First Internet Bancorp raises $21M in subordinated notes at 8% fixed rate
What's the deal? First Internet Bancorp (Nasdaq: INBK) has completed a private placement of $20.5 million in fixed-to-floating rate subordinated notes due 2036. The notes carry a fixed 8.0% annual rate through September 15, 2031, then reset quarterly to three-month term SOFR plus 373.5 basis points until maturity.
What's the endgame? The Fishers, Indiana-based holding company plans to use net proceeds for general corporate purposes, including the potential redemption or retirement of existing debt accruing interest at higher rates. The notes are structured to qualify as Tier 2 capital for regulatory purposes.
Who's involved? Piper Sandler & Co.Dealroom has a profile for this one. Try Dealroom → acted as placement agent. Faegre Drinker Biddle & ReathDealroom has a profile for this one. Try Dealroom → served as counsel to the company, and Kilpatrick Townsend & StocktonDealroom has a profile for this one. Try Dealroom → advised Piper Sandler.
Why now? By locking in a fixed 8.0% coupon before the 2031 floating-rate reset, the company gains near-term certainty on borrowing costs. Redeeming higher-rate debt could lower its overall interest expense.
First Internet BankDealroom has a profile for this one. Try Dealroom →, the company's subsidiary, opened in 1999 as an early pioneer of branchless banking. The holding company reported assets of $5.6 billion as of June 30, 2026, and its stock is a component of the Russell 2000 Index.
The signal: The deal shows a mid-sized bank tapping the subordinated debt market to shore up regulatory capital and refinance costlier borrowings. For a branchless lender operating nationally, cheaper funding matters directly to margins.
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