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Hills Bank and Trust Company Successful Business Newsletter.  Member FDIC.
Volume 6, Issue 5: September - October 2011     

In This Issue

We sincerely appreciate your confidence and trust. Thank you for voting us Best Bank and Best Commercial Real Estate Lender in the Corridor. It has been a pleasure to serve the Corridor and we look forward to serving you in the many years to come!

10 Second Tip

Posture Makes Perfect

Create the perfect workstation by sitting up straight with your chin up. Position your monitor so the top of your screen is just below eye level. Place your arms parallel to the floor or tilt them slightly upward. Rest your feet parallel to the floor. Having an ergonomic workstation can help prevent work-related stress injuries, keeping you healthy!

Hills Happenings

Holiday Schedule

The bank will be closed on the following holidays:

  • Veterans' Day - Friday, November 11th
  • Thanksgiving Day - Thursday, November 24th

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

See all the 2011 Hills Bank holidays.

QuickBooks Training

Hills Bank is offering a basic and advanced QuickBooks training seminar at Hills Bank, 3905 Blairs Ferry Rd NE, Cedar Rapids. Complimentary lunch will be served at 11:30 am with the seminar from 12:00 - 1:30 pm. RSVP to Elaine Blythe at 319-866-7022 or

  • QuickBooks Basic - Tuesday, September 27
  • QuickBooks Advanced - Thursday, September 29

Alzheimer's from the Inside Out
Presented by Richard Taylor, PhD
a person living with dementia

After his diagnosis in 2001, thinking, speaking, and writing about what it is like for him to live with this condition became Richard Taylor’s new purpose for his life. He speaks of Alzheimer’s from the inside out to create a supportive community where others affected by the challenges of dementia can speak up.

Come hear Richard share his ideas as he helps to demystify and disarm Alzheimer’s disease and all forms of dementia.

Wednesday, October 5th - 7:00 pm
Coralville Center for the Performing Arts
5th Street and 12th Avenue, Coralville

Free and open to the public.

Learn more about Richard Taylor, author of the book Alzheimer’s from the Inside Out, at

Sponsored by Hills Bank
and the UI College of Nursing

Send us your feedback!

Greater Cedar Rapids Parade of Homes

The Greater Cedar Rapids Area Home Builders Association is hosting its annual Parade of Homes. Homes are open on Saturday and Sunday from noon to 5 pm and on Tuesday and Thursday from 5 to 8 pm.

  • Saturday, September 24
  • Sunday, September 25
  • Tuesday, September 27
  • Thursday, September 29
  • Saturday, October 1
  • Sunday, October 2

Visit the Greater Cedar Rapids Area Home Builders Association website for more details.

Send us your feedback!

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The Dollars and Sense of Business
The State of the Economy

By Dr. David Kohl

There appear to be more questions than answers concerning the state of the economy. Analogous to the weather, the domestic and global economies have become more unpredictable and volatile. Let’s take a shot at where we are and what is in store for this fall.

Housing, unemployment, and political indecision are three headwinds to the U.S. economy. Housing, which accounts for one in seven people employed in the U.S., is experiencing a slow recovery in many regions of the country. The ideal metric is 1.1 million housing starts annually. Review of the past six months of data finds between 500,000 and 600,000 housing starts, far below the norm. High down payment requirements, along with approximately a 10-year delay in household formation by the younger generation because of education indebtedness and the lack of employment are key elements that will not be resolved in the short run.

Unemployment has remained above 8 percent for the longest period ever recorded, including the Great Depression. Small business owners’ lack of sustained demand and concerns over regulation, taxes, and health care have resulted in a reported unemployment rate exceeding 9 percent, and the rate jumps to 16 percent when including discouraged and dislocated workers. Improvement of these rates is unlikely in the near future. The quest for qualified workers by business owners in a population lacking high tech and high skill levels will be an issue for small business owners in the future.

Of course, political inaction and stalemates in Washington, D.C. have everyone concerned, including our foreign creditors. While the downgrade of U.S. debt by Standard & Poor’s did not result in an increase in interest rates in the short run, a quick change can occur should global economic events occur.

The purchasing manager index, reported domestically and abroad, suggests that the U.S. and global economies are slowing and will bear watching this fall and winter. Both core and headline inflation, which includes food and energy, have nearly doubled in the past six months. In China, food inflation is above 14 percent, which is critical there and in other parts of the world where 43 percent of the population lives on less than two dollars a day. Often, food cost issues lead to social discontent, which can result in higher oil and energy prices, as seen in the Middle East.

