Exploring First Internet Bancorp (INBK) Investor Profile: Who’s Buying and Why?

You've seen the headlines about First Internet Bancorp (INBK) and are probably asking: who is buying this stock after the Q3 2025 earnings report showed a massive $41.6 million net loss? Honestly, that's the exact question the seasoned money managers are asking, too, but they're seeing a deep-value play, not a disaster. The loss was largely a one-time clean-up-driven by a $34.8 million provision for credit losses and a pre-tax loss on a major loan sale-which is why the stock is now trading at a near 50% discount to its tangible book value per share of $39.88. Institutional investors already own 65.46% of the company, and they're not running; in November 2025, we saw insiders like the COO acquire 2,000 shares, plus firms like Heartland Advisors Inc. increasing their stake by over 5%, signaling a defintely bullish conviction in the turnaround. Are these sophisticated buyers chasing a falling knife, or are they positioning for the management's guidance of improved Q4 2025 pre-provision income of about $17.5 million? Let's map out the profile of who is stepping in and why they believe the digital bank's eight consecutive quarters of net interest income growth-reaching $30.4 million in Q3-is the real story here.

Who Invests in First Internet Bancorp (INBK) and Why?

If you look at the shareholder base of First Internet Bancorp (INBK), the picture is clear: this is an institutional play, not a retail favorite. The majority of the float is locked up by professional money managers who see a compelling, albeit volatile, growth story in the digital banking space.

As of late 2025, institutional investors-the big mutual funds, pension funds, and asset managers-own a significant chunk, around 76.95% of the company's stock. That's a massive concentration for a bank holding company with a relatively small market capitalization of about $152.53 million. This high ownership means that the stock's price movements are defintely driven by large-block trades, not individual retail sentiment.

Retail investors hold the rest, often drawn to the bank's unique position as an industry pioneer in branchless banking since 1999. Plus, you see strong insider confidence, like the recent purchase of 2,000 shares by a Chief Operating Officer in November 2025, valued at over $35,920.00. That's management putting their own cash on the line.

• Institutional Investors: Drive price action, seek scale.
• Retail Investors: Attracted to the FinTech pioneer narrative.
• Insiders: Show conviction via recent stock purchases.

What Attracts Investors to First Internet Bancorp (INBK)?

The core motivation for buying INBK is a bet on its specialized growth and its net interest margin (NIM) expansion. The bank is not a high-yield dividend stock, but a pure-play on the efficiency of a digital-only model. For the 2025 fiscal year, analysts are forecasting an EPS of $4.11, with expectations for that to jump to $4.95 in the following year-a projected growth rate of 20.44%.

The market position is key. INBK isn't trying to compete with national giants on branch count; it focuses on high-yield, niche lending like SBA financing, franchise finance, and commercial real estate. Management's guidance projects solid underlying business expansion: 10-12% loan growth and 5-7% deposit growth for the year, with the Net Interest Margin (NIM) expected to reach 2.35-2.45% by the fourth quarter of 2025.

The dividend is a minor, stable factor. The company pays a quarterly cash dividend of $0.06 per share, totaling an annual dividend of $0.24, which translates to a modest yield of around 1.4%. It's a nice bonus, but it's not the primary investment thesis. Honestly, the real story is in their strategic direction, which you can see laid out in their Mission Statement, Vision, & Core Values of First Internet Bancorp (INBK).

Here's the quick math on the Q3 2025 results: they reported a big EPS miss of ($1.43) which included a significant loss from a strategic loan sale, but revenue was a strong beat at $43.53 million versus the $33.48 million consensus. This tells institutional investors that the revenue engine is working, even if the balance sheet cleanup caused a temporary earnings dip.

Investment Strategies: Growth, Value, and the Turnaround Bet

The strategies employed by INBK investors generally fall into two camps: the long-term growth holder and the near-term value hunter. Given the Q3 2025 earnings volatility, the latter group is currently active, looking for a rebound.

