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The First Exchange shuffle.

The First Exchange Shuffle

Randy Johnson turned over the leadership reins at First Exchange Bank of Little Rock in May and returned to his hometown of Cape Girardeau, Mo.

Johnson had served as president and chief executive officer of the bank since it opened in 1989. The change was described as a move up the corporate ladder for Johnson, who would be taking an executive position with the bank's holding company.

However, his status with First Exchange Corp. is unknown.

It may be non-existent.

Johnson resigned from the holding company's board of directors prior to Labor Day. Now, employees in the Cape Girardeau headquarters won't say if Johnson even works there.

The changes in Little Rock coincide with a large increase in problem loans at First Exchange Bank of St. Louis, which had a $109,000 loss during this year's first quarter.

Non-performing loans, categorized as loans that are non-accrual or at least 90 days past due, totaled $2.5 million during the first three months of the year. That's 4.09 percent of the St. Louis bank's total loan portfolio.

Johnson headed that bank, which actually is located in the St. Louis suburb of Mehlville, Mo., when it opened in 1986. He came to Arkansas in 1988.

Performance woes followed Johnson to west Little Rock.

The bank, with $30.2 million in assets, has yet to show a profit. Its non-performing loans totaled $545,000 by March 31. That represents 2.81 percent of the bank's total loan portfolio.

The total was 2.54 percent at the end of last year, compared with 0.15 percent the previous year.

To put those non-performing loans in perspective, the state average in 1990 was 1.79 percent. The national average was 3.68 percent.

First Exchange's second-quarter numbers in Little Rock are shaping up to be worse than the previous three months. Real estate loans are a prime source of problems at St. Louis and Little Rock.

Johnson's track record in both cities may have cost him his job at First Exchange.

Employees at Cape Girardeau can't even answer the simple question of what Johnson's title is these days.

"I don't have that information," one employee says.

The best she can do is suggest that additional inquiries be directed to Johnson's Cape Girardeau home.

Johnson couldn't be reached at home for comment.

He isn't the only First Exchange executive to leave in the midst of problem loans.

Don Chilton, chairman of First Exchange Bank of Little Rock and First Exchange Corp., resigned those positions July 30. He left to pursue opportunities in an unspecified family business.

Chilton is remembered as a tough-talking banker who overcame local efforts to prevent First Exchange from entering the Little Rock market.

First Commercial Bank of Little Rock mounted formal opposition to First Exchange's efforts to obtain a national bank charter.

Prior to 1989, every First Exchange bank turned a profit. Chilton and Johnson expected to continue that trend.

But the Little Rock bank, which is located at Interstate 430 and Shackleford Road, has not lived up to their predictions.

Asset projections for the Little Rock operation met or exceeded expectations of $17.9 million for 1989 and $28.1 million for 1990. This year's forecast of $38.5 million doesn't appear attainable, however.

The Family Tree

First Exchange Corp., which owns four banks, is the 11th-largest bank holding company in Missouri with $418.84 million in total 1990 assets.

It would rank as the 10th-largest holding company if it were in Arkansas and the Little Rock bank counted toward the asset total.

In order to adhere to state banking laws, the corporation directly owns only a portion of the Little Rock bank. The Little Rock operation does, however, serve as a loan feeder for other First Exchange banks.

How do other members of the First Exchange family stack up in terms of non-performing loans?

Jackson Exchange Bank & Trust had $2.98 million in problem loans, representing 2.14 percent of its total loans as of March 31. That compares with 0.72 percent and 0.27 percent at the end of 1990 and 1989, respectively.

The holding company was formed in 1982 with the Jackson, Mo., bank as its sole property.

First Exchange Bank of Cape Girardeau, which opened in 1984, had $1.41 million in non-performing loans as of March 31, accounting for 1.58 percent of the bank's total loans. That compares with 1.69 percent and 0.01 percent at the end of 1990 and 1989, respectively.

Problem loans at First Exchange Bank of Madison County totaled $128,000, 0.43 percent of its total loan portfolio.

At the end of 1990 and 1989, the percentages were 0.16 and 0.30, respectively. The Fredericktown, Mo., bank was acquired in 1983.

What does the man who replaced Johnson as president and CEO of First Exchange Bank of Little Rock have to say about his predecessor?

"Randy moved back to Cape Girardeau after showing me around for about a month," says Guy Humphries. "I was surprised to read in the newspaper about his resignation from the First Exchange board."

More surprises could follow.
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Title Annotation:Randy Johnson and Don Chilton resigns as president and chief-executive-officer and chairman, respectively, of First Exchange Bank of Little Rock
Author:Waldon, George
Publication:Arkansas Business
Article Type:Company Profile
Date:Sep 9, 1991
Words:860
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