BankWise January 17, 2019

The community banking industry in Minnesota is strong, healthy, well-capitalized and ready to provide funding to families, farms and small business.”

ICBM President & CEO Jim Amundson before the Minn. Senate Agriculture, Rural Development, and Housing Policy Committee on Jan. 15.

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ICBM testifies in first full week of session

More than a dozen meetings were scheduled on the House and Senate calendar on Tuesday as a number of committees, subcommittees and divisions gathered for the first time.

Among them was the Senate Agriculture, Rural Development, and Housing Policy Committee which invited ICBM to testify. We’re proud to have had the opportunity to report to the Senate that Minnesota community banks are investing in rural areas and are supporting the ag economy. 

Listen to the testimony of Jim Amundson, ICBM President & CEO. (Fast forward to 1:09:00.) 

190050 ICBM Day at the Capitol 2
Lawmakers want to meet you!
ICBM’s Day at the Capitol makes it easy for you to meet them.
We’ll set up the transportation and get you up to speed on key issues.

Community banks feel the effects of record-length shutdown

This is officially the longest government shutdown in the history of the United States. We’re on day 27, and hundreds of thousands of federal workers have now missed their first paycheck. Some banks have stepped up to help smooth the gap, but financial institutions themselves are also feeling the pinch as the shutdown impacts SBA lending, ag functions, and mortgage approvals among others. 

We’ve gathered important updates on the shutdown: 

How are community banks affected? 

USDA announces certain Farm Services Agency offices will reopen temporarily. 

 

Community Bankers elect new ICBM board members

Serving on the ICBM board is a valuable and important way that community bankers further the mission of this association and promote the future success of our industry.

Thank you and welcome to our new and re-elected board members!

Urge lawmakers to support short-form call reports

A provision in the Economic Growth, Regulatory Relief, and Consumer Protection Act establishes a short-form call report in the first and third quarters for banks with less than $5 billion in assets. As currently proposed, however, the rule would only reduce reporting burdens by just 1.18 hours for institutions under $1 billion.

ICBA is encouraging member banks to write to regulators supporting its version of the rule by Jan. 18. Whether your bank has less than $1 billion assets or more than $1 billion, send a message supporting the move today. 

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February 21, 2019

Faces and Places

  • ·     Succession planning at Citizens Bank Minnesota has culminated in a series of promotions in preparation for Lou Geistfeld’s retirement. The bank has announced its new executive team, Geistfeld’s successor, and other promotions. 

·     Janesville State Bank is pleased to announce Sean Finley as assistant vice president and chief financial officer. 

·     WNB honored as top Winona Business by local chamber. 

·     ICBM President/CEO Jim Amundson was invited to judge competitors in a Tiger Cage business competition in Albert Lea. Winners were awarded cash grants to spur local entrepreneurial activity.

·    Brian Nelson was promoted to AVP of Commercial Lending at BankVista. 

Agriculture: Tight profit margins likely to continue in 2019

Looking at the year ahead, tight profit margins in crop production will likely continue. Corn and soybean prices are projected to be near or below break-even levels. With increases in seed, fertilizer and chemical costs, higher interest rates, and only average crop yields, potential profits in 2019 look grim. Required loan payments on capital investments will be another major variable. 

Average rental rates for 2018 in the region were likely very similar to 2017 rental rates or slightly lower. Based on early reports, 2019 land rental rates will remain steady or adjust slightly downward. 

We break down each of these variables. 

Agriculture: Ag bankers invest in farmers’ success

The American Banker shared an opinion that diminished access to capital in rural areas could be rectified by something called “FCS banking.” The idea is for the federal government to broaden existing farm credit infrastructure to provide checking and savings accounts, and loans, to individuals and businesses who live in rural areas but who are not necessarily engaged in agricultural endeavors. The argument is predicated on the decrease in the number of rural bank offices nationally. We couldn’t disagree more.
 
Minnesota’s 87 counties are well-served by more than 290 community banks, which operate 1,010 bank offices. Furthermore, our banks need a level playing field in order to better serve customers. That means less competition from the GSEs and other tax-advantaged entities. The infrastructure to serve rural communities is already in place: independent community bankers are available throughout Minnesota ready and willing to serve their communities.We were disappointed with how the Star Tribune characterized Minnesota’s ag bankers recently.
 
Using data from Creighton University’s Rural Mainstreet Index, which covers 10 states, the Strib reporter said bankers were “tightening the screws on farmers” as a consequence to a worsening economic environment — screw tightening a rhetorical interpretation of raising collateral requirements. But, read on and you learn the opposite is true: Ken Oraskovich of the First National Bank of Bagley reports his bank isn’t asking for more collateral. 
 
A survey conducted by the Federal Reserve Bank of Minneapolis reveals that perhaps one banker in five is planning to ask for increased collateral to balance reduced farm income. It’s too bad the reporter didn’t think to call ICBM to learn how bankers invest in, and support, their farm customers! 

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