IBJNews

Feds take over SCB Bank in Shelbyville

Back to TopCommentsE-mailPrintBookmark and Share

The Federal Deposit Insurance Corp. on Friday night seized SCB Bank, a Shelbyville institution with $183 million in assets. First Merchants Bank, headquartered in Muncie, is taking over all four SCB branches.
 
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. IBJ reported in November that SCB was at risk of being taken over because of a high proportion of problem loans, especially in its real estate and commercial-and-industrial portfolios. One of the customers who defaulted was Tim Durham, the Indianapolis financier now facing felony charges of orchestrating a Ponzi scheme.

SCB Bank's failure is expected to cost the government $33.9 million.

First Merchants said it is buying $117 million in SCB loans and assuming $136 million of its deposits. The deal with the FDIC excludes all development loans, land lands and all non-performing loans. The remaining assets were purchased for a $29 million discount and the deposits were assumed at no premium.

Under the deal, First Merchants also is buying SCB's main office building in Shelbyville for $1.4 million.

“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."

Including SCB and a small Illinois bank also closed Friday by regulators, the total number of U.S. bank failures this year rose to nine, a slower pace than in 2011, when there were 92 bank closures. The Illinois bank was Charter National Bank and Trust, based in Hoffman Estates, with $93.9 million in assets and $89.5 million in deposits

The number of closures already had dropped sharply in 2011 from the two previous years, when banks were working their way through the bad debt accumulated in the recession. But by this time last year, regulators had shuttered twice as many banks—18.

In all of 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. Those failures cost around $23 billion. The FDIC has said 2010 likely was the high-water mark for bank failures from the Great Recession.

In 2009, there were 140 bank failures that cost the insurance fund about $36 billion, more than in 2010 because the banks involved were bigger on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.

From 2008 through 2010, bank failures cost the fund $76.8 billion. The FDIC expects failures from 2011 through 2015 to cost $19 billion.

The deposit insurance fund fell into the red in 2009. With failures slowing, the FDIC's fund balance turned positive in the second quarter of last year.

By Sept. 30, the end of the federal government's most recent fiscal year, it stood at $7.8 billion.

ADVERTISEMENT

  • Anyone pass Econ 101???
    In aggregate, banks are taxpayers. The owners of banks, who took a hair cut, are also taxpayers.
  • Mr. Banker
    The FDIC is funded by assessments paid by banks, not taxpayers. That is not to say that bank customers don't ultimately pay the cost because, in the end, banks don't survive if they don't make profits.
  • scb bank
    SCB Bank's failure is expected to cost the government $33.9 million,dont you mean middle class another bailout our government has no money

    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. Of what value is selling alcoholic beverages to State Fair patrons when there are many families with children attending. Is this the message we want to give children attending and participating in the Fair, another venue with alooholic consumption onsite. Is this to promote beer and wine production in the state which are great for the breweries and wineries, but where does this end up 10-15 years from now, lots more drinkers for the alcoholic contents. If these drinks are so important, why not remove the alcohol content and the flavor and drink itself similar to soft drinks would be the novelty, not the alcoholic content and its affects on the drinker. There is no social or material benefit from drinking alcoholic beverages, mostly people want to get slightly or highly drunk.

    2. I did;nt know anyone in Indiana could count- WHY did they NOT SAY just HOW this would be enforced? Because it WON;T! NOW- with that said- BIG BROTHER is ALIVE in this Article-why take any comment if it won't appease YOU PEOPLE- that's NOT American- with EVERYTHING you indicated is NOT said-I can see WHY it say's o Comments- YOU are COMMIES- BIG BROTHER and most likely- voted for Obama!

    3. In Europe there are schools for hairdressing but you don't get a license afterwards but you are required to assist in turkey and Italy its 7 years in japan it's 10 years England 2 so these people who assist know how to do hair their not just anybody and if your an owner and you hire someone with no experience then ur an idiot I've known stylist from different countries with no license but they are professional clean and safe they have no license but they have experience a license doesn't mean anything look at all the bad hairdressers in the world that have fried peoples hair okay but they have a license doesn't make them a professional at their job I think they should get rid of it because stateboard robs stylist and owners and they fine you for the dumbest f***ing things oh ur license isn't displayed 100$ oh ur wearing open toe shoes fine, oh there's ONE HAIR IN UR BRUSH that's a fine it's like really? So I think they need to go or ease up on their regulations because their too strict

    4. Exciting times in Carmel.

    5. Twenty years ago when we moved to Indy I was a stay at home mom and knew not very many people.WIBC was my family and friends for the most part. It was informative, civil, and humerous with Dave the KING. Terri, Jeff, Stever, Big Joe, Matt, Pat and Crumie. I loved them all, and they seemed to love each other. I didn't mind Greg Garrison, but I was not a Rush fan. NOW I can't stand Chicks and all their giggly opinions. Tony Katz is to abrasive that early in the morning(or really any time). I will tune in on Saturday morning for the usual fun and priceless information from Pat and Crumie, mornings it will be 90.1

    ADVERTISEMENT