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Rural Bankers Share Top Concerns Index

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The rural economy is slowly improving after being crashed by the COVID-19 pandemic in 2020. For the third time in the past four months, the Creighton University Rural Mainstreet Index (RMI) climbed above growth neutral. 

For January 2021, the monthly survey of bank CEOs in a 10-state Midwest region sits at 52, which is up slightly from December’s 51.6.

The current reading is the second highest level since January 2020. The index ranges between 0 and 100 with a reading of 50 representing growth neutral.

“Recent sharp improvements in agriculture commodity prices, federal farm support payments and Federal Reserve’s record low short-term interest rates have underpinned the Rural Mainstreet Economy in a solid and positive growth range. However, the rural economy remains well below pre-pandemic levels,” says Ernie Goss, who chairs Creighton’s Heider College of Business and leads the RMI.

Bankers were asked their top concern for the economy in 2021. The results showed:


Excessive inflation and higher long-term interest rate.



A double-dip recession (W-shaped recover).



Trade restrictions and/or higher tariffs



Higher loan defaults and bankruptcies.


“I feel the economy is moving in a positive direction that can be rattled by a combination of higher taxes, higher inflation, and a return of stricter regulation,” shared Jim Levick, president of Nebraska State Bank in Oshkosh, Neb.

For a fourth straight month, the farmland price index advanced above growth neutral. The January reading climbed to 56.3, its highest level since July 2013. This is first time since 2013 the RMI has recorded four straight months of above growth neutral farmland prices.

“Farmland values in our general area are not on the decline as supported by recent auctions,” reports Jeff Bonnett, president of Havana National Bank in Havana, Ill., 

Bankers once again reported anemic loan volumes. The January loan volume index dropped to 33.9 from December’s 43.7, but up from November’s record low 25.8. The checking-deposit index soared to record high 88.0 from December’s 78.1, while the index for certificates of deposit, and other savings instruments increased to 46.0 from 42.2 in December.

Approximately 44% of bank CEOs expect low loan demand to be the greatest issue facing their banks for 2021. This is up from 7% that recorded this as a top concern last year at this time,” Goss says. “One year ago, 32% of bankers indicated that rising loan defaults and bankruptcies were their greatest concern for 2020. This is significantly above the 4% of bankers that registered this as their greatest 2021 issue.”
However, 24% indicated that rising competition from untaxed credit unions and Farm Credit posed the greatest 2021 bank threat. This is well up from the 5% recorded last year at this time. 

“We compete day-in-and-day-out with them and they simply have a 21% advantage that they can leverage over tax paying banks,” reports Joseph Anglin, senior vice president and chief financial officer at Pioneer Bank & Trust in Rapid City, S.D.

The confidence index, which reflects bank CEO expectations for the economy six months out, declined slightly to a still healthy 60 from December’s 62.9. 

“Federal farm support payments, improving gain prices, and advancing exports have supported confidence offsetting negatives from pandemic ravaged retail and leisure and hospitality companies in rural areas,” Goss says.

This RMI, which started in 2005, represents an early snapshot of the economy of rural agricultural and energy-dependent portions of the nation. It focuses on 200 rural communities with an average population of 1,300. 

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