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OSBC says Kansas banks are overall strong but monitors a few troubled institutions closely
Summary
OSBC reported 153 state-chartered banks managing about $218.9 billion in assets, noted a decline in the number of state charters since 2020, and said three banks carried CAMELS ratings of 3–5 with one at a 5 that the agency monitors daily.
Brock Raeler told the Financial Institutions and Insurance Committee that Kansas’s state-chartered banking sector remains generally strong but is experiencing consolidation. He said Kansas had 153 state-chartered banks in 2025—31 with active trust departments, 13 trust companies and one TAPI—collectively managing about $218.9 billion in assets.
Raeler explained the agency uses CAMELS ratings to evaluate institutions on capital, asset quality, management, earnings, liquidity and sensitivity to market risk, with overall ratings of 1 (best) to 5 (worst). He told the committee that three banks were rated at levels considered troubled (3–5) and that one bank carried a 5 rating. "The 5 rated bank is a very serious concern for us," Raeler said. "We do not rate a 5 lightly, and that is one that we are having conversations with on a daily basis. As of right now, it is not in danger of failing, but we are looking at it very closely."
Raeler also summarized examination practices: state exams occur at least every 18 months and may be alternated with federal regulators (FDIC or Federal Reserve), with joint or concurrent exams more likely for troubled institutions. He said the combination of fewer banks and growing total assets reflects national trends.
On trust assets, Raeler said the state’s trust industry manages about $161 billion in client assets and that Midwest Institutional Trust assumed custodial trust assets from BMO Bank in 2024, substantially increasing the state’s reported trust assets.
The committee asked clarification questions; the presentation was informational and prompted no immediate policy votes.
