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Branching out: if the Worthen-Union merger occurs, 18 Pulaski County bank branches could be up for grabs.

The central Arkansas banking market remains in a state of flux following the collapse of the savings and loan industry.

The Resolution Trust Corp. recently sold $1.3 billion in deposits from 51 branch locations operated by Home Federal Savings Association of Kansas City, Mo.

Thirty-two of the S&L branches were in Arkansas. They represented the former FirstSouth network. FirstSouth was a Pine Bluff-based thrift that collapsed in 1986.

The other Home branches were in Missouri and Kansas.

The RTC also has sold several branch locations from defunct thrifts such as First Federal Savings & Loan Association, both of which were based in Little Rock.

If the proposed merger of Worthen Banking Corp. and Union of Arkansas Corp. occurs, there will be even more of a realignment.

Little Rock's Union National Bank of Arkansas has 18 Pulaski County locations. And Worthen National Bank of Arkansas doesn't need all of those branches.

Executives at Central Bank & Trust of Little Rock are among those watching for branch opportunities. Central officials would like branches in North Little Rock, Sherwood and southwest Little Rock.

"That would be our area of initial interest," says Leonard Dunn, Central's chairman and chief executive officer.

The shifting market has led to the creation of institutions such as Central, which rose from the ashes of a defunct thrift. The bank is based in the former headquarters of Madison Guaranty Savings & Loan Association on South Main Street in downtown Little Rock. It recently bought a west Little Rock branch from the shrinking One National Bank.

Other banks are expanding geographically.

Metropolitan National Bank of Little Rock soon will open its first North Little Rock office in a former First Federal branch near McCain Mall. But bank executives are taking a wait-and-see approach concerning branch sales that might be generated by a Union-Worthen merger.

"We'll look at it on a location-by-location basis," says Lunsford Bridges, president and CEO at Metropolitan.

Twin City Bank of North Little Rock paid $490,000 for $102 million in deposits at five former Home branches in Little Rock. The branches are at University Mall, Southwest Mall, Galleria Shopping Center, on West Capitol Avenue and on Kavanaugh Boulevard.

TCB officials are evaluating whether to keep the University Mall branch open. TCB will consolidate deposits from the other branches into existing locations.

The North Little Rock bank earlier picked up the leases on former First Federal branches in Jacksonville and southwest Little Rock. TCB is considering additional Little Rock branches in the University-Markham and Mississippi-Cantrell areas.

Boatmen's Bancshares Inc. of St. Louis added a third North Little Rock branch to its recently acquired Superior Federal Bank network. Boatmen's paid $1.31 million for a Home branch on John F. Kennedy Boulevard, two branches in Hot Springs, one branch in Malvern and one branch in Arkadelphia. Deposits at the five branches total $134.7 million.

Too Many Branches?

Other central Arkansas financial institutions have little interest in taking advantage of the opportunities afforded by closed S&L branches and duplications that would be created by a Worthen-Union merger.

"We're not looking to get out of our current market," says Larry Wilson, president and CEO of First Jacksonville Bank & Trust. "... There are too many bank branches in the Little Rock-North Little Rock market already. It would be difficult to profitably branch in those areas.

"We play to win, and if we can't win, we don't want to play."

First Jacksonville has four Jacksonville locations.

Similarly, National Bank of Arkansas has all of its four locations in North Little Rock.

"Anything we do will be north of the river," says Al Harkins, president and CEO. "That's our focus."

Worthen is likely to maintain the two Jacksonville locations and the Sherwood branch it would pick up from Union.

"They're going to have some problems because some of their busiest branches are located close to each other," Robert Magee, president and CEO of Little Rock's Pulaski Bank & Trust Co., says of the Worthen-Union merger. "I don't know if one facility will be able to handle the increased traffic in those areas."

Costs for a new branch can run from $250,000 to $1 million, depending on land costs and how elaborate a facility is. Equipment costs can run $150,000 when automatic tellers, security measures, vaults and safe-deposit boxes are included.

"Our size would preclude us from buying any branches," says Pete Maris, president and CEO of North Little Rock's Bank of Little Rock. Executives at Bank of Little Rock wanted to move into a former OneBank branch in the Heights area of Little Rock after OneBank relocated to a former Savers location. But OneBank officials decided to hold onto the empty site rather than lease it to a competitor.

It's tough to picture Worthen Chairman Curt Bradbury, who watches the bottom line, taking a similar stance when it comes to duplicate branches.

The question is which central Arkansas branches Worthen officials will deem expendable.
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Article Details
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Title Annotation:Worthen Banking Corp.; Union of Arkansas Corp.
Author:Waldon, George
Publication:Arkansas Business
Date:Apr 6, 1992
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