Kansas City, Mo. ? Kansas banks recorded much smaller profits in the second quarter of 2009 as bad loans continued to hurt lenders’ bottom lines.

The Federal Deposit Insurance Corp. said Thursday that Kansas’ commercial banks reported a combined net profit of $16.3 million for the three-month period ending June 30. By comparison, the banks earned $127.5 million during the same period a year ago.

The state’s savings and loans reported earning $10.5 million, a 37 percent decline from the $16.7 million reported a year ago.

Demonstrating the continued pressure on banks because of foreclosures in the housing market, Kansas banks wrote off 1.25 percent of loans and leases during the quarter, up from 0.41 percent a year ago and the percentage of nonperforming assets, or loans past due, rose to 2.9 percent. Money set aside to cover potential loan losses also spiked, rising from $75 million a year ago to $185.3 million now.

It was similar for savings and loans, which wrote off a net of 0.49 percent of loans and leases, up from 0.12 percent a year ago, and reported that 0.96 percent of assets were nonperforming. They also set aside $9.3 million for potential loan losses, up from $7.1 million a year ago but down from $15.8 million in the first quarter.

The percentage of unprofitable commercial banks more than doubled from a year ago from 7.2 percent to almost 19 percent while those reporting an increase in earnings fell from 54 percent to 31 percent and 38 percent in the first quarter. The state had 327 commercial banks in the second quarter, down from 335 a year ago.

Among Kansas thrifts, of which there were 16 in the second quarter, down from 17 a year ago, the percentage of unprofitable ones increased to 25 percent, up from 17 percent a year ago. Almost 38 percent of the savings and loans recorded an increase in earnings, down from almost 59 percent a year ago and flat from the first quarter.

Commercial banks reported total deposits during the second quarter of $39.7 billion, down from $40.5 billion a year ago. But savings and loans saw a 4 percent increase to $7.1 billion.

Nationally, banks lost $3.7 billion during the quarter compared with a $4.7 billion profit during the second quarter of 2008.