METROPOLITAN BANK, OAKLAND, CALIFORNIA, ASSUMES ALL DEPOSITS OF BARBARY COAST NATIONAL BANK, SAN FRANCISCO, CALIFORNIA
FOR IMMEDIATE RELEASE
(FDIC) Andrew Porterfield (714) 442-1131
(OCC) Frank Vance (202) 874-4700
Metropolitan Bank, Oakland, California, has assumed all deposits of
Barbary Coast National Bank, San Francisco, California, after
Barbary Coast was closed today by the Office of the Comptroller of
the Currency (OCC) and the FDIC was named receiver. The bank's
board of directors, by resolution, consented to the appointment.
The bank's board acted following unsuccessful efforts to find a
merger partner of otherwise ensure the bank's long-term viability.
Barbary Coast, with assets of about $12.5 million, became a matter
of concern in 1991 when the OCC identified significant deficiencies
in loan portfolio management, including liberal and aggressive loan
underwriting standards and weak administration practices by prior
management. The bank, which relied heavily on volatile deposits,
also suffered a liquidity crisis which necessitated a halt in
mortgage operations. Without this profit-making business, the bank
could not offset its high overhead, costly funding sources and lack
of a distinctive market niche in downtown San Francisco. In March
1992, the board of directors entered into a formal agreement with
the OCC to address the bank's problems. However, loan and
operating losses persisted and caused the bank's condition to
further deteriorate. Attempts to liquidate and merge the
institution were also unsuccessful. Although the bank was
adequately capitalized, the board of directors decided to seek
voluntary receivership to prevent continued future losses.
The failed bank's sole office will not reopen, but customers can
get access to their deposits at Metropolitan's branch at 1351
Powell St., San Francisco, beginning Friday, May 20, 19994. The
failed bank's depositors automatically will become depositors of
the assuming bank.
Metropolitan will assume about $10.0 million in about 480 deposit
accounts. The assuming bank will pay a premium of $1,000 for the
right to receive the failed bank's deposits and will purchase $7.3
million of the failed bank's assets. The Board of Directors
approved the deposit assumption under its authority to do so
whenever it determines that such a transaction will reduce the
potential loss to the FDIC. The FDIC notes that its claim on
recoveries from the sale of the failed bank's assets will have
priority over non-depositor creditors of the failed bank.