Long-term holders are essentially buying the FinTech-enabled growth story. They are willing to overlook short-term credit issues and earnings misses-like the recent ($1.43) EPS loss-because they believe the bank's digital model will eventually deliver superior profitability, targeting a return on average assets (ROAA) of 1%.

Value investors, on the other hand, are focused on the gap between the stock price and the consensus price targets. Analysts have a consensus rating of 'Hold' but an average price target of $28.67, which suggests a significant upside potential of over 60% from recent trading levels. They are betting that the decisive actions taken in Q3 2025-like the major loan sale that enhanced capital ratios-have effectively 'cleaned the slate' for a stronger 2026.

What this estimate hides is the execution risk. The turnaround depends on management delivering the projected 2.35-2.45% NIM and successfully integrating the FinTech deposit growth without accumulating new credit problems. If the economy falters, that 10-12% loan growth projection could become a liability.

Next Step: Portfolio Managers should model the impact of a 50 basis point miss on the Q4 2025 NIM guidance to stress-test the value thesis by the end of the year.

Institutional Ownership and Major Shareholders of First Internet Bancorp (INBK)

The short answer is that institutional investors are the primary owners of First Internet Bancorp (INBK), and their recent activity shows a mixed but overall cautious approach, largely reacting to the company's strategic balance sheet restructuring in the third quarter of 2025.

As of the 2025 fiscal year, institutional investors-which are the large asset managers, mutual funds, and pension funds-hold a significant stake, owning approximately 65.46% of the company's stock. This high level of institutional ownership is common for a NASDAQ-listed regional bank, but it also means the stock's price and liquidity are heavily influenced by the decisions of a few major players.

Top Institutional Investors and Their Shareholdings

When you look at the 13F filings for the quarter ending September 30, 2025, the list of top shareholders is dominated by the usual heavy hitters in the asset management world. These are the funds that buy and hold large positions, often tracking indices or following a value-oriented strategy in the financial sector. Their holdings represent millions of dollars and a substantial portion of the company's market capitalization.

Here is a snapshot of the largest institutional owners and their share counts as of the end of the third quarter of 2025:

Note: Share value is an estimate based on a representative stock price near the reporting date to provide context.

Changes in Institutional Ownership: A Mixed Signal

The recent changes in ownership are what tell the real story of investor sentiment toward First Internet Bancorp. The data from the third quarter of 2025 shows a clear divergence in strategy among major holders, which is typical after a bank undergoes a major event like a balance sheet restructuring.

Some of the largest passive and active funds reduced their exposure. For example, Blackrock, Inc. decreased its stake by -2.115%, and Dimensional Fund Advisors Lp cut its position by -2.929%. This is often a sign that funds are rebalancing their portfolios or reacting to the bank's reported net loss of $41.6 million for Q3 2025, which was significantly below analyst expectations.

But it's not all selling. Other sophisticated investors used the lower price as a buying opportunity, increasing their stakes:

• Vanguard Group Inc. increased its holdings by 1.312%.
• Heartland Advisors Inc. grew its position by a notable 5.286%.
• Acuitas Investments, Llc made a substantial increase, acquiring an additional 164,620 shares.

This tells you that while some are trimming risk, others are seeing deep value in the stock, especially after the Q3 earnings miss. Honestly, that kind of split decision is a strong indicator of a stock trading at a discount to its tangible book value, which is exactly what happened after the strategic loan sale. You see this kind of action when investors are trying to determine if the short-term pain is worth the long-term gain.

Impact of Institutional Investors on Stock Price and Strategy

These large institutional investors play a critical role; they act as a major source of both stability and volatility. Their collective action directly impacts the stock price, and their long-term presence can influence corporate strategy.

The most immediate impact was seen after the Q3 2025 earnings report. First Internet Bancorp executed a strategic balance sheet restructuring, selling $836.9 million in single tenant lease financing loans. This was a move to improve the bank's financial foundation and focus on higher-yielding segments, but it resulted in a one-time loss of $37.8 million and a quarterly loss per share of ($1.43). The market, driven by institutional algorithms and short-term traders, reacted immediately, causing the stock to drop 9.58%. That's the power of institutional reaction.

