Under orders from its regulator to improve its capital ratios, Community First Bank & Trust in Columbia, Tenn., is selling one of its 10 branches to Southern Community Bank in Tullahoma, Tenn., and could be looking to unload several more.

In a news release Wednesday, Community First President Louis Holloway said that the sale of the Murfreesboro, Tenn., branch fits into the bank's broader strategic plan of focusing on its core markets. The bank has just the one branch in Rutherford County, where Murfreesboro is located.

The sale would also rid the Community First of some overhead that should help improve its capital ratios. Plagued by losses on real estate loans, the bank is under orders from the Federal Deposit Insurance Corp. to increase its total risk-based capital-to-assets ratio to 12% and its Tier 1 risk-based capital ratio to 10%. At Sept. 30, its total risk-based ratio was 9.5% and the risk-based ratio was 8.2%.

The Nashville Business Journal reported in November that the bank is considering selling additional branches to beef up its capital reserves and that it had been in discussions with several potential buyers.

The Murfreesboro branch has nearly $33 million of deposits, for which the $115 million-asset Southern Community is paying a 4% premium. The sale also includes roughly $8 million of the nearly $14.7 million of loans associated with the branch, which Community First opened in 2006.

Southern Community has a loan production office in Murfreesboro and the acquisition would give the six-year-old bank its first full-service branch there.

The sale is expected to close later this quarter.

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