Named 5th Strongest Bank in KC!

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Pony Express Bank Named 5th Strongest Bank in Kansas City!

Five years ago, we were in the midst of one of the worst financial disasters in U.S. history.

The Kansas City area was not immune, seeing several troubled banks shut down by regulators or gobbled up by competitors.

Today, the overall banking market in the Kansas City area is much healthier, more vibrant and stronger. But we wanted to know which banks in the area were posting the strongest numbers.

Taking a look at the most recent data available for every bank in the Kansas City area, we focused on four categories:

Core capital ratio, which measures the amount of reserves a bank sets aside. Banks are required to hold a minimum of 4 percent core capital in reserve to be considered well capitalized by regulators. If this ratio drops to less than 2 percent, regulators step in and shut a bank down.

Problem loan ratio, which shows the percentage of loans in a bank’s portfolio that are 90 days past due or are no longer accruing interest at the stated rate.

Equity capital, which is capital set aside that is free of debt and available to be used in the interest of the business.

Texas ratio, which measures the credit problems of a bank. It’s determined by adding up the problem loans and dividing them by a bank’s equity capital and loan-loss reserves. If a bank has a Texas ratio that exceeds 100 percent, it’s in serious jeopardy of being shut down by regulators.

Here, in reverse order, are the top five banks in Kansas City that performed exceptionally well when viewed under these categories,

Liberty-based Pony Express Bank takes the No. 5 spot. The 120-year-old bank focuses on the Northland and is led by CEO Scott Page.

Fourth went to Overland Park-based The Federal Savings Bank, which was named as the fastest-growing bank in the United States. It’s pairing that strong growth pace with strength.

First National Bank of Louisburg lands at No. 3. It’s a 93-year-old institution that recently established a new location in Prairie Village.

The Bank of Grain Valley took second. The bank is led by Chairman Allen Lefko, who has nearly six decades of experience.

“It hasn’t been accidental, but a goal to hit over 20 percent capital,” Lefko said. “We feel that is very advantageous because our insurance costs less. We’re also able to do things that a less capitalized bank wouldn’t be able to do. We can take more time with a loan if it’s going bad and work with our customer. It also gives us an ability to be better prepared for surprises.”

And, finally, rolling in at No. 1 on the list: Industrial State Bank. A member of the Valley View Financial family of banks, this bank posted huge capital reserves, nonexistent problem loans and strong equity capital compared with peers of its size.

“Our problem loans ebb and flow over time, but our last report was practically at nothing,” Industrial State Bank CEO Jim Lewis said. “We watch that very closely and stay on top of potential problems before they happen. We’ve also benefited greatly from an ownership group that has a view to not take really big distributions and maintain a strong capital base.”

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