Nicole S. Lorch
About Nicole S. Lorch
Nicole S. Lorch is President, Chief Operating Officer, and Corporate Secretary of First Internet Bancorp, appointed President and COO effective June 30, 2021 after serving as EVP & COO since 2017; she joined the company in 1999 and was age 47 at the time of her appointment press release in 2021 . She holds a BA from DePauw University, an MBA from Indiana University’s Kelley School of Business, and is a 2015 graduate of the CBA Executive Banking School . Under the executive team’s stewardship, 2024 performance improved materially: net income was $25.3 million and diluted EPS $2.88, revenue reached $134.7 million (+33.3% YoY), deposits grew 21.3%, loans grew 8.6%, book value per share rose to $44.31, and TSR since 2019 measured $159.4 on a $100 fixed investment; asset quality remained solid with a 0.50% nonperforming assets ratio and a Texas Ratio of 5.6% .
Past Roles
| Organization | Role | Years | Strategic impact / notes |
|---|---|---|---|
| First Internet Bancorp/Bank | President & COO | 2021–present | Appointed President & COO effective June 30, 2021; no compensatory changes at appointment . |
| First Internet Bancorp/Bank | EVP & COO | 2017–2021 | Progressive leadership culminating in COO role . |
| First Internet Bank | SVP, Retail Banking | 2011–Jan 2017 | Led retail banking; advanced internal operations . |
| First Internet Bank | VP, Marketing & Technology | 2003–2011 | Oversaw marketing and technology functions . |
| First Internet Bank | Director of Marketing | 1999–2003 | Joined at launch in 1999 . |
| Virtual Financial Services | Director of Marketing | 1996–1999 | Online banking services provider; pre-INBK experience . |
| Leadership notes | — | — | CEO highlighted Lorch’s strategic vision and contributions to growth at appointment . |
External Roles
| Organization | Role | Years |
|---|---|---|
| Indianapolis Neighborhood Housing Partnership (INHP) | Advisory Board Member | Not disclosed |
| Hamilton County Community Foundation | Advisory Board Member | Not disclosed |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Base Salary ($) | $470,000 | $500,000 | $515,000 | $540,750 |
| Target Bonus (% base) | 55% | 55% (plan unchanged weighting; target % consistent for NEOs) | 55% | 55% (Annual Bonus Plan metrics unchanged) |
| Threshold/Max Bonus (% base) | 20% / 70% | 20% / 70% | 20% / 70% | 20% / 70% |
| Actual Cash Bonus Paid ($) | $230,300 | $175,000 | $281,319 | — |
Performance Compensation
Annual Cash Bonus Plan – 2024 outcome and design
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout contribution |
|---|---|---|---|---|---|---|
| Net Income ($000) | 25% | $23,670 | $26,300 | $30,245 | $25,276 | 24% (96% of target × 25%) |
| Net Interest Income ($000) | 25% | $82,890 | $92,100 | $105,915 | $87,377 | 24% (95% of target × 25%) |
| Texas Ratio (%) | 25% | 11.0 | 10.0 | 8.5 | 5.6 | 29% (max) |
| Nonperforming Assets Ratio (%) | 25% | 1.10 | 1.00 | 0.85 | 0.50 | 29% (max) |
| Total | 100% | — | — | — | — | 105% of target |
Notes:
- 2024 bonuses required additional gate conditions (positive net income; satisfactory regulatory review; dividend continuity), which were met .
- Lorch’s 2024 bonus equaled 55% of base ($281,319) based on combined 105% performance .
Long-term equity – design and 2024/2025 grants
| Grant Year | Instrument | Grant date | Target shares | Vesting/Performance | Grant-date fair value ($) |
|---|---|---|---|---|---|
| 2024 | TRSUs | Jan 2, 2024 | 6,387 | Time-based; equal installments on Jan 31, 2025/2026/2027 | $154,118 |
| 2024 | PRSUs | Jan 2, 2024 | 9,581 | 3-year cliff vest (2024–2026) subject to NPA gateway (<1.5% or >75th percentile peer) and ROAA target (threshold 0.9%, target 1.0%, max 1.5%) | $231,190 |
| 2025 | TRSUs | Jan 2025 | 4,508 | Time-based; equal installments on Jan 31, 2026/2027/2028 | — |
| 2025 | PRSUs | Jan 2025 | 6,761 | 3-year cliff vest (2025–2027) with NPA gateway and ROAA scale (threshold 90%, target 100%, max 150% of target shares) | — |
Additional details:
- Company does not grant stock options or SARs; none outstanding .