In terms of strategy, the institutional base acts as a check on management. Their investment thesis is now clearly tied to the success of the new strategic focus areas, which include construction, investor commercial real estate, and the expansion of the Banking-as-a-Service (BaaS) model through fintech partnerships. Their continued holding signals an implicit approval of the long-term pivot, despite the near-term financial hit. If you want to understand the strategic direction, you should look at the Mission Statement, Vision, & Core Values of First Internet Bancorp (INBK).

The collective institutional buying and selling determines the stock's trading range, and their high ownership percentage means that any major move-like a large fund liquidating a position-could defintely create significant short-term pressure. So, keep an eye on those quarterly 13F filings; they are your early warning system.

Key Investors and Their Impact on First Internet Bancorp (INBK)

You want to know who is betting on First Internet Bancorp (INBK) and why, especially after a tough Q3 2025. The short answer is that large institutional funds are the backbone of the stock, holding a substantial 65.46% of the company, and their recent moves-plus significant insider buying-signal a belief that the worst of the credit cleanup is over.

The key takeaway is that institutional investors are mostly sticking with the stock, viewing the Q3 2025 net loss of $41.6 million as a necessary, non-recurring clean-up. Insider purchases right after the earnings miss are a powerful vote of confidence.

Who Owns the Largest Stakes in INBK?

As of the most recent filings, the investor profile for First Internet Bancorp is dominated by financial institutions, which is typical for a regional bank. These aren't just passive holders; their large positions give them a strong voice in the long-term strategy, particularly around capital allocation and risk management.

The largest holders are specialized financial funds, often focused on the banking sector. Here's a quick look at the top institutional stakes from the first half of the 2025 fiscal year:

• Patriot Financial Partners GP LP: The largest holder, with 403,482 shares valued at over $10.8 million.
• Heartland Advisors Inc.: Holds 240,400 shares, worth approximately $6.4 million.
• Acadian Asset Management LLC: Owns 186,529 shares, valued at nearly $5.0 million.
• Foundry Partners LLC: Holds 149,361 shares, valued at $4.0 million.

These firms are essentially saying, 'We see the value at this price,' which is a strong signal for other investors. They're looking past the noise of one bad quarter to the long-term tangible book value per share, which was still $39.88 even after the Q3 hit.

Investor Influence and the Strategic Loan Sale

The influence of these large investors is most visible in the company's strategic decision-making, especially the recent balance sheet restructuring. In Q3 2025, First Internet Bancorp took decisive action to address credit issues, including a strategic sale of $836.9 million in single tenant lease financing loans. This was a massive move, and the largest block of that loan portfolio was sold to a major entity like Blackstone.

Here's the quick math: The sale resulted in a $37.8 million loss on sale, which, combined with a $34.8 million provision for credit losses, drove the Q3 net loss. This kind of aggressive, one-time clean-up is often a response to investor pressure or a proactive move to preempt activist campaigns. The goal was to enhance regulatory capital ratios, which improved the Common Equity Tier 1 ratio to 9.24%, and provide balance sheet flexibility. This is a clear example of management making a painful, but strategically sound, decision to satisfy capital-focused investors. If you want to dive deeper into the health metrics that drove this, you should read Breaking Down First Internet Bancorp (INBK) Financial Health: Key Insights for Investors.

Recent Moves: Insiders Stepping Up

The most compelling recent activity is the insider buying that occurred immediately following the Q3 2025 earnings release, which reported an adjusted Earnings Per Share (EPS) of -$1.43, missing the consensus estimate of $0.66. This is a classic contrarian indicator that management defintely believes the stock is undervalued.

Key insider purchases in late October 2025 include:

• Director John Keach, Jr. purchased 2,000 shares at an average cost of $19.34 per share, a total transaction of $38,680.00.
• Director Ann Dee acquired 1,110 shares at $17.94 per share, totaling $19,913.40.

