Breaking a seven-month streak without a bank failure, Philadelphia's Metrobank was closed Friday.
The $43.3 million-asset national bank became the first to fail since July 28 when the Office of the Comptroller of the Currency closed it under the prompt-corrective-action law that permits the government to seize an institution even if it still has capital.
Metrobank "suffered from poor asset quality, an insufficient earning- asset base, and ineffective board and management supervision," the OCC explained.
Since its chartering in 1989, Metrobank had never turned a profit. It paid too much for funds, did a lousy job underwriting its loans, and concentrated too much on real estate finance, the OCC said. A check-kiting scheme last year was the last straw.
Jefferson Bank, Haverford, Pa., assumed $38.2 million from Metrobank's 1,800 deposit accounts.