SHELBYVILLE, Ind. — Federal regulators have seized a troubled central Indiana bank and turned over its assets to a Muncie institution.
The Federal Deposit Insurance Corp. on Friday night seized Shelbyville-based SCB Bank, which has $183 million in assets. First Merchants Bank, based in Muncie, is taking over all four SCB branches.
"As an Indiana-based community bank, we have a great deal of experience operating banks in county seat markets throughout the state," First Merchants CEO Michael Rechin said in a statement. "Shelby County's demographic profile is consistent with many of our current Indiana markets and we understand how to service those markets very well."
SCB is the third bank to fail in Indiana since the banking crisis developed three years ago, following Columbus-based Irwin Union and Evansville-based Integra, the Indianapolis Business Journal reports.
IBJ reported in November that SCB was at risk of being taken over due to a high proportion of problem loans, particularly in its real estate and commercial-and-industrial portfolios.
First Merchants said it is buying about $117 million of loans and assuming $136 million in deposits. The deal with the FDIC excludes all development loans, land loans and non-performing loans. The remaining assets were purchased for a $29 million discount and the deposits were assumed at no premium, First Merchants said.
First Merchants said it also is buying SCB's main office building in Shelbyville, about 25 miles southeast of Indianapolis, for $1.4 million.
SCB Bank's failure is expected to cost the government $33.9 million.
IBJ reported that the total number of U.S. bank failures this year stands at nine, including SCB and a small Illinois bank that also was closed Friday. That is a slower pace than in 2011, when there were 92 bank closures.