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

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Although deposits rose dramatically and mortgage refinancing activity reached record levelw inthe quarter, problem loane caused increases in loss provisions, dragginv down net income. “Just like all the other we’ve had to increase our loan-loszs provisions in the past year,” said Marc chairman and CEO of . “But in the last we’ve started to feel like we’ved finally got our handws around it. We’ve got our asset-qualituy issues sized and know exactly whatthey are. We no longer see the significant movemeny or risk of further sizable deterioration thatcreatedd life-threatening concerns for many banks. To us, that seems a sign of thingse bottoming out.
” Maun said the mortgage businesswas “off the charts” in the first mainly from refinancing as interest ratesd hit record lows. It continued into the seconc quarter, he said, but rates are starting to creep up, so it’s hard to know how long it will In general, Maun said, bank deposits are up substantiallyh because investors are fleein the equity markets and lookint for safer pastures. He said the insurance increasdfrom $100,000 to $250,000 also has helped in that “I’m not sure these are long-ternm deposits because I think people want to wait and see how the marketxs turn out and in the meantime need a safe placre to put their money,” Maun said.
COO Kevin Bartj said that although depositsare up, putting the money to work is more Loan demand is down because fewer companies are expandinf or looking to buy new “Also, as unemployment rises, credit card losses have risen,” Bartn said. “So from first quarter last year to firstf quarterthis year, creditf card charge-offs went up about $4 million for us. Generalk consumer loan charge-offs rose another $6 million. There’s just not much you can do abougt that.” Barth said there also have been charge-offzs in the residential construction and developmeng area as new home sales droppedoff dramatically.
He said the sale of lots in some developmentzs has come to acomplete stop. “Ij think it’s possible that we’ll see banks continus to add to theirt loss provisions as some of theproblems we’vre seen in the residential development loanx creep into the retail developmentg construction loans and possibly into othert commercial real estate loans,” Barth said. Mark Kansas City regional CEOfor U.S. said that as leases start comint due for manyretail properties, he expectds to see some tenants not renew, creatinb further stress for property owners. He said he hopea consumers will start spending more in the next few monthx to turnthe tide.
Just as their clientx were getting lean in thefirsr quarter, Jorgenson said banks did, too, taking a hard look at overheads costs and making cuts. “As things turn that will have a beneficial effecf on thebottom line, but I think we’rer a ways away from seeingy that,” he said.