CHARLOTTE, NC In a move that is sending shock waves through Charlotte's Micro Banks, First Trust Bank has cut 20% of their commercial lending staff. This reduction follows large cuts made last year.
First Trust Bank (NCFT) recently reported results of $0.14 per share, for the quarter ending March 31, 2009 compared to $0.22 per share, for the first quarter of 2008 reasons for the decline of more than 36% have not been made public.
While the bank has been reporting slim profits and asset growth the sudden departure of experienced senior commercial lenders sent rumors about, bad loans, massive charge offs and write downs, rippling across the Queen City.
Shock waves could be felt in uptown as the small bank was once considered immune to the woes of Charlotte's Mega Banks, now seems to be desperately trying to cut costs to improve 2nd quarter numbers.
It is also reported that employees will be given only a two week severance package, adding insult to injury.
But sources tell CP that First Trust Bank President Jim Bolt was contacted by a major business publication and Bolt would not acknowledge that any lay offs had occurred.
Who to believe Jim Bolt or the Gossip?
Well, back in April First Trust Bank's Jim Bolt proudly proclaimed in an press release: "We have no “toxic assets” nor did we participate in the federal government’s TARP program."
But the truth is only last month did Treasury Secretary Timothy Geithner offer TARP bailout funds to banks with less than $500 million in assets such as First Trust Bank.
In other words of course they didn't take "bail out money" because they couldn't.
Additionally rumor has it that First Trust had invested considerable dollars in Silverton Bank of Atlanta which was seized by Federal Regulators on May 1, 2009.
Seems that employees were fired on the same day and performance was cited, yet maintaining the numbers at any cost has been the mantra of Bolt and his number two John Keane.
While staff cut backs work from time to time, you can't create growth through budget reductions.
June 18, 2009 - Update: The Charlotte Business Journal didn't waste time cornering First Trust's Jim Bolt regarding the reported lay offs. While Bolt denied any "Formal layoffs" news that more cuts are in the works surfaced.