That Other Online Bank We Like

Interesting article on INBK:

A number of factors have converged to create a positive situation for INBK. First, INBK raised capital at approximately book value in Q4 2013 (more on this later), and put this capital to use to grow organically and are just now receiving the fruits of that (read easy comps at the present). Second, through the course of 2014, the bank built a commercial lending team that has and is fueling rapid loan growth in this area. Third, INBK is not covered well by analysts (only two) and they underestimate the earnings power currently and going forward.

The CEO, at the 2014 annual meeting and again at the 2015 annual meeting, said they are expecting YoY asset growth in the 25-30% range through 2015 and 2016. Given their past growth, size, online business model, national customer base, and increasing customer preference for online banking services, this growth forecast is realistic and could accelerate with the market valuation now 1.5 times book value, i.e. future capital raises would be accretive to book value.

Definitely read the whole thing at…

  • Matt