Just when you thought things could not be more interesting for the banking sector … suddenly, regulators closed Silicon Valley Bank (SVB), subsequently followed by Signature Bank. Before I move into my column for the month, I want to extend a special thank you to the NBA member banks and board of directors, as well as our NBA team members, who worked diligently and contacted customers, coordinated media responses and interview requests, participated in regulatory calls and webinars, and held discussions with elected officials following these bank closures. Nebraska banks should be proud of how our industry responded in a very proactive and positive way!

One of the primary causes of the SVB failure was the technology industry concentration of the bank’s balance sheet in both its deposit and lending bases. If you have spent time working with businesses in the technology and software development sector, it is clear that these firms tend to be highly volatile and burn cash at a very rapid rate, especially during challenging economic times. Conversely, technology firms that go into default on business loans leave very little in terms of usable collateral (e.g., four laptops and some questionable intellectual property).

Nebraska banks of all sizes are blessed to have a diverse customer base which helps them better weather economic turbulence. While some might argue that Nebraska banks tend to have a concentration in ag lending, it is also true that the ag sector is not one-dimensional and is extremely diverse. Each year, the NBA joins our members to celebrate National Ag Week, and we have a lot to celebrate! Following are a few quick facts that you might find useful:

1. In 2022, there were 44,800 farms and ranches in Nebraska, with an average size of 1,011 acres. These farms and ranches utilize 44.8 million acres – or 92% – of the state’s total land mass.
2. Nearly half of Nebraska’s ag land is rangeland and pastureland.
3. Nebraska led the nation in commercial cattle slaughter with over seven million.
4. Nebraska was also the leader for great northern bean production, popcorn production and cattle on feed.
5. Ag cash receipts per capita were $13,515 in 2021.
6. Nebraska was the second largest ethanol producer behind our friends in Iowa, producing 2.3 billion gallons last year.
7. Nebraska exported $9.2 billion worth of ag commodities in 2021.
8. With exports of $2.3 billion, corn was the state’s top exported commodity.
9. Corn, soybeans and beef were the top three ag exports.
10. Nebraska banks loaned nearly $7 billion for the purchase of ag real estate.

And the list goes on.

Nebraska is blessed with abundant natural resources, including productive land and water, which allows our farmers and ranchers to raise the food necessary to feed our growing global population. In addition, our ag producers and agribusiness firms lead the world in innovation and ag technology utilization. The future for Nebraska agriculture is bright. Let’s take time this spring to thank and congratulate our Nebraska farmers for a job well done!