“Buy a toaster and get a bank for free!” There are 12 to choose from. Even one from Missouri.
Columbia, the middle of Middle America, is wonderfully isolated from the “big cities” east and west of us. When I moved here in 2003, my mother asked me how far the next city was from my new home.
“About 125 miles, mom. About a two-hour drive.”
“Nah,” was her reply. “There has to be something between you and St. Louis?”
“No big city or major town, mom. Columbia is the big town. What’s between here and St. Louis? Corn.”
However, the ramparts of maize protecting our fair city, the county and the region have been breached by the economic terrors taking place in the really big cities of New York, Chicago, Los Angeles. And Miami as well as St. Louis and Kansas City. Columbia has seen job loss and the threat of even higher unemployment before things start looking up. Worse, we are still seeing foreclosures and our banks are still seeing bad debts mount.
Greg Harmon, broker with Boone Re/Max, is an expert on foreclosure properties. His membership-only Web site estimates 150 Boone County homes currently in foreclosure. This does not include the number of homes on “pre-foreclosure,” not yet bank-owned or listed. Now we hear that Premier Bank is under “supervision” of the Federal Reserve Bank. So what does this really mean?
To the average banking customer in our fair town, not much. Talking to Premier Bank’s Steven A. Smith, president of the Columbia market, the issue is really a “non-event” event for the average depositor. According to Smith, the Federal Deposit Insurance Corporation is not involved. At all.
It is actually the parent company, Premier Bancshares Inc., that has the Fed overseeing its office, watching the larger and more complicated financial transactions of the parents. Not that the company is broke.
I asked David Barr, spokesperson for the FDIC, about bank failures. Yes, U.S. wide, 21 banks have failed so far this year. I am afraid that 2009 will not be a good year for banks, except maybe in Missouri. In 2008, the FDIC had two Missouri problem banks, Hume Bank and Douglass National Bank in Kansas City. In 2009, none so far.
Columbia Board of Realtors’ CEO Carol Van Gorp agrees with Smith. The banking and real estate markets in central Missouri still look good. OK, not great, but good. Though pre-owned home sales were down almost 50 percent in November and December 2008 and January 2009 from a year earlier, the February numbers looked much better. In addition, Van Gorp anticipates the number of new home sales may be up for March.
Our real estate market is not in the best shape but is not on life support. According to Van Gorp, the value of our homes has dropped since 2007, but be glad you do not live in Del Ray, Fla., where values have dropped over 50 percent in some cases.
Our local banks, Premier, Boone County National Bank and alike, seem to be in good shape. Not great, but good. After speaking with the experts, I do not see a mid-Missouri bank joining the likes of Wachovia, Washington Mutual, *ANB Financial or Hume Bank on the coupon list.
So, should we run out and buy our toaster before the offer for a free bank expires? I don’t think so. Should we be wary of our local economy? It depends – are you a glass half-full or half-empty person?
Follow-up – I received two telephone calls this week thanking me for “forcing” the State Historical Museum to select a new site and the city from using eminent domain. My article was good, but not that good. It took a lot of voices, yours, mine, the owners of Bengals and others, to show the light to the society. Thank you, citizens of Columbia.
David Rosman is a business and political communications consultant, professional speaker and college instructor in communications, ethics, business and politics. Besides the Missourian, David is also a featured columnist for MissouriTribune.comTRCB.com. He welcomes your comments at ProfDave1011@netscape.net.