Derby’s Verus Bank is changing its bank charter from a national bank to a state bank to save money.
Kevin Chase, chairman and CEO of the 37-year-old bank, said Monday that the bank has been looking at ways to minimize its expenses in light of a tough environment for banks because of the economy, regulatory costs and low interest rates.
“The times just call for really watching your expense items,” Chase said.
He expects the bank to save about $30,000 from the charter conversion, once it receives approval from the Kansas bank commissioner.
“That’s $30,000 we can put back into the community,” he said. “That’s very valuable to us.”
Chase estimates that savings is half of what the bank would pay in assessments to the Office of the Comptroller of the Currency, the regulator of national banks. Assessments are the costs associated with operating under a given bank charter.
He said the charter conversion is bittersweet because the $114 million-asset bank has been a national bank since its founding. Until 2004, Verus’ name was First National Bank of Derby. It operates five branches in Derby, Augusta and El Dorado.
If it had kept the original name and tried to do the charter conversion, it would have had to change the name at the same time. And that would have been a much larger expense for the bank.
“It’s kind of nice not having to worry about that,” Chase said.
He said with the state charter there will be two regulatory agencies overseeing his bank – the state bank commissioner and the Federal Reserve – instead of just one.
According to the bank commissioner’s office, Verus is the second financial institution this year to request a charter conversion. The other is First Federal Savings and Loan Association of Olathe, which filed for a state bank charter in September. Last year, two banks converted to a Kansas charter. And in 2009, four banks were approved for converting to a Kansas charter.