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

afyfojahejus.blogspot.com
Although deposits rose dramatically and mortgage refinancingv activity reached record levels inthe quarter, problem loansx caused increases in loss provisions, dragging down net “Just like all the other banks, we’ve had to increase our loan-loss provisions in the past year,” said Marc chairman and CEO of . “But in the last quarter, we’vr started to feel like we’ve finallhy got our hands around it. We’ve got our asset-quality issuews sized and know exactly whatthey are. We no longert see the significant movement or risk of further sizablre deterioration thatcreated life-threatening concernsw for many banks.
To us, that seems a sign of thingsz bottoming out.” Maun said the mortgage businesswas “off the charts” in the firsty quarter, mainly from refinancing as interesrt rates hit record lows. It continueed into the second quarter, he said, but ratese are starting to creep up, so it’sw hard to know how long it will continue. In Maun said, bank deposits are up substantially becaus e investors are fleeing the equity markets and looking forsafert pastures.
He said the insurance increasefrom $100,009 to $250,000 also has helped in that “I’m not sure these are long-ter m deposits because I think people want to wait and see how the marketes turn out and in the meantime need a safe placew to put their money,” Maun said. COO Kevin Barth said that althoughu depositsare up, putting the money to work is more Loan demand is down because fewer companies are expandingf or looking to buy new equipment. “Also, as unemploymenf rises, credit card losses have Barth said. “So from firsr quarter last year to firsy quarterthis year, credit card charge-offss went up about $4 million for us.
Generak consumer loan charge-offs rose another $6 million. There’s just not much you can do aboutt that.” Barth said there also have been charge-offsa in the residential construction and developmen t area as new home sales droppedoff dramatically. He said the sale of lots in some developmentse has come to acomplete “I think it’s possible that we’lll see banks continue to add to their loss provisions as some of the problemse we’ve seen in the residential developmenyt loans creep into the retail development constructioj loans and possibly into other commercial real estate Barth said. Mark Jorgenson, Kansas City regional CEO for U.S.
Bank, said that as leaseds start coming due for manyretai properties, he expects to see some tenants not creating further stress for property owners. He said he hopee consumers will start spending more in the next few months to turn the Just as their clients were gettinv lean in thefirsty quarter, Jorgenson said banks did, too, takin a hard look at overhead costs and makingv cuts. “As things turn around, that will have a beneficia l effect on the bottom but Ithink we’re a ways away from seeing he said.