Loan losses contribute to First Internet’s poor earnings

Indianapolis-based First Internet Bancorp on Wednesday said it lost $208,806 in the third quarter, as loan losses continued to increase.

The loss of 11 cents per share compared with a profit of 25 cents per share in the same time frame last year, when the company earned $461,867.

The bank’s loan-loss provision through Sept. 30 totaled $6.1 million, an 84-percent increase from the first nine months of 2008. As a result, the bank said it increased its loan-loss reserve to 1.8 percent, up from 1.2 percent a year ago.

“While there are indications that the nation’s economy may be starting to recover, loan losses remain elevated at First Internet Bancorp,” Chairman and CEO David Becker said in a prepared statement. “We have tightened our requirements for loan approvals given this challenging economy but also recognize that economic recovery and improvement in the bancorp’s earnings will not occur unless we continue to make loans.”

Total assets dipped 3 percent, to $523.5 million. Deposits fell 2.7 percent, to $411 million.

First Internet is the parent company of First Internet Bank of Indiana. Company shares trade over the counter and were fetching $6.75 each in early-afternoon trading, unchanged on the day.