Worthen Notes Dim Assessment Of Its Condition
LITTLE ROCK, Ark. -- Worthen Banking Corp. disclosed that bank regulators view the company's condition as "unsatisfactory" and listed six of its banks as "problem" institutions.</br></br>Worthen, Arkansas's largest banking company, disclosed that it replaced its longstanding independent accountants last year after a series of disagreements concerning the adequacy of its 1985 loan-loss allowance and disclosure of lawsuits against Worthen, among other things.</br></br>Worthen, with $2.1 billion assets and 10 banking units, was reviewed by the St. Louis Federal Reserve Bank, the Comptroller of the Currency, the Federal Deposit Insurance Corp. and Arkansas bank regulators. As a result, bank regulators have increased their scrutiny of Worthen by requiring it to submit various written plans, policies and procedures to the St. Louis Fed, including its so-far unsuccessful attempt to name a chairman of the company, its debt-service plans, capital levels and its business plan for the remainder of 1987 and 1988.</br></br>Moreover, Worthen must enlist an independent management consultant to review its organization and management structure and report back to the St. Louis Fed. Worthen also must either charge off as losses or collect all loans or parts of loans that it classified as losses by last Sept. 30. The regulators examined the condition of the company as of that date.</br></br>Worthen signed a regulatory agreement with the Federal Reserve Bank last March, and made a brief public announcement of the action at the time. However, it didn't disclose that bank regulators took a dim view of its operations and the "problem" status of seven of its bank units, one of which it sold this year.