Teresa Gilreath has recently joined Stockman Bank as a Real Estate Loan Officer at the Billings Heights location. She will develop and originate real estate loans while assisting clients in home purchase financing, consolidating debt, lowering monthly payments, construction financing or utilizing their home as an investment tool. Gilreath brings over 39 years of banking experience to the position, which includes 22 years in the mortgage banking industry. Her vast expertise will assist Stockman Bank in deepening client relationships and expanding our real estate loan portfolio. She has been active in the community and will continue by participating in Stockman Bank related events.
Author: Press Room
Fewer Using Credit Cards, But Debt at Record High
More than a fourth – -27.1 percent – of Montana households do not use credit cards.
Three percent of Montana households are “unbanked”. They do not have credit cards, checking accounts or savings accounts. Another 11.5 percent utilize alternatives to banks and are categorized as “underbanked”, according to Upgraded Points, a consumer information center for travelers. The national average of households without credit cards is 28.5 percent.
Underbanked are households with a checking or savings bank account but who also relied on check cashing, money orders, international remittances, payday loans, rent-to-own services, pawn shop loans, etc.
Nationally, the share of households that are unbanked is 4.5 percent; and those underbanked is 14.1 percent.
Upgraded Points calculated the share of households that do not possess any Visa, Mastercard, American Express, or Discover credit cards in the past 12 months. The report estimates that 123,847 households in Montana do not use credit cards. As a ratio to the population, Montana ranks 25th among states as to households without credit cards, based upon the rejection rate by banks because they lack a credit record or are credit unworthy.
While the available credit to American consumers has reportedly declined, credit card indebtedness reached a record in the second quarter this year at $1.03 trillion, according to the New York Federal Reserve Bank. Total household debt exceeds $17 trillion, with 72.4 percent of that coming from mortgages and home equity lines of credit.
Credit card balances increased by $45 billion, from $986 billion in the first quarter of 2023 to a series high of $1.03 trillion in the Q2 2023, marking a 4.6 percent quarterly increase. Credit card accounts expanded by 5.48 million to 578.35 million. Aggregate limits on credit card accounts increased by $9 billion and now stand at $4.6 trillion.
Montana ranks 43rd in terms of the average debt per credit card holder at $6,160, according to scholaroo.com. Among cardholders with unpaid balances, the national average for card debt stands at $7,227. According to TransUnion millennials have become record setters as to who is behind on credit card payments since the start of the pandemic.
Connecticut residents bear the highest average debt of $9,408, surpassing the national average by 30 percent. Following closely are credit card debtors in New York, holding the second position with an average debt of $9,165. Kentucky has the lowest average credit card debt, with debtors owing just $5,408.
Upgraded Points explains the increased rejection of applicants for credit cards placing much of the reason on inflation and increased interest rates. Banks can respond to these constraints in several ways. Often, they simply pass on higher interest rates to consumers. But in many cases, the banks may also get choosier about issuing credit, whether by limiting how much they lend out or raising the standards for borrowers to get approved. This increased scrutiny can be felt across all lending products, from bank and vehicle loans, to consumer credit cards “that many Americans rely on every day.”
In this environment, more people’s credit card applications are being denied. The rejection rate for credit card applications as of June 2023 sits at 22 percent, one of the highest rates in a decade. After falling to a low of 10 percent in February 2020, the rejection rate spiked to 26 percent in just one year. Credit card rejection rates fell briefly in 2021 but have risen steadily over the last year.
Big-picture economic trends can certainly affect how likely a credit card application is to be approved, but credit card companies are also always looking at factors specific to each application when making an approval decision. Common reasons for rejection include low credit scores, high levels of debt, a history of late payments or bankruptcy, and insufficient income. But the biggest obstacle for many applicants is a “chicken or the egg” dilemma: it’s harder for someone to get approved for credit if they don’t already have a credit history, reports Upgraded Points.
Existing-Home Sales Decreased 0.7%
Existing-home sales moved lower in August, according to the National Association of Realtors. Among the four major U.S. regions, sales improved in the Midwest, were unchanged in the Northeast, and slipped in the South and West. All four regions recorded year-over-year sales declines.
Highlights reported by the association include:
* Existing-home sales retreated 0.7% in August to a seasonally adjusted annual rate of 4.04 million. Sales dropped 15.3% from one year ago.
* The median existing-home sales price climbed 3.9% from one year ago to $407,100 – the third consecutive month the median sales price surpassed $400,000.
* The inventory of unsold existing homes dipped 0.9% from the prior month to 1.1 million at the end of August, or the equivalent of 3.3 months’ supply at the current monthly sales pace.
“Home sales have been stable for several months, neither rising nor falling in any meaningful way,” said NAR Chief Economist Lawrence Yun. “Mortgage rate changes will have a big impact over the short run, while job gains will have a steady, positive impact over the long run. The South had a lighter decline in sales from a year ago due to greater regional job growth since coming out of the pandemic lockdown.”
