ABA Survey: 51% of Ag Borrowers Profitable in 2020

Amid ongoing stresses in the ag sector and economic dislocation from the COVID-19 pandemic, lenders reported that just under 51% of their agricultural borrowers were profitable in 2020, a decline of six percentage points from the prior year, according to the latest agricultural lenders survey conducted by ABA and Farmer Mac. About half of the lenders, 49%, said do not expect borrower profitability to improve in 2021 and respondents expressed the most concern about the grain, dairy and cattle sectors.‌

Credit quality and the deterioration of agricultural loans were ranked as the top concerns facing lenders in 2020 for institutions of all sizes and across all regions. Competition from other lenders and weak loan demand were also ranked as leading concerns. Nearly 60% of lenders said they expect delinquencies to increase for agricultural production loans over the next year. Nearly three in five lenders reported that demand for agricultural production loans was flat over the last six months.

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ABA Calls for Extension of CARES Act Relief

The ABA on Tuesday urged lawmakers to consider extending several banking-related CARES Act provisions that are set to expire at year-end. These include temporary relief from troubled debt restructurings, optional temporary relief from CECL implementation, a temporary lending limit waiver and temporary regulatory capital relief for community banks.

“Banks of all sizes will continue to support their communities as the recovery continues, and we hope your committees can assist by providing additional tools,” the ABA wrote. “Although several other committees are also considering issues important to the customers and communities served by America’s banks, extension of these key, temporary changes is critical to empower banks to continue to assist those in need.” Read the letter.

ABA, Trade Groups Call for Halt to PPP Loan Necessity Questionnaires

The ABA on Tuesday joined a broad coalition of groups from various industries in a letter to the Small Business Administration and Treasury Department raising concerns about the loan necessity questionnaires that SBA is using to evaluate borrowers’ good-faith certification of their economic need for Paycheck Protection Program loans.

SBA rolled out the questionnaires—which included separate versions for nonprofit and for-profit entities—last month to borrowers with loans totaling $2 million or more. However, the groups noted that the forms ask for information—such as quarterly revenue and employee earnings—that is unrelated to what borrowers were asked to consider when they applied for their PPP loan.

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Regulators Exploring Relief for Banks Participating in COVID-19 Programs

Regulators are exploring additional ways to provide temporary relief to banks that may be approaching regulatory asset thresholds that could trigger additional compliance requirements as a result of participation in COVID-19 relief programs like the Paycheck Protection Program.

In testimony before the Senate Banking Committee on Tuesday, Acting Comptroller of the Currency Brian Brooks said that regulators are working on an interagency basis “on a set of rules that would relieve for a period of time certain asset thresholds being tripped that would trigger heightened scrutiny and heightened compliance requirements at different levels.” Brooks signaled that this relief would “cap out at $10 billion, most likely, based on current conversations.”

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ABA, Industry Groups Launch Campaign for Struggling Mortgage Borrowers

With some Americans experiencing difficulties paying their mortgage due to COVID-19, the ABA on Tuesday joined a broad coalition of mortgage industry stakeholders and consumer groups to launch a new national campaign to help raise awareness about consumers' forbearance options. This effort is intended to augment the successful outreach efforts already underway by mortgage servicers and housing counseling groups nationwide and is supported by the Consumer Financial Protection Bureau.

As part of the "COVID Help For Home" campaign, ABA is making creative materials available to member banks to help them reach borrowers who may have missed one or more mortgage payments due to the pandemic and who may be eligible for assistance under the CARES Act or other mortgage payment relief. The national ad campaign also targets borrowers whose forbearance plans are ending and may need to request an extension or additional assistance. Banks participating in the campaign can access a downloadable toolkit that includes customizable communications materials and templates that can be adapted for social media and other advertising platforms.

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With Presidential Race Called, ABA Releases 2020 Election Analysis

With major media outlets calling the 2020 presidential election for former Vice President Joe Biden and Sen. Kamala Harris over the weekend, ABA President and CEO Rob Nichols congratulated Biden and Harris. “We look forward to working with the new administration and the new Congress to address the nation’s challenges,” he said. “ABA and our member banks stand ready to work with the Biden administration and lawmakers from both parties to bolster the economy, increase opportunity and create a brighter future for all Americans.”

The ABA on Monday issued a 2020 election analysis prepared by its government relations and political engagement teams. The analysis covers what to expect from the Biden administration, as well as expectations for Congress, where control of the Senate will be determined by Jan. 5 runoff elections in Georgia. The ABA members-only analysis also covers results of ABA’s political engagement efforts during the campaign.

