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Agreement between Peoples Bank and the Federal Reserve Bank of Kansas City ( .PDF )
Lawrence-based Peoples Bank has two months to deliver a written plan for improving the bank’s “earnings and overall condition,” after being cited by federal banking regulators for underperforming business and other loans.
The $300 million bank is the 33rd in Kansas and the fourth with locations in Lawrence — joining University National Bank, Central National Bank and CornerBank — to face regulators’ orders to strengthen their financial conditions.
The Federal Reserve Bank of Kansas City released its 14-page written agreement Monday, outlining a series of management conditions, reporting standards, financial limitations and planning requirements designed to maintain the financial soundness of the bank.
The agreement mentioned a June bank examination that criticized selected loans and credit extensions. In 2009, the bank had loan chargeoffs of more than $4.9 million.
Wint Winter Jr., president and CEO of Peoples Bank, said that company shareholders had contributed $2.5 million of additional capital last year to boost the “capital cushion” for the bank, whose future he considers “very bright.”
Last year the bank reported record operating income, of $7.4 million, and improved its net liquidity by $31.3 million, Winter said.
“We’ve made substantial progress and we’re very pleased with our improved safety and soundness,” Winter said, in a statement. “We’re proud to be a responsible, family-owned community bank. We gather deposits and lend money locally. We’ve never accepted TARP funding. We don’t make subprime real estate loans.
“This agreement reflects the effects of unique local financial challenges experienced over the last couple of years by many of our business and consumer guests. Because of our close proximity and relationship with these guests, at times their challenges become ours.”
Peoples provides banking, mortgage and investment services at 15 locations, including three in Lawrence.
Comments
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ModerateOne (anonymous) says…
Mark is that a misquote? Wint probably meant to say that they don't make "subprime" real estate loans. I doubt he said that they don't make "supreme" real estate loans.
AreUNorml (anonymous) says…
I would imagine that if the federal government had actually done something to bolster the economic stability of the people, rather than the largest banks, the smaller banks wouldn't be in trouble right now.
mfagan (Mark Fagan) says…
Hello, ModerateOne.
Thanks for the note. You're right: Wint Winter said "subprime," not "supreme." (FYI: When you write "subprime," the first word that pops up on SpellCheck is "supreme"...) We've made the change.
- Mark Fagan
Reporter
Bob_Keeshan (anonymous) says…
Peoples doesn't make supreme real estate loans, they make almighty real estate loans.
Everyone knows that.
funkdog1 (anonymous) says…
Wow. A bank run by a politician. Eff that.
Thinking_Out_Loud (anonymous) says…
troll, the money in Peoples Bank is insured by FDIC. Depositors are in no danger of losing anything up to a quarter million dollars (US). Even if the Feds took it over (which I doubt will occur), they would turn it over to a solvent corporation and the entirety of your insured deposits would be available to you. Closing an account there would accomplish nothing and cost much.
Danimal (anonymous) says…
I wish the Fed. would get busy harassing the big banks that caused the financial crisis and were "too big to fail." Of course the Fed is run by the same people that bankrupted all of our major financial institutions, so they don't want to shine too bright a light into that cave.
KU_cynic (anonymous) says…
Peoples Bank's troubles appear to be due to poorly performing commercial and construction loans.
It would be interesting if the LJW would run a story comparing the financial status of all banks doing business in Lawrence with some key comparisons based on capital, asset composition and quality, and profitability. Of special interest is how many local banks are truly locally owned and how many appear local but have out-of-town stockholders.
gatekeeper (anonymous) says…
AreUNorml (Anonymous) says…
I would imagine that if the federal government had actually done something to bolster the economic stability of the people, rather than the largest banks, the smaller banks wouldn't be in trouble right now.
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Small banks that didn't do risky loans (subprime aren't the only risky loans out there) are doing well. I have a lot of family members that work in banking. Many of these small banks had money to loan while larger banks were scrambling to survive. It pays to do research on a bank before doing business with them.
devobrun (anonymous) says…
Compared to 40 or 50 years ago, the economy is stagnant and not hopeful. Even during the stagflation days of Jimmy Carter, people knew that electronics would eventually take hold and the electronic office, expanding communications, even internet were envisioned.