“Home prices continue to march higher despite lower home sales,” Yun said. “Supply needs to essentially double to moderate home price gains.”
Entrepreneurship on Rise; Reaches Highest Level
Following the pandemic when thousands of businesses were forcibly closed and many failed, leaving people unemployed and facing big changes in their lives, an unprecedented number launched their own businesses escalating the rate of entrepreneurship.
According to the Washington Post nearly 1 in 5 adults — 19 percent — are in the process of founding a business or have done so in the past 3 and a half years, based on data from the Global Entrepreneurship Monitor, recently released by Babson College. That is the highest level since the survey began in 1999.
In Montana, with more than 30,000 new businesses registered to date in 2023, the state appears to be on pace to have another record year of new business registration. New business registrations in Montana surged in June 2023 with roughly 5,300 new businesses registered with the Secretary of State’s Office, easily surpassing the approximately 4,300 new registrations in June of 2022.
The Montana Business Economic Report revealed 51,508 new businesses registered in 2021, surpassing the 2020 total by more than 12,000. In 2022 the state had record growth with some 53,000 businesses registering.
“We’re seeing an upward trend in entrepreneurship that’s continued through the pandemic, and that’s a really great sign,” said Donna Kelley, a professor at Babson College and the report’s lead author. “It means businesses are introducing innovation, creating jobs and contributing to the competitiveness of the United States.”
Globally, the United States had the third-highest entrepreneurship rate among 21 high-income economies, lagging behind the United Arab Emirates and Saudi Arabia, but ahead of Canada and the United Kingdom, researchers found.
Applications for new businesses spiked to an all-time high in July 2020, when more than 550,000 Americans filed paperwork to start their own companies. A boost in government funding — in the form of stimulus checks, extra unemployment benefits and small-business loans — gave many people the financial cushion to get started.
Since then, business registrations have remained well above pre-pandemic levels.
But also being reported is that many small businesses founded in recent years are struggling due to economic uncertainty, higher costs and a slowdown in consumer spending. Business closures ticked up last year, to 5.2 percent from 2.9 percent in 2019.
Adults between the ages of 18 and 34 were nearly twice as likely to start businesses as those between 35 and 64. And although men are still slightly more likely than women to start their own companies, that gap continues to narrow. There was also a clear shift away from service industries, such as finance and real estate, toward manufacturing and logistics.
Deaths Decline
Quote Wizard News analysts found that there has been a 13% decrease in drug related overdose deaths in Montana over the last year – that’s the 4th highest decrease nationwide.
Key Findings for Montana:
* 178 people died of an overdose in the last 12 months
* Overdose deaths nationwide have risen more than 60% in the past 5 years
* Nationally, opioids are found in nearly 70% of overdoses
Dear Editor,
I wanted to thank you, and the staff at Big Sky Business Journal, for the very flattering article about Wood’s Powr-Grip. We were extremely honored to be chosen by the SBA as one of their Legacy Businesses of the year. Just as we didn’t expect to be recognized by the SBA we are equally flattered by the kind words from the Big Sky Business Journal.
Thank you very much for the great work you guys do in recognizing all the good that goes on in our business community.
Sincerely,
Bryan Wood
SBA Sets New Rules that Support Economic and Equity Priorities
The Small Business Administration (SBA) has implemented new rules that support the Biden-Harris Administration’s economic and equity priorities. Called the Growth Final Rule SBA Administrator Isabella Casilla Guzman said that the regulatory and policy reforms will increase access to private equity and debt capital for:
• Underserved small businesses and startups,
• Undercapitalized critical technologies,
• Diverse and emerging fund managers, and
• Innovation investment. Starting Private market fund managers can apply for SBIC licenses designed for investing in American small businesses and startups with equity-oriented or long-duration strategies.
The two new SBIC licenses – the “Accrual SBIC” and the “Reinvestor (Fund-of# Funds) SBIC” – expand the SBIC program network of private market financing partners and the SBA’s reach to historically underserved small businesses and startups.
Critically, the regulatory and policy reforms are designed to reduce the financial burden for new program applicants and provide a more streamlined application experience.
Since 1958, the SBA has licensed and regulated private market investment funds as “SBICs.” SBICs invest equity or lend private capital, plus funds borrowed with an SBA guarantee, to make equity and/or debt investments in small businesses and startups. Today, the SBIC program is comprised of more than 308 discrete private funds across mezzanine, private credit, buyout, growth, venture, and multi-strategy, which collectively have more than $40 billion in public and private assets under management (AUM). Last year, SBICs invested $8 billion in more than 1,500 companies that created and sustained over 103,000 U.S. jobs. ?
