WASHINGTON -- Riggs National Corp., a troubled Washington bank holding company, entered agreements that will place it under tight supervision by federal banking regulators.
The holding company said yesterday that it has agreed to a memorandum of understanding with the Federal Reserve Bank of Richmond. Its main banking unit, Riggs National Bank of Washington has entered into an agreement with the Comptroller of the Currency.
The company also said it expects to name soon "a highly experienced and well-regarded financial services executive" as president and chief executive officer of its principal banking subsidiary.
Riggs lost $27.6 million in the first quarter of 1993, partly because of $13 million in loan loss provisions related to commercial real estate loans in the Washington area and commercial real estate and corporate loans in the United Kingdom. The $5.2 billion-asset bank lost $19.8 million in 1992 and $63.5 million in 1991.
Riggs closed at $8 a share yesterday, unchanged.
The agreement with the Fed requires Riggs to notify the Fed before it declares dividends, incurs or redeems long-term debt or uses cash assets in certain circumstances. Riggs also must submit plans to the Fed relating to capital, asset quality, loan loss reserves and operations.
In addition, Riggs' audit committee will submit a report to the Fed on the adequacy of data submitted to it and to the board of directors. Riggs will appoint a compliance committee to monitor its performance under the Fed agreement.
"Our objective for Riggs is the same as the regulators', and the corrective measures requested by our regulators are already under way," Riggs Chief Executive Officer Joe Allbritton said in a statement.
A Riggs spokesman couldn't be reached for comment on the release.