Print edition: 
Signs that the banking crisis is easing are hard to miss. The number of bank failures nationally through the first full week of September totaled 71, compared with 157 in all of 2010.
And the Federal Deposit Insurance Corp., the receiver of failed banks and savings and loans, said it would close its temporary satellite office in Schaumburg, Ill., this month, which was responsible for handling most Midwest bank failures.
A little more than a year ago, then-FDIC Chairman Sheila Bair said in an interview with The Eagle that 2010 would be the peak of bank failures.
If that holds true, then Kansas — and more specifically, Wichita — will have come through the 2008 financial crisis more intact than the last banking crisis.
According to FDIC data, 89 Kansas banks and savings and loans failed in the 14-year-long banking crisis that started in 1980.
That crisis claimed three Wichita banks and thrifts: University Bank of Wichita, Boulevard State Bank and Mid Kansas Federal Savings and Loan Association of Wichita.
But in the 2008 financial crisis, only eight Kansas banks and thrifts have failed so far, with none based in Wichita.
There undoubtedly will be more bank failures, bank officials and regulators said. But the FDIC is sticking with its forecast that the number of them will decline this year.
"Right now we are still under the assumption that last year is going to be considered the peak year for bank failures," FDIC spokesman David Barr said.
The FDIC comes to that conclusion based on a number of measures, Barr said.
One of them is looking at the banks that are considered in troubled condition.
"We're seeing capital come in," Barr said. "You can see that conditions in the banking industry have been improving. Bank earnings are up.
"Even a bank that is having problems because of troubled loans, if it is making money it can offset those losses in its loan portfolio."
Another key factor is banks have curtailed making risky loans. No longer are they "going down the credit scale to attract new business," he said.
Riskier loans, loan portfolios that were loaded with commercial real estate and a heavy reliance on brokered deposits are what led to many of this crisis' failures.
A renewed effort by regulators has curtailed the slipping lending standards and unbalanced loan portfolios. So, too, have measures aimed at curbing banks' dependence on brokered deposits, which is a practice that allows banks to buy deposits so they can increase their lending.
It was a practice more common to smaller, community banks, especially those that were just a few years old.
"We want to see them wean themselves off" brokered deposits, Barr said.
As for Kansas
Chuck Stones, president of the Kansas Bankers Association, thinks dramatically fewer failures of Kansas banks this time around were largely because not many were too tied up in commercial real estate loans, especially in areas where commercial real estate valuations tanked.
"It's hard to work your way through that," he said.
Stones said Kansas banks' heavy emphasis in agriculture also helped to shield them somewhat from the crisis and broader economic downturn.
"Ag has been performing very well," he said. "Banks concentrated in ag didn't see the difficulties that banks concentrated in commercial real estate did."
It was the collapse of the agriculture and oil and gas industries that drove Kansas' record number of failures 20 to 30 years ago.
"That's why the failures were so profound in Texas, Kansas, Oklahoma," said Tom Page, president and CEO of Emprise Bank.
"This time the primary stress was caused by residential real estate and particularly residential real estate construction lending," he said.
In general, Page said, Kansas banks kept their lending in residential real estate construction and other loans within the state and not beyond Kansas, unlike many of the failed banks from across the country that engaged in real estate lending far from the states in which they were based.
But not all Kansas banks and thrifts were immune from the crisis.
Among the most notable of the Kansas failures were First National Bank of Anthony, now Bank of Kansas; Security Savings Bank, now Simmons First National Bank; and Hillcrest Bank, which was acquired by a different holding company but whose original name was retained.
None of those banks or thrifts were based in Wichita but they did operate one or more branches in the city.
And while none of the bankers and industry officials could say with certainty that there will be no other failures here or in the state, they are confident that the crisis — at least in Kansas — is winding down.
"The banking sector certainly won't be as profitable as in the pre-2008 period," said Rick LeCompte, a Wichita State University finance professor. "We still don't know the true cost of regulation" such as the Dodd-Frank Wall Street Reform and Consumer Protection Act.
But "you should have a more solid set of banks going forward. They have much more equity capital than before. And they are positioned to take advantage of a rebounding economy."
