Banker’s Bank of Kansas is the third Wichita-area bank in the past 12 months to make the move from a national bank charter to a state one.
That’s according to the Kansas Office of the State Bank Commissioner’s Applications Activity Summary.
Banker’s Bank, a $140 million bank that provides banking services strictly to other banks, filed an application with the Kansas bank commissioner Oct. 11 to convert its charter. The filing was made public Nov. 1.
According to the applications reports for 2012 and 2011, Banker’s Bank is the latest area institution to change its charter. Derby-based Verus Bank received approval for its conversion to a state charter on Nov. 30, 2011. And Andover-based Equity Bank applied for and was approved for its charter switch earlier this year.
Those three banks represent the most charter conversions among area banks in five years, according to bank commissioner reports.
Bruce Schriefer, Banker’s Bank president and CEO, said Wednesday that his bank is seeking a state charter for several reasons. One is that fees for a state charter are less than for a national charter, he said.
“It wasn’t the overarching decision, but it is a factor when you add it all up,” Schriefer said. He wouldn’t say how much his bank will save. “The fees are higher but they’re not huge, either.”
Most of the bank’s Kansas customers are also state-chartered banks, he said, adding the charter conversion provides for “a definite kind of kinship with them.”
And the head regulator of Kansas is a lot closer than is the head regulator at the Office of the Comptroller of the Currency, which oversees national banks.
“When we look at the avalanche of new regulations, it made sense to be regulated by someone 120 miles away rather than in Washington, D.C.,” Schriefer said. But the OCC does have a Wichita field office.
Chuck Marshall, a banking consultant for Kennedy and Coe, said he doesn’t think there is any en masse movement by Kansas banks toward state charters. He thinks it’s more a matter of what each bank thinks is its best option.
“It depends on your situation,” Marshall said. “One of the pluses of being regulated by the OCC is you only have to be regulated by one agency. If you are a state-chartered, Fed member bank, you get alternate exams by the OSBC and the Federal Reserve. Every 18 months, one or the other comes in, generally looking at the same things but each has a little different eye. I think some bankers we work with see that as an advantage and some bankers look at the cost versus that particular advantage.”
Marshall added that a national bank charter used to be the only way a bank could open a branch in a neighboring state, but laws and regulations have changed and that is no longer a requirement. “It’s what best meets the demands of their customers and their markets at this time,” he said. “I think Banker’s Bank has made that evaluation and decided for themselves the other is a better fit.”