It's the economy, stupid.
Those famous words from the 1992 campaign of Bill Clinton came to mind as I was putting together this week's column. I've got a leading banker's view of the region, indicators of state economic health and a study of how we along the river are doing as a region.
First up is David Crader, chief executive officer of Bank of Missouri and newly named president-elect of the Missouri Independent Bankers Association. In an interview last week, Crader told me that commercial lending in Southeast Missouri is robust, but new mortgage loans are lagging. The credit squeeze hitting the big finance houses like Citigroup and Bear Stearns hasn't had a big impact on local banks. But that doesn't mean it won't, Crader warned.
"I think probably it will trickle down and start affecting independent banks," he said. "But we are not seeing much of an impact yet. Bankers I see across the state are pretty much telling me the same thing. We haven't experienced" any problems "but we do see an increasing number of foreclosures."
Crader was elected to the leadership post in September at the association's annual convention. The group represents community banks across the state in lobbying and provides education and seminar programs focused on independent banks.
Crader, 60, has been with Bank of Missouri since 1996, and before that was with Regions Bank out of Perryville, Mo. He oversees the bank's 11 branches in Perryville, Cape Girardeau, Jackson, Marble Hill, Columbia and Springfield.
Overall, he sees the regional economy as healthy, led by a growing commercial sector. "For the most part, we are seeing very little commercial bad times," Crader said. "It is really pretty good in our areas."
Interest rates have been stable for borrowers with good credit, and Crader said his bank is conservative about to whom it grants credit. While a lot of the home loans originating with the bank are adjustable rate loans, Crader said he shies away from making 100 percent financing loans for home buyers. And while some loans from Bank of Missouri are sold on the secondary mortgage market, Crader said the same standards apply.
"Most of our real estate loans are 85 percent, max," he said. "That does give us a little threshold."
In contrast to the commercial side, the market for "one to four" residential loans -- a banker's term for mortgages on homes with one to four bedrooms -- has declined sharply, Crader said. "Those have slowed down considerably," he said. "I would say our business is off one-third in residential loans."
And Crader has some advice for people caught with adjustable mortgages expected to reset to higher interest rates: The recent Federal Reserve rate cut, with more expected, could provide an opportunity to refinance. The basic rule of thumb when refinancing, he said, is to compare the up-front costs of a new loan to the cost of continuing under current conditions. If the switch pays for itself in two years, it is worth considering. As for going to a fixed-rate mortgage, that is "more of a peace of mind issue," he said. "With a fixed-rate mortgage, I know this is my payment."
n State revenue shows growth: The overall economic health of Missouri seems sound, the latest tax receipt numbers from Jefferson City show. During the first three months of the state fiscal year, sales tax receipts increased 4.44 percent and individual income tax collections increase 7.36 percent, according to figures from the Missouri state treasurer's office.
Overall general revenue rose 4.24 percent in the July to September quarter compared to a year ago. And while the raw numbers are just that, the inflation adjustment for the minimum wage was recently announced at 2.2 percent. That's an indication that taxable retail sales are growing faster than inflation and wage income is rising at a good clip, whether the result of more people working or higher individual paychecks.
I've watched these figures for a long time -- my first reporting post was at the state Capitol and I became familiar with the ups and downs in revenue -- and while they aren't the best I've ever seen, the numbers are typical of a period of modest, steady growth.
n Economic surveys: The University of Missouri's Community Policy Analysis Center started work last week on an economic baseline study for the Mississippi River Hills Region, defined as all the counties bordering the river from Jefferson in the north to Scott in the south, plus St. Francois County.
The study will examine historic patterns of employment, the work force, commuting patterns, population, taxable retail sales, county revenue and spending and other economic data. The information, the university said in a news release, will be used to provide 10-year projections to assist communities in facing future challenges.
The study is part of the MU Extension's Community Economic and Entrepreneurial Development project, which focuses on entrepreneurship as a rural development strategy.
I also received notice that the U.S. Census Bureau's 2007 Economic Census is underway. In December, 1,600 businesses in Cape Girardeau County, along with 4 million businesses nationwide, will receive survey forms. The completed forms are due Feb. 12, and federal law requires businesses receiving the forms to complete and return them.
The Census Bureau conducts the survey every five years, providing detailed data about economic activity in every corner of the country. For more information, visit the Census Bureau Web site at www.business.census.gov.
n Business milestone: Crain Funeral Home marked 75 years in operation last week. The Southern Illinois funeral service began in the towns of Pulaski and Tamms on Oct. 20, 1932. Since then, through family growth and buying out competitors, Crain has grown to offer services in Alexander, Union, Pulaski, Williamson and Jackson counties.
The Crains are in their third generation as a family-run business.
n Financial guru: Southeast Missouri State University will offer financial advice and a chance for students to win money to pay off a major bill. Jean Chatzky, financial editor of NBC's "Today" program, will be on campus Nov. 13 at Glenn Auditorium in Dempster Hall to speak about methods for debt reduction and how to keep control over personal finances.
Chatzky is the author of four books on personal financial management.
To generate interest in her talk and her subject, a bright blue Chrysler PT Cruiser will be parked at various points around campus today, Wednesday and Friday. Students will be able to make a short video explaining why they should win up to $1,000 to pay off a bill.
The winners will be announced at Chatzky's speech, with prizes of $250, $500, $750 and $1,000.
Rudi Keller is the business editor for the Southeast Missourian. Contact him at 335-6611, extension 126