Tennessee Commerce Bancorp is closing its three out-of-state loan production offices to help it cut costs and focus more on growing in Middle Tennessee.
Officials at the Franklin-based lender told analysts and investors on a conference call this morning that the offices in Birmingham, Atlanta and Minneapolis will close their doors Jan. 31. The sites employ about 10 people who are being paid severance.
CFO Frank Perez said Tennessee Commerce also is on the hook for some lease payments at one of the offices, but that that amount and the severance payments are not significant to its financial statements.
Perez said the closing of the loan offices – the Birmingham site opened in the spring of 2006, the other two in 2008 – has been a while in coming.
"Production was minimal," Perez said. "We had minimized our emphasis there in early 2010. This is something we’ve been talking about for a while."
The expense savings from the closures and other measures will, Perez said, put Tennessee Commerce's overall costs in line with its first-half 2010 performance. The company's non-interest expenses in the first six months of last year totaled $13.2 million; in the second half, they topped $16.4 million.
Also on the call, President and CEO Mike Sapp provided more detail about the resignation of Chief Administrative Officer Martin Zorn. Sapp said Zorn's departure for a Hawaii risk management company is a "once-in-a-lifetime opportunity."
"He’s not running from something, he’s running to something," Sapp said.
Talking later to NashvillePost.com, Zorn said he has known the founder and principals of the Hawaii company for years. They approached him around the turn of the year about heading to the islands.
"Given the economic meltdown, they've obviously seen tremendous growth," said Zorn, who owns property on Maui and has long planned to retire there. "They needed me now."
Sapp said Tennessee Commerce has a plan to replace Zorn and will soon begin to interview candidates. The job may not be structured the same or have the chief administrative officer title, he said.