FDIC: Kansas bank earnings jump, loans fall in first quarter

05/24/2012 5:00 AM

05/25/2012 6:50 AM

Kansas banks and thrifts collectively recorded their highest first-quarter earnings in three years.

They also had fewer loans on their books.

That’s according to the Federal Deposit Insurance Corp.’s State Banking Performance Summary for the first quarter of 2012.

The report, released Thursday, said Kansas’ 317 banks and thrifts earned $145 million in the three-month period ended March 31.

That compares with net income of $114 million in the first quarter of 2011 and $72 million in the first quarter of 2010.

What’s more, the percentage of institutions that reported higher earnings was nearly 67 percent, the highest in five years.

Total assets grew slightly year over year by 0.6 percent, to $62.6 billion, the report said, while deposits increased by a little more than 1 percent to $48.2 billion.

But total loans and leases were the lowest in three years: $33.3 billion compared with $34.7 million in 2011 and $37.5 billion in 2010.

Some of that decrease could be attributed to fewer banks in Kansas. The report said there were 317 banks operating in Kansas in the first quarter of 2012. That’s eight fewer than the same period in 2011 and 21 fewer than in 2010.

Yet Chuck Stones, president of the Kansas Bankers Association, thinks several factors are keeping loan activity low.

Part of it may be lower demand for farm loans because farmers in some parts of the state are benefitting from extra income from new or recent oil and gas leases.

The regulatory environment may also be keeping banks from making more loans.

But the biggest factor may be continued low demand for business and home loans.

Stones said he continues to hear from bankers across the state that a lot of uncertainty remains among business owners regarding where the economy is headed and what will happen with federal taxes specific to businesses.

“I don’t know that it’s any one thing but a lot of little things,” Stones said of the wariness in attitude.

As for the significant increase in earnings, Stones said he expected it, following the past couple of years of industry turmoil combined with a slow-growing economy.

“Banks are like any other business; it takes a while to acclimate themselves to a new environment,” he said.

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