First Internet Bancorp (INBK) Stock Analysis

First Internet Bancorp’s primary competitive advantage lies in its branchless, digital-first banking model, which enables a lower cost structure compared to traditional regional banks such as Old National Bancorp or First Merchants. As of June 2025, INBK operates with a tangible common equity to tangible assets ratio of 6.35% and a cost-to-average-assets ratio of 1.66%, reflecting operational efficiency. Its national reach in consumer and small business lending, including a top-three position in SBA 7(a) loan originations, allows for geographic and sector diversification that many local peers lack.

INBK’s technology-driven platform supports rapid deposit growth through fintech partnerships, with total deposits rising 24% year-over-year to $5.3 billion as of Q2 2025. This digital infrastructure also enables competitive pricing on deposits and loans, helping to maintain a net interest margin of 1.96%—notably higher than the peer median for digital banks.

However, INBK faces challenges from larger digital banks (e.g., Ally, Axos) with greater scale and marketing budgets, as well as from traditional banks investing heavily in digital transformation. Its asset quality metrics, such as a 1.00% nonperforming loan ratio, are in line with industry averages, but recent elevated charge-offs in small business and franchise lending highlight credit risk as a potential vulnerability. Overall, INBK’s lean cost base, digital reach, and niche lending expertise underpin its competitive edge, though scale and credit discipline remain critical to sustaining it.