PITTSBURGH — On the first business day after reporting the first loss in its 118-year history, $60 million in the 1987 first quarter, Mellon Bank on Monday said Chairman J. David Barnes had resigned and a search was on for a permanent successor.
Nathan W. Pearson, 75, the senior member of the board of directors, was named to fill Barnes' posts as chairman and chief executive until a new leader is found.
Barnes' exit offers no assurance that Mellon can extract itself any faster from a tide of non-performing loans in the energy-dependent Southwest and to developing nations, primarily Brazil.
Mellon announced earlier this month that it was placing $1.45 billion in loans to Brazil on non-accrual status because Brazil was suspending interest payments on medium- and long-term debt to foreign banks.
FOR THE RECORD
Los Angeles Times Wednesday April 15, 1987 Home Edition Business Part 4 Page 2 Column 3 Financial Desk 1 inches; 28 words Type of Material: Correction; Wire
Mellon Bank announced earlier this month that it was placing $310 million in loans to Brazil on non-accrual status. In Tuesday's editions, an Associated Press story incorrectly reported the amount.
The loan reclassification means Mellon plans to record interest payments on those loans only when they are received, rather than when they are due.
"One CEO does not a bank make," said Douglas Stone of Prudential-Bache Securities. "Barnes was not the cause of all the problems."
Nonetheless, Stone called Barnes' retirement "a step in the right direction."
As president since 1980 and chairman since 1981, Barnes played a key role although he did not act alone in the strategy decisions that later soured, the analysts said.
"He was in charge . . . and yes, he's got to accept responsibility," said Chris Kotowski of Oppenheimer & Co.