A.M. Best Assigns Ratings to Central Bank of Kansas City and Central Bancshares of Kansas City, Inc

Business Wire, Oct 11, 2007

OLDWICK, N.J. -- A.M. Best Co. has assigned a Bank Deposit Rating (BDR) of "bbb " and an issuer credit rating (ICR) of "bbb " to Central Bank of Kansas City (Kansas City, KS), and an ICR of "bbb" to Central Bancshares of Kansas City, Inc. (Kansas City, KS). The outlook for all ratings is stable.

The rating of Central Bank of Kansas City, an urban community development bank, is based on its franchise strength and superior financial performance achieved through a well-positioned strategic model, strong implicit support from government agencies, years of experience within its management team, goodwill among the community and strong support of its shareholders. These are tempered in part by informal risk management procedures and accounting policies, areas potentially needing greater analytical depth prior to bank growth.

Central Bank of Kansas City's strong earnings consistently have outranked both mainstream banks similar in asset size and other community development banks across the nation. The bank's operating performance is based on diverse earnings sources, including a competitive net interest margin, strong non-interest income and limiting of loan losses. Management's focus on outreach programs and community relations are a key part of its operating performance in this market, having a variety of products and high levels of individualized customer service to meet the needs of the local community.

The bank's balance sheet condition is good. Its historically prudent upfront credit risk underwriting protected its capital while the bank operated profitably through the closing of a nearby steel plant and other economic setbacks. Liquidity is derived from a strong base of core deposits. The overall risk profile is not complex.

While the scope and nature of the bank's operation is without complex risk issues, the ratings of the bank also reflect some limitations within its risk management, accounting and reporting systems. Prior to future growth, accounting procedures may need to be expanded to provide disclosures appropriate for a larger institution. Monitoring of liquidity risk and portfolio-wide, industry or sector credit risk is currently conducted but in a less technical or quantitative manner. However, management is taking steps to strengthen some of these functions.

Central Bancshares of Kansas City, Inc. is the holding company for Central Bank of Kansas City, a small bank with assets of approximately $140 million in total assets as of June 30, 2007. In operation for more than 50 years, Central Bank of Kansas City is committed to the neighborhoods of urban Kansas City and has developed special features in its loan and deposit products, credit underwriting and leadership ties that enable it to effectively lend to local small business borrowers and residents. As a community development banking organization, its management is especially focused on promoting economic growth in low-moderate income neighborhoods of Kansas City.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.