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Ag Policy Expert Barry Flinchbaugh Dies

Barry FlinchbaughDr. Barry Flinchbaugh, a popular presenter at the SDBA's Agricultural Credit Conference and National Schools for Ag Bankers, passed away on Monday at Stormont Vail Hospital in Topeka, Kan., at the age of 78. Flinchbaugh was a professor emeritus in Kansas State University's Department of Agricultural Economics.

Flinchbaugh's career in agricultural policy at Kansas State University spanned nearly a half-century, and he was well known as one of the United States’ leading experts on agricultural policy and agricultural economics. For more than four decades, he was a top adviser to politicians of both major political parties, including Secretaries of Agriculture, chairs of the House and Senate Ag committees, and numerous senators and state governors.

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SDBA to Hold Virtual Retirement Celebration for Curt Everson

Curt Everson's RetirementPlease join the SDBA in saying thank you to President Curt Everson for  his service to the banking industry. The SDBA will hold a virtual retirement reception for Everson on Tuesday, Nov. 10, at 4-5 p.m. CST. After more than 18 years leading the SDBA on behalf of South Dakota's banking industry, Everson is retiring at the end of this year.

Everson's virtual retirement reception will be held via Zoom. Registration is required to receive the meeting link. Upon clicking the "Register Now" link, you'll be redirected to the SDBA's Zoom registration page. Register now.

Marijuana Banking Resources Available

With the passage of Amendment A and Initiated Measure 26 legalizing medical and recreational use of marijuana in South Dakota, the SDBA remains committed to supporting its member banks during this transition.

There are several resources available. The SDBA’s webinar partner, On Course Learning, has a variety of on-demand webinars addressing the topic of marijuana. Visit www.bankwebinars.com, click on the search option and enter “marijuana”.  Similarly, the ABA provides a wealth of information at https://www.aba.com/advocacy/our-issues/cannabis.

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Appraisers: Learn About New Evaluations Market in South Dakota

During the 2020 South Dakota Legislature, HB 1127 was passed allowing South Dakota credentialed appraisers to do evaluations. While the bill became law on July 1, the rules defining the statute that allow South Dakota appraisers to offer evaluations do not go into effect until after the rules hearing the first part of November.

The South Dakota Appraiser Certification Program is offering a four-hour virtual seminar "Evaluations: Understanding the Brand New Product/Service that SD Appraisers Can Offer their Clients" on Monday, Nov. 16. The seminar will cover the new rules defining when and how South Dakota appraisers can provide evaluations to their clients. The seminar is designed for all real estate appraisers that work in the state. 

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ABA Works with USDA to Support Credit Needs for New Farmers, Ranchers

The ABA and other industry groups met with the U.S. Department of Agriculture and the Farm Service Agency yesterday to discuss ways to support the credit needs of new farmers and ranchers. Representing ABA at the meeting were Heather Malcolm, VP, Bank of the Rockies, Livingston, Mont.; Dinese Watson, VP, Merchants Bank of Indiana, Lynn, Ind.; and Caleb Hopkins, chief lending officer, Westside State Bank, Halbur, Iowa. The bankers participated in a panel discussion on the challenges of serving beginning farmers and ranchers and shared some of the best practices they have learned.

During the event, the groups agreed to establish a process for agricultural lenders and FSA to communicate when challenges arise in financing beginning farmers; to engage agricultural lenders and FSA staff in loan-making training sessions and farm loan conferences; and to develop working groups of lenders and FSA staff to share best practices and overcome challenges.

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SDBA Congratulates Outstanding Bank Workplaces

American Banker Magazine yesterday published its eighth annual list of the best banks to work for, and two SDBA member banks and one associate member were part of the 85 honorees. Dacotah Bank in Aberdeen was named number 28, First PREMIER Bank in Sioux Falls was named number 58, and SDBA associate member Bell Bank in Fargo was named number two. 

The SDBA and ABA salutes these and other banks for establishing a culture and amenities that help attract and retain top talent, from generous health insurance and retirement benefits to employee prize programs, jovial atmospheres and employee financial health programs. View the list.

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SDBA to Hold Two Virtual Events Next Week

The SDBA will hold two virtual events next week--the NEXT STEP: Emerging Leaders Summit on Tuesday and Wednesday, Oct. 27-28, and Security Officers Conference on Tuesday, Oct. 27. There is still time to register for both events, which will be held via Zoom and also recorded. 

