A big reason why: a run of profitable years that preceded it, said
"If we hadn't had five great years, and we had this (broadly unprofitable) year, that would be a problem," Feldman said at a semi-annual briefing. "But we've had five great years, so a lot of people are fine."
Among the 334 commercial banks in
So are banks around the state.
Corn prices in
"The concern would be, it's not just going to be this year that has low farm income," Feldman said, suggesting that next year might be a different story.
"We're off the record years, and we're going to be back to more normal periods," he added. "For most producers, if you look at their input costs -- fertilizer, seed -- all those are up over time. ... It's going to be harder for them to be profitable.
Not all farmers are hurt when grain prices fall. Producers of pork, milk, poultry and beef like lower input costs, and many are now seeing healthy profits after some tough years. So the impact is mixed.
Meanwhile, among the 85 commercial banks in
The housing bust hit
"For the state as a whole, we've improved a lot from the crisis, but we're not back to where we were," Feldman said.
That reflects another concern among
The "new normal" of slimmer profit margins is having some ripples across the state.
One ripple is that banks continue to consolidate. The state now has 334 commercial banks, about half the number it had 30 years ago. And it's losing roughly 5.5 percent each year, which translates to about 18 fewer
That's a worry especially in
The Minneapolis Fed has wondered if the increased cost of regulation, following the financial crisis, has accelerated the decline. So far, "we don't see any evidence" that it has, Feldman said.
But compliance costs have risen. And so have information technology and computer-security costs. Even when banks are earning profits, their costs continue to rise, Feldman said.
The Minneapolis Fed district spans
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