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Assessing Metropolitan’s market timing: Experienced risk takers pulled it off

Metropolitan Bank will open a new headquarters in Ridgeland at the end of the month

It’s not like founder Curt Gabardi and his Metropolitan Bank partners decided to sell popsicles in an ice storm.

But starting a bank as the nation’s financial sector verged on falling off a cliff?

“Whether intentional or by chance, in a warped kind of way they probably picked the best time in the world to start a bank,” said Hans Petit, head of HORNE CPAs’ banking division.


Petit, who has done external auditing for Metropolitan, said it seems to him the start-up had the luxury of operating free of the distractions that hampered other banks. “Everybody else was up to their eyeballs in bad loans, having to get TARP…”

From a competitive standpoint, they could excel on day-to-day things such as customer satisfaction and growing loans, Petit said.

Metropolitan Bank founder and CEO Curt Gabardi

“If you don’t have troubled assets and you’ve got plenty of capital, you are able to focus exclusively 100 percent on your customers.”

Likewise, banking consultant Brandon Roberts said he sees at least some wisdom in what Metropolitan did.

“You’re starting off with a clean book of business,” he said. And you can see the causes of other failures and decide “we’re not going down that road.”

Confident risk takers can scan a landscape and see plenty of opportunity — and see what mistakes to avoid, said Roberts, principal of Premier Insights in Canton.

“Still, I say it was a gutsy move to do what they did.”

What they did was achieve break even after 17 months and profitability not long afterward. “That’s unheard of,” said Roberts. “Typically, de novo institutions require four to five years to start making money.”

Roberts, who has familiarity with the bank’s executives through consulting work he has done for Metropolitan, pegged much of the bank’s rapid success to the depth of experience among its bankers and their deep connections.

“These guys and girls have been through a lot and they really had the experience to make it work,” Roberts said.

Petit said credit must also go to a business strategy that emphasized niche lending to commercial enterprises.

While Metropolitan had the benefit of hindsight in moving forward in its early days, the bankers there have some challenges ahead, Roberts noted. “A clean book of business is one thing but maintaining it is another.

“That portfolio is going to come under some stress. I think they are going to have to plan for that.”

As countless bankers learned near the end of the last decade, “a loan that is a great idea today in an environment that is changing rapidly could look like a horrible decision a couple years from now,” Roberts added.

Navigating a new regulatory minefield will also be a challenge. It will consume time and money, he said.

Roberts said Metropolitan founder & CEO Gabardi made the right call in setting up shop in competitive urban markets like Jackson, Memphis and Nashville. “A newer bank is better off in a competitive market than a smaller market,” he said.

Take, for instance, a small community with three banks where the market is divided 60 percent, 30 percent, 10 percent. “It wouldn’t make sense for a small bank to locate there. Those are very hard to penetrate. But going into a Nashville market, you have lots of banks. Your slice is going to be small but you have a more favorable situation.

“With the model they want to develop, they just want to slice off one sliver.”


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