First Internet Bancorp issued $20.5 million of subordinated notes carrying 8.0% fixed interest through 2036, with the rate resetting to SOFR plus 3.735% from 2031. The proceeds are intended for general corporate purposes, including potential retirement of higher-rate indebtedness, while the notes are intended to qualify as Tier 2 capital.

Key Highlights

  • The notes mature on September 15, 2036, and become redeemable on or after September 15, 2031.
  • Interest resets to the applicable SOFR rate plus 3.735% during the floating-rate period.
  • The securities are unsecured, subordinated obligations ranking behind First Internet Bancorp’s senior indebtedness.

$20.5M Notes Carry Fixed-Rate Terms

The notes were sold at 100% of Face Value and carry an annual fixed Interest Rate of 8.0% from September 10, 2026, through September 15, 2036, unless redeemed earlier. From September 15, 2031, the rate resets quarterly to the applicable term SOFR rate plus 3.735%, although the governing terms allow another reference rate in the floating period. The notes have no sinking fund, cannot be converted or exchanged except through the exchange offer, and cannot be redeemed at a holder’s option.

The notes are unsecured and subordinated, are not guaranteed by any subsidiary, and rank junior to First Internet Bancorp (NASDAQ: INBK)’s current and future senior indebtedness. Principal and interest can accelerate only in limited Bankruptcy or insolvency-related circumstances.