LR bank gets 2nd sanction in 4 years

LITTLE ROCK — The federal Office of the Comptroller of the Currency issued its second sanction against Little Rock’s Metropolitan National Bank in the past four years, the bank said Wednesday.

The order replaces an agreement the bank made with the federal regulator in 2008, said Lunsford Bridges,Metropolitan’s chief executive officer. The order was issued March 21, but was not made public until Wednesday.

Also, the bank said Wednesday that it lost $1 million in the first quarter, down from a $4 million loss in the first quarter last year.

The issuance of a second regulatory order to a bank is not uncommon, particularly after a bank has been underan order for more than two years, said Garland Binns, a Little Rock banking attorney.

“I would say that is more the norm than not,” Binns said.

Metropolitan has been encumbered by real-estate loans in Northwest Arkansas since before its first sanction in 2008. But the problems are improving, Bridges said.

Metropolitan has decreased its nonperforming assets by about 30 percent in the past year, Bridges said. A nonperforming loan is more than 90 days past due.

Its primary asset ratios improved to 6.18 percent for tier 1 capital to assets and 9.57 percent for risk-based capital to assets in the past year, Bridges said. It was the fourth-straight quarter in which Metropolitan has improved its ratios,Bridges said.

Yet the ratios are still below the required levels of 8 percent and 12 percent that the federal regulator told Metropolitan to meet in 2008.

In the latest order, the regulator reiterated the requirements of reaching the goals for Metropolitan’s capital ratios.

The regulator set a targetdate of July 20 for Metropolitan to reach those ratios, but Bridges said that was a “soft date, not a deadline.”

From looking at Metropolitan’s financial statements, Binns, who does not represent Metropolitan, said the bank is making good progress in reducing its nonperforming assets.

Metropolitan has sought assistance from a New York investment firm to seek ways to raise capital, including attempting to find a buyer for the bank, but the efforts have been unsuccessful, Bridges said.

In the past four years, most bank acquisitions have been through the federal government’s failed bank sales, Binns said.

Acquirers for healthy banks have been on the sidelines because of the attractive guarantees the government makes for failed banks, Binns said.

“I believe that trend is now changing,” Binns said. “There have been less than 20 closures this year.”