InsCorp Inc. announced Friday it has reported an incident of loan fraud perpetrated against its subsidiary InsBank.
According to a release, the fraud incident is limited to a single credit client with an exposure of $5 million.
The release notes the Nashville-based community bank is pursuing recovery of loan proceeds by working with law enforcement. It is pursuing all options through civil and criminal courts.
"As it is too early to ascertain recovery potential, management believes the appropriate course of action is to charge-off the entire balance while it pursues the perpetrator," the release reads.
InsBank anticipates, given the amount of the fraud-related charge-off, the company to report a loss for the fourth quarter but will remain "solidly profitable" for the year ended Dec. 31.Â
The fraudulent credit appears to be an isolated incident and is not part of a regular lending program in which similar exposures might exist, the bank said.
"While this incident is indeed unfortunate, the impact on our shareholders should be limited to an interruption of one quarter's earnings, and a modest impact on tangible book value growth,"Â Jim Rieniets, InsBank CEO, said in the release.
"Fortunately, the company has momentum around loan and deposit growth which we expect to allow us to return to our operating earnings trajectory in the first quarter of 2026."
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