Tennessee Commerce Bancorp Reports First Quarter 2011 Results

FRANKLIN, Tenn., April 29, 2011 (GLOBE NEWSWIRE) — Tennessee Commerce Bancorp, Inc. (Nasdaq:TNCC), the bank holding company of Tennessee Commerce Bank (the “Bank”), today reported financial results for the first quarter ended March 31, 2011. The Company reported a net loss of .2 million for the quarter ended March 31, 2011, compared with net income of .4 million for the same period in 2010. The net loss per diluted common share was .26 compared to net income per diluted common share of .24 for the same period in 2010.

The net loss for the period ended March 31, 2011 resulted from an additional .0 million of loan loss provision expense and .4 million associated with losses on repossessed assets, each by the Bank. These charges combined accounted for a .37 per diluted share impact. The loss on repossessions was mainly attributed to measures taken to dispose of all repossessions older than eighteen months. This was a result of measures taken to dispose of repossessions in accordance with our existing plan of accelerated reduction and pursuant to an agreed plan to comply with state law on holding periods for this type of asset.

Assets increased .0 million or 4.7% compared to the fourth quarter of 2010. The increase in assets is mainly attributable to an increase of million in securities available-for-sale and an increase of million in federal funds sold offset in part by a decrease in gross loans of million.

The net interest margin decreased slightly from 3.93% for the three months ended December 31, 2010, to 3.89% for the three months ended March 31, 2011. The cost of interest bearing liabilities improved to 2.04% or 13 basis points from 2.17% for the 2010 fourth quarter. DDA accounts increased .9 million or 29.0% from the 2010 fourth quarter. The increase is a reflection of our continued push to reduce our cost of funding. ������

“We made significant progress during the quarter in our deposit funding base,” stated Mike Sapp, President and Chief Executive Officer of Tennessee Commerce Bancorp, Inc.�”One of our key strategic initiatives in 2011 is to enhance our deposit franchise.”

Total non-performing assets increased to .4 million or 3.5% at March 31, 2011, compared to .2 million at December 31, 2010.�The increase is mainly due to an increase in non-accruals of .1 million offset by a decrease of .9 million in repossessions for the period.�Net loan charge-offs for the three months ended March 31, 2011, were .3 million or an annualized 1.4% of average loans outstanding.��� �

The loan loss provision for the three months ended March 31, 2011, was .9 million, which included the additional .0 million previously mentioned and increases the allowance for loans and lease losses to total loans to 2.16% at March 31, 2011 compared to 1.75% at December 31, 2010.�

The efficiency ratio for the three months ended March 31, 2011, was 59.6% compared to 62.1% in the 2010 fourth quarter. �The improvement in the efficiency ratio is mainly attributed to lower operating expenses.

At March 31, 2011, the Bank satisfied the well capitalized regulatory guidelines, with total risk-based capital at 10.98%, tier 1 capital 9.72%, and tier 1 leverage capital of 8.64%.�The holding company’s total risk based capital is 12.19%, tier 1 capital 10.93%, and tier 1 leverage capital of 9.73%.�Tangible common equity to tangible assets is 5.65% at March 31, 2011.�However, as a result of the recent regulatory events that were disclosed in our 10-K filing, we anticipate that our regulators will seek higher capital ratios, likely increasing our minimum total risk-based capital ratio to 12.00%, our tier 1 capital to 11.00%, and our tier 1 leverage capital to 9.00%.�Based on our regulatory capital ratios at March 31, 2011, Bank management believes that, if the proposed increased regulatory capital ratios materialize, such benchmarks could be achieved within a reasonable period of time through balance sheet management combined with earnings, which would preclude a need to raise additional outside capital.�However, we cannot give assurances that we will be given a reasonable period of time to achieve such ratios.�

“We are disappointed by the events that occurred during the quarter and the resulting loss,” stated Mike Sapp, President and Chief Executive Officer of Tennessee Commerce Bancorp, Inc.�”We are committed to operating the Bank in a sound and profitable manner.�We have already increased our efforts to resolve the open issues that adversely affected us this quarter and return to profitability.”

