Ann Arbor banks tighten belts to get back into the black

He added that more cost containment measures will probably be announced soon, but wouldn't say exactly what they might be.

"We've looked at a lot of ways to save money," he said. "We're finalizing some additional things to cut costs for the next year."

The bank has lost $2.89 million through the first three quarters of the year, and has had to put aside millions of dollars to account for potentially bad real estate development loans.

Chapman said the hiring freeze has not resulted in large reduction in the company's staff of approximately 250 positions. He estimated between 5 and 10 positions have been eliminated as they became vacant. He said there's no predetermined plan for which jobs will be removed.

"It just depends on the position. We analyze each on its own merits," he said.

Chapman said the team of approximately 10 top executives have not received raises or bonuses in three years. According to the bank's 2009 proxy statement, executive bonuses are based on return on investment for shareholders, and the bank did not reach the threshold of 12.22 percent return on average equity required to distribute any extra compensation last year.

Bank of Ann Arbor, meanwhile, added 13 positions so far this year, CEO and president Tim Marshall said, but it is also reining in raises in order to save money.

Marshall said the new positions, which bring the company's staff total to about 100, are in mortgage origination, commercial lending, investment management and other areas that provide the best prospects for quick revenue generation.

The bank also added two veteran local bankers to its staff this year, Charles Crone and Walter Byers.

However, the bank is looking at cutting its annual raises from 3 percent to 2 percent, Marshall said, and is planning for slower growth in spending on operations - about 1.7 percent - for 2010 than in previous years.

"That's pretty tight," he said.

Freelance reporter Dan Meisler can be reached at danmeisler@gmail.com.