First Internet Bancorp

Good day, everyone, and welcome to the first Internet Bank Corp earnings conference call for the third quarter of 2025. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. And please note that today's event is being recorded. I would now like to turn the conference over to Ben Brodkowitz from Financial Profiles, Inc. Ben, please go ahead.

Thank you, Operator. Hello, everyone, and thank you for joining us to discuss First Internet Bancorp's third quarter 2025 financial results. The company issued its earnings press release yesterday afternoon, and it is available on the company's website at www.firstinternetbancorp.com. In addition, the company has included a slide presentation that you can refer to during the call. You can also access these slides on the website. Joining us from the management team today are Chairman and CEO David Becker, President and COO Nicole Lorch, and Executive Vice President and CFO Ken Levick. David and Nicole will provide an overview, and Ken will discuss the financial results. Then we'll open up the call for your questions. Before we begin, I'd like to remind you that this conference call contains forward-looking statements with respect to the future performance and financial condition of First Internet Bancorp that involve risks and uncertainties. Various factors could cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. These factors are discussed in the company's SEC filings, which are available on the company's website. The company disclaims any obligation to update any forward-looking statements made during the call. Additionally, management may refer to non-GAAP measures, which are intended to supplement but not substitute for the most directly comparable GAAP measures. The press release available on the website contains the financial and other quantitative information to be discussed today, as well as the reconciliation of the GAAP to non-GAAP measures. At this time, I'd like to turn the call over to David.

Thank you, Ben. Good afternoon, and thank you for joining us on the call today. I want to start by highlighting the continued strength of our core business fundamentals and the key strategic execution. Our revenue engine remains robust. We delivered our eighth consecutive quarter of net interest income growth, with net interest margin expansion continuing as planned. Additionally, our SBA and BATS businesses contributed meaningful growth to non-interest income. In the third quarter, we maintained our top-line growth momentum as adjusted total revenues reached 43.5 million, an increase of 30% over the second quarter. Revenue growth was driven by a significant increase in the gain on sale of SBA-guaranteed loan balances. Net interest income was also up, marking the eighth consecutive quarter of growth. Net interest income increased over 8% compared to the linked quarter and was up 40% compared to the third quarter of 2024, driven by higher earning asset yields and lower deposit costs. Accordingly, net interest margin on a fully tax-equivalent basis increased eight basis points in the second quarter to 2.12%. Further, our prudent operating expense management and strong top-line growth grew significant operating leverage for the quarter. During the quarter, we executed certain strategic actions that had a near-term negative impact on earnings but strengthened our financial position at the stage for our future growth. First, we successfully completed the sale of $837 million of STL loans. This has several key benefits that advance our strategic priorities. The transaction enhances our interest rate risk profile, strengthens our capital ratios, and expedites the optimization of our interest earning asset base. These improvements will significantly enhance net interest margin, and accelerate our progress towards achieving our near-term goal of a 1% return on average assets. During the quarter, we also took decisive and aggressive action to address credit issues in the small business lending and franchise finance portfolios. We recognized a $34.8 million provision for credit losses, which included $21 million of net charge-offs, additional specific reserves, and a significant increase to the allowance for credit losses related to the small business lending. These actions reflect our intentions to expedite the improvement of our portfolio's credit quality. As a result of these actions, total delinquencies were 35 basis points of September 30th, down from 62 basis points in the second quarter and 77 basis points in the first quarter. From the standpoint that delinquencies are the best indicator of potential future credit losses, this puts the health of our portfolio right in line with our peers. Importantly, our credit issues are isolated to small business lending and franchise finance portfolios. Credit quality across the remainder of our lending vertical is sterling, reflecting the strength and stability of our broader portfolio. Turning to lending activity for a minute, our commercial lending teams continue to deliver a strong level of originations throughout the quarter. Excluding the impact of the loan sale, commercial loan balances were up $115 million, or 3.2%, and total loan balances were up $105 million, or 2.4%. Heading into the fourth quarter, our loan pipelines remain strong as our teams continue to see excellent opportunities especially in our commercial real estate, single-tenant lease financing, and commercial and industrial lines of business. Looking ahead, the fundamentals that drive our business, the differentiated model, experienced and dedicated teams, diversified revenue streams, solid capital position, and disciplined risk management position us well to continue delivering sustainable growth and enhanced long-term shareholder value. I'll turn it over to Nicole to talk about small business lending and VAST.