First Internet Bancorp

Thank you for standing by. My name is Trevor and I will be your conference operator today. At this time, I would like to welcome everyone to the first Internet Bancorp Earnings Conference call for the second quarter, 2026. Thank you. Thank you. Thank you.

Thank you, Operator. Hello, everyone, and thank you for joining us to discuss First Internet Bancorp's second quarter 2026 financial results. The company issued its earnings press release earlier this 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 Lovik. David and Nicole will provide an overview and Ken will discuss the financial results and then we'll open the call up 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 involves 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 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, Julia. Good afternoon, and thank you for joining us. We're excited to report solid second quarter results with total revenue growing 23% year over year, pre-provision net revenue of 28%, and earnings per share of 27 cents. up significantly from the prior year period. More importantly, this quarter marks a meaningful inflection point in our credit trajectory. For the past several quarters, credit has been the primary overhang on our results and on our stock. This quarter, that story began to turn. Over the past 18 months, we took a hard look at the credit outcomes we experienced and made meaningful changes to our underwriting, servicing, portfolio management, and resolution processes. Our disciplined actions are now translating into clear, measurable improvement, and we believe the credit trends we are seeing today mark a clear turning point in this cycle. Let me walk through why we feel confident in that conclusion. First, provision for credit losses, while still elevated on a historical basis, declined significantly from the prior quarter. Net charge-offs in our SBA portfolio were down almost 50% from the first quarter, reflecting the enhanced underwriting servicing and early warning capabilities we built over the past year. Second, non-performing loans declined from the first quarter and total non-accrual loans declined for the second consecutive quarter down 19% from year end. Furthermore, non-performing loans excluding government guaranteed balances declined to 1.07% of total loans down from 1.22% in the prior quarter. and third, perhaps most encouraging of all, delinquencies fell significantly during the quarter. We experienced a sharp drop in early stage delinquencies and total small business lending delinquencies declined to $1.5 million from $13.3 million in the prior quarter. The reduction in provision expense demonstrates that our credit performance is improving today. The decline in non-performing loan formation and delinquency gives us Conviction that credit costs will continue to moderate as we move through the second half of the year. At the same time, we continue to optimize the loan portfolio. Continued runoff in existing portfolios such as healthcare finance and residential mortgage combined with elevated payoffs in franchise finance is creating capacity that we are redeploying into construction, investor commercial real estate, single tenant lease financing, small business lending, and emerging verticals such as Wealth Advisory Lending and Embedded Finance, where we see better risk-adjusted returns and more efficient use of our balance sheet. A good example is the evolution of our relationship with JARIS, an embedded finance technology partner that helps payment processors and ISOs modernize their platforms through capabilities such as digital onboarding, instant payouts and business financing solutions. Historically, we funded loans originated on JARIS's platform and retained a small portion of that production, selling the majority to a fund managed by JARIS. Beginning in June, we took that relationship a meaningful step further and are now retaining all originations going forward. The short-duration, high-yielding assets should be accretive to net interest income, and the expanded arrangement reflects the trust and depth of collaboration we have built with JARIS over time. Looking ahead, we are navigating the current macro and geopolitical environment with prudent strategy and appropriate discipline. Our credit trends and earnings are moving in the right direction while we continue to deepen high-value FinTech partnerships and invest in the technology and talent that differentiate our platform. We believe this combination of improving credit, disciplined capital deployment, and expanding non-interest income positions us well to maximize growth and profitability in future periods. Well, the financial results speak for themselves. What gives us confidence in the future is the operational progress occurring throughout the company. I will now turn the call over to Nicole for additional perspective on the changes we've made and why we believe they position First Internet for continued improvement in the quarters ahead.