U.S. Closes Arkansas S

Arkansas’ second-largest savings and loan association, FirstSouth, was closed today by federal regulators, who said the closure was the biggest such action ever handled by the Federal Savings and Loan Insurance Corp.

Regulators said “reckless and imprudent” lending to insiders is partly to blame for FirstSouth’s insolvency. FirstSouth’s insured accounts in 36 offices in 26 Arkansas cities were ordered transferred to a newly chartered institution, Riverside Federal Savings and Loan Assn. FirstSouth had assets of $360 million in June, 1982, before embarking on an aggressive growth strategy. By the end of last year, FirstSouth had $1.8 billion in assets.