IBJNews

First Internet profit falls on rising interest rates

Back to TopCommentsE-mailPrintBookmark and Share

Shares of First Internet Bancorp tumbled in trading Friday after the company posted a lower third-quarter profit, citing rising interest rates that pinched mortgage spreads.

The parent of Indianapolis-based First Internet Bank posted a profit of $727,000, or 25 cents a share, compared with $1.63 million, or 57 cents a share, in the same quarter last year.

At midday, First Internet shares had slid 17 percent, or $5.42, to $25.92.

Chairman and CEO David Becker said that as a result of rising interest rates, the bank shifted focus to home-purchase loans instead of refinancing loans.

During the quarter, 51 percent of mortgages closed were for home purchases versus 12 percent during the same time last year.

“Our mortgage banking unit has made significant progress during the quarter on transitioning from a refinance-based national mortgage origination platform to becoming a preferred home purchase lender,” Becker said in a statement.

First Internet Bank has been expanding its mortgage operations in recent years. Earlier this year, it invested $4.3 million to outfit nearly 50,000 square feet of office space at 11201 USA Parkway.

The bank boasted assets of $739 million in the third quarter, up from $628 million in the same quarter last year.

The bank also has put a focus on commercial lending. Commercial real estate loans receivable at Sept. 30 increased from $78.3 million in the third quarter of 2012 to $121 million in the third quarter this year.

ADVERTISEMENT

  • Confused
    Not sure why switching from refinancing of home mortgages to financing of new home purchases would make any difference in interest rate spread. The rates would be the same, and therefore, the spreads would be the same. The issue is volume in general is down due to the higher interest rates. Plus, the spreads usually remain the same regardless of the rate. If the rate increases, the spread increases. This is about volume and Wall Street is not sure they can continue to grow without the easy refinance market.

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. In reality, Lilly is maintaining profit by cutting costs such as Indiana/US citizen IT workers by a significant amount with their Tata Indian consulting connection, increasing Indian H1B's at Lillys Indiana locations significantly and offshoring to India high paying Indiana jobs to cut costs and increase profit at the expense of U.S. workers.

  2. I think perhaps there is legal precedence here in that the laws were intended for family farms, not pig processing plants on a huge scale. There has to be a way to squash this judges judgment and overrule her dumb judgement. Perhaps she should be required to live in one of those neighbors houses for a month next to the farm to see how she likes it. She is there to protect the people, not the corporations.

  3. http://www.omafra.gov.on.ca/english/engineer/facts/03-111.htm Corporate farms are not farms, they are indeed factories on a huge scale. The amount of waste and unhealthy smells are environmentally unsafe. If they want to do this, they should be forced to buy a boundary around their farm at a premium price to the homeowners and landowners that have to eat, sleep, and live in a cesspool of pig smells. Imagine living in a house that smells like a restroom all the time. Does the state really believe they should take the side of these corporate farms and not protect Indiana citizens. Perhaps justifiable they should force all the management of the farms to live on the farm itself and not live probably far away from there. Would be interesting to investigate the housing locations of those working at and managing the corporate farms.

  4. downtown in the same area as O'malia's. 350 E New York. Not sure that another one could survive. I agree a Target is needed d'town. Downtown Philly even had a 3 story Kmart for its downtown residents.

  5. Indy-area residents... most of you have no idea how AMAZING Aurelio's is. South of Chicago was a cool pizza place... but it pales in comparison to the heavenly thin crust Aurelio's pizza. Their deep dish is pretty good too. My waistline is expanding just thinking about this!

ADVERTISEMENT