First Merchants Bank assumes SCB Bank
02/13/2012
SCB Bank in Shelbyville, closed by Indiana banking regulators on Friday, is just the
third Indiana bank to be closed since the financial crisis began in 2007. It was rated E-
("Very Weak") by Weiss at the time of failure and first identified as "Weak"
in June 2007. It reported a loss of more than $3.6 million for the nine-month period ended
September 30, 2011 and had below-FDIC-mandated Tier 1 (5%) and risk-based capital (6%) ratios
of 3.07% and 5.40%, respectively. Nonperforming loans represented 10.2% of its loan portfolio.
First Merchants Bank, N.A., Muncie, Indiana, with assets of $4.1 billion and a Weiss
Financial Strength Rating of C ("Fair"), assumed the deposits of SCB Bank. First
Merchants has Tier 1 and risk-based capital ratios of 13.14% and 15.96%, respectively, and
nonperforming loans make up a below-average portion of its total loan portfolio at 2.84%. It
earned $24.5 million through September 30, 2011 for an ROA of 0.80%, just below the industry average of 0.94%.