Tower Financial Corp. of Fort Wayne, Ind., announced Monday that it has called off plans to establish its first bank in Indianapolis.
Don Schenkel, Tower's chairman, president, and chief executive, said in a news release that the $683 million-asset company decided not to open the bank because of market conditions and "other opportunities available to us close to our home base."
Tower also said the four employees who had been working in its Indianapolis loan production office, which is now closed, have been hired by the two-year-old Symphony Bank, which has assets of $46 million.
Tower had announced in October that it planned to form Tower Bank of Central Indiana with an initial capitalization of $13.5 million to $15 million. Tower would have put up 51% of the money, and outside investors would have contributed the rest.
The company said in its earnings release in April that it had spent $528,000 to develop the Indianapolis bank.
Tower's first-quarter earnings fell 82.2% from a year earlier, to $177,000. This was largely because of a provision taken for two loan relationships that were performing but that management believed had underlying weaknesses.
The company said it has not ruled out reentering the market in the future. Mr. Schenkel did not return calls seeking further comment.
