Community Banking News Blog | Community Bankers of Iowa (CBI)

Iowa Legislature Update – Week Ending Feb. 7, 2020

2/7/2020

by Charlotte Eby - Managing Director of Government Affairs, LS2group

View the Iowa Legislative Bill Tracker

Overview/Major Events
Iowa presidential caucuses under fire after results delayed for days
Results of Iowa’s first-in-the-nation presidential caucuses were marred Monday night with delays and technical errors, with no definitive winner declared after months of intense campaigning. The caucuses came under a harsh national spotlight when networks that had come to Iowa to broadcast results had no winner to report on caucus night. One news outlet described the night as an “epic meltdown.” By Thursday morning, Democrats Pete Buttigieg and Bernie Sanders were locked in a dead heat as results trickled in from the last precincts.

The Iowa Democratic Party, which administers the caucuses, blamed the delays on a faulty phone app that precincts were supposed to use to report results. Instead, many of the local officials chose to report their results by phone, jamming phone lines for hours.

None of the large field of candidates got the type of media bounce a caucus winner typically enjoys. Soon after the caucuses were over, candidates and their campaigns already were headed to New Hampshire, which holds its presidential primary on Feb. 11.

November Rural Mainstreet Index Rises to Highest Reading for 2019: Bankers Expect Holiday Sales to Grow by only 1.3% from 2018

11/25/2019

November Survey Results at a Glance:

Overall index climbs to highest reading for 2019. It also marked the fourth time in the past five months that the overall index has risen above growth neutral.
The trade war with China and the lack of passage of the USMCA are driving confidence and the economic outlook lower for most areas of the region.
On average, bankers, expect a 1.3% expansion with 17.1% of bank CEOs anticipating a decline in retail sales from last year.
Bankers reported that approximately 16.7% of farmers and 5.5% of business owners in their area had no organization succession plan.

OMAHA, Neb. (Nov. 21, 2019) – The Creighton University Rural Mainstreet Index (RMI) for November climbed above growth neutral for the fourth time in the past five months, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The overall index rose to 54.2 from 51.4 in October. Although still tepid, this is the highest reading for 2019. It also marked the fourth time in the past five months that the overall index rose above growth neutral.

“Federal agriculture crop support payments and somewhat higher grain prices have boosted the Rural Mainstreet Index slightly above growth neutral for the month. Given a continued weak rural economy, bank CEOs, on average, expect holiday buying to increase by only 1.3% above last year’s levels,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Jeff Bonnett, president of Havana National Bank in Havana, Illinois, reported that, “The latest harvests are showing significant declines in test weights leading to the point that 2019 harvest production looks to be running below average.” Bonnett goes on to say that grain prices are still sitting at extremely low levels for such yields.

Farming and Ranching: The farmland and ranchland-price index for November increased slightly to a weak 40.4 from October’s 40.3. This is the 72nd straight month the index has remained below growth neutral 50.0.

The November farm equipment-sales index declined to 37.5 from October’s 39.7. This marks the 74th month the reading has remained below growth neutral 50.0.

July Rural Mainstreet Index Above Growth Neutral: Bankers See Negative Tariff Impacts on Economy

7/22/2019

July Survey Results at a Glance:

For the seventh time in the past eight months the Rural Mainstreet Index remained above growth neutral.
Bankers reported that approximately one in 10 farm operating loans from 2018 were not repaid and were rolled into 2019 loans.
Less than half of bank CEOs think the Federal Reserve should reduce short-term interest rates at its July meetings.
Almost nine of 10 bankers reported that tariffs and trade skirmishes have had, or will have, a negative impact on their local economy.

OMAHA, Neb. (July 18, 2019) – The Creighton University Rural Mainstreet Index (RMI) for July rose above growth neutral for the month. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, the RMI for July indicated positive growth for the region.

Overall: The overall index fell to 50.2 from 53.2 in June. This is the seventh time in the past eight months that the index has remained above growth neutral. The index ranges between 0 and 100 with 50.0 representing growth neutral, and an RMI below the growth neutral threshold. 50.0, indicates negative growth for the month.

