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First Internet Bank raises $23.4M with new stock offering

December 21, 2016

First Internet Bank announced Tuesday that it raised $23.4 million in a new stock offering, money the online-only bank plans to use to support its growing loan business.

The Fishers-based bank said it sold 945,000 shares of common stock at $26.50 a share in a sale that closed Dec. 14. It's the third equity offering for the company since its initial public offering in 2013. Including two additional debt offerings, the company has raised about $110 million since the IPO.

CEO David Becker, who founded the 190-employee bank in 1999, said the capital is not for an acquisition, but rather to allow the bank to grow loans in 2017.

"It's really just working capital for the organization," Becker said. "Our loan portfolio continues to expand at about a 40 percent pace [year-over-year], and as a financial institution we have to keep a certain percentage of capital based on our overall assets."

The company has been on a growth tear since it debuted on the NASDAQ Stock Exchange in 2013, going from about $802 million in assets at the end of that year to just over $1.8 billion in assets as of Sept. 30.

Loans, which make up the bulk of assets, grew to $1.2 billion in the latest quarter from $869 million in the year-ago quarter, or 37 percent. Commercial real estate loans make up the biggest slice of its loan portfolio.

First Internet's stock entered 2016 trading around $28.70 a share, but slid in the lower $20 range and stayed depressed for most of the year. But the U.S. election gave the stock a jolt. It has traded at around $29 since Nov. 8.

The "Trump Bump," as it's come to be called, played a role in First Internet's timing of the recent offering.

"We had planned on doing something in 2017; we just moved that forward to take advantage of the uptick in the market without question," Becker said.

Becker said the company has been growing loans and deposits across the country, which has given the bank an advantage.

"The nationwide footprint has really enabled us to take advantage of the uptick in the market without having to slug it out with the local banks and the local marketplace."

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