Beams of Sunlight for Bistate Banks

PUBLISHED JULY 2025

One must possess a truly ravenous appetite for financial-services data—or perhaps just have way too much time on one’s hands—to turn up these particular data nuggets, but there they are: Buried deep in the Kansas City Federal Reserve Bank’s assessment of banking conditions in the 10th District (Page 30 of a 33-page analysis) are a few figures that at the very least defy recent banking history, if not expectations:

• As the first quarter of 2025 came to a close, there were actually more commercial banks operating in the two-state area than in the opening quarter of 2024. Kansas added seven, reaching 196, while Missouri picked up an additional bank to hit 201.

• Although assets, total loans and deposits pulled back slightly in each state, there were significant declines in what are categorized as problem assets: In Missouri, the total for those plunged from $1 billion to $670 million; in Kansas, the figure dropped from $404 million to $269 million.

• And in terms of asset quality—including non-current construction and development, commercial real estate, residential, commercial/industrial loans—Missouri banks saw declines in seven key lending categories, while Kansas banks recorded improvement in five of the seven markers (non-current C&D and non-current farm loans were the exceptions.)

A quarter that began with widespread trepidation of a looming recession turned out to be, in sum, a period of banking stability. The percentages of banks with operating losses fell in each state, the average return on assets increased in both, and the percentage of loan losses to average loans was down significantly in each state.

While the year-over-year figures suggest a period of relative calm, though, a broader view of regional bank lending offers a much sunnier picture. Overall, banks in the two-state region have been thriving since the onset of the pandemic, growth fueled in large part by the initial policy responses and federal cash infusions that came in response to COVID-19.

That longer look, and a sharper focus on just the Kansas City area, shows that for the 70 banks operating throughout that period, loan/lease portfolios surged from $57.7 billion to more than $93.7 billion—an increase of 62.38 percent. The money was flowing considerably freer on the Missouri side; those banks accounted for nearly $19 billion of the roughly $23.6 billion surge in loan volumes.

So who’s driving that boat?

In dollar volumes, just three lenders accounted for more than 70 percent of the increased lending volume: UMB Bank (up $12.04 billion), Commerce Bank ($2.47 billion) and then-CrossFirst Bank, now Busey Bank ($2.38 billion).

In percentage terms of portfolio growth, though, the community banks stood tall: 10 recorded increased lending of more than 100 percent over that five-year period. Leading the way was Kendall Bank, which found paydirt when it expanded from its Jefferson County roots in Kansas and set up shop in Johnson County. Its five-year growth rate was an impressive 544.52 percent. 

Not far behind was Bank of Orrick at 480.41 percent portfolio growth, with eight others recording increases of between 100 and 150 percent.