First Internet Bancorp: The 8% Yielding Baby Bonds Are Attractive On A 3-Year Basis

First Internet Bancorp is restoring net interest margins, with management guiding for sequential quarterly improvement through year-end. Loan loss provisions are expected to decrease in H2, supporting a projected EPS increase of over 100% versus H1 and targeting $4+ EPS from next year.

I maintain a "Buy" rating on INBK common shares due to the improving margin and earnings outlook, despite having sold my position for liquidity reasons. I continue to hold INBK's baby bonds, which yield ~8.1% and mature in 2029, viewing them as attractive risk/reward for capital parking.

Introduction First Internet Bancorp ( INBK ) is an Indiana-based digital bank, and in the past few years, it has had to focus on restoring its net interest margins . Those margins are now heading in the right direction again, and