Metrocorp Bancshares, a Houston bank company with $661 million of assets, said Thursday that its factoring subsidiary fell victim to a scheme that would force Metrocorp to charge off $5.3 million in the second quarter.
The company alleges that a longtime customer of Advantage Finance Corp., the factoring unit, fraudulently documented and sold fabricated and inflated accounts receivable to Advantage. Metrocorp, the parent of Metrobank, did not identify the customer and said the FBI is investigating.
Metrocorp said the accounts receivable were supposed to be paid by another company that has a long payment history with Advantage. It said the $5.3 million would equate to a writedown of about 50 cents a share in the quarter. The company had earnings of $2.1 million, or 30 cents a share, in the second quarter last year.
Don J. Wang, Metrocorp's president and chairman, called the $5.3 million the "maximum potential chargeoff." He said the bank is pursuing its own investigation and plans to seek restitution.