updated 10/29/2010 8:15:35 AM ET 2010-10-29T12:15:35

FRANKLIN, Tenn., Oct. 29, 2010 (GLOBE NEWSWIRE) -- Tennessee Commerce Bancorp, Inc. (Nasdaq:TNCC) today reported financial results for the third quarter ended September 30, 2010. The Company reported a net loss of $1.1 million, before the preferred dividend or $0.12 per diluted share for the quarter ended September 30, 2010 compared with net income of $1.5 million, before the preferred dividend or $0.32 per diluted share, for the quarter ended September 30, 2009. The Company also reported net income of $2.5 million, before the preferred dividend, or $0.37 for the nine months ended September 30, 2010, compared to a net loss of $7.2 million before the preferred dividend, or $1.53 for the nine months ended September 30, 2009.

The net interest margin of 3.77% was impacted by loan interest reversals of $1.5 million during the quarter. The net interest margin would have been stable at 4.22%, excluding these interest reversals, when compared to the first two quarters of 2010. The net interest margin for the nine months ended September 30, 2010 was 4.09% up from 3.49% for the first nine months ended September 30, 2010.

The increase in non-performing assets to $86.5 million during the quarter compared to $74.2 million at June 30, 2010 was mainly attributed to one relationship that totaled $17.3 million. Non-performing assets would have been $69.2 million, a decrease of $5.0 million or 7.2%, when compared to the linked second quarter, exclusive of this relationship. Repossessed assets, consisting primarily of transportation assets, decreased for the second consecutive quarter by $3.6 million to $32.7 million at September 30, 2010. "While we saw a small pullback in the ATA truck tonnage index in August, we believe that industry trends will continue to rebound in response to economic recovery," stated Mike Sapp, President and Chief Executive Officer of Tennessee Commerce Bancorp, Inc.

The loan loss provision of $7.2 million for the quarter exceeded the net charge-offs of $5.8 million, resulting in a ratio of loan loss provision to net charge-offs of 124.1%. The increase in charge-offs from the second quarter of $1.6 million was mainly attributed to a single credit of $1.1 million that had been on non-accrual where a bankruptcy distribution was anticipated, but recent events indicate that the timing of the distribution is uncertain.   

Non-interest income was stable at $1.3 million for the quarter compared to $1.4 million for the quarter ended September 30, 2009. Non-interest income is primarily attributable to fees associated with leveraged leases slightly offset by losses on repossessions and loan buybacks exceeding gains on loan sales. 

Non-interest expenses increased to $8.3 million or 23.9% for the quarter compared to $6.7 million for the linked second quarter. The increase was mainly attributable to increased costs associated with professional fees, employee benefits, other real estate owned, repossessed assets and increased collection efforts that totaled $2.1 million during the quarter.  

"The financial results this quarter included several non recurring events that will be discussed on our conference call. While our customers remain cautious, we are optimistic that earnings momentum will grow in a more straight-line manner going forward. We remain focused on enhancing our capital position and reducing the level of credit risk," stated Mike Sapp. 

The efficiency ratio for the quarter was 61.0% compared to 47.1% in the second quarter.  The increase in the efficiency ratio for the quarter is mainly attributable to the $1.5 million in loan interest reversals combined with increase in regulatory expenses of $0.8 million and increases in professional expenses of $0.7 million.   

The holding company and the bank continue to exceed the well capitalized regulatory guidelines at September 30, 2010, total risk-based capital was 12.42% for the holding company and 11.06% for the bank; Tier 1 capital was 11.16% for the holding company and 9.80% for the bank; and Tier 1 leverage capital was 10.34% for the holding company and 9.09% for the bank. Tangible common book value per share for the quarter was $7.68. This includes the dilutive effect of the additional 6.5 million shares of stock issued in a public offering during the quarter.  The ratio of tangible common equity to tangible assets was 6.60% at September 30, 2010.  

Third Quarter Conference Call

Schedule this webcast into MS-Outlook calendar (click open when prompted): http://apps.shareholder.com/PNWOutlook/t.aspx?m=44678&k=BCE1B50D


Tennessee Commerce will provide an online, real-time webcast and rebroadcast of its third quarter earnings conference call to be held at 11:00 a.m. Eastern on October 29, 2010. The live broadcast will be available online at http://www.tncommercebank.com under the Investor Relations tab.  

An audio replay of the conference call will be available approximately two hours after the call's completion on our website at http://www.tncommercebank.com under the Investor Relations tab or by dialing one of the following Dial-In Numbers and the Conference ID shown below:

The recording will be available on our website from: 10/29/2010 to 11/05/2010

About Tennessee Commerce Bancorp, Inc.

Tennessee Commerce Bancorp, Inc. is the parent company of Tennessee Commerce Bank. The Company celebrated its tenth anniversary on January 14, 2010. The Bank provides a wide range of banking services and is primarily focused on business accounts. Its corporate and banking offices are located in Franklin, Tennessee, and it has loan production offices in Atlanta, Birmingham and Minneapolis. Tennessee Commerce Bancorp's stock is traded on the NASDAQ Global Market under the symbol TNCC.

Additional information concerning Tennessee Commerce can be accessed at www.tncommercebank.com .

Forward Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements about our regional economy and non-GAAP financial measures. Forward-looking statements can be identified by the use of the words "anticipate," "believe," "expect," "outlook," "estimate," "continue," "predict," "project",   "intend," "could" and "should," and other words of similar meaning. These forward-looking statements express management's current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties and there are a number of factors that could cause actual results to differ materially from those in such statements. Factors that might cause such a difference include, but are not limited to, the effects of future economic, business and market conditions and changes, domestic and foreign, that may affect general economic conditions, governmental monetary and fiscal policies, negative developments in the financial services industry and U.S. and global credit markets, fluctuations in interest rates, changes in accounting policies, rules and practices,  other matters discussed in this press release and other factors identified in the Company's Annual Report on Form 10-K and other periodic filings with the Securities and Exchange Commission.

These forward-looking statements are made only as of the date of this press release, and Tennessee Commerce undertakes no obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this release. Tennessee Commerce is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this document by wire services or Internet services.

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