Public Lands Ranchers Speak Out Against Biden Antiquities Act
From Northern Ag Network
The Public Lands Council and National Cattlemen’s Beef Association slammed President Biden’s use of the Antiquities Act to put sweeping federal designations on over a million additional acres of land in Arizona, amounting to yet another presidential land grab. This designation is the latest in a long series of recent actions from the Biden administration that has disenfranchised communities across the West.
“Rural communities have long been an afterthought to D.C. politicians and this decision once again shows that President Biden cares more about talking points than truly listening to the needs of rural communities and ranching families,” said PLC President Mark Roeber, a Colorado rancher. “While this designation may appear to be a ‘win’ on paper, the new monument comes with no outreach to the public lands ranchers who have stewarded the lands for generations. Decisions like these set land management in the West back by 50 years or more all so President Biden could score a few cheap political points.”
“This kind of use of the Antiquities Act is one of the most appallingly political moves to lock up millions of acres of land across the country. Today’s latest designation follows a concerning trend of Washington politicians trampling local communities, land managers, farmers, and ranchers with the stroke of a pen,” said NCBA President Todd Wilkinson, a South Dakota cattle producer. “NCBA is strongly opposed to the continued abuse of the Antiquities Act, and we urge President Biden to listen to the local communities that will be hurt by this designation.”
NCBA says this designation adds insult to injury for communities that are unheard and intentionally removed from land management conversations. Additionally, the Biden administration failed to communicate with the affected landowners prior to the designation and their so-called public opinion meeting and poll failed to gather perspective from the people most impacted by this decision.
The Antiquities Act gives the President of the United States broad power to establish national monuments from existing federal lands. The act requires no review, economic impact analysis, or public input required. In effect, the act allows any President to radically reshape rural economies, eliminate jobs, and harm industries operating on public lands all through the stroke of a pen.
The livestock groups say that these designations are especially harmful to rural communities that rely on federal lands for their livelihood, such as public lands ranchers.
Public lands ranching has existed since the early days of exploration in the West and is governed today by the Taylor Grazing Act of 1934. Nearly 40 percent of cattle spend their time on public lands and public lands ranchers protect water sources, safeguard open space, promote forage growth, limit invasive species, and reduce the risk of catastrophic wildfires.
Presidential Approval
There are 29 states in which President Biden has a lower approval rating than in Montana, according to The Center Square. In Montana, Biden has an approval rating of 38 percent while 59 percent disapprove, based on a survey of registered voters who participated in the November 2022 midterm election.
In the 2020 presidential election Trump took 56.9 percent of the vote and Biden 40.5 percent in Montana. Montana’s population is the seventh smallest in the country at 1,077,978.
Main Street Needs Senator Daines’ Tax Cut
By Ronda Wiggers, Montana State Director for National Federation of Independent Business
Montana Main Street businesses, farmers and entrepreneurs have endured a lot the last three years. More than 90% of Montana’s businesses are considered ‘small,’ employing less than 50 people. These small businesses have faced uncertainty, supply problems, and struggled to find enough employees. And now they may face a 20% increase in their federal tax bill.
Every Montanan shops at small businesses, so we’re all affected by this turn of events. Before the pandemic, we benefitted from two years of unprecedented economic opportunity and optimism, and the credit goes to the 2017 creation of the Small Business Deduction (Section 199A), which allows small businesses organized as pass-through entities (sole proprietorships, S-corporations, partnerships, or LLCs) to deduct up to 20% of their qualified business income on their 1040 IRS form.
That gave small businesses the relief they needed to thrive. Small employers responded with investment, innovation, growth, and wage hikes, lifting up our state in incredible ways. It’s impossible to overstate how important the Small Business Deduction was. The Small Business Deduction made it easier for Main Street to compete with Wall Street corporations. Without it, big businesses would have an insurmountable advantage over small businesses.
Tens of thousands of Montana small businesses have benefitted from this common-sense policy. There’s a good chance you know someone who got a bonus because of the Small Business Deduction, or someone who got hired because a small business was able to expand. And while the pandemic and government shutdowns stifled a lot of this progress, the Small Business Deduction helped a lot of Main Street job-creators survive the past three years.
Now, the Small Business Deduction is about to expire, putting tremendous pressure on Main Street. That’s bad enough on its own, but it’s made even worse by the fact that Wall Street’s tax cuts are still permanent. Only in Washington does it make sense to put big business ahead of small business.
Thankfully, one leader wants to right this wrong. Sen. Steve Daines introduced a bill that would make the Small Business Deduction permanent. It’s called the “Main Street Tax Certainty Act,” and small businesses are grateful for his leadership. It deserves to pass as soon as possible.
The sooner this bill is signed into law, the stronger small businesses will be. But if this bill goes nowhere, Main Street will go downhill, very soon and very fast. Instead, we need to make things easier for small businesses – because when Main Street wins, Montana wins.