Today we have only the promise of green jobs. These are fictional accounts of magical new energy. It is bologna.
So, Peoples bank, United Missouri Bank and even UBS really have no place to invest that is growing and vital. Peoples Bank will survive. Construction will pick up. A few new hamburger joints will start and that will be it for the foreseeable future. Yawn.
Nope, what we really need is some of the crazy physics that has been around for about 80 years to finally find application that can turn into business, like Maxwell's equations turned into electronics. At this point, science and technology is moribund. And there are no new cell phone type apps in the works.
Stimulus schmilulus. The economy is about jobs and jobs are about growth. The horizon is flat and calm.
workinghard (anonymous) says…
Capital Federal bank was featured on the Today show for how well they stood up to the recession. I believe it was called "the little bank that could". They did not get involved in the whole subprime loan practice. I love their online banking, transfers do not have to wait until the next business day. The big banks should look at how they do things.
LarryNative (anonymous) says…
Wint's bank is being attacked for giving loans that may or may not have been 100% collaterized. The same morons who complain that banks don't give loans to them are now complaining because this bank did give loans to individuals who were risky. Wint is a great guy and People's a great bank.
ilovelucy (anonymous) says…
Agreed. And Peoples will be fine.
Alabamastreet (anonymous) says…
Wint IS a great person and I wish him and his bank well. Lawrence has gone through a rough couple of years, no surprise to me that someone who is involved helping Lawrence grow is going to be suffering a bit too at the moment.
Good luck to Peoples and Wint, but I'm sure they'll be fine.
And for heaven's sake, who ever said pull your money out, that is beyond silly. Google FDIC.
srj (anonymous) says…
The big banks stay alive because their investments are scattered across a large region. Local banks only serve one area, so if that area goes down, your in trouble. That's why most of the bank closings are only in a few states.
You are all correct about the FDIC, but it's your money. I want to add the banks needed the bailouts quick because the bank runs in the fall of 2008, on accounts that where insured (up to 100K at the time).
srj (anonymous) says…
And let's not forget the cost of FDIC insurance for the banks has skyrocketed over the past 16 months, hurting smaller banks.
blue73harley (anonymous) says…
Just a comment about the safety of your money. I took CDs out for my kids in several "local" banks during the 80's and 90s. During this time, some folded and changed names. I can't remember them all but the current US Bank at 9th and Vermont had at least one or two name changes. On one occasion, at US Bank, I had them arguing with an out-of-state bank on WHO ended up with my account. It took over a week to straighten it out.
OldEnuf2BYurDad (anonymous) says…
No publicity is bad publicity.
Unless it's this kind of publicity.
blue73harley (anonymous) says…
Correction - US Bank should read Intrust Bank...but that might have changed by now! Haven't been by there lately.
kernal (anonymous) says…
Devobrun, as I recall UMB was still in pretty good shape a couple of months ago. Their lending policies are somewhat conservative and they did not jump on the subprime bandwagon. I'm wondering why you included them in your statement, or were you just using them as an example for all banks? And, no I don't bank with them. My money is in banks chartered in KS.
kernal (anonymous) says…
Devobrun, as I recall UMB was still in pretty good shape a couple of months ago. Their lending policies are somewhat conservative and they did not jump on the subprime bandwagon. I'm wondering why you included them in your statement, or were you just using them as an example for all banks? And, no I don't bank with them - yet. My money is in banks chartered in KS.
mr_right_wing (anonymous) says…
I've always been a little suspicious of a bank that has a motto "banking UNusual".
lawthing (anonymous) says…
Does that mean no more free cookie?
coldandhot (anonymous) says…
Google FDIC? They will soon be broke. They will be borrowing newly printed money from the Treasury. Know your facts folks. Peoples and some other banks in town are likely in trouble. If real estate doesn't pick-up, banks will be closing. The biggest banks in the world are technically insolvent. This crisis ain't over. Own hard assets. Gold, silver and other natural resources. Check out www.silversaver.com. New, local company that can protect your assets.
jcphawk (anonymous) says…
There are still good banks that are fairly local. UMB Bank, based in KC, was recently rated by Forbes Magazine as the second best bank in the US. Commerce Bank was third.