The former chief financial officer of the failed Tennessee Commerce Bank has taken the same role at a struggling Kentucky bank.
First Financial Service Corporation (FFKY) in Elizabethtown announced Wednesday it has hired Frank Perez as its chief financial officer of the company and its First Federal Savings Bank unit. The move comes less than four months after the $1.2 billion-asset Tennessee Commerce was failed by state regulators.
The company said in the press release that Perez's appointment, along with hiring of Dann Small as chief lending officer, was approved by the Federal Deposit Insurance Corp. Small's hiring was announced in February.
A bank failure on a banker's resume is not exactly a kiss of death, but observers have said the hiring and regulatory approval of a key executive of a failed bank is an indication that the person is not being held responsible for the failure.
Perez was with Tennessee Commerce for three years. Prior to that, he was chief financial officer of Cumberland Bank & Trust in Clarksville, Tenn.
First Financial Service is struggling with asset-quality issues. The FDIC and the Kentucky Department of Financial Institutions have ordered the bank to have a leverage ratio of 9% and a total risk-based capital ratio of 12% by June 30. The company is selling eight of its branches in two separate deals to bolster its capital levels, though it is still unclear if the sales would improve its ratios enough to satisfy regulators.
The additions of Perez follow several executive changes made in February, including B. Keith Johnson stepping down as chief executive because of health reasons and assuming a vice chairman position, while Gregory S. Schreacke, president since 2008, assumed the helm. Walter Dee Huddleston, a former Democratic senator from Kentucky, also stepped down as chairman, but remains a board member.