FINANCIAL INDUSTRY PERSPECTIVES

          The Federal Reserve Bank of Kansas City’s latest edition of Financial Industry Perspectives features an examination of low and moderate-income home financing trends in Kansas City and an article highlighting successful strategies used by banks in low-growth markets.

          In "Low and Moderate-Income Home Financing: What are the Trends in Kansas City?" James Harvey, senior examiner and policy economist, and Kenneth Spong, senior policy economist, find substantial growth has occurred in home purchase lending in the Kansas City area, with an increasing share of the lending going to low- and moderate-income borrowers and neighborhoods. The authors, who examined mortgage lending in the period from 1992 to 2001, also find a growing importance of home lending by banking organizations without deposit-taking offices in Kansas City.

          In "Community Bank Performance in Slower Growing Markets: Finding Sound Strategies for Success," Spong and Forest Myers, policy economist, write about the challenges faced by banks in rural areas that are experiencing slower economic growth and how the banks respond to those challenges. The authors also note a number of strategies used by some of the more successful banks in slower growing markets. In addition to beginning with a positive, but realistic attitude towards what they can accomplish, these banks also:

• Get the basic business of banking down right, from customer service to efficient operations and unquestionable credit quality;
   

• Are skillful in entering new business lines;
   
• Actively assist the local community and the next generation of bank customers.

          Financial Industry Perspectives is available on the Bank’s public web site at www.kansascityfed.org. A print copy is available from the Federal Reserve Bank of Kansas City upon request.

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