In the latest phase of a seven-month restructuring effort, Kentucky's Trans Financial Inc. said it is selling two small branches in Tennessee.
The Bowling Green, Ky.-based bank agreed to sell the branches, which together totaled $18 million in deposits, to two community banks in Tennessee for an undisclosed sum. The transactions are expected to close in March.
The proposed sales of the Lebanon and Sparta, Tenn., branches, announced Jan. 10, are part of the effort by $1.8 billion-asset Trans Financial to refine its business and geographical focuses since the June 4 firing of former chief executive officer Douglas Lester, current CEO Vince Berta said.
"It's a move to streamline operations and focus on areas where we can add to shareholder value," Mr. Berta said.
The Lebanon branch is slated to be sold to $216.2 million-asset Farmers and Merchants Bank of Clarksville and the Sparta branch to $291.4 million- asset Citizens Bank of Carthage.
While small for Trans Financial, the two branches were profitable, Mr. Berta said. But they were the bank's only presence in the communities, and Trans Financial had failed to obtain significant market shares since acquiring the branches in the early 1990s.
Moreover, the bank sees more potential opportunity in Clarksville, a larger market where it currently has only one branch, Mr. Berta said. It intends to open another branch there.
In seven months, Mr. Berta, who was named interim chief executive after Mr. Lester was fired and became the full-time CEO Dec. 16, has substantially made over Trans Financial. He has eliminated some nonbank ventures initiated by Mr. Lester, including the travel, venture capital, and human resource consulting subsidiaries. He also has sold off the bank's corporate jet and the recently completed 30,000-square-foot corporate headquarters.
Meanwhile, he is bolstering the bank's corporate and consumer banking operations. He is also focusing Trans Financial's attention on rural and suburban communities and has closed loan origination offices in Louisville, Ky., and Knoxville and Chattanooga, Tenn..
Mr. Berta's efforts seem to be paying off. During the second quarter of 1996, immediately before Mr. Lester's firing, the bank lost $5.8 million. During the third quarter, after Mr. Berta took over, the bank earned $4.8 million, excluding a one-time charge on thrift deposits.