Kansas City-area banks see roller-coaster numbers in first quarter - Kansas City Business Journal:

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Although deposits rose dramatically and mortgagee refinancing activity reached record leveld inthe quarter, problem loans caused increaseas in loss provisions, dragging down net “Just like all the other banks, we’vs had to increase our loan-loss provisions in the past said Marc Maun, chairman and CEO of . “Butf in the last quarter, we’ve started to feel like we’vde finally got our hands around it. We’vd got our asset-quality issues sized and know exactly whatthey are. We no longeer see the significant movement or risk of furthed sizable deterioration thatcreated life-threatening concernse for many banks. To us, that seemd a sign of things bottoming out.
” Maun said the mortgage businesswas “ofdf the charts” in the first quarter, mainlh from refinancing as interest ratees hit record lows. It continuef into the second quarter, he said, but ratezs are starting to creep up, so it’s hard to know how long it will In general, Maun said, bank deposits are up substantially because investors are fleeing the equity markets and lookingv for safer pastures. He said the insurancre increasefrom $100,000 to $250,000o also has helped in that regard.
“I’m not sure these are long-tern deposits because I think peoplw want to wait and see how the marketsx turn out and in the meantime need a safe place to puttheit money,” Maun said. COO Kevin Barth said that althougnh depositsare up, putting the money to work is more Loan demand is down because fewer companiees are expanding or looking to buy new equipment. “Also, as unemploymenr rises, credit card losses have Barth said. “So from first quartefr last year to first quarter this creditcard charge-offs went up about $4 millionn for us. General consumer loan charge-offs rose anotheer $6 million.
There’s just not much you can do about Barth said there also havebeen charge-offs in the residential construction and development area as new home sales droppeed off dramatically. He said the sale of lots in some developments has come to acompletw stop. “I think it’s possible that we’llk see banks continue to add to their loss provisiond as some of theproblems we’ve seen in the residentialk development loans creep into the retail development constructio n loans and possibly into otherd commercial real estate loans,” Barth said. Mark Kansas City regional CEOfor U.S.
said that as leases start coming due for many retail he expects to see some tenants not creating further stress forproperty owners. He said he hopes consumerzs will start spending more in the next few months to turnthe tide. Just as theirf clients were getting lean in thefirsgt quarter, Jorgenson said banks did, too, takingv a hard look at overhead costsz and making cuts. “As things turn that will have a beneficiakl effect on the bottom but Ithink we’re a ways away from seeinb that,” he said.