First Internet Bancorp (INBK): Marketing Mix Analysis [Dec-2025 Updated]

You're looking at a bank that's making some tough, necessary calls in late 2025. First Internet Bancorp has clearly decided that the old way wasn't working, evidenced by that $\text{\$836.9 million}$ sale of legacy loans and the recent $\text{\$41.6 million}$ net loss framed as balance sheet optimization. Honestly, the strategy is now all about digital-first, high-yield commercial focus, pushing loan yields to $\text{7.50\%}$ while aggressively managing deposit costs down to $\text{3.87\%}$. This is a pure-play, branchless model betting big on BaaS (Banking-as-a-Service) for growth. You need to see how their Product, Place, Promotion, and Price stack up post-pivot; it's a masterclass in risk-adjusted repositioning. Let's break down the four P's for First Internet Bancorp right now.

First Internet Bancorp (INBK) - Marketing Mix: Product

The product element for First Internet Bancorp centers on its specialized and digitally-delivered financial services, which have recently undergone a significant portfolio optimization. You see a clear focus on commercial lending segments that offer better risk-adjusted returns following a major strategic divestiture.

Commercial lending activities now concentrate on specific areas. The current focus is heavily weighted toward Construction/Investor CRE and C&I loans (Commercial and Industrial loans). This pivot is evident in the post-sale loan mix, where Construction/Investor CRE accounted for 16% of the remaining loan portfolio as of September 30, 2025. This is alongside other regional commercial offerings like office, retail, industrial, and multi-family permanent financing, with underwriting and servicing for loans up to $25 million.

The strategic shift was punctuated by the sale of $836.9 million in single tenant lease financing loans, which was completed in the third quarter of 2025. This transaction, which resulted in a $37.8 million loss, was executed at approximately 95% of the unpaid principal balance. The impact of this sale was immediate: single tenant lease financing dropped from a historically significant portion to just 5% of the total portfolio as of September 30, 2025. This move was intended to strengthen capital and enhance net interest margin, with the bank anticipating a target of 1.00% return on average assets.

Core consumer offerings remain a staple, providing stable deposit funding and mortgage origination volume. You can see the competitive nature of their deposit products, such as high-yield Certificates of Deposit (CDs), which require a minimum of $1,000 to open. For instance, as of November 10, 2025, the 12-Month CD offered a 3.76% interest rate, equating to a 3.83% Annual Percentage Yield (APY). On the residential side, mortgage products contribute to the overall loan mix, representing 13% of the portfolio post-sale. The yield on funded portfolio loan originations across consumer loans was 7.78% in the first quarter of 2025.

Specialty finance continues to include SBA financing and franchise finance, though this area has recently presented credit challenges. First Internet Bancorp was recognized as the 2024 Online Lender of the Year by the Coleman Report, underscoring its strength in the SBA 7(a) program, where it funded $610 million in 2024. However, credit issues were isolated to the small business lending and franchise finance portfolios, leading to a $34.8 million provision for credit losses in the third quarter of 2025, with $21 million allocated to charge-offs. To be fair, management noted a 79% reduction in franchise finance delinquencies in the same period, suggesting active remediation.

For commercial clients, First Internet Bancorp provides Treasury Management solutions designed to optimize cash flow. This service suite includes the recent addition of Zelle® access for business customers, announced on October 20, 2025. The bank's deposit base shows a significant commercial component, with commercial deposits making up 43% of total deposits as of September 30, 2025.

Here is a snapshot of the product-relevant financial metrics and portfolio composition as of late 2025:

The bank's overall product strategy is clearly shifting away from lower-coupon, fixed-rate assets like the sold single tenant loans toward areas where they see pipeline strength, such as construction and investor CRE, and leveraging their established digital platform for consumer and SBA products. The loan balances decreased by 17%, or $732.2 million, from the second quarter of 2025 to the third quarter of 2025, reflecting this strategic pruning.

You should review the pipeline strength in Construction/Investor CRE for Q4 2025 projections, as management cited this as a focus area for growth following the balance sheet optimization.

First Internet Bancorp (INBK) - Marketing Mix: Place

First Internet Bancorp's distribution strategy centers entirely on its digital infrastructure, a model it pioneered starting in 1999 as the first state-chartered, FDIC-insured Internet bank. This branchless approach is fundamental to its national market access.

The Banking-as-a-Service (BaaS) platform, which First Internet Bancorp refers to as its VAST platform, is a critical digital distribution channel. This model supports the acquisition of deposits and the delivery of various financial services through fintech partnerships, which contributed significantly to liquidity. As of September 30, 2025, the company noted that its deposit strategy continues to leverage this BaaS model and fintech relationships.

For consumer and small business segments, distribution is explicitly national, facilitated through online and mobile banking systems. This allows First Internet Bancorp to serve customers across the United States without the physical constraints of traditional branch networks. The company's consolidated assets stood at $5.6 billion as of September 30, 2025, supported by a strong liquidity position where cash and unused borrowing capacity totaled $2.9 billion.

The distribution for lending products shows a clear segmentation between national and regional focus. Consumer and small business deposit services, along with SBA financing and specialty finance, are provided nationally. However, the deployment of capital for larger commercial segments is more geographically constrained.

