Bear State tabs Metropolitan National Bank leader as CEO

Following a quick turnaround in profitability at Springfield-based Metropolitan National Bank, CEO Mark McFatridge was selected to lead a Little Rock, Ark.-based public bank aggressively growing its footprint.

On Oct. 1, Bear State Financial Inc. (Nasdaq: BSF) handed over the CEO reins to McFatridge, a move that was expected following the bank holding company’s June agreement to acquire Metropolitan National for $70 million in cash and stock. In the recently closed deal, Bear State adds $442 million in assets, $340 million in loans and $375 million in deposits from Metropolitan National.

The combined company comprises $2 billion in assets, 55 branches and four loan production offices.

Prior to the buyout – which leaders say is expected to include some layoffs – Bear State Bank operated 43 branches in Arkansas and southeast Oklahoma.

Changing names
Already settled in his Little Rock, Ark., office at Bear State’s headquarters, McFatridge said the banks’ charters would merge in mid-first quarter 2016, and Metropolitan National would then adopt the Bear State moniker.

McFatridge’s resume illustrates a career in large regional bank work – with Regions Bank/Union Planters and Fifth Third Bank – and community banking experience at Guaranty Bank and OakStar Bank.

“I think that combination of experience was important to Bear State Financial because that’s who we are,” said McFatridge, who served nearly two years as vice president and chief operating officer at Guaranty and was named interim president/CEO of Metropolitan National in February 2012 before officially taking the post three months later.

He said both Bear State and Metropolitan National serve rural and urban markets, so he doesn’t think the approach to business would change – just the scale.

“The play that we’re running really is no different than the play we were running at Metropolitan,” he said.

The playbook calls for more growth.

Bear State board Chairman Richard Massey, who has served as CEO since April when former CEO Chris Wewers left the company, said under McFatridge, growth is expected to come through acquisitions and organically via an improved bottom line.

Emphasizing efficiency, he said the near-term asset goal is $3 billion-$5 billion.

“A $100 billion bank may not be any more efficient than a $10 billion bank. But I do think that for us, being $3 billion, $4 billion, or $5 billion in assets represents a sweet spot,” Massey said.

Toward that goal, McFatridge said Bear State would seek additional acquisitions.

“I think Missouri has a lot of opportunity. I think the contiguous states have a lot of opportunity,” said McFatridge, who spends most of the workweek in Little Rock and plans to move his family after the school year. “We’d rather do it sooner than later, but it’s not just us that’s going to dictate that.”

That’s the rub. Healthy banks aren’t always looking to sell.

According to Bank Director’s 2015 Bank M&A Survey – which interviewed more than 200 banking executives – 47 percent of survey respondents said they plan to purchase a healthy bank within the next 12 months, compared to a mere 3 percent who plan to sell their bank.

Culture and redundancies
In his first official month of work as CEO at Metropolitan National, McFatridge promoted 10 individuals, including four executive vice presidents who report directly to him.

He credits similar efforts to change the culture at Metropolitan National with creating the environment that helped the team achieve profitability. The year before McFatridge arrived, the bank experienced a $7 million net loss. His first year, it broke even.

By the second year, the bank had positive net income of $500,000 and last year nearly profited $2 million.

“It was a huge group effort. We had to take a culture that by performance and the regulatory environment had been kind of beaten down and turn it around,” McFatridge said. “We really focused on our culture and having that can-do, forward looking attitude.”

Longtime Metropolitan National board member John Moore acknowledged Bear State’s move of McFatridge is rare.

“I don’t have any concerns about it. I think it is a bit unusual that the CEO of the acquired bank has become the CEO of the acquirer,” said Moore, a former president of Drury University. “Mark is an exceptional banker, an exceptional leader. He has promoted and I know will continue to promote very effectively.

“People like working for Mark. He has promoted a culture that I understand, albeit second-handedly, is very consistent with the culture that Bear State has developed.”

Massey said McFatridge’s first job is to identify and eliminate redundancies. That means layoffs. Bank officials declined to estimate a number, but Massey said layoffs could come from either side. Executives plan to review talent during the next six months.

“One of the economic reasons companies go through mergers and acquisitions is that they are looking for opportunities to gain efficiencies,” he said. “We are too.”

By February, Metropolitan National board members expect the board to dissolve. One member, John Ghirardelli, was selected to join Bear State’s board of directors.

“There is a bittersweet element to it. We’ve seen it through the bad times and seen it through the good times,” Moore said, noting he’s not yet a Bear State stockholder.

“I’m looking at it.”