Rural banker confidence plummets | BankBeat


The Creighton University Rural Mainstreet Index plummeted in March to its lowest level since 2016, taking its biggest one-month decline since the survey’s inception in 2006. The overall index slumped to 35.5 in March from 51.6 in February.

The RMI is a monthly survey of community bank presidents and CEOs in non-urban agricultural and energy dependent areas in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming. A reading of 50 and above indicates growth.

Ernie Goss

“Approximately 61.3 percent of bank CEOs expect the coronavirus to produce a recession in their market area. However, almost one-third, or 32.3 percent expect little economic impact from the coronavirus threat,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University, Omaha, Neb.

In the past few weeks, roughly one half of bankers surveyed reported a decline in client or customer visits. One in four indicated their bank had experienced higher loan applications following the coronavirus threat.

At the time of the survey, 14.3 percent reported an increase in employee absences, and not all banks had experienced impacts.

“Our rural area has not been directly impacted by the virus as of yet,” said Don Vogel, CEO of Farmers National Bank in Phillipsburg, Kan.

“Our bank location is in a smaller town and less influenced by consumer traffic as we primarily finance farm operations,” said Marc Lamon, branch president of FirsTier Bank, Kimball, Neb.

The March farm equipment-sales index slipped to 37.5 from 37.9 in February. This is the 79th consecutive month the reading has been below growth neutral.

The farmland and ranchland-price index has fallen below growth neutral for three consecutive months. March’s reading dipped slightly to 46.6 from 46.8 the month before. This is the 75th time in the past 76 months the index has been below growth neutral.

Borrowing by farmers expanded in March, rising to 66.1 from 50 in February. The checking-deposit index advanced to 69.4 from 60.9 the month before, while the index for certificates of deposit and other savings instruments dropped to 45.2 from 50 in February.

This month, bankers were asked about their plans for a nationwide quarantine resulting from the novel coronavirus. More than half, or 54 percent, said their bank had a plan, while 29 percent reported their bank was developing a plan. One in five bankers reported that their bank did not have a plan, and were not developing such a plan.

The hiring employment gauge fell to 48.3, its lowest reading since the end of 2016, and down from 57.8 in February. The home-sales index slipped to 56.5 in March from 58.1 the month before.

The confidence index, which reflects bank CEOs expectations for the economy six months out, plunged to 28.3 from 58.1 in February. This is the lowest one-month drop in confidence since the survey was created in 2006.

The March RMI for Illinois dropped to 32.3 from 56.6 the previous month. The farmland-price index decreased to 45.1 from February’s 48.1. The state’s new-hiring index slumped to 32.8 from last month’s 67.2. Between 2018 and 2019, the total exports for the state sank by 8.5 percent with food and agricultural commodities representing 9.8 percent of 2019 total exports.

The March RMI for Iowa fell to 31 from February’s 50.1. Iowa’s farmland-price index slipped to 44.6 from 45.9 the previous month. The state’s new-hiring index for March sank to a regional low of 28.5 from February’s 47.7. Between 2018 and 2019, the total exports for the state dropped by 8.3 percent with food and agricultural commodities representing 32.3 percent of total exports for 2019.

The March RMI for Minnesota dropped to 34.9 from 58.3 the previous month. The state’s farmland-price index dipped to 46 from 47.4 in February. The new-hiring index for March fell to 50.2 from February’s 60.9. Between 2018 and 2019, total exports for the state fell by 2.1 percent with food and agricultural commodities representing 9.2 percent of total exports for 2019.

The North Dakota RMI for March fell to 34.9 from 51.7 in February. The state’s farmland-price index dipped to 46 from 46.4 the previous month. North Dakota’s new-hiring index dropped to 41.7 from 52.4 in February. Between 2018 and 2019, the total exports for the state declined by 14.4 percent. Food and agricultural commodities represented 10.5 percent of the total exports in 2019.

The RMI in March for South Dakota declined to 36.1 from 57.8 in February. The state’s farmland-price index decreased to 46.3 from 47.6 the previous month. South Dakota’s new-hiring index worsened to 48.4 from 63.5 in February. Between 2018 and 2019, total exports for the state declined by 5.8 percent. Food and agricultural commodities represented 35.2 percent of total exports in 2019 for the state.

The Kansas RMI for March dropped to 32 from 54 in February. The state’s farmland-price index increased to 45 in March from 44.3 the previous month. Between 2018 and 2019, the total exports for the state expanded by 0.2 percent with food and agriculture representing 33.8 percent of total exports in 2019.

The March RMI for Missouri fell to 34.4 from 51.5 in February. The farmland-price index declined to 45.8 from 46.3 last month. The state’s new-hiring index for March slipped to 49.2 from 51.7. From 2018 to 2019, the total exports for Missouri declined by 7.8 percent with food and agricultural commodities representing 13.4 percent of total exports in 2019.

The Nebraska RMI for this month dropped to 32.6 from 48.3 last month. The state’s farmland-price index slipped to 45.2 from 45.3 in February. Nebraska’s new-hiring index tumbled to 33.9 from 42.3 the previous month. Between 2018 and 2019, total exports for the state declined by 6.2 percent. Food and agricultural commodities represented 52.4 percent of total exports.



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