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First State Bank Announces $15,000 in Funding to Homebuyers

A grant totaling $15,000 was recently awarded to First State Bank by Federal Home Loan Bank of Des Moines. The grant is part of FHLB Des Moines Rural Homeownership Fund (RHF) which supports homeownership opportunities for families and individuals in rural communities.

Hardworking home buyers who can make a house payment with no difficulty sometimes cannot purchase a home because they do not have the funds required for upfront costs. This program provides an opportunity for qualified individuals and families to purchase homes by receiving funds to assist with the down payment, closing cost, counseling or rehabilitation of the property.

By participating in RHF, First State Bank will be able to distribute awards of up to $1,000 to each eligible homebuyer.  “This grant allows us to help eligible buyers with a down payment, closing costs, counseling or small rehabilitation projects that can greatly assist homebuyers in their closing process,” said Brad Eimer, vice president of wholesale lending at First State Bank Mortgage.  “As a community bank, it’s important to us to be able to offer assistance to local homebuyers.”

Since the creation of RHF in 1996, 6,110 grants totaling $20.6 million dollars have been awarded to support rural housing activity in five Midwest states. “These grants provide our member financial institutions the opportunity to help community members achieve their dream of homeownership. Homeownership not only brings stability to individuals and families but also to the neighborhoods and communities where they live,” said Gary Dodge, community investment director at FHLB Des Moines.

If you are interested in purchasing a home using the Rural Homeownership Fund grant, contact one of First State Bank’s experienced mortgage lenders for details at (636) 940-LOAN or apply online by clicking here.

First State Bank Confirms Commitment to Provide No-Fee ATM Network and Free Mobile Banking

Established in 1867, First State Bank of St. Charles is committed to continuing to evolve with the changing times by offering the latest products available to banking consumers.  The bank recently rolled out its new Mobile Banking program.

“Mobile Banking allows our customers to access accounts from anywhere using a cell phone,” said marketing officer Trish Lovan.  “Customers can view account balances and recent transactions and even transfer funds and pay bills.  The program is free and appeals to a large segment of our customer base.”

Mobile Banking services can be used by any First State Bank customer with a mobile phone that is capable of receiving and sending text messages.

The bank is also pleased to offer their debit card customers a network of over 22,000 no-fee ATMs.  The bank operates its own ATM machines, but also participates in the MoneyPass network of ATMs, which allows its customers to use any ATM included within the MoneyPass network and complete transactions without any fees.  Customers can search for free ATMs in their area by using the First State Bank ATM Locator tool.

“We are working to educate our customers on our expanding network of surcharge-free ATMs,” Lovan said.  “We have hundreds of ATM locations in the St. Charles County area, and we have many more nationwide.  We are committed to remaining accessible to our customers.”

Bank Economists See Improving U.S. Economic and Employment Growth

Economic activity will pick up in the second half of this year from the current soft patch, according to the American Bankers Association’s Economic Advisory Committee, which issued its consensus forecast in June.

The group, which includes a dozen chief economists from the largest banks across the country, predicts that inflation-adjusted GDP growth will rise to near 3 percent in the second half of this year and during 2012.

“Business growth has built up some staying power, despite continued head winds,” said Peter Hooper, committee chairman and chief economist of Deutsche Bank, New York. “Economic recovery at an above-trend pace will support continuing recovery of jobs, but we have a long way to go to get back to where we were before the Great Recession.”

According to the committee, more than 2 million jobs will be created this year – more than twice as many as last year. And next year, it will be 2.5 million.

However, with nearly 9 million jobs lost in 2008-2009, and less than 2 million regained so far, the bank economists see high unemployment lingering yet trending down. The group forecast is for the national unemployment rate to decline from 9.1 percent in May to a bit under 8 percent by the end of next year.

The bank economists see businesses leading growth, while consumers remain cautious. Business investment is expected to grow at twice the pace of the overall economy this year and accelerate in 2012. On the other hand, the committee sees real consumer spending growing around 2.5 percent this year and next.

“The high price of food and gas is eating into discretionary spending and the termination of the payroll tax cuts next year won’t help,” said Hooper. “Moreover, lingering high unemployment and further weakness in home prices will add to consumer caution.”

In addition, the committee expects the housing sector to remain weak into next year. The bank economists see home prices falling another 3 percentage points before bottoming by mid-2012. At that point, however, the committee foresees that home building and sales will start to grow and begin to contribute positively to the economy.

Low interest rates and strengthening credit will support growth, according to the committee.  For consumer credit, and even more so for business credit, the committee foresees steady reduction in delinquencies and strengthening of credit growth into 2012.  The committee forecasts consumer loans to grow at 3.9 percent and business loans to grow at 6.1 percent in 2012.

“Even with overall inflation somewhat elevated currently, core inflation is expected to be tame – below 2 percent – through 2012. Absent inflationary pressures, the Fed will hold back on raising interest rates until next year,” said Hooper.

The committee forecast is that the Fed will not raise the federal funds target rate from the current 0.25 percent ceiling until the second quarter of next year, with the target rate moving above 1 percent by year-end 2012.

“As economic growth solidifies, the Fed will want to stay ahead of the inflation curve by gradually pushing rates up.”

Low inflation and Fed restraint will keep interest rates down in general, according to the committee. The forecast for 3-month Treasury bills is to hold near 0.1 percent through this year. The 10-year Treasury note and 30-year mortgage rates are expected to rise to 3.6 percent and 5.1 percent (respectively) by year-end.  As the Fed begins to tighten monetary policy, interest rates will move higher.  Treasury bills will rise to 1.3 percent, 10-year Treasuries will rise to 4.3 percent, and 30-year mortgages will rise to 5.8 percent by year-end 2012.

“With the Fed moving slowly and credit quality steadily improving, bank lending will support economic recovery,” said Hooper.

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