Metropolitan National Bank announced Friday a $13.7 million loss for the third quarter.
The loss was the fourth straight quarterly loss for the Little Rock bank, which has struggled with problem real estate lending in northwest Arkansas.
"The bank continues to build significant loan loss reserves for possible future losses in the commercial real estate sector and has aggressively addressed the decline of commercial real estate values," according to the press release Metropolitan's Tier 1 capital ratio sunk to 6.67 percent as of Sept. 30 and its risked-based capital is 10.36 percent, according to the announcement. The bank acknowledged that the capital levels "are below the limits prescribed" in a formal agreement entered with the Office of the Comptroller of the Currency in 2008.
That agreement required Metropolitan to maintain capital ratios of 8 and 12 percent. But, according to Friday's announcement, "the bank has sufficient time to improve these ratios."
"While this year has been particularly tough for many fianncial institutions including Metropolitan, we have been fortunate to have the capital to cover these losses," CEO Lunsford Bridges said in the release. "ALthough we are by no means satisfied with our results for the third quarter, we have made an improvement over our second quarter number."
The bank lost $32.5 million in the second quarter, which followed a loss of $8.6 million in the first quarter of 2009. And although 2008 was barely profitable, the OCC required Metropolitan to restate its fourth-quarter results, with the final number being a loss of about $5.7 million.
Bridges said in the release that the bank expects to return to profitability "in 2010 and beyond."
He said the bank "continues to show strong deposit growth in both central and northwest Arkansas."
The Federal Deposit Insurance Corp.'s recent summary of deposits showed deposits in Benton and Washington counties in northwest Arkansas were up by double digits in the year ended June 30, but total deposits slumped about 2 percent.
"Only because of [lower] public funds [deposits]," Senior Executive Vice President Susie Smith told ArkansasBusiness.com. "Our core deposit growth has been great."
The bank's complete third-quarter call report was not yet available on Friday afternoon.
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