Aquesta lays off more than 10 percent of employees
by Staff Writer
CORNELIUS – Faced with continued lagging demand for loans, Cornelius-based Aquesta Bank laid off seven employees Friday, Aug. 19, according to Aquesta President and CEO Jim Engel.
The five full-time and two part-time employees represented more than 10 percent of the bank’s 54 employees, Engel said Wednesday, Aug. 24.
“We’ve been profitable for the last three years,” Engel said, “but demand (for loans) continues to be low. The economy does not appear to be picking up at a very rapid pace. And when you run a business, the two ways to make a profit are to grow or reduce costs. So we decided we need to reduce our costs.”
Engel described most of the employees laid off as “back-office people” in administrative positions, including Director of Marketing Lauren Furcht.
“All of them are good, talented people, and I believe they’ll be able to find other work,” Engel said. “It’s a hard decision to make, very difficult, but you have to do what you have to do.”
The bank couldn’t offer the employees hope of returning because bank officials really don’t know when the economy will revive, Engel said. “The Federal Reserve is not seeing much improvement for two years,” he added.
In May, the bank announced a $176,000 net operating loss in the first three months of 2011, compared to $231,000 in net income in the first quarter of 2010. At the time, the bank said it recorded $530,000 in “loan losses” in the first quarter of 2011, compared to only $140,000 in the first quarter of 2010. The higher loan loss “essentially explains the difference in operating results between the two periods,” the bank said.
“While we are pleased that Aquesta Bank has continued to increase market share as evidenced by its deposit growth, we continue to experience weak loan demand and heightened loan losses,” Engel said in a news release. “Recently we have seen some improvement in the overall economy. Unfortunately, it will take some time for those improvements to translate directly to improved operating results.”
Earlier this month, the bank reported a small profit of $29,000 in the second quarter, which ended June 30. The bank also opened its fourth branch – on Brawley School Road in Mooresville – in the second quarter.