Last year, we reflected on our past while celebrating twenty-five years of operation at First Internet Bank. From the moment of our inception, we looked to the future and embraced the changes that would shape the next quarter century. And all the while, we remained ardently committed to enhancing shareholder value.
We proudly delivered twelve months of improving financial performance and five consecutive quarters of growth in net interest income and net interest margin expansion. Net interest income rose to $87.4 million, up 17 percent year-over-year, while fully taxable equivalent net interest margin improved to 1.74 percent, increasing 7 basis points from 2023. Fueled in part by higher gain-on-sale revenue from small business lending, our net income and diluted earnings per share tripled in 2024, reaching $25.3 million and $2.88, respectively.
Confirming our commitment to operational discipline and diligent balance sheet management through very challenging periods for the banking industry, our tangible book value per share is up more than 55 percent since 2018. We also grew loan balances by $330.4 million, a 9 percent annual increase, driven by strong commercial loan growth — particularly in construction, investor commercial real estate and small business lending — which enhanced our interest rate risk profile and drove higher loan yields. As a result, total revenue growth far outpaced expense growth, creating strong momentum and significant operating leverage as we enter 2025.
Our small business lending team remains instrumental in repositioning our loan portfolio and strengthening the resilience of our revenue streams. Affirming our dedication to providing capital to entrepreneurs nationwide, small business loan originations reached nearly $540 million in 2024 — up 45 percent from the prior year. As we sell the guaranteed portion of our Small Business Administration (SBA) loan originations into the secondary market, the growth of our SBA business significantly increased noninterest income for the year, accounting for one-third of total annual adjusted revenue, up from 26 percent in 2023.
We proudly retained our position as a top SBA 7(a) lender and were honored as the 2024 Online Lender of the Year by Coleman Report, a leading small business industry publication. The publication’s annual awards celebrate financial institutions and individuals who demonstrate exceptional performance in SBA lending.
Our construction and investor commercial real estate team also had another solid year of production. As the year ended, unfunded commitments in our construction line of business were $480 million.
I am proud of the performance our lending teams displayed while also diligently managing their portfolios. Overall credit quality remains sound, with asset quality metrics comparing favorably to our peers.
Working together across all lines of business, strong deposit growth in 2024 provided balance sheet flexibility, enabling us to pay down a significant portion of wholesale funding throughout the year while maintaining a solid liquidity position. This strategic approach positions us to better optimize both sides of the balance sheet moving forward.
An emergent factor in our growth across both sides of our balance sheet is our fintech partnerships line of business. Our activities as a sponsor bank drive increased revenue and allow us to reach new market segments with purpose-driven services and embedded tools. We view partnerships between chartered institutions and solutions-focused innovators as essential to the evolution of financial services. Having been a driving force for challenging the status quo these past 25 years, we are uniquely positioned to deliver on the vision of fintech entrepreneurs.
When we launched First Internet Bank in 1999, the internet was still finding its footing. Phones were barely mobile. Banking seemed tethered to physical locations where customers could deposit a check or withdraw cash. We had a vision, however, that others did not: a future where technology could deliver a better banking experience. We didn’t just embrace the digital revolution, we pioneered it, inventing a new way to bank before the world even realized it needed one.
Now, standing on the cusp of another wave of technological transformations, we find ourselves on familiar ground — poised to blaze new trails and reimagine what’s possible in banking. Automation and artificial intelligence (AI) have unlocked new possibilities, offering greater flexibility, efficiency and customization than ever before. These advances also allow our team to leverage technology in ways that make banking interactions more meaningful. By streamlining processes and utilizing predictive analytics and real-time insights, we can focus on what matters most — delivering tailored financial solutions that help our customers succeed.
As we step into this next chapter, we do so with the same entrepreneurial spirit that has defined us for more than 25 years. Thriving in this dynamic landscape requires embracing bold ideas and delivering financial innovations that help redefine the customer banking experience and relationship — competencies we have honed since our launch. Our commitment remains steadfast: to enhance banking by making the experience more intuitive, more personalized and, ultimately, more human. Our relentless drive for progress will strengthen our position as an industry leader and ensure we remain an indispensable partner to those we serve.
Yet, the irony isn’t lost on me that, as a bank embracing technology as a key differentiator, we recognize our people as our most important asset. An engaged team of banking experts ensures that technological innovation serves a greater purpose — enhancing the human experience of banking. At its core, banking is built on trust. Our customers aren’t just interacting with algorithms; they rely on our people to guide them through complex financial decisions with customized financial solutions, even in an online environment.
On behalf of the dedicated team members who help fulfill that promise every day and our insightful Board of Directors, I want to thank our shareholders for their continued support.
DAVID B. BECKER
Chairman and
Chief Executive Officer