First Quarter Conference Call

Schedule this webcast into MS-Outlook calendar (click open when prompted):

http://apps.shareholder.com/PNWOutlook/t.aspx?m=47483&k=00B6AF90

Toll-free: 877-312-5412

Conference ID: 61533881

Listen via Internet: http://investor.shareholder.com/media/eventdetail.cfm?eventid=95966&CompanyID=ABEA-2G5D9Z&e=1&mediaKey=B8DF282067CD208270C595F65354F2C4

Tennessee Commerce will provide an online, real-time webcast and rebroadcast of its first�quarter earnings conference call to be held at 11:00 a.m. Eastern on April 29, 2011.�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:

Encore Dial In #: (800) 642-1687 Encore Dial In #: (706) 645-9291

The recording will be available from: 04/29/2011 14:00 to 05/05/2011 23:59 Conference ID number: 61533881

About Tennessee Commerce Bancorp, Inc.

Tennessee Commerce Bancorp, Inc. is the parent company of Tennessee Commerce Bank.�The Bank provides a wide range of banking services and is primarily focused on business accounts.�Its corporate and banking office is located in Franklin, Tennessee.�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 resolution of our recent regulatory examination, 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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TENNESSEE COMMERCE BANCORP, INC.			�
FINANCIAL HIGHLIGHTS (CONTINUED)			�
THREE MONTHS ENDED MARCH 31, 2011, DECEMBER 31, 2010 AND MARCH 31, 2010			�
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(a)�Averages are for the quarters ended March 31,�2011, December 31, 2010 and March 31, 2010
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(b) Reported measure uses net income available to common shareholders
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(c) Net income available to common shareholders for each period divided by average tangible common equity during the applicable period. Average tangible shareholders’ equity during the applicable period less (i) average preferred stock during the applicable period and (ii) average goodwill and other intangibles during the period.
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RECONCILIATION OF AVERAGE SHAREHOLDERS’ EQUITY TO AVERAGE TANGIBLE COMMON EQUITY
�
�	THREE MONTHS ENDED�
�	March 31, 2011	December 31, 2010	March 31, 2010
AVERAGE SHAREHOLDERS’ EQUITY	�$�118,593	�$�122,118	�$�97,170
Less: average preferred stock, net of discount	�29,736	�29,713	�29,644
Less: warrant	�453	�453	�453
Less: average goodwill and other intangibles	�–�	�–�	�–�
AVERAGE TANGIBLE COMMON EQUITY	�$�88,404	�$�91,952	�$�67,073
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(d) Tangible common equity equals ending shareholders’ equity less preferred stock, net of discount, warrant and goodwill and other intangibles, in each case at the end of the period.
�	�	�	�
RECONCILIATION OF SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY
�
�	THREE MONTHS ENDED�
�	March 31, 2011	December 31, 2010	March 31, 2010
SHAREHOLDERS’ EQUITY	�$�116,210	�$�119,337	�$�98,407
Less: preferred stock, net of discount	�29,747	�29,724	�29,655
Less: warrant	�453	�453	�453
Less: goodwill and other intangibles	�–�	�–�	�–�
TANGIBLE COMMON EQUITY	�$�86,010	�$�89,160	�$�68,299
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(e) Net income available to common shareholders for each period divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill and other intangibles
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RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS
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�	THREE MONTHS ENDED�
�	March 31, 2011	December 31, 2010	March 31, 2010
AVERAGE ASSETS	�$�1,474,808	�$�1,473,799	�$�1,371,526
Less: average goodwill and other intangibles	�–�	�–�	�–�
AVERAGE TANGIBLE ASSETS	�$�1,474,808	�$�1,473,799	�$�1,371,526
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(f) Tangible common equity divided by tangible assets. Tangible assets equals total assets less goodwill and other intangibles.
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RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS
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�	THREE MONTHS ENDED�
�	March 31, 2011	December 31, 2010	March 31, 2010
TOTAL ASSETS	�$�1,521,343	�$�1,453,166	�$�1,382,851
Less: goodwill and other intangibles	�–�	�–�	�–�
TANGIBLE ASSETS	�$�1,521,343	�$�1,453,166	�$�1,382,851
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RECONCILIATION OF EFFICIENCY RATIO
�	THREE MONTHS ENDED�
�	March 31, 2011	December 31, 2010	March 31, 2010
NON-INTEREST EXPENSE	�$�6,588	�$�8,126	�$�6,509
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NET-INTEREST INCOME	�13,153	�13,580	�13,249
NON-INTEREST INCOME	�(2,092)	�(493)	�687
NET REVENUES	�11,061	�13,087	�13,936
EFFICIENCY RATIO	59.56%	62.09%	46.71%
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(g) Efficiency ratio is calculated by dividing net revenues into non-interest expense.
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(h) Common book value at period end equals shareholders’ equity less preferred stock, net of discount and warrant, in each case at end of period
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CONTACT: Frank Perez
         Chief Financial Officer
         615-599-2274

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