NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — With the recent bank failures of Silicon Valley Bank and Signature Bank earlier this year, it prompted Creighton University economist Ernie Goss to look at how many banks there are in the Midwest region now as compared to before the 2008 financial crisis.
"Kansas, much like the other states, lost over 40% due to mergers and insolvencies," Goss said. "The banking sector has really had a tough go of it over the last year. They are having to pay higher and higher rates on deposits at the same time the long term rates are not rising as much, so they are lending at lower rates. It doesn't take an economist to figure that one out."
Kansas was down to 71 banks per million in population at the end of last year. That still isn't nearly as dire as Colorado, which is down to just 12 banks per million in population.
"Community banks are doing reasonably well right now," Goss said. "They are very important to those communities out there that populate this area of the country."
The latest Rural Mainstreet Survey from Goss showed that small town bankers are skeptical that the negative effects of the tightening money supply are over.
"The survey of bank CEOs in rural areas of ten states, including Kansas, 85% of them still think we're going to see some more negative outcomes from the banking sector. In other words, we're going to see some more failures, perhaps in other regional banks and it is frustrating."
Between the banking issues and the brutal drought in Kansas, the business confidence index is still well below growth neutral, still rising slightly to a weak 38.5 for May, up slightly from 38.0 in April. That means these bankers think times could still be rough for a while in the areas they serve.
CLICK HERE to download the Hutch Post mobile app.
CLICK HERE to sign up for the daily Hutch Post email news update.