Piper Sandler Says Elevated Credit Costs Continue to Weigh on First Internet Bancorp (INBK)
Piper Sandler analyst Nathan Race raised the price target for First Internet Bancorp (INBK) to $24 from $23.50, while maintaining a Neutral rating. The firm noted that elevated credit costs, including net charge-offs and loan loss provisions, continue to affect the company's asset quality, potentially jeopardizing its 2026 guidance, though improvement is expected in the second half of the year. Despite these credit challenges, First Internet Bancorp reported strong Q1 2026 results, with total revenue up 21% year-over-year and deposits growing to $5 billion.
How this was made
The 30-second read
Why it matters
Credit cost concerns could lead to increased volatility and downward pressure on the stock, especially if asset quality deteriorates further.
Market read
The news is relevant for investors and traders focusing on regional banks and financial sector health, especially those with exposure to INBK.
What to watch
Potential for improvement in credit quality in the second half of 2026; broader economic conditions may influence asset quality positively.
Background
First Internet Bancorp (INBK) has reported solid revenue growth but faces ongoing challenges with elevated credit costs, which are impacting asset quality and profitability.
Ticker impact
Primary focus of the news, significant impact on the stock.
Potential short-term decline or sideways movement; long-term impact uncertain due to credit cost concerns.
The positive earnings are offset by ongoing credit challenges, which may lead to volatility and cautious trading behavior.
Market effects
The banking sector may experience increased volatility, especially among regional banks with similar credit risk profiles.
Potential negative impact on regional banking stocks in the US.
Limited; primarily affects US regional banks and related financial institutions.
Counterpoint
The strong Q1 results and deposit growth suggest resilience; the credit cost concerns may be temporary or overstated.
Key entities
- CompanyFirst Internet Bancorp
A regional bank providing banking services primarily in the United States.
- AnalystNathan Race
Analyst at Piper Sandler who provided the recent outlook.
