First Internet Bancorp announced its financial results for the first quarter ended March 31, 2025, reporting net income of $0.9 million, a significant decrease from $5.2 million in the first quarter of 2024. Diluted earnings per share fell to $0.11 from $0.59 in the prior year's quarter. This decline was primarily driven by a substantial increase in the provision for credit losses.
Despite the drop in net income, net interest income continued its growth trajectory, reaching $25.1 million, up from $23.6 million in the fourth quarter of 2024 and $20.7 million in the first quarter of 2024. The net interest margin (NIM) expanded to 1.82% from 1.67% in the previous quarter, reflecting higher yields on earning assets and reduced funding costs. The weighted average cost of new CDs was 4.07%, 99 basis points lower than maturing CDs, contributing to improved deposit costs.
Asset quality continued to be a challenge, with nonperforming loans increasing to $34.2 million, or 0.80% of total loans, up from $28.4 million at December 31, 2024. Net charge-offs remained elevated at $9.7 million, primarily in the franchise finance ($5.8 million) and small business lending ($3.7 million) portfolios. The provision for credit losses surged to $11.9 million, up from $7.2 million in the fourth quarter of 2024, reflecting these elevated charge-offs and additional specific reserves of $3.3 million.
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