First Merchants Bank, a part of First Merchants Corporation, and the Federal Deposit Insurance Corporation (FDIC) in the US have signed an agreement to buy $117m of loans and assume $136m of deposits in SCB Bank, Shelby County Indiana, US.
Under the agreement, the FDIC excluded all land loans; all construction and development loans; all non-performing loans, such as non-accrual, restructured and 90 days past due credits; and all other real estate owned (OREO) balances.
First Merchants Bank said it has bought the remaining assets for a $29m discount and the deposits were assumed at no premium.
The FDIC seized Shelbyville-based SCB Bank with $183m in assets, which crippled in financial trouble due to a high proportion of problem loans, especially in its real estate and commercial-and-industrial portfolios.
First Merchants Corporation president and CEO Michael Rechin said the firm is pleased to have closed this accretive transaction with the FDIC by purchasing a modified loan package, assuming all core deposits and the purchase of the main office building in Shelbyville, Indiana, US.
First Merchants Corporation has obtained the financial advice from Sandler O’Neill & Partners, but did not reveal the amount of the deal.