Commercial Real Estate, construction, and Commercial and Industrial (C&I) lending maintain a more targeted regional focus, with the bank delineating nine full counties within the Indianapolis-Carmel-Anderson, Indiana, Metropolitan Statistical Area as its primary assessment area for Community Reinvestment Act purposes. Following a strategic loan sale in Q3 2025, the remaining loan portfolio composition highlights the focus areas:

• - Construction and investor commercial real estate: 16% of the total portfolio.
• - Public finance: 13% of the total portfolio.
• - Residential mortgage: 13% of the total portfolio.

The overall funding structure, heavily reliant on digital channels, is detailed below, showing the importance of non-interest-bearing and commercial/fintech deposits as of the third quarter of 2025:

The loans-to-deposits ratio remained favorable at 73.9% as of September 30, 2025, reflecting the successful balance sheet management that included moving over $700 million of deposits off-balance sheet to manage cash balances following a strategic loan sale.

First Internet Bancorp (INBK) - Marketing Mix: Promotion

You're looking at how First Internet Bancorp (INBK) frames its narrative, especially following a tough quarter. Promotion here is less about flashy ads and more about strategic communication to reposition the balance sheet and highlight digital strengths.

Marketing emphasizes competitive deposit rates, often advertised as 5x the national average. To give you a concrete look at what they are promoting as of November 10, 2025, here are some of the Certificate of Deposit (CD) Annual Percentage Yields (APYs) they are featuring:

• 6 Months Term APY: 3.92%
• 12 Months Term APY: 3.83%
• 24 Months Term APY: 3.45%
• 60 Months Term APY: 3.45%

The bank's money market account and certificates of deposit (CDs) are explicitly marketed as paying annual percentage yields (APYs) that are above national averages. Still, the messaging must work hard to overcome recent financial headlines.

Strategic communication frames the Q3 2025 $41.6 million net loss as a necessary balance sheet optimization. This is a key promotional pivot, as the loss was largely tied to the strategic sale of $836.9 million in single tenant lease financing loans, which itself resulted in a pre-tax loss of $37.8 million. Management is promoting the resulting cleaner credit profile and improved capital structure, evidenced by a Common Equity Tier 1 ratio of 9.24% post-transaction.

Here's the quick math on the Q3 2025 results they are using to show underlying operational strength despite the headline loss:

Investment in AI-driven analytics is used to improve SBA loan origination and credit monitoring. Specifically, the partnership with Parlay Finance to deploy its AI-native Loan Intelligence System (LIS) is promoted as a way to eliminate manual tasks. The bank anticipates up to a 50% increase in efficiencies throughout the lending process from this technology integration. Fintech Initiatives Revenue growth is also a talking point, showing a 130% increase compared to the third quarter of 2024.

Fintech partnerships drive liquidity and revenue growth through the BaaS (Banking-as-a-Service) model. First Internet Bancorp was a co-winner of the 2025 American Banker Innovation of the Year award, which supports their promotional narrative around being a tech-forward partner. The company defintely uses digital channels for all customer acquisition and service, relying on its online and mobile banking systems for customer information access, as it operates as a digital-only bank.

The promotional focus centers on these key differentiators:

• Proactive credit risk management following the $836.9 million loan sale.
• Eight consecutive quarters of net interest income growth, reaching $30.4 million in Q3 2025.
• Anticipated 50% efficiency gain in SBA lending via AI deployment.
• Offering high-yield CDs with APYs above national averages, such as 3.92% for 6 months.
• Strong liquidity, with cash and unused borrowing capacity totaling $2.9 billion as of September 30, 2025.

Finance: draft 13-week cash view by Friday.

First Internet Bancorp (INBK) - Marketing Mix: Price

You're looking at how First Internet Bancorp prices its core offerings to drive margin. The strategy here is clearly focused on maximizing NIM (Net Interest Margin) expansion through active asset/liability management.

New loan originations are priced aggressively, yielding a weighted average of 7.50% in Q3 2025. This contrasts with the overall portfolio yield, which saw its yield on average interest-earning assets rise to 5.68% in the same period. So, the pricing on new assets is definitely pulling the overall yield up.

Deposit costs are actively managed, decreasing 5 basis points to 3.87% in Q3 2025. This reduction in funding costs, combined with the higher loan yields, is what's pushing the margin. Net Interest Margin (FTE) expanded to 2.12% in Q3 2025, with a Q4 target of 2.4% to 2.5%. That forward guidance shows you where management sees the pricing power going.

To attract core funding, high-yield CD products are deployed. For instance, the 6-month CD is priced at 3.92% APY. The minimum deposit to secure these competitive rates is $1,000. Anyway, the bank maintains a favorable loans-to-deposits ratio of 73.9% as of September 30, 2025, suggesting balance sheet funding is well-managed relative to lending activity.

Here's a quick look at the key Q3 2025 pricing metrics:

The use of specific CD terms helps segment the funding market. You can see the tiered pricing structure used to attract longer-term, more stable deposits:

• 3-Month CD APY: 3.30%
• 6-Month CD APY: 3.92%
• 12-Month CD APY: 3.83%
• 24-Month CD APY: 3.45%
• 60-Month CD APY: 3.45%

Also, remember that First Internet Bancorp declared a quarterly cash dividend of $0.06 per common share for the October 2025 payment, which is a component of the overall shareholder value proposition tied to pricing performance.