First Internet Bancorp Q2 Revenue Jumps 23% on Fintech Surge

First Internet Bancorp reported a significant increase in total revenue for the second quarter of 2026, signaling a recovery in credit trends and a surge in its fintech operations. The Indiana-based digital bank is leveraging its online-only infrastructure to pivot toward high-growth partnerships.

Total revenue for the quarter reached $41.1 million, representing a 23% increase year-over-year. This growth was supported by a 16% rise in net interest income, which climbed to $32.4 million. On the bottom line, the company reported earnings per diluted share of $0.27, exceeding analyst estimates of $0.15. Management characterized the period as a "meaningful inflection point" for the organization.

The Fintech Pivot

First Internet Bancorp operates as one of the first state-chartered, FDIC-insured banks to function entirely online. In recent periods, the company has navigated elevated charge-offs within its legacy portfolios. To mitigate these risks and diversify its income streams, the bank has aggressively expanded its Banking-as-a-Service (BaaS) strategy. This approach allows the bank to provide the underlying regulatory and financial infrastructure for other fintech companies.

The scale of this expansion is evident in the company's trailing 12-month data. Fintech payments volume surged by 256%, while fintech fee revenue increased by 222% over the same period. These figures underscore the bank's successful transition from a traditional digital lender to a critical infrastructure provider for the broader fintech ecosystem.

Market Implications

This shift toward fintech partnerships is more than a revenue play; it is a strategic move to optimize the bank's balance sheet. By replacing high-cost certificates of deposit (CDs) with lower-cost fintech deposits, the company is proactively repricing its deposits. This strategy is expected to drive margin expansion, providing a more sustainable path toward profitability despite a volatile interest rate environment.

For the broader industry, First Internet Bancorp's results demonstrate the viability of the BaaS model as a hedge against credit pressures in legacy loan portfolios. The ability to scale fee-based income rapidly through partnerships reduces the bank's reliance on traditional interest margins.

Outlook and Risks

While the current trajectory is positive, the bank remains focused on the continued stabilization of its credit trends. Investors will be watching to see if the explosive growth in fintech volume can be maintained without introducing new regulatory or operational risks associated with third-party partnerships. The primary metric for future success will be whether the bank can continue to lower its cost of funds through its fintech channels while keeping credit losses in check.