Worthen Net Increases 3.9%
LITTLE ROCK, Ark. -- Continuing its recovery from write-offs in the 1980s, Worthen Banking Corp. is preparing to report second-quarter net income of $5.3 million, or 49 cents a share, said Andrew T. Melton, chief financial officer.
Earnings rose 3.9% from $5.1 million, or 47 cents a share, a year earlier. For the first half of this year, net income at Arkansas' largest banking company rose 18.5% to $10.9 million, or $1 a share, from $9.2 million, or 84 cents a share.
In the first quarter, Worthen received a payment of about $800,000 from the bankruptcy estate of Bevill Bresler & Schulman Inc., a New Jersey Securities firm that failed in 1985, costing Worthen $52 million. Worthen also received a payment of about $400,000 from Bevill Bresler in last year's second quarter.
Loan-Loss Provision Slashed
Reflecting continued improvement in credit quality, the provision for loan losses was slashed to $835,000 from $1.9 million a year earlier, Mr. Melton said. Nonperforming assets dropped 19% to $28.4 million on June 30, from $35 million.
Nonperforming assets peaked at about $120 million in May 1987 and have generally fallen in every quarter since. The allowance for loan losses, meanwhile, improved to 125.03% of nonperforming loans from 106.34% a year earlier, Mr. Melton said.
Mr. Melton attributed the loan portfolio's health in part to Worthen's preoccupation with cleaning up the Bevill Bresler problem in the late 1980s, which kept it from making the sorts of commercial real estate loans that have mired many other banks recently.
In the latest quarter, non-interest expense more than doubled to $19.9 million from $7.4 million, mostly reflecting costs of changing all of the company's banking units to the Worthen name.
Total assets rose 22% in the 12 months through June 30 to $2.19 billion, Mr. Melton said, mostly a result of purchases of other banks and failed thrifts in Arkansas. On July 1 the company completed the acquisition of eight North Little Rock branches of Little Rock-based One National Bank, adding $153 million of assets and liabilities.
Worthen recently announced its plan to buy First National Bank of Fayetteville, Ark., which would boost assets to $2.6 billion at a cost of $32 million in cash and stock. The deal is expected to close in the fourth quarter.