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Hills Bank and Trust Company Successful Business Newsletter.  Member FDIC.
Volume 6, Issue 1: January - February 2011     

In This Issue

ACH Origination. Send and receive payments electronically! Click to learn more!

10 Second Tip

Make Time Management a New Year's Resolution

This year, make a resolution to schedule blocks of time to work on project tasks. Consider these important meetings with yourself that are blocked off on your calendar as not to be interrupted. Be just as respectful of your time as you would a normal meeting. Don't check email, voice mails, or allow interruptions. Devoting blocks of time to your project tasks will leave you less stressed and allow for more constructive time to dedicate to your business.

Hills Happenings

The bank will be closed on the following holiday:

  • Presidents' Day - Monday, February 21

Even though we will be closed, you can still do your banking at over 70 Hills Bank ATMs in the Corridor, Hills Bank Online, or through Push Button Banker.

View the complete Hills Bank holiday schedule.

Iowa City Home and Builder Show 2011
See thousands of home, remodeling, landscaping, and decorating ideas come to life at the 2011 Iowa City Home and Builder Show. Plus, you can meet face-to-face with local contractors and material suppliers that will help you enhance your home’s comfort, functionality, appeal, and value.

Coralville Marriott Convention Center
• Friday, January 21: 5 – 9 p.m.
• Saturday, January 22: 10 a.m. – 6 p.m.
• Sunday, January 23: 10 a.m. – 4 p.m.

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The Dollars and Sense of Business

By Dr. David Kohl

Welcome to the Dollars and Sense of Business column for Hills Bank. My goal is to provide insight on challenges and issues impacting business decision makers. Interspersed will be tips and techniques for strategic and day-to-day operation of your business.

The Super Cycle Continues
The economic health of both agricultural and non-agricultural businesses is being influenced by the run-up of commodity prices. The longest enduring super cycle for commodities in the past century is now moving into its eighth year. The previous four super cycles lasted between three and four years. The current one is being driven by five “game changers” of which strategic business decision makers must be aware. Export markets have been buoyed by strong demand in Asia, and particularly China, along with a weak U.S. dollar. The demand for commodities and the growth in the ethanol industry, along with low interest rates and adverse weather conditions in production regions of the world have been keys in maintaining strong commodity prices. The livestock sector is again faced with high input prices hindering its recovery process.

The key to success for any business in this environment is proactive margin management. Develop a series of cash flow budgets covering a wide set of assumptions and scenarios based upon global and domestic economics. In your 2011 business plan, determine strategies and actions to implement given each cash flow scenario.

Hot Land Values
Many have heard stories of recent land sales in the Upper Midwest region that are reminiscent of the 1970s. High quality farm ground with water, minerals, and other natural resource opportunities is bringing a premium. Any changes in the aforementioned “game changers” will soften real estate appreciation. Should all five “game changers” converge in a negative alignment, then land values would experience a major correction.

Prudent strategies must be followed when purchasing or selling real estate. First, is your business historically profitable? Second, do you have one third of your business revenue in net working capital? Finally, is the real estate purchase or sale consistent with your business, family, and personal goals?

Economic Outlook
The U.S. economy is in recovery mode early in 2011 as a result of Federal Reserve actions and stimulus; however, the economy will continue to drag because of less than optimal housing starts and factory utilization. Also, a high unemployment rate above 8 percent may continue as automation replaces workers in the U.S. and abroad and the older generation delays retirement. The demand for products and services from the growing BRIC nations (Brazil, Russia, India, and China) will drive the Upper Midwest economy. Upward pressure on interest rates could occur because of uncertainty in the amount of foreign financed federal debt, budget deficits, and the overall plan by national and state leaders.

Action Tips
Here is a list of actions to complete as you begin the New Year.

  • Schedule a review with your lender to assess strengths and areas for improvement.
  • Compile your financial statements for 2010.
  • Keep an eye on cash and liquidity in order to increase flexibility and prepare for economic volatility.
  • Check your credit score and credit reports for accuracy.
  • Determine how much growth of net worth on the balance sheet resulted from earned net worth versus paper appreciation of asset values.

Dr. David Kohl is a Professor Emeritus of Agricultural Finance and Small Business Management and Entrepreneurship at Virginia Tech, Blacksburg, VA. As a small business owner and world-traveled economist, his personal involvement with agriculture and interaction with key industry players provides a unique perspective into domestic and global business and economic trends.


Smart Saving

Having FDIC insured funds has become a growing concern during the Great Recession (late 2000s). According to the FDIC and the NUCA, our nation witnessed over 200 financial institution closures during 2010. Hills Bank has recognized this concern among area consumers, and has partnered with Promontory Interfinancial Network to offer an Insured Cash Sweep account (ICS).

Through the ICS account, customers can access multi-million-dollar FDIC protection on savings deposits by allocating funds to partnering financial institutions.


ABC Company has $1,000,000 in their savings account and currently only has $250,000 in insurance coverage. With an ICS account they can split that million dollars into four financial institutions giving them complete FDIC coverage.

Hills Bank Bank B
Bank C
Bank D
$250,000 $250,000 $250,000 $250,000

If you are interested in learning more about FDIC insurance on deposit accounts or an ICS account, please contact a Commercial Deposit Representative at any Hills Bank location.

VISA One Card Coming Soon!

For area businesses, tracking and controlling expenses is vital in maximizing profits. A new Hills Bank business credit card program called VISA One will do just that. Businesses choose from three different credit card types: purchasing, fleet, and corporate. To assist in the management of your cardholders, you will have the ability to set the cards up to fit the unique needs of you and your employees. The new Hills Bank VISA One program will be offered to area businesses in the second quarter of 2011. Hills Bank looks forward to providing this new and improved business credit card technology.


Ask the Expert

Q. My business has had checks returned for non-sufficient funds. Is there anything I can do to help prevent this?

A. There are a couple of ways you can both prevent the return of checks and recoup the funds you lose when a check is returned as having non-sufficient funds (NSF). For starters, it is always a good idea to make sure the check has a valid phone number. If not, write one down while the customer is in front of you.

In some instances, these precautionary steps are not a fail proof way to prevent the loss of funds. Check collection agencies are a great way to help with returned checks. They will do the work so you don’t have to worry about tracking down the check issuer. Hills Bank and Trust Company uses a product called Check Collect which offers an online login so you can see the status of returned checks within the agency. When a check is returned to your account, Hills Bank automatically notifies Check Collect so they can begin acting on the recovery of your money. For more information on Check Collect, please contact your Commercial Deposits Representative at any Hills Bank location or call 1-800-445-5725.

Another way to help collect funds on an NSF check is to send the returned check through as an ACH (Automated Clearing House) transaction, more commonly referred to as direct debit. There are specific rules and regulations on how to send a returned check as an ACH transaction, but it allows you to collect a fee for the returned check. For more information on returned check ACH transactions, please contact Hills Bank Commercial Support at 1-866-890-3109.

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