Future looks better for Metropolitan Bank
by October 30, 2012 7:48 pm 99 views
It’s been a long haul for Little Rock-based Metropolitan National Bank since it began bleeding losses just two years after it invested more than $30 million in Northwest Arkansas infrastructure.
The banking climate has come full circle since 2007 and Metropolitan National has lost roughly $100 million since then.
But the future looks brighter these days as the bank, while still posting small losses through three quarters of 2012, seems to have a firm grip on the stern stirring it toward sunnier destinations.
“The bank’s management has done a remarkable job through this very long and slow turnaround. And it appears they have come through the worst of it,” said veteran analyst and banking professor John Dominick from the University of Arkansas.
Through nine months of 2012, the bank posted a net loss of $2.704 million, $1.2 million of that came in the third quarter. One year ago, the bank had lost $5.355 million in the same nine month period.
“As the economy continues to improve and the real estate market stabilizes, we will maintain our strategy to look for opportunities to strengthen our overall financial position by aggressively reducing non-performing assets while maintaining adequate capital levels,” CEO Lunsford Bridges noted in a press release.
Metropolitan reported net nonaccrual and past due loans of $69.83 million as of Sept. 30. Troubled loans are a precursor for future losses and in Metropolitan’s case this metric is improving. One year ago the bank sat on $114.9 million of toxic loans.
Other real estate owned by the bank has also been reeled in during the past year. The bank has $88.77 million in real estate on its books, down from $104.89 million a year ago.
Dominick says bank management also looks to be more cautious with respect to the new loans it writes, which will likely pay off down the road. Average loans on the books totaled $592.8 million as of Sept, 30, down 19.3% from the same time in 2011.
The bank has $1 billion in total assets, down from $1.9 billion at its peak in 2007.
In March, federal regulators stepped up the enforcement action against the bank that has been out of compliance with capital levels for more than a year. To reach compliance with the capital ratios the bank agreed to maintain it would need a cash infusion somewhere in the neighborhood of $35 million.
The bank reported equity capital of $64.861 million at the end September. Ongoing bank losses have eroded capital from $68.735 million in the past year and down from $85.19 million since the end of 2009.
Bridges has said over the past year the bank is working to address its capital shortfalls and there was some progress in the recent quarter – though not from a capital infusion.
The bank reported its Tier 1 leverage ratio improved to 6.14% from 5.56% a year ago. The bank agreed to maintain 8% back in March, according to the consent order.
The other two key capital ratios also improved in the recent quarter, but still fall short of compliance.