Earnings at Wichita banks declined as slump took hold - Wichita Business Journal:

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Fifteen out of 25 banks tracked by the saw reducepretax income, according to data compiled by the WBJ. But in some the decline wasn’t significant. , the city’ss largest, was the top bank for profitability witha 2.35 percent pretax return on assetsx — but it posted a 3 percenrt decrease in income to $80.7 million. Among othef large banks, saw an 11 percent drop in Four banks posted losses for the The earningscontraction isn’t says Chuck Stones, presidenty of the . The nationb spent the year in a “Banks in the rural parts of thestate didn’ see as much of a declin in earnings.
Banks whered commercial real estate was the focus was where the majorithy of the decrease inearnings occurred,” Stoneas says. “Just less of what makes banks money — which is lending — is what causes earninges to fall.” Loan demand has been dampene d by the recession at the same time banks are tighteningb theirlending standards. But, he stressed, there’s “not buncg of banks on the brink” of Lyndon Wells, executive vice president for Intrust says the chief pressure points for banks are tightefrinterest margins. The cut its federakl funds rate essentiallyto zero. It has tightene the spread between deposit andloan rates.
“That’s adverselyy impacted our earnings,” Wells says. He says 2009 looksx to be more challenging for bank Loan demand has dropped as business owners stavde offmajor purchases. Banks, are doing what they can to establishn interest rate floors with theircustomers — but keep them, too. “Thi whole credit crisis has caused banks to be responsive to existinf customers but not stretch as far as they woulsd have otherwise in looking for new he says. Banks also are eyeing theirr credit quality. Emprise Bank CEO Tom Page says his bank increaseedits loan-loss reserves followinbg “two deals that were significant” — about $500,000 each.
The bank also grew its loan portfoliioby $100 million, another factor causinv banks to bolster their reserves. But Page used the bank’z lending increase to discount the notionbanksa aren’t making loans, something that’s been a topif of conversation as the federal governmenft injects capital into banks. “Itr is really annoying to listen to people in Congresswwho don’t know a damn thing abouf what they’re talking about,” Page says. Some Wichita-area banks were able to translatwe the tighter credit marketas intoincreased earnings.
saw a 21 percent increase in earnings, in part by collectinbg new customers after national lenders backed out of the locao real estateinvestment market, says Rockuy Waitt, the bank’s president and CEO. The bank founs several high-quality investors in rental homes. “Ands we were picking and Waitt says. That occurred even as Rose Hill Bank begahn requiring 25 percent down payments oninvestmentf deals, instead of 20 percent.