NEXT STEP: Emerging Leaders is designed to help cultivate, connect, engage and empower South Dakota’s future bank leaders. This event will encourage emerging bank leaders to find and express their voices within their organizations, communities and the banking industry and provide opportunities to network and exchange ideas with other industry professionals. It will also increase emerging bank leaders’ knowledge of topics of interest to the banking industry and promote involvement and advocacy. Learn more and register

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First Dakota National Bank Honored with Brand Slam Marketing Award

The ABA recognized seven of the nation’s best bank marketing initiatives, including that of First Dakota National Bank headquartered in Yankton, at its Unconventional Convention on Monday. The 2020 ABA Brand Slam awards honored elite bank marketing strategies that stood out among hundreds of entries from banks of all sizes nationwide.

“Marketing is essential to nurturing a company’s reputation and enhancing its engagement with customers,” said Jim Edrington, ABA’s chief member engagement officer. “During a year filled with extraordinary challenges, these award winners have excelled at implementing creative solutions to make powerful connections with their customers and communities.”

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Promontory Interfinancial Network Changes its Name to IntraFi Network

Promontory Interfinancial Network, a SDBA associate member, announced this week during ABA’s Unconventional Convention that it has changed its name to IntraFi Network. The innovative fintech is adopting new names that better describe its suite of financial services — popular products that until now have included CDARS®, Insured Cash Sweep®, Insured Network Deposits®. Going forward, the company’s deposit products will be consolidated into IntraFiSM Network DepositsSM and its funding products will become IntraFi FundingSM.

The new name recognizes the evolution over the past 18 years, from a small fintech providing a single service for less than 100 banks to a company offering an array of all-weather solutions to thousands of institutions. It’s a new name, but the same people, products and service to financial institutions. Learn more.

Governor Noem Announces Small Business Relief Program

Gov. Kristi Noem last Friday announced the launch of the Small Business and Healthcare Provider Relief Program, which will utilize up to $580 million in Coronavirus Relief Fund (CRF) dollars to assist small businesses, community-based healthcare providers and nonprofits negatively impacted by the COVID-19 pandemic.

“Together, South Dakota is rebounding from COVID-19, but some businesses and organizations took a hit from this pandemic,” said Noem. “These folks are the lifeblood of our communities and economy, and it’s our turn to give back to them. I’m grateful to the legislature for stepping up and providing guidance for this program.”

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SDBA to Hold Retirement Celebration for Curt Everson

Curt Everson's RetirementSave the date for a virtual retirement reception for SDBA President Curt Everson on Tuesday, Nov. 10, at 4-5 p.m. CST. After more than 18 years leading the SDBA on behalf of South Dakota's banking industry, Everson is retiring at the end of this year.

Everson's virtual retirement reception will be held via Zoom. Be watching for more details to come, including the Zoom link to participate. 

SDBA Emerging Leaders Summit Going All Virtual

Next Step: SDBA Emerging Leaders SummitThe SDBA is going all virtual with its 2020 NEXT STEP: Emerging Leaders Summit on Oct. 27-28. In order to ensure the safety and well-being of our members, the decision was made to cancel the live portion of the event but continue with the virtual component via Zoom. All registrations have automatically been converted to virtual.

This year’s line up of speakers promises to engage and enlighten emerging leaders. Sessions will address leadership, cultural intelligence, gratitude and communications, as well as musings from SDBA President Curt Everson as he prepares to ride off into the retirement sunset. There will also be a variety of interactive activities to allow participants an opportunity to connect with one another and reinforce the speakers’ messages.

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SBA Streamlines PPP Forgiveness for Small Loans

The Small Business Administration last night released a much-anticipated, streamlined loan forgiveness application for Paycheck Protection Program loans totaling $50,000 or less. While eligible loans account for just 9% of overall PPP loan dollars, they amount to about two-thirds of all PPP loans.

The two-page forgiveness application, Form 3508S, includes certifications from the borrower but does not require calculations to be submitted with the application. Applicants must submit documentation verifying forgivable payroll and non-payroll expenses. Borrowers are required to retain the documentation supporting their certifications for six years, but do not need to submit it.

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SDBA to Hold Virtual Security Officers Conference

The SDBA will offer the Security Officers Conference virtually on Oct. 27 via Zoom. The session will be recorded and available for 30 days. This well-rounded conference focuses on a range of issues of concern to security officers, facility personnel and management.

Using current trends and examples, a variety of topics will be covered: pandemic fraud: what’s ahead, human trafficking, elder fraud: growing faster than the speed of age, social engineering—creating accomplices, financial crime investigations and preparing your case for law enforcement.

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