M&F Bank has laid off seven employees, or 11 percent of its staff, as part of a cost-cutting effort aimed at improving the bank’s performance.
The Durham-based community bank, which has four branches in the Triangle and seven overall, announced the layoffs Friday in conjunction with releasing the second-quarter earnings of its corporate parent, M&F Bancorp. The bank edged into the red with a $9,000 loss in the quarter.
CEO James H. Sills III said in an interview that the employees who were laid off were spread across several functions: operations, collections/special assets and the mortgage group.
At the same time, however, the bank also hired two new loan officers during the quarter.
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Technology that has boosted efficiency and a steady reduction in delinquent loans paved the way for some of those layoffs, Sills said. In addition, the bank has temporarily withdrawn from the mortgage business in light of regulations that took effect last year that “are very complex and very burdensome.”
“We plan to get back into (mortgages), but we are going to have a different business model,” he said.
Overall, Sills said, the bank is focusing on “improving our loan growth, hiring the right people and reducing our overhead.”
Although the bank’s loans had been stagnating, it closed $12 million in new loans during the second quarter.
“We’re changing our business model to go after more small and medium-sized businesses,” he said.
M&F’s net loss of $9,000 in the quarter, or zero cents per share, was down from net income of $259,000 a year ago.
M&F posted net income of $50,000, down from $318,000 a year ago, before accounting for dividends paid to the U.S. Treasury stemming from federal stimulus money the bank received in 2009.