While the actual number is by no means huge, the number of Kansas-headquartered banks seeking to convert their charters from national to state is as high through April as it was in all of 2012.
And 2012 represented the highest number of charter conversions in three years.
That’s according to data from the Office of the State Bank Commissioner, which this week released its April applications activity report.
The report said that four banks have requested or received approval through April to convert to a state charter: Kingman-based Citizens Bank of Kansas, First National Bank in Independence, Farmers Bank & Trust in Great Bend and Farmers National Bank in Stafford.
In 2012, four other banks requested or received approval for conversion to a state charter, while in 2011 the number was three and in 2010 it was two.
For Citizens Bank, the conversion request is for a number of reasons, said chairman Jane Deterding, who is based in the bank’s west Wichita office.
“The majority of our loans are agricultural bank wide, and the state bank (commissioner) and their examiner seem to have a better understanding of the nuances of ag lending,” she said.
Also, many of the reasons it was advantageous to have a national charter 30 years ago no longer apply because of changes in law and regulation, such as opening and operating branches in another state.
“There was a time you did have to be a national bank to do certain things, and those times have come and gone,” Deterding said.
Kansas Bank Commissioner Ed Splichal said the common reason for conversion that the commission hears from bankers is, “I want to be closer to my regulator … and also that maybe on the state side we understand what’s going on in the state better than … the OCC (the regulator of national banks).”
Splichal said he toured western Kansas last summer, logging 1,400 miles, holding town-hall-style meetings with bankers in that part of the state. He plans a similar tour this year on the eastern side of the state.
“Whether it be an urban bank in Johnson County or a bank in Syracuse, Kansas, we like to feel that we understand what’s going on in their locales: what’s the positives and what’s the negatives?” he said.
His office doesn’t actively solicit banks to convert their charters — fees and assessments of which financially support the agency — but if a bank calls to discuss charter conversions, the commission is “glad to help,” Splichal said.