| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 54.11 | 148 |
| Intrinsic value (DCF) | 29.54 | 36 |
| Graham-Dodd Method | 54.61 | 151 |
| Graham Formula | 102.66 | 371 |
First Internet Bancorp (NASDAQ: INBK) is a digital-first financial institution operating as the holding company for First Internet Bank of Indiana. Founded in 1999 and headquartered in Fishers, Indiana, the company provides a full suite of commercial and retail banking services entirely online via its firstib.com platform. As a pioneer in digital banking, First Internet Bancorp offers a range of deposit products including non-interest and interest-bearing accounts, money market accounts, and CDs. Its lending portfolio spans commercial and industrial loans, commercial real estate financing, residential mortgages, consumer loans, and specialized offerings like franchise finance and municipal lending. The bank also provides treasury management and corporate credit card services. With a focus on technology-driven banking solutions, First Internet Bancorp serves customers nationwide without traditional brick-and-mortar branches, positioning itself as a nimble competitor in the regional banking sector. The company's digital model allows for cost-efficient operations while maintaining regulatory compliance as an FDIC-insured institution.
First Internet Bancorp presents an interesting investment case as a pure-play digital bank with a specialized lending focus. The company's $205 million market cap and 0.672 beta suggest it may offer lower volatility than many regional bank peers. With $128.9 million in revenue and $25.3 million net income (2.88 diluted EPS) in the most recent period, INBK demonstrates profitability in the challenging interest rate environment. The bank maintains a strong liquidity position with $466 million in cash and equivalents against $400 million in total debt. However, investors should note the competitive pressures in digital banking and potential margin compression risks. The 0.24 dividend provides modest yield, while the bank's digital-first model could offer scalability advantages as banking continues shifting online. Credit quality in its specialized lending segments and deposit retention in a rising rate environment will be key metrics to watch.
First Internet Bancorp competes in the increasingly crowded digital banking space while maintaining a niche in specialized lending areas. Its primary competitive advantage stems from being an early mover in internet-only banking (founded 1999), giving it operational experience that newer digital banks lack. The company's focus on commercial lending (particularly in commercial real estate and municipal finance) differentiates it from consumer-focused digital banks. Its ability to offer nationwide deposit gathering while maintaining an Indiana bank charter provides regulatory and cost advantages. However, INBK faces intense competition from both traditional banks expanding digital offerings and fintech disruptors. The bank's smaller scale limits its ability to compete on technology investment with mega-banks, while its lack of physical branches may constrain certain commercial banking relationships. Its specialized lending expertise in areas like franchise finance and municipal lending provides some insulation from pure price competition. The bank's efficiency ratio likely benefits from its branchless model, though customer acquisition costs in the digital space are rising. INBK's challenge is to maintain underwriting discipline in its niche lending areas while competing for deposits in the high-rate environment.