Shares of community lender First Internet Bancorp (NASDAQ:INBK) experienced a significant decline, falling as much as 22.1% on Thursday and hitting their lowest level since November 2023.
The sharp drop followed the bank's late Wednesday report of first-quarter profit that fell substantially short of Wall Street's expectations, primarily due to a deterioration in credit quality.
As of late morning trading, the stock was down 18.7% at $20.90.
This marks the fourth consecutive quarter that First Internet Bancorp has missed profit expectations, according to data compiled by LSEG.
The bank's first-quarter results indicated that nonperforming loans and net charge-offs – debts deemed unlikely to be recovered – remained elevated.
The challenging quarter prompted commentary from analysts.
Brett Rabatin, an analyst at Hovde Group, suggested that the bank's current valuation indicates a potential need for a capital raise.
According to LSEG data, out of five brokerages covering the stock, two currently rate it a "buy" and three recommend "hold."
The median price target among these analysts is $37.
Year-to-date, as of its last close, First Internet Bancorp's stock had already declined by 28.6%, highlighting existing pressures prior to the latest earnings release.