LITTLE ROCK — For the eighth-consecutive quarter, Metropolitan National Bank reported a net loss, losing $2.4 million in the period that ended Sept. 30, the Little Rock bank said Friday.
Yet the loss is an improvement compared with the third quarter of 2009, when the bank lost $13.7 million. Metropolitan lost $80 million in 2009, and has lost $7.4 million through the first nine months this year.
“The good news is that it is not losing a lot of money,” said Randy Dennis, president of DD&F Consulting Group, a bank consulting firm in Little Rock.
“They can go a long time at [a loss of] $2 million a quarter,” Dennis said. “As long as they can keep their losses that low, it gives them the opportunity to try to find somebody to help recapitalize the bank or hope for an economic turnaround. They seem to have stopped the huge losses they experienced last year.”
Most of Metropolitan’s problems are related to real estate lending in Northwest Arkansas.
Lunsford Bridges, the bank’s chief financial officer, said in a prepared statement, “As we all know, recovery in the real estate market is a slow process and this has directly affected our earnings over our recent history. However, we continue to make great progress in improving ourbalance sheet.”
The bank still has not reached the two required capital ratios - measures of a bank’s strength - that the Office of the Comptroller of the Currency established inMay 2008, when the bank was issued a written agreement.
The federal regulator told Metropolitan it had to maintain a risk-based capital ratio of 12 percent and a Tier 1 capital ratio of 8 percent.
Risk-based capital is a measure of a bank’s financial strength and includes reserves for loans, investmentsand other items. Tier 1 capital also is a measure describing the capital adequacy of a bank.
In the third quarter, Metropolitan’s risk-based capital ratio was 8.69 percent and its Tier 1 capital ratio was 5.40 percent.
Metropolitan said it continues to show strong depositnumbers in both central and Northwest Arkansas, which is evident by the bank’s solid market-share positions. Statewide, Metropolitan has $1.17 billion in deposits, down 8.6 percent from $1.28 billion in deposits last year, according to the Federal Deposit Insurance Corp.
“We are proud that we havemaintained our market share in both central and Northwest Arkansas,” Bridges said.
Rumors persist that Metropolitan may be closed soon, but the rumors have no basis, Dennis said.
“Those are just incorrect,” Dennis said. “It’s not hemorrhaging. It has cash. They are shrinking their size.”
The bank also has sufficient capital - which includes preferred and common stock and profits - at 5 percent of its assets, Dennis said.
There are many banks in the country in much worse condition than Metropolitan that would be likely to close before Metropolitan, Dennis said.
Business, Pages 35 on 10/30/2010