Hello, MBA readers,
Are some banks over-reliant on overdraft fees? A recent report from the Brookings Institution highlighted financial institutions across the country that generated more than half of their 2020 profits from the fees. Two banks owned by Kansas City-based Dickinson Financial Corp. were among them. By comparison, the average regional bank generates about 9% of its net income from overdraft charges. Although it’s not illegal to generate a high percentage of income from overdrafts, the fees tend to disproportionately affect low-income customers, according to the report. In Jefferson City, Missouri’s Medicaid program remains at the forefront of budget conversations. After lawmakers failed to pass a tax vital to funding the health care program during the legislative session that ended last month, Gov. Mike Parson has suggested budget cuts and a special legislative session are both possible. And, as the hard-hit movie theater industry looks to diversify its offerings, one St. Louis startup is lending a hand. Mission Control, which makes software for organizing recreational sports leagues and competitions, is teaming with Cinemark to help the theater operator expand its esports business.
Want Missouri’s top business news in your inbox? Subscribe here.
Budget cuts loom without tax extension
Missouri lawmakers failed to renew a tax on health care facilities that’s vital to funding the state’s Medicaid program during their legislative session. Now, Gov. Mike Parson is threatening budget cuts, and some expect him to call a special legislative session. (Missouri Independent)
Elanco to sell former Bayer Animal Health facility in KC area
Elanco Animal Health will sell the former Bayer Animal Health North American headquarters in Shawnee, Kansas, affecting several hundred local employees. (Kansas City Business Journal)
Homebuilders McKelvey, Fischer begin construction on $100 million St. Louis County project
The companies are breaking ground on a 188-home residential development in south St. Louis County. (St. Louis Business Journal)
Sonesta adds fourth Kansas City-area property
This fast-growing hotel company took over the Hyatt Place Kansas City Airport hotel. (Kansas City Business Journal)
Red Sash Brewing opening in Kansas City’s Crossroads neighborhood
The veteran-owned brewery is coming to the Crossroads Arts District, taking over a space left behind by a different Kansas City beer business. (WDAF)
Prosecutors want KC-area fraudster to serve more than 11 years in prison
Joel Tucker has been convicted of selling phony consumer information to debt collectors and not paying millions of dollars in taxes. He faces sentencing next week. (Kansas City Star)
Virginia Stowers dies at 91
The co-founder of Kansas City’s Stowers Institute for Medical Research died Saturday. (Kansas City Star)
Two banks owned by Kansas City-based Dickinson Financial Corporation — Academy Bank and its sister bank Armed Forces Bank — are among six banks nationwide whose overdraft fees in 2020 accounted for more than half their net income, according to a Brookings Institution report. An overdraft fee typically comes from a customer who tries to purchase something that exceeds the amount in their account. The bank will then cover the overdraft and charge a fee for doing so. However, there isn’t much regulation for the amount banks can charge or profit on overdraft fees. One analyst said these six banks aren’t breaking any laws by making most of their profit this way, but the fees tend to disproportionately affect low-income customers.
Say that again
“It kept those people employed and allowed the businesses to be ready to grow again as things started to open up. … Everything’s opening up again, and those that have survived are ready to do a lot of business.”
That’s TJ Berry, deputy director of the Kansas City office of the Small Business Administration, speaking about the impact of the Paycheck Protection Program that ended late last month. More than 237,000 PPP loans were approved to businesses in Missouri to help combat the economic struggles from the pandemic. Now that the program has ended, recipients of the loans are shifting their focus from surviving the present to moving forward and planning for the future.
— Lesa Mitchell (@lesamitchell) June 4, 2021
Lesa Mitchell of the startup accelerator program Techstars tweeted last week in anticipation of Techstars Kansas City’s latest class beginning its time in the program this week. The cohort started the three-month business development program Monday. The latest class features 10 companies, including five that hail from the Kansas City area. Four of the companies that were chosen are led by women CEOs, and several are building businesses that leverage artificial intelligence, according to Techstars.
Hello, my name is
This St. Louis-based startup is making waves in the esports pool. Mission Control recently signed a partnership with the No. 3 U.S. movie theater chain, Cinemark, the St. Louis Business Journal reports. Under the deal, Mission Control will help Cinemark with the online administration of the cinema company’s esports leagues. The startup makes software designed to help organizers run recreational sports leagues, and it’s applying that to esports competitions as Cinemark looks to grow that part of its business.
It’s been a pleasure doing business with you this morning.