OmniAmerican Bancorp (OABC) in Fort Worth, Texas, is exiting the business line that accounts for its largest single group of loans.
The $1.3 billion-asset company will stop buying auto loans originated through dealerships, it said Wednesday. OmniAmercan plans to cut about 24 jobs, or 8% of its workforce, as it exits indirect auto lending.
The company also terminated Terry Almon, its chief operating officer, as part of the cuts. The company said in a regulatory filing that it would eliminate the COO role.
OmniAmerican said it expects to record about $800,000 in employee separation costs in the fourth quarter, including $80,000 tied to exiting the indirect auto business.
"Interest margin pressure and the competitive rate environment are impacting the profitability of banks across the nation," Chief Executive Tim Carter said in a press release. "In order to adjust to these pressures, we must continually streamline our processes and find new ways to reduce our expenses."
OmniAmerican held $252 million of indirect auto loans, or 31% of its entire loan portfolio, at June 30, according to its latest quarterly report. Of these loans, $2.2 million were past due.
OmniAmerican converted from a mutual to a stock-owned company in 2010. In the second quarter, it earned $674,000, down 53% from the same period a year earlier.