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Archive for Tuesday, January 14, 1992

ASSET TOTAL FALLS IN 3RD QUARTER

January 14, 1992

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Douglas County's commercial banks established no discernible trend with their performance during the third quarter of 1991, which saw assets at two of the local institutions shrink from their second-quarter levels while other banks remained in something of a holding pattern.

For the July to September period, the six banks with previous track records had combined assets of $428.38 million, down from $435.8 million a quarter earlier. However, their third-quarter asset total represented an increase over the $425.3 million reported at the end of 1990.

The six existing Douglas County-based commercial banks were joined during the third quarter by The University National Bank, which until Sept. 30 had operated under a thrift charter as Savings Bank of Lawrence.

UNB then contributed another $13.91 million to the third-quarter combined asset total, raising it to $442.29 million.

ASSETS AT The Bank of Kansas/Lawrence were $59.856 million, down from $60.989 million in the second quarter. But for individual banks, the most notable change occurred at Lawrence National Bank, which is in the process of being sold. There, assets decreased by about $4.8 million from the second quarter and were down 7.3 percent from the end of 1990.

The value of LNB's loan portfolio dropped by about $510,000 from the previous quarter and was down 11 percent from the end of the year.

MidAmerican Corp., the bank holding company that owns First National Bank of Lawrence, currently is negotiating a definitive agreement to buy LNB.

Terry Sutcliffe, president of LNB, said the figures were the result of several factors.

"I think it's the pending sale and then interest rates are lower," he said. "Ordinarily that would mean that people would be borrowing, but I think we're starting to see pay-downs because they don't want to be in debt."

THE TOTAL size of the six banks' combined loan portfolio was $256.359 million, up 2.11 percent from the second quarter and up 5.6 percent from the end of 1990. The addition of UNB's loans to the six-bank total raised the combined figure to $261.707 million.

Of the seven Douglas County-based banks, four posted a return on average assets (ROA) greater than 1, which is considered the industry benchmark of profitability.

The lowest, an ROA of 0.12, belonged to UNB. Todd Sutherland, UNB's president, said the low profit was a reflection that the institution, which was founded as a federal savings bank in 1988, was relatively young and also had conversion costs to absorb during the quarter.

Compared with peer institutions, those with similar longevity, Sutherland said that UNB looked good.

"The fact that we're making any profit is unusual," he said.

Although all seven banks exceeded the regulatory requirement for a capital-to-assets ratio of at least 6, UNB's was the highest at 20.77. That ratio measures a bank's cushion against losses.

THIRD-QUARTER results for the county's commercial banks, as reported by Sheshunoff Information Services Inc., a Dallas-based banking analysis firm, are:

Baldwin State Bank: Assets, $36,197,000; loans, $19,466,000; non-performing loans, $204,000, as a percentage of gross loans, 1.05 percent, as percentage of total assets, 0.56 percent; income before extra items, $403,000; ROA, 1.51; and capital-to-assets ratio, 12.30.

Kaw Valley State Bank: Assets, $27,200,000; loans, $13,354,000; non-performing loans, $133,000, as a percentage of gross loans, 1.00 percent, as percentage of total assets, 0.49 percent; income before extra items, $174,000; ROA, 0.88; and capital-to-assets ratio, 6.31.

The Bank of Kansas/Lawrence: Assets, $59,856,000; loans, $38,099,000; non-performing loans, $126,000, as a percentage of gross loans, 0.33 percent, as percentage of total assets, 0.21 percent; income before extra items, $326,000; ROA, 0.73; and capital-to-assets ratio, 6.60.

Douglas County Bank: Assets, $100,345,000; loans, $49,412,000; non-performing loans, $233,000, as a percentage of gross loans, 0.47 percent, as percentage of total assets, 0.23 percent; income before extra items, $872,000; ROA, 1.16; and capital-to-assets ratio, 12.67.

First National Bank: Assets, $147,697,000; loans, $95,505,000; non-performing loans, $323,000, as a percentage of gross loans, 0.34 percent, as percentage of total assets, 0.22 percent; income before extra items, $1,772,000; ROA, 1.63; and capital-to-assets ratio, 7.52.

Lawrence National Bank: Assets, $57,085,000; loans, $40,523,000; non-performing loans, $421,000, as a percentage of gross loans, 1.04 percent, as percentage of total assets, 0.74 percent; income before extra items, $928,000; ROA, 2.06; and capital-to-assets ratio, 10.01.

The University National Bank: Assets, $13,910,000; loans, $5,348,000; non-performing loans, zero, as a percentage of gross loans, zero, as percentage of total assets, zero; income before extra items, $13,000; ROA, 0.12; and capital-to-assets ratio, 20.77.

THIRD-QUARTER performance totals for two other commercial banks that have branch offices in Douglas County are included in the results for the banks that serve as their home offices. Results for their Douglas County operations are not reported separately.

Bank IV Kansas City: Assets, $547,662,000; loans, $303,280,000; non-performing loans, $3,054,000, as a percentage of gross loans, 1.01 percent, as percentage of total assets, 0.56 percent; income before extra items, $514,000; ROA, 0.12; and capital-to-assets ratio, 6.58.

Emprise Bank of Hillsboro: Assets, $38,291,000; loans, $21,955,000; non-performing loans, $245,000, as a percentage of gross loans, 1.12 percent, as percentage of total assets, 0.64 percent; income before extra items, $105,000; ROA, 0.38; and capital-to-assets ratio, 11.34.

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