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Foreclosure Houses in Kansas Clip Bank Profits



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By : John Cutts    99 or more times read
In the second quarter this year, the profits of banks in Kansas dropped sharply as foreclosure houses forced the banks to write off an increased percentage of home loans during the quarter.

The net profits of commercial banks in Kansas dropped to a low $16.3 million in the quarter ended June 30 from the $127.5 million gained during the same quarter last year.

Savings and loans association meanwhile earned only $10.5 million, a substantial 37 percent drop from their total earnings of $16.7 million in the second quarter last year.

Due to continued foreclosures in the residential market, Kansas banks made a 1.25 percent write-off on loans, an increase from the 0.41 percent during the same quarter last year. They also increased their reserves for bad loan losses to $185.3 million, much more than double the $75 million posted last year. The percentage of bad loans increased to 2.9 percent.

Savings and loans also increased their write-offs, writing off 0.49 percent during the quarter, marking an increase from the 0.12 percent during the same quarter last year.

They made $9.3 million in total reserves for bad loans, an increase from the $7.1 million they set aside last year. The reserves however marked a decrease from the $15.8 million they allocated for bad loans in the first quarter.

In the second quarter last year, there were 335 commercial banks in Kansas. This year's second quarter reports showed only 327 banks.

Nearly 19 percent of commercial banks in Kansas were unprofitable in the second quarter, more than double the 7.2 percent during the same quarter last year.

The percentage of banks posting an increase in profits decreased to 31 percent from 54 percent one year ago and from 38 percent in the first quarter.

Among Kansas savings and loans associations, 25 percent posted losses in the second quarter, an increase from the 17 percent during the same quarter in 2008. The percentage of thrifts posting an increase in profits dropped to 38 percent from the 59 percent one year ago. The percentage was unchanged from the first quarter.

Total bank deposits decreased, with deposits in commercial banks dropping from $40.5 billion one year ago to $39.7 billion in the second quarter. Deposits in thrifts however increased by 4 percent to $7.1 billion.

Nationwide, banks posted a total loss of $3.7 billion in the second quarter. It was an overwhelming contrast to the $4.7 billion they earned during the same quarter in 2008.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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