Moving forward, the Federal Reserve has taken a stance to wait on the sidelines. Watch for continued debt and banking issues in the euro sector. This could lead to challenges to the euro as a currency, which could ripple through global economies.

Management Tips to Kickoff Fall Planning

  • Use communication skills to reinforce business goals. First, one must define goals. Eighty percent of all Americans have no goals. Sixteen percent lock them in their minds. Only 4 percent write down their goals. What’s the bottom line? Those who write down goals earn nine times as much over their lifetime as those with no goals.
  • During periods of growth, leadership and coaching are critical. The art of winning minds and hearts to a common cause or goal consists of choosing the right words along with the right goals. This builds buy-in to the plan and broad ownership among team members.

Johnson County Economic Indicators and Trends

Housing, retail sales and employment are all key indicators that are tracked to show economic trends. Locally, Johnson County is adjusting well in the unstable economy. Below you will find examples of local data to help support that finding:

Locally housing showed an uptick in 2009 with a significant drop in 2010, which has continued in 2011. One factor that impacted this change was the federal stimulus package, which favored first home purchases. The downturn in 2010 and 2011 was 20 to 25% below the five year average and is true for multi-family construction as well as single family. In spite of the downturn, occupancy levels are at historic highs and there is increasing upward pressure on rents. As rents continue to rise, it may tend to reduce the gap between renting and owning, which should lead to more single family construction. Moreover, the pace of existing home sales have strengthened. There is currently a larger number of buyers moving up compared to last year when the stimulus of 2010 increased the number of first time buyers.

Retail Sales
Retail sales in Johnson County increased 21% between 2000 and 2010, however, there was a significant decrease in 2010, with retail sales down 10.83%. State-wide retail sales are down 3.59% for the year.

Employment is a critical measure of growth since households tend to be built around a job, or alternatively, where a second wage earner can add significantly to disposable income. Jobs in Johnson County declined slightly (-0.4%) in 2010 from the previous year. The last significant increase in employment occurred in 2007; since that time the local job market has essentially been flat. The unemployment rate in Johnson County compares favorably to the state and the nation. Two factors have had an impact on the local unemployment rate. Education is typically considered counter cyclical, meaning that as the economy contracts, people seek more education. Secondly, the large base of medical employment in the county remains stable. In both cases, public funding will continue to decline as there is enormous downward pressure on federal research dollars.

The market is clearly in an adjustable phase. While retail sales declined in 2010, there have been no further declines in 2011. Similarly, job growth has been flat since 2007. In contrast, there has been significant strength in the sale of existing homes. Apartment rents continue to increase as occupancy rates strengthen. Both of these trends put pressure on development of new housing. Most importantly, there have been few new lots brought to the market over the past three years. The lack of new lot development has encouraged absorption of the available inventory. This is evident for entry level housing and for mid-level lots as well.

Adapted from September 2011
A Market Analysis of Multi-Family Housing and Subdivision Development in Johnson County
Kyran J. Cook, MAI, M.A and Sandra Mason

Ask the Expert

Q. I heard that Hills Bank will no longer sell paper savings bonds. Is this true?

A. Yes. As of January 1, 2012, financial institutions will no longer sell paper savings bonds. Savings bonds, introduced in 1935, are not going away. Electronic savings bonds in Series EE and I will remain available through purchase via TreasuryDirect®, a secure, web-based system operated by Public Debt – where investors have been purchasing savings bonds, available 24/7, since 2002. This will support the U.S. Department of the Treasury’s goal to increase the number of electronic transactions with citizens and businesses and save American taxpayers approximately $70 million over the first five years.

Electronically investing has many benefits such as reducing the chance of misplacing or losing the bonds or worrying about storing paper savings bonds. Opening a TreasuryDirect® account is free, and once it’s established investors can:

  • Buy, manage, and redeem Series EE and I electronic savings bonds.
  • Convert Series EE and I paper savings bonds to electronic savings bonds through the SmartExchange® feature.
  • Purchase electronic savings bonds as gifts.
  • Enroll in a payroll savings plan for purchasing electronic bonds.
  • Invest in other Treasury securities such as bills, notes, bonds, and TIPS (Treasury Inflation-Protected Securities).

Redeeming your current paper savings bonds can still be done at any Hills Bank location.

Savings Bonds are not a deposit, not FDIC insured, not insured by any federal government agency, carry no bank guarantee, and may go down in value.


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© Copyright 2011 Hills Bank and Trust Company. Member FDIC.
Equal Housing Lender