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Union's growth tops Arkansas banks.

Weeks Before Merger With Worthen, Union's Assets Improve by $58.7 Million

WITH ONLY A FEW WEEKS remaining before Union National Bank of Arkansas is merged into Worthen Banking Corp., Union recorded the largest increase in assets of any bank in the state.

Union's assets increased $58.7 million during the third quarter that ended Sept. 30. The 10.2 percent growth was the most by any of the top 25 Arkansas banks in Arkansas Business' quarterly ranking of the financial institutions.

Union's assets increased from $575 million in the second quarter to $633.7 million in the third quarter. Union officials would not comment on the increase.

That move stood out among the top 25 banks. Worthen National Bank of Arkansas' growth in assets of 2.78 percent ranked second behind Union.

The slow growth by most of the banks in the state could be attributed to the cap on interest rates in Arkansas, says Jack Fleischauer Jr., president of Little Rock's Worthen National Bank of Arkansas.

"The concern I have is that Arkansas' usury law, as it is currently being interpreted, is a real detriment to economic development and growth in central Arkansas and throughout the state," Fleischauer says. "Certainly, the real big |corporations~ have access to capital markets outside Arkansas. It's generally the small businesses that can be hurt by the antiquated laws.

"You can look at almost any other state in the country and no one has to operate with a law like this. It's just got to hurt your economy."

Among the state chartered banks in Arkansas, Mercantile Bank in Jonesboro had the best growth in assets -- 2.62 percent from $252.5 million in the second quarter to $259.1 million in the third quarter.

Julian Rainey of the Arkansas State Bank Department says some of the state banks "have been selling some securities and recognizing some profits."

He says loan growth has improved by 8.5 percent in state chartered banks in the last year.

Merger Plans

Worthen's acquisition of Union of Arkansas Corp. should be completed by the end of January 1993, Fleischauer says.

The acquisition involves three banks: Union National Bank of Arkansas, Union National Bank of Texas at Austin and Union National Bank of Magnolia.

The merger will leave Worthen with about $1.8 billion in assets in Arkansas.

Fleischauer says both Worthen and Union began a hiring freeze even before the merger was announced this summer.

"That was to let attrition take its natural course," Fleischauer says. "We'll have very few eliminations |of employees~, once it's all said and done. There will be a lot of jobs, where there were duplications, that will be eliminated. But there will not be many incumbents in those positions."

There will be an effort to place those people in positions that are eliminated in other areas of the banks, Fleischauer says.

The bank president says Worthen will keep the 259,780-SF, 21-story Union National Bank building in downtown Little Rock.

"Ultimately, we'll make a decision on the ownership |of the building~, based on what's best for our company," Fleischauer says. "We don't have a burning desire to sell it or to keep it. We'll just make whatever decision is best."

After the acquisition is completed, there will be 35 Worthen branches in Pulaski County -- 16 Worthen branches and eight Union branches will be kept.

Eleven offices will be consolidated.

The Union locations to be eliminated are the main office downtown and branches on Capitol Avenue, Rodney Parham Road and Arkansas 10.

Worthen branches to be eliminated are on East Roosevelt Road, Scott Hamilton Road, Cantrell Road, Geyer Springs Road, West Markham Street, at Park Plaza and on McCain Boulevard in North Little Rock.

Worthen officials still are considering other areas of expansion.

"We always have our eyes open for opportunities to grow the company profitably," Fleischauer says.
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Union National Bank of Arkansas
Author:Smith, David (American novelist)
Publication:Arkansas Business
Date:Nov 30, 1992
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