“Higher agriculture commodity prices and rebuilding from recent floods supported the Rural Mainstreet Index (RMI) for the month. Furthermore, almost nine of 10 bankers reported tariffs and trade skirmishes have had, or will have, a negative impact on their local economy. This is up from eight of 10 recorded last September,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

June Rural Mainstreet Index Climbs Above Growth Neutral: Farm Woes Raise Loan Defaults for One-Fourth of Bankers

6/21/2019

June Survey Results at a Glance:

For the sixth time in the past seven months the Rural Mainstreet Index climbed above growth neutral.
More than one in four bank CEOs reported rising loan defaults due to farmer financial woes.
Almost half of bankers reported that due to crisis level farm income, farmers in their area have responded by selling the farm, or otherwise leaving the farm.
Almost seven of 10 bank CEOs support continuing or raising current tariff levels.

OMAHA, Neb. (June 19, 2019) – The Creighton University Rural Mainstreet Index (RMI) for June rose above growth neutral for the month. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, the RMI for June indicated positive growth for the region.

Overall: The overall index climbed to 53.2 from 48.5 in May. This is the sixth time in the past seven months that the index has risen above growth neutral. The index ranges between 0 and 100 with 50.0 representing growth neutral, and an RMI below the growth neutral threshold. 50.0, indicating negative growth for the month.

“Higher agriculture commodity prices and rebuilding from recent floods boosted the Rural Mainstreet Index (RMI) for the month. Furthermore, despite the negatives from the trade war, 69.4 percent of bankers support either raising, or continuing current tariffs,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Jeff Bonnett, president of Havana National Bank in Havana, Illinois, said it has been estimated that anywhere from 15 to 20 million acres were not planted in corn.

According to Bonnett, “Based upon this information, corn prices should be in the $5.75 to $6 (or more) a bushel range. What are we missing? Will the true corn acres planted be revealed after the required certification through FSA due by July 15th?”

Rural Mainstreet Index Rises for March: Almost Half Report Negative Flood Impacts

4/16/2019

March Survey Results at a Glance:

Overall index moves above growth neutral and to its highest level since December of last year.
More than half of supply managers reported negative economic impacts from flooding.
Approximately 82.9 percent of bankers reported that the number one reaction to farmer financial stress has been restructuring loans.
On average, bankers expect approximately 18 percent of grain farmers to experience expenses to exceed revenue for 2019. Up only slightly from March 2018.

OMAHA, Neb. (March. 21, 2019) – The Creighton University Rural Mainstreet Index for March rose to its highest level since December of last year according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. A large share of survey responses occurred before most of the negative impacts of the recent floods became widely known.

Overall: The overall index expanded to 52.9 from 50.2 in February. This is highest reading since December of last year, and the eleventh time in the past twelve months that the index has moved above growth neutral. The index ranges between 0 and 100 with 50.0 representing growth neutral.

Rural Mainstreet Index Falls for February: Almost Two-Thirds of Banks Raised Farm Loan Collateral Requirements

4/16/2019

February Survey Results at a Glance:

Overall index remains above growth neutral for the 11th time in past 12 months.
Bank CEOs project a 6.1 percent decline in farm equipment sales over the next year compared to a 6.9 percent reduction last February.
Weak farm income has pushed almost two-thirds of banks to increase collateral requirements on farm loans.
Almost one-third of banks have increased the farm loan rejection rate due to anemic farm income.

OMAHA, Neb. (Feb. 21, 2019) – The Creighton University Rural Mainstreet Index for February fell, but remained above growth neutral, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The overall index sank to 50.2 from January’s 51.5. This was the 11th time in the past 12 months the index has remained above growth neutral. The index ranges between 0 and 100 with 50.0 representing growth neutral.

“Our surveys over the last several months indicate the Rural Mainstreet economy is expanding outside of agriculture. However, the negative impacts of tariffs and low agriculture commodity prices continue to weaken the farm sector,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Rural Mainstreet Index Falls for January: More Than Forty Percent See Loan Defaults Biggest 2019 Challenge

2/14/2019

January Survey Results at a Glance:

Overall index moves above growth neutral for the 11th time in past 12 months.
More than four of 10 bank CEOs expect farm loan defaults to be biggest 2019 challenge.
More than one third of bankers support the Federal Reserve holding on 2019 rate hikes.
Only 22.9 percent, or slightly more than one in five, bankers reported expanding economic conditions in their area.

OMAHA, Neb. (Jan. 17, 2019) – The Creighton University Rural Mainstreet Index for January fell, but remained above growth neutral, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The overall index sank to 51.5 from December’s 54.2. This was the 11th time in the past 12 months the index has remained above growth neutral. The index ranges between 0 and 100 with 50.0 representing growth neutral.

