story and photo by Kim Souza
ksouza@thecitywire.com
Bankruptcy Judge James Mixon is accepting bids for the sale of Metropolitan National Bank from its insolvent holding company, Rogers Bancshares.
The stalking horse bidder, Ford Financial, proposed to the court a $74.2 million capital equity infusion and $16 million in cash if it’s allowed to acquire the Little Rock-based bank. Ford Financial is run by Texas banker Gerald J. Ford and partner Carl Webb who placed their bid for Metropolitan National.
Judge Mixon is accepting bids through Sept. 3. The court will award the bank in a hearing on Sept. 12, following an auction process.
In a recent filing, Rogers Bancshares said it needed to sell its bank, which is subject to deterioration and the loss of 440 jobs, unless the proposed buyer can inject significant capital, which the Ford Fund is willing to do.
As of June 30, Metropolitan National had $62.177 million in equity capital and reported earning $1.944 million in net profits for the first six months of this year. The bank’s key capital ratios showed improvements from a year ago, but remain below the ordered minimums by federal regulators.
A capital infusion of $74.2 million would restore the bank to sound financial footing with $136 million in equity for a $1 billion bank.
Creditors of Rogers Bancshares asked the court to stall the sale of the holding company’s only real asset, but Judge Mixon ruled the sale will happen and he reduced the bidder’s fee from $3.25 million to $640,000.
Metropolitan reported $69 million in real estate on its books at the end of June. Much of that property is in Northwest Arkansas, where the bank aggressively loaned more than $500 million to developers between 2005 and 2007.
The bank reported $28.977 million in nonaccrual loans at the end of June. Nonaccrual loans shrunk from $66.615 million a year ago, according to the bank’s recent filing with the Federal Deposit Insurance Corp.
Metropolitan has roughly 5.82% of the deposit market share in the Little Rock metro area. It ranks seventh, behind Bank of America, Regions, Centennial, First Security, Arvest and Bank of the Ozarks, according to FDIC reports as of June 2012, the last data available.
In Northwest Arkansas the bank has less than 1% of the deposits, ranking 22nd in market share.