $ 0.56
−Removed: Weighted average common shares outstanding
−Removed: Basic 9,825,784 9,979,603 10,148,285 10,217,637
−Removed: Diluted 9,843,829 9,980,612 10,148,285 10,230,531
−Removed: First Internet Bancorp
−Removed: Notes to Consolidated Financial Statements
−Removed: (Tabular dollar amounts in thousands except per share data)
Recent Accounting Pronouncements
27 unchanged sentences
In November 2019, the FASB issued ASU 2019-10 - Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) - Effective Dates.
−Removed: This ASU delayed the effective date for smaller reporting companies to fiscal years beginning after December 15, 2022.
+Added: This ASU delayed the effective date for public companies to fiscal years beginning after December 15, 2022.
An entity will apply the amendments in this update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach).
9 unchanged sentences
Entities still have the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment is necessary.
−Removed: The amendments in this ASU are effective for smaller reporting companies for annual and interim impairment tests performed in periods beginning after December 15, 2022.
+Added: The amendments in this ASU are effective for public companies for annual and interim impairment tests performed in periods beginning after December 15, 2022.
Early adoption is permitted.
27 unchanged sentences
Facilitation of the Effects of Reference Rate Reform on Financial Reporting (March 2020)
−Removed: In March 2020, FASB issued ASU 2020-04 to ease the potential burden in accounting for the transition away from the LIBORon financial reporting.
+Added: In March 2020, FASB issued ASU 2020-04 to ease the potential burden in accounting for the transition away from LIBOR on financial reporting.
The ASU provides optional expedients and exceptions for applying GAAP to contract modification and hedge accounting relationships.
The guidance is effective March 12, 2020 through December 31, 2022.
−Removed: The Company believes the adoption of this guidance will not have a material impact on the consolidated financial statements.
+Added: The Company is still evaluating the impact of reference rate reform and does not believe the adoption of this guidance will have a material impact on the consolidated financial statements.
+Added: First Internet Bancorp
+Added: Notes to Consolidated Financial Statements
+Added: (Tabular dollar amounts in thousands except per share data)
+Added: On November 2, 2021, the Company announced it has entered into a definitive agreement to acquire First Century Bancorp.
+Added: (“First Century”), the parent company of First Century Bank, N.A., headquartered in Roswell, GA.
+Added: According to the terms of the definitive agreement, First Internet will acquire all of the outstanding shares of First Century common stock for $ 80 million in cash, which First Internet will fund with available on-balance sheet cash.
+Added: As of December 31, 2021, First Century had total assets of $ 486.7 million, total deposits of $ 409.4 million, and total loans of $ 25.2 million.
+Added: The transaction, which remains subject to regulatory approvals, is expected to close in the second quarter 2022.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.