Metropolitan nears end of federal agreement

by The City Wire staff ([email protected]) 53 views 

Metropolitan National Bank reported a first quarter 2012 loss of $1.04 million, while making enough progress with regulators to warrant a change in supervisory authority.

The Little Rock-based bank — with significant operations in Northwest Arkansas — reported a first quarter loss of $4.05 million one year ago and has been under a formal agreement with the Office of the Comptroller of the Currency for nearly 4 years.

Privately-held Metropolitan reported today (April 11) that its Tier 1 capital ratio was up to 6.18% as of March 31, 2012 compared to 5.11% a year ago. Its risk-based capital stood at 9.57% compared to 8.34% at the end of last year’s first quarter.

Since March 2011, non-performing assets have decreased by $83.4 million, including a reduction of $16.5 million in the first quarter of 2012 as Metropolitan has resolved legal issues surrounding large loans and has worked extensive real estate owned (REO) off its books.

“The small loss and the increased capital ratios on top of having been able to reduce our non-performing assets by 30% – that’s the big takeaway,” Metropolitan CEO Lunsford Bridges tells Talk Business.

Another big takeaway involves federal regulators.

On March 21, 2012, Metropolitan entered into a consent order with the OCC after improving its capital ratios and level of non-performing assets. The consent order replaces a more restrictive formal agreement that the bank has been operating under since May 2008.

“The consent order is an outline to assist the bank as it continues to recover from the effects of the economic downturn that has impacted our communities and customers,” Bridges said.

He said Metropolitan is already in compliance with 3 of the 5 provisions of the order. The three articles already achieved center on continuation of an existing compliance committee, adhering to a strategic plan and maintaining adequate loan loss reserves.

The two provisions remaining involve improving asset quality and raising capital ratios to 8% and 12% levels, respectively.

The consent order establishes a July 20, 2012 target date to achieve those levels, but Bridges said it is a “date of encouragement, not a deadline.”

“I can confidently say that Metropolitan National Bank is in better condition today than at any point since we entered the formal agreement four years ago,” he said.