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IDOB Update

IDOB Update . Vaughn Noring Bank Bureau Chief. April 8, 2011. Topics. Background Iowa Banking Environment Areas to Monitor Outlook for 2011 Questions. Iowa Bank Demographics. 360 banks and thrifts headquartered in Iowa. 311 state banks 34 national banks 15 thrifts

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IDOB Update

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  1. IDOB Update Vaughn Noring Bank Bureau Chief April 8, 2011

  2. Topics • Background • Iowa Banking Environment • Areas to Monitor • Outlook for 2011 • Questions

  3. Iowa Bank Demographics • 360 banks and thrifts headquartered in Iowa. • 311 state banks • 34 national banks • 15 thrifts • 13 out-of-state banks with 318 offices. • Total assets of the state banks is $51.7B • $ 166,000,000 avg. size IA state-chartered bank • 2,000,000,000,000 BofA, Citibank, Chase • Declining number of banks, but more locations • Economic engine for Iowa’s main streets & communities As of 12/31/10

  4. 42 Iowa Bank Failures 1982 2 banks 1983 1 bank 1984 3 banks 1985 11 banks 1986 10 banks 1987 6 banks 1988 6 banks 1993 1 bank 2000 1 bank 2001 0 banks 2002 0 banks 2003 0 banks 2004 0 banks 2005 0 banks 2006 0 banks 2007 0 banks 2008 0 banks 2009 1 bank (Vantus—OTS Charter) 2010 0 banks

  5. Areas to Monitor

  6. Farmland Prices

  7. BUBBLE Obtained from Mike Duffy at ISU

  8. Interest Rate Risk • Businesses and banks will need to do good job of risk management • Impact of rising interest rates • Don’t be over-reliant upon short-term funding if rates increase • Maintain adequate capital and liquidity

  9. Other Areas Worth Monitoring • Unemployment • Housing • Inflation • Legislation & Policies • OD policy • Dodd-Frank implementation • GSEs • Credit risk retention • Stress testing • CFPB • Durbin Amendment • $250,000 deposit insurance permanent • De Novo Interstate Branching • Changes in regulatory personnel

  10. Properly Evaluating Risks Remains Important

  11. What’s the Outlook for 2011?

  12. Predictions • The outlook is for the U.S. economy to expand at a solid pace this year and next year • Employment is expected to rise moderately over the next two years with the unemployment rate edging lower • Slackness in the economy will lead to a relatively contained inflation rate • Low loan demand by consumers and businesses • Interest rates expected to stay low • Opportunities for businesses and individuals willing to take calculated risks

  13. Questions?

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