Aug. 2--Columbian Bank and Trust Co. is working with regulators, investment bankers and consultants to resolve loan problems, boost its capital backing and recruit a new top officer.

Its actions were spurred in part by an agreement with regulators and a $5.2 million loss in the second quarter. The loss stemmed from a decision to set aside money to cover potential losses on real-estate loans.

The Federal Deposit Insurance Corp. has urged banks with heavy real-estate loan portfolios to boost reserves and their capital backing. Some other area banks have reported quarterly losses resulting from steps to deal with problem real-estate loans.

Columbian issued a statement Friday that said its problems stemmed from a volatile real-estate market. It said the 88-year-old bank has been through downturns before and "will work through this one as well."

The $735 million bank is based in Topeka and has branches in Johnson County and Lee's Summit. Columbian has actively lent money in those markets and elsewhere, including Arizona and Texas, often to commercial real-estate developers. The three-month loss essentially offset the bank's first-quarter profit, leaving Columbian with a $3,000 profit in six months.

More important, the loss cut into the bank's capital reserves, which previously exceeded regulators' standard for a well-capitalized bank.

Columbian remains adequately capitalized by regulators' measures, said Carl McCaffree, its owner.

McCaffree, who owns the bank through its parent company, said Friday he would be able and willing to write a check for additional capital should it become necessary.

"I'm the only shareholder. That's a possibility," he said.

The bank has hired Milestone Advisors LLC in Washington to explore other measures to boost the bank's capital levels. Additional funds could come from other investors or from selling assets.

Banks also can boost capital ratios by shrinking in size, which reduces the amount of total capital the bank needs to meet regulators' standards.

McCaffree acknowledged that the bank is operating under a July 15 agreement with banking regulators, though the agreement has not been disclosed publicly by regulators.

Thomas Thull, Kansas' banking commissioner, could not be reached for comment.

As part of the agreement, Columbian is seeking a new chief executive officer.

Jim Helvey, who has held that post for 12 years, retired this week. Helvey, 67, said he remains with the bank as a consultant.

McCaffree, who is not an officer of the bank, said the new CEO would come from outside Columbian.

Helvey said many of the bank's loans financed real-estate developers' purchases of land. He said Columbian's loans typically were paid off as developers sought and gained construction lending from other banks.