IBJNews

First Internet Bank suffers first loss since 2000

Back to TopCommentsE-mailPrintBookmark and Share

Problem loans dragged First Internet Bancorp into the red last year for the first time in nearly a decade.

The Indianapolis-based parent company of First Internet Bank of Indiana on Friday announced a loss of $2.1 million, or $1.12 per share, for 2009, compared with profit of $1.6 million, or 84 cents per share, the previous year.

The annual loss was the first for the 11-year-old company since it became profitable in 2001.

First Internet last year increased its provision for loan losses 140 percent, or by $6.7 million, to $11.6 million. According to First Internet, that reserve included $3 million set aside in December to address a single troubled commercial loan. The bank’s management said it believes it can eventually recover about $2 million of the $3 million.

“Unemployment and the real estate market continue to plague a portion of our customers, commercial and consumer alike,” First Internet Chairman and CEO David Becker said in a prepared statement.

As of Dec. 31, First Internet deposits stood at $411.6 million, a 6-percent decrease from the $439.2 million at the end of 2008. Loans fell 4 percent, from $324.4 million to $312.6 million. Assets dropped from $543 million to $504.6 million.

Despite its problems with soured loans, there were bright spots in First Internet’s 2009 results. Net-interest income grew 12 percent, from $12.3 million in 2008 to $13.7 million in 2009. Non-interest income also increased, from $2.6 million to $2.9 million. First Internet attributed the growth to modestly higher asset yields, lower cost of funds and an increase in the bank’s online mortgage-origination operation.

Much of the bank’s mortgage business was in refinancing, driven by 2009’s low mortgage rates. First Internet does not hold the mortgages it originates on its balance sheet, instead selling them on the secondary market.

Shares of First Internet are priced at $4.26 on the Over the Counter Bulletin Board. One year ago, they were worth $8 per share.

ADVERTISEMENT

  • Love
    I love FirstIB. I've been a customer since shortly after they started.

    All I've got...
  • Beam Me Up Scotty Banks
    The long term issue with pure play internet banks is their dependence on deposits and loans that tend to be priced higher and without a more local client base which is a provider of less expensive core deposits the cycle is hard to break. BANKALCHEMIST.

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I am a Lyft driver who is a licensed CDL professional driver. ALL Lyft drivers take pride in providing quality service to the Indianapolis and surrounding areas, and we take the safety of our passengers and the public seriously.(passengers are required to put seat belts on when they get in our cars) We do go through background checks, driving records are checked as are the personal cars we drive, (these are OUR private cars we use) Unlike taxi cabs and their drivers Lyft (and yes Uber) provide passengers with a clean car inside and out, a friendly and courteous driver, and who is dressed appropriately and is groomed appropriately. I go so far as to offer mints, candy and/or small bottle of water to the my customers. It's a mutual respect between driver and passenger. With Best Regards

  2. to be the big fish in the little pond of IRL midwest racin' when yer up against Racin' Gardner

  3. In the first sentance "As a resident of one of these new Carmel Apartments the issue the local governments need to discuss are build quality & price." need a way to edit

  4. As a resident of one of these new Carmel Apartments the issue the local governments need to discuss is build quality & price. First none of these places is worth $1100 for a one bedroom. Downtown Carmel or Keystone at the Crossing in Indy. It doesn't matter. All require you to get in your car to get just about anywhere you need to go. I'm in one of the Carmel apartments now where after just 2.5 short years one of the kitchen cabinet doors is crooked and lawn and property maintenance seems to be lacking my old Indianapolis apartment which cost $300 less. This is one of the new star apartments. As they keep building throughout the area "deals" will start popping up creating shoppers. If your property is falling apart after year 3 what will it look like after year 5 or 10??? Why would one stay here if they could move to a new Broad Ripple in 2 to 3 years or another part of the Far Northside?? The complexes aren't going to let the "poor" move in without local permission so that's not that problem, but it the occupancy rate drops suddenly because the "Young" people moved back to Indy then look out.

  5. Why are you so concerned about Ace hardware? I don't understand why anyone goes there! Every time ive gone in the past, they don't have what I need and I end up going to the big box stores. I understand the service aspect and that they try to be helpful but if they are going to survive I think they might need to carry more specialty parts.

ADVERTISEMENT