City Bank

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’s decision to resign followe the nationalaccounting firm’s recentf assessment of City Bank in its annuaol report, in which it noted therr is uncertainty as to the bank’sz ability to continue as a “going In a regulatory filing Wednesday, City Bank said McGladreh & Pullen gave the bank notice of its decision on Aprilk 2. The resignation will become effectivw either when City Bank finds a replacement or upon the filing ofthe bank’as first quarter report.
In the last two there have been “no disagreements with McGladreyy on any matters of accountint principlesor practices, financial statement disclosure or auditingv scope,” according to City Bank’a regulatory filing. In a lettet to the Federal DepositInsurance (FDIC), McGladrey & Pullen agreed with City Bank’xs statement. The accounting firm’sa decision to resign adds to a growingt number of problems facing City including its recent disclosure that it expect s federal regulators to More than 50 perceng ofthe bank’s assets are classifieds as nonperforming, an indicator of the bank’ difficult financial situation.
Because accountingg firms don’t make much monet on audits, it’s possible the McGladreuy was “cutting its losses,” particularly when it look s at the outlook forCity Bank’s profitability, said Sara a banking analyst with brokerage in Seattle. Hasa n said it’s uncommon for accounting firmeto resign. “We may see more of these, not just relatedc to banks, as accounting firm s kind of pull back and look at the most profitablr parts oftheir business,” she City Bank’s stock (NASDAQ: dropped 6 cents in Wednesdayh trading, falling to $2.88.