“Our surveys over the last several months indicate the Rural Mainstreet economy is expanding outside of agriculture. However, the negative impacts of tariffs and low agriculture commodity prices continue to weaken the farm sector,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Rural Mainstreet Index Shows Growth for December: More Than Half of Bankers Increased Farmer Collateral Requirements

2/14/2019

December Survey Results at a Glance:

Overall index moves above growth neutral for the 10th time in past 12 months.
Bankers project negative cash flow (losses) for more than one in six grain farmers.
More than half of bankers have boosted collateral requirements for farm loans due to low agricultural income
One-fourth of bank CEOs have made no change in farm lending practices due to weak farm income.
Approximately one in 10 bank CEOs project 2019 farm loan defaults to rise by over 10 percent over 2018 levels.

OMAHA, Neb. (Dec. 20, 2018) – The Creighton University Rural Mainstreet Index for December rose above growth neutral after slipping below the 50.0 threshold in January, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The overall index climbed to 54.2 from November’s 49.9, its first sub-growth neutral reading since January 2018. The index ranges between 0 and 100 with 50.0 representing growth neutral.

“Our surveys over the last several months indicate the Rural Mainstreet economy is expanding outside of agriculture. However, the negative impacts of tariffs and low agriculture commodity prices continue to weaken the farm sector,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Larry Winum, CEO of Glenwood State Bank in Glenwood, Iowa, said, “Glad to see Congress passed a bipartisan farm bill. (It) allows farmers and their community bankers to budget more accurately in the future.”

Rural Mainstreet Economy Declines for July: More Than 3 of 5 Bankers Report Negatives from Trade Skirmishes

7/23/2018

July Survey Results at a Glance:

For a sixth straight month the overall index rose above growth neutral.
Almost one-third of bank CEOs recommended that the Federal Reserve leave short-term interest rates at their current levels for the rest of the year.
More than three of five, or 78 percent, of bank CEOs reported that current trade skirmishes and rising tariffs have had a negative impact on their local economy.
Approximately 75.6 percent of bankers reported negative impacts of trade rifts and tariffs on grain farmers in their area.
Economic confidence plummeted among bankers for the month.

OMAHA, Neb. (July 19, 2018) – The Creighton University Rural Mainstreet Index climbed above growth neutral in July for a sixth straight month, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. This is the first time since the July 2014 survey that the overall index has risen above growth neutral for six straight months.

Overall: The overall index slid to 53.8 from 56.1 in June. The index ranges between 0 and 100 with 50.0 representing growth neutral.

“Surveys over the past several months indicate the Rural Mainstreet economy is solid but with less positive economic growth. However, the negative impacts of recent trade skirmishes have begun to surface with the weakening of already anemic grain prices,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Pete Haddeland, CEO of the First National Bank in Mahnomen, Minnesota, said, “Grain prices are at, in some cases, 10-year lows. Not good.”

According to Fritz Kuhlmeier, CEO of Citizens State Bank in Lena, Illinois, “The trade issues/tariffs have been devastating on our local dairy industry when tacked on top of already below cost or breakeven milk prices.”

Rural Mainstreet Economy Expands for June: Rate of Farm Loan Rejections Almost Doubles Among Banks

6/18/2018

June Survey Results at a Glance:

For a fifth straight month the overall index rose above growth neutral.
In reaction to weak farm income, the percentage of banks increasing farm loan rejection rates expanded from 23.9 percent to 42.9 percent over the past year.
Almost two-thirds of bankers indicated their banks had increased collateral requirements on farm loans in reaction to weak farm income.
On average, bankers expect farmland prices to decline by 2.1 percent over the next 12 months. This is less than the 3.1 percent projected fall recorded last year at this time.

OMAHA, Neb. (June 21, 2018) – The Creighton University Rural Mainstreet Index climbed above growth neutral in June for a fifth straight month, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. This is the first time since July 2015 the survey has recorded five straight months of overall indices above growth neutral.

Overall: The overall index slid slightly 56.1 from 56.3 in May. The index ranges between 0 and 100 with 50.0 representing growth neutral.

“Surveys over the past several months indicate the Rural Mainstreet economy is trending upward with improving, and positive economic growth. However, the negative impacts of recent trade skirmishes has yet to show up in our survey results. While agriculture commodity prices have improved recently, prices remain below breakeven for a large share of grain farmers,” said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.