Susie Smith Testimony Recounts Trials, Tribulations at Metropolitan National Bank

by George Waldon  on Monday, Aug. 19, 2013 12:00 am  

A  bankruptcy sale next month will separate Metropolitan National Bank from its insolvent parent company and bring the bank much- needed capital.  (Photo by Mauren Kennedy)

Other steps were taken to make Metropolitan more appealing to investors, efforts to lighten the holding company’s load of obligations that were weighing on the bank.

“In 2012, TARP is starting to try to close down their program,” Smith testified. “They want to get out of their TARP borrowings because many banks have been able to successfully pay back the program and the remaining banks in the program are mostly troubled banks.

“So they have devised a situation where they’re going to try to pool and auction some of this debt off to sell to outside investors. And during 2012, as they would contact us, we were always agreeable and would say, ‘Yes, you can have us included in one of your auction pools.’”

“We also used it to go out to possible investors in private equity, asking them, ‘If you’ll work with us, we can get a discount at least from Treasury on their debt as part of a capital raise.’”

But to no avail, and the marketing efforts continued throughout 2012 and into 2013.

“As we continued to survive, which is what we were doing, we knew that over and over we were hearing from investors that they thought that the bank might have their arms around the risk in the balance sheet, but there is no way that they would take on the holding company debt. And it was a repeated message we heard in 2011.”

The solvency of Metropolitan National Bank was maintained at the cost of its parent company’s insolvency, and would-be investors interested in Metropolitan National Bank balked at taking on the financial obligations of Rogers Bancshares.

The holding company owes $47 million on a series of trust preferred securities sold in 2005, 2006 and 2007. That debt total includes $5.1 million in unpaid dividends.

The bankruptcy sale will allow the Little Rock bank to separate itself from its debt-ridden holding company and wipe clean the equity obligations associated with stockholders.

Smith spoke proudly of the bank’s staff who have stayed on board despite no 401(k) contributions, no bonuses and scant increase in pay since 2009.

“Our existing executive staff and officers have been so loyal the last 4 1/2 years,” she testified. “It has been a passion and a sense of duty, of care and loyalty, that the folks who have remained at the bank and have seen it through this 4 1/2 years are still there, and they are being recruited heavily by other banks.”



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