Economy

Real estate weighs heavily on Kansas City's banks

Mounting real estate woes are weighing heavily on parts of Kansas City’s banking industry. And some banks are reporting sizable net losses from foreclosed properties and delinquent real estate loans.

Dealing with those problems has taken bankers away from the business of finding good borrowers. Management members have been booted. Owners have pumped capital into banks to make them more buoyant amid a sea of troubles.

For at least six area banks, these problem assets have grown to be larger than the bank’s own equity.

Their shared situation surfaced during a review of about two dozen area banks’ year-end financial reports.

"It’s the Kansas City market," said Richard Ciemny, who was promoted in January to president and chief executive officer of First National Bank of Johnson County. "Kansas City has not been good to this bank."

The bank is based in Anthony, Kan., southwest of Wichita, and goes by its formal name, First National Bank of Anthony, outside the Kansas City area. It moved into the Johnson County market with loan offices in Overland Park and Olathe, then converted them to branches.

Ciemny, who had run the Wichita branch, said he is wary of this market's future.

"I don’t foresee that it’s going to get better very soon," he said.

Read more on this story at KansasCity.com

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