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. These liberals are out of control. They want to drive our economy into the ground and double and triple our electric bills. Sierra Club, stay out of Indy!

  2. These activist liberal judges have gotten out of control. Thankfully we have a sensible supreme court that overturns their absurd rulings!

  3. Maybe they shouldn't be throwing money at the IRL or whatever they call it now. Probably should save that money for actual operations.

  4. For you central Indiana folks that don't know what a good pizza is, Aurelio's will take care of that. There are some good pizza places in central Indiana but nothing like this!!!

  5. I am troubled with this whole string of comments as I am not sure anyone pointed out that many of the "high paying" positions have been eliminated identified by asterisks as of fiscal year 2012. That indicates to me that the hospitals are making responsible yet difficult decisions and eliminating heavy paying positions. To make this more problematic, we have created a society of "entitlement" where individuals believe they should receive free services at no cost to them. I have yet to get a house repair done at no cost nor have I taken my car that is out of warranty for repair for free repair expecting the government to pay for it even though it is the second largest investment one makes in their life besides purchasing a home. Yet, we continue to hear verbal and aggressive abuse from the consumer who expects free services and have to reward them as a result of HCAHPS surveys which we have no influence over as it is 3rd party required by CMS. Peel the onion and get to the root of the problem...you will find that society has created the problem and our current political landscape and not the people who were fortunate to lead healthcare in the right direction before becoming distorted. As a side note, I had a friend sit in an ED in Canada for nearly two days prior to being evaluated and then finally...3 months later got a CT of the head. You pay for what you get...

ADVERTISEMENT