- 2022 PRSUs were forfeited in March 2025 (NPA gateway met, ROAA not met) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (Mar 21, 2025) | 55,629 shares; less than 1% of shares outstanding . |
| Beneficial ownership (Mar 20, 2023) | 44,761 shares; less than 1% of shares outstanding . |
| Unvested RSUs at 12/31/2024 | 6,387 TRSUs ($229,868) and 9,581 PRSUs ($344,820) . |
| Options held | None; company has not historically granted options . |
| Hedging/pledging | Prohibited by policy; all executives in compliance as of 12/31/2024 and proxy date . |
| Ownership guidelines | NEOs required to hold ≥2× base salary; all covered individuals in compliance as of 12/31/2024 and proxy date . |
Employment Terms
| Provision | Terms (Lorch) |
|---|---|
| Agreement term | Effective April 20, 2022; auto-renews annually unless 90-day advance notice . |
| Non-compete / non-solicit / confidentiality | Required for at least one year post-termination for severance eligibility . |
| Severance (no CoC) | Base salary continued for ≥24 months; lump sum bonus = greater of average of last 3 years or designated current-year bonus; acceleration of all outstanding time-based equity; Company-paid COBRA up to 12 months . |
| Severance (within 12 months after CoC) | Base salary continued for 24 months; Company-paid COBRA up to 18 months; “double trigger” required . |
| Illustrative payouts (as of 12/31/2024) | Involuntary termination w/o cause or good reason: severance $1,030,000; bonus $281,319; accelerated RSUs $414,029; health benefits $15,602 . |
| Illustrative payouts (CoC + termination) | Severance $1,030,000; bonus $281,319; accelerated RSUs $414,029; health benefits $23,022 . |
| Clawback policy | Incentive-based compensation recoupment in event of accounting restatement, applicable to Section 16 officers . |
| Perquisites and tax gross-ups | No executive-only perquisites; no gross-ups . |
Performance & Track Record
- 2024 highlights: revenue $134.7 million (+33.3% YoY), net interest income $87.4 million (+16.7% YoY), deposits $4.9 billion (+21.3% YoY), loans $4.2 billion (+8.6% YoY), book value per share $44.31, tangible book value per share $43.77, with strong liquidity ($2.2 billion cash/unused capacity) and diversification of loan and deposit mix .
- Asset quality/performance metrics used in pay design correlate with outcomes: nonperforming assets/total assets 0.50%, nonperforming loans/total loans 0.68%, and maximum payouts on credit risk metrics in 2024 bonus .
- SBA franchise momentum: ~$540 million 7(a) loan originations in 2024; top-10 program lender positioning .
Compensation Committee Analysis
- Committee comprised entirely of independent directors; 2024 members included Aasif M. Bade, Ann Colussi Dee, John K. Keach Jr. (Chair), and Michele Raines .
- Independent consultant Aon was engaged; peer group centered on banks with $3–10B assets, limited wealth/insurance businesses, and MSAs ranked 3–100; Axos included as a model peer despite size .
- Say-on-pay: approximately 95% approval in 2024; program unchanged materially for 2024 in response to supportive feedback .
Related Party Transactions and Governance Flags
- At appointment as President, no compensatory changes and no Item 404(a) related party transactions; no family relationships with directors/executives .
- Company prohibits hedging and pledging, with compliance affirmed; a clawback is enforced under policy and equity awards .
- Directors/executives’ banking transactions conducted at market terms; insider lending complies with Regulation O .
Performance Compensation – Detailed Mechanics
| Instrument | Metric | Weighting | Target | Actual (latest assessed) | Payout / Vesting |
|---|---|---|---|---|---|
| Annual Bonus (2024) | See table above (NI, NII, Texas Ratio, NPA Ratio) | 25% each | Set per budget (see thresholds/targets) | Combined 105% of target | 55% of base salary for Lorch |
| PRSUs (2024–2026) | Gateway: NPA Ratio; Scale: ROAA | 60% of RSUs | ROAA target 1.0% (threshold 0.9%; max 1.5%) | In-progress; not yet determined | Cliff vest 12/31/2026 if achieved |
| TRSUs (2024) | Time-based | 40% of RSUs | — | — | Jan 31, 2025/2026/2027 |
| PRSUs (2022–2024) | Gateway met; ROAA not met | — | — | Forfeited in Mar 2025 | Forfeited |
Investment Implications
- Pay-for-performance alignment is tight: short-term bonus metrics balanced credit discipline with earnings growth; long-term PRSUs require both credit quality and ROAA, evidenced by 2022 PRSUs forfeiture—reducing windfall risk but increasing future vesting uncertainty and potentially lowering near-term sell pressure from unvested PRSUs .
- Insider selling pressure is most likely around scheduled TRSU vest dates (late January each year), but hedging/pledging prohibitions, ownership guidelines (≥2× salary), and continued role tenure mitigate misalignment risk; Lorch held 55,629 shares (<1%) and had $414,029 of unvested RSUs at 12/31/2024 .
- Retention risk appears managed via multi-year equity and severance protection (24 months base + bonus, double-trigger CoC), though strict performance gates on PRSUs heighten at-risk compensation; 2024 say-on-pay support (95%) suggests investor acceptance of design .
- Operational track record (SBA leadership, diversified growth, strong asset quality) supports confidence in execution under Lorch’s operating leadership; however, continued delivery on ROAA targets is critical for PRSU realizations and long-term alignment .