Community Bankers of Iowa Monthly Banker Update January 2014 | Page 17
According to Michael Flahaven, president of Wenona State
Bank in Wenona, “Community banks are being forced out of
residential real estate loans. As this happens I expect small
banks and their communities to suffer.”
to a still solid 55.6 from November’s 58.8. The farmland and
ranchland price index expanded to 69.4 from November’s 68.0.
Colorado’s hiring index for December fell to a still healthy 58.7
from November’s 63.5.
Each month, community bank presidents and CEOs in nonurban, agriculturally and energy-dependent portions of a
10-state area are surveyed regarding current economic
conditions in their communities and their projected economic
outlooks six months down the road. Bankers from Colorado,
Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North
Dakota, South Dakota and Wyoming are included. The survey is
supported by a grant from Security State Bank in Ansley, Neb.
Illinois: The RMI for Illinois slipped to 54.1 from November’s
54.5. The RMI has remained at or above growth neutral for
15 straight months. The state’s farmland price index rose to a
weak 47.3 from 46.0 in November. The state’s new-hiring index
expanded to a frail 48.9 from 48.8 in November.
This survey represents an early snapshot of the economy
of rural, agriculturally and energy-dependent portions of the
nation. The Rural Mainstreet Index (RMI) is a unique index
covering 10 regional states, focusing on approximately 200 rural
communities with an average population of 1,300. It gives the
most current real-time analysis of the rural economy. Goss and
Bill McQuillan, president of CNB Community Bank of Greeley,
Neb., created the monthly economic survey in 2005.
Colorado: For the 15th straight month, Colorado’s Rural
Mainstreet Index (RMI) remained above 50.0 though it slipped
Iowa: The December RMI for Iowa advanced to 55.3 from
November’s 53.9. The farmland-price index for December sank
to 52.3 from November’s 53.5. Iowa’s new-hiring index for
December was unchanged from November’s 53.9.
Kansas: The Kansas RMI for December dipped to 53.6 from
November’s 53.8. The farmland-price index for December
declined to 48.2 from November’s 48.6. The state’s new-hiring
index slipped to 50.2 from 50.6 in November. Dale Bradley,
chairman of the Citizens State Bank in Miltonvale, reported,
“Good Fall crops in our area and Kansas overall.”
(Rural Mainstreet continued on next page)
Tables 1 and 2 summarize survey findings
Next month’s survey results will be released on the third Thursday of the month, Jan. 16.
Table 1: Rural Mainstreet Economy Last Two Months and One Year Ago:
(index > 50 indicates expansion)
December
2012
November
2013
December
2013
Area economic index
60.6
54.3
56.1
Loan volume
62.1
56.9
66.7
Checking deposits
75.8
72.0
66.0
Certificates of deposit and savings instruments
49.2
44.8
37.2
Farmland prices
82.5
54.3
47.0
Farm equipment sales
67.0
47.3
44.3
Home sales
61.3
56.2
53.1
Hiring
53.5
54.4
56.9
Retail business
59.0
47.4
54.7
Confidence index (area economy six months out)
55.5
48.3
47.0
Table 2: The Rural Mainstreet Economy, December 2013
Percentage of bankers reporting
Rising
regulatory costs
What is your estimate of the average per acre
cash rent for non-irrigated cropland (not pasture)
in your area for 2014?
Rising loan
defaults
Other
55.9%
23.5%
14.7%
1.5%
4.4%
ACA costs and
uncertainties
Overly
aggressive EPA
Downturn
in Ethanol
Industry
Other
80.6%
10.4%
4.5%
1.5%
3.0%
Over $800
What do you expect to be the biggest economic
challenge for your area economy for 2014?
Competition from
Farm Credit
Low agriculture
commodity
prices
What do you expect to be the biggest economic
challenge for community banks for 2014?
Low loan
demand
$500 - $800
$300 - $499
$200 - $299
Below $200
1.7%
1.5%
27%
36.5%
33.3%