Intrust Bank wrote off $57.4 million in loans in 2012, according to a filing with federal bank regulators.
Most of the charge-offs were in commercial loans, according to the bank’s report of condition and income.
“It was a few bad loans that every banker hopes gets better,” Intrust chairman and CEO Charlie Chandler said on Wednesday.
The report said Wichita’s largest, locally based bank wrote off as bad debt $55.1 million in commercial and industrial loans, $2.1 million in credit card loans, and $148,000 in automobile and other loans.
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Chandler said based on the bank’s economic outlook, he and others decided to write off the loans because “the chance of these getting better was dimming.”
“When we do have a problem, we address it rapidly and aggressively so it doesn’t become an ongoing issue for us,” he said.
The bank posted a profit of $8.9 million for the year. That compares to profit of $43.3 million in 2011.
Chandler said that the bank covered most of the loans it wrote off with its 2012 earnings. “Had it not been for the charge-offs, earnings would have been better for the year,” he said.
Rick LeCompte, a Wichita State University finance professor, said after examining Intrust’s report that while $57 million is a lot of money, it represents about 1.3 percent of Intrust’s $4.3 billion in assets.
“Some of these credit card companies have write-offs of 5 or 6 percent (of their assets),” LeCompte said.
LeCompte said he thinks Intrust is a safe and sound bank.
“If you’re going to make loans, occasionally you’re going to lose some,” he said. “They’re basically doing what they’re supposed to do, owning up to their losses.”
Last March, Intrust was named a secured creditor that was owed $53.2 million by Ryan International Airlines, which filed Chapter 11 bankruptcy reorganization in U.S. Bankruptcy Court for the Northern District of Illinois. The company, which was founded by Ron Ryan, was headquartered in Wichita until it was sold in 2004 to Rubloff Jet Express, which was based in Rockford, Ill.
According to news reports, Ryan International liquidated and ceased operations last month.
Chandler declined to say if any of the loans it wrote off were connected to the Ryan International bankruptcy.
“We don’t comment on any customers in situations like this, for that matter, any customers,” he said.