Plus, CEO David Becker stated on the Q3 conference call that he would be in the market buying shares soon after the call. When the people who know the company best are buying after a stock drop of 9.58%, it suggests they feel the market has overreacted to the necessary balance sheet overhaul. This insider activity acts as a stabilization force, signaling to the broader market that the current price-trading at a roughly 50% discount to its tangible book value-is a buying opportunity, not a warning sign.

Market Impact and Investor Sentiment

You need to know if the smart money is running for the hills or quietly loading up, and for First Internet Bancorp (INBK), the picture is defintely mixed. Near-term sentiment is negative, driven by a brutal third quarter, but a core of value-focused institutional and insider buyers suggests a positive long-term view. The short-term pain is real, but the deep discount to tangible book value is attracting seasoned investors.

Investor Sentiment: Institutional vs. Insider Conviction

Institutional ownership remains high, sitting at approximately 76.95% of the company's stock, which shows that large funds haven't abandoned the bank. However, the sentiment is fractured. Major index-tracking funds like Blackrock, Inc. and Dimensional Fund Advisors LP slightly decreased their holdings in the third quarter of 2025, with Blackrock trimming its position by 2.115% to hold 817,181 shares as of September 30, 2025. This move often reflects passive portfolio rebalancing rather than an active sell-off.

The real signal for active sentiment comes from the insiders. Following the weak Q3 2025 results, President and COO Nicole S. Lorch bought 2,000 shares on November 17, 2025, and Director John Keach, Jr. acquired 2,000 shares on October 28, 2025, for a total of $38,680.00. Insider buying is a powerful, concrete signal. They're putting their own cash on the line.

Here's a quick snapshot of the largest institutional holders as of Q3 2025:

Recent Market Reactions to Earnings and Ownership

The stock market's reaction to First Internet Bancorp's Q3 2025 earnings was swift and punishing. The company reported a substantial earnings miss, posting an Earnings Per Share (EPS) loss of -$1.43, dramatically missing the consensus estimate of $0.63. This led to an immediate stock price drop of 8.44%. The loss was largely driven by a significant $35 million loan loss provision, mainly tied to small business and franchise loans, plus a $27 million hit from selling a portion of its loan portfolio to clean up the credit book. The market hates uncertainty, so this kind of aggressive balance sheet clean-up, even if necessary, causes a sharp sell-off.

This big drop pushed the stock to trade at a roughly 50% discount to its tangible book value per share, which stood at $39.88. That is a deep discount. The stock had already lost 39.1% year-to-date as of late October 2025, so the Q3 results were a major blow to investor confidence, but they also created a classic value opportunity for some buyers, which is why you see the insider purchases.

Analyst Perspectives and Key Investor Impact

Wall Street analysts are cautious, reflecting the bank's credit concerns. The consensus rating from five analysts is 'Reduce' or 'Hold,' with an average brokerage recommendation score of 2.6 on a 1 (Strong Buy) to 5 (Sell) scale. Keefe, Bruyette & Woods (KBW) notably lowered their price target to $25.00 from $27.00 in October 2025, citing the ongoing credit issues in the small business and franchise finance portfolios. The average 12-month price target is around $24.33, which still implies a potential upside of approximately 25.62% from the low October 2025 price, assuming management can execute on its guidance.

The impact of key investors, particularly the large institutional holders, is to provide a floor for the stock price. Their sheer volume of shares means any major selling would tank the price, but their continued presence, even with minor trims, stabilizes the long-term outlook. Management is guiding for a Q4 2025 loan balance growth of 4-6% and net interest income between $32.75 million and $33.5 million, which analysts are watching closely. You can review the strategic direction driving these estimates in the Mission Statement, Vision, & Core Values of First Internet Bancorp (INBK).

The core issue is execution risk; management needs to prove their credit cleanup is complete and that the 2025 full-year revenue estimate of $120.42 million is achievable despite the Q3 miss. The market will reward a clean Q4. So, the next action is clear: Investment Team: Model a scenario analysis on INBK's Q4 2025 guidance assumptions by next Wednesday.