- At 131, the first quarter 2026 CBSI slipped one point from the fourth quarter 2025 value and down only two points from the record high of 133 reached six months ago. The latest CBSI is up two points from one year ago and up 33 points from two years ago.
- Four of the seven components that comprise the CBSI decreased from the previous quarterly survey and three advanced.
- At 148, the profitability component improved eight points from last quarter. The Profitability indicator has remained at or above 129 during the last seven quarters and reached a peak of 152 one year ago.
- At 98, the future business conditions indicator is the only component below the neutral level of 100, down one point from last quarter. The business conditions indicator has been above the neutral level of 100 only once since 2021 when it hit 117 in the fourth quarter of 2024.
- At 107, the monetary policy component dropped 13 points from last quarter and is now off 23 points from its all-time high reached six months ago. Even so, the monetary policy indicator has been in positive territory (above 100) since the end of 2023.
- At 122, the regulatory burden component fell back eight points from last quarter’s record level. Community bankers still foresee a lighter regulatory environment in the coming year, but their optimism has faded somewhat. The regulatory burden indicator has remained at or above 100 for six straight quarters, following fifteen consecutive quarters—from early 2021 to late 2024—when the indicator was consistently below 30 and indicated, at that time, a much heavier regulatory burden expected.
- At 134, the operations expansion component increased 5 points from last quarter, while the capital spending indicator fell two points to 134. Both indicators are near their long-run series averages.
- At 170, the franchise value indicator climbed two points to a new all-time high. Similar to the profitability indicator, the franchise value component has been above 150 over the past seven quarters.
- Read More on the 2026 Q1 Community Bank Sentiment Index Survey Results
- 254 community bankers from 42 states and the District of Columbia responded to the first quarter 2026 CBSI survey.
- In the open-ended comments, several community bankers voiced concerns on how the war in Iran might impact the US economy, specifically inflation from higher oil prices, raised recession probabilities, and how the Federal Reserve’s monetary policy decisions might change direction. Community bankers are also concerned about regulatory matters. For example, deposit flight could result from the current stablecoin legislation and that big banks are allowing check fraud because the depositing bank is not liable under current rules.
- The CBSI Uncertainty Index (computed by adding together the “I don’t know/unsure” responses for all seven components) returned to 31 this quarter, indicating more uncertainty than recorded in the previous quarter’s survey.
- In a special question, 39% of community bankers believe the U.S. economy is at the start of, or already in, a recession, down from 48% last quarter. Thirty-seven percent of community bankers said the economy is at the start of an expansion while 24% believe there is solid economic growth.
- In another special question, community bankers once again rated the following as their top concerns: cyberattacks, bank fraud, the cost and availability of labor, competition, and the federal debt/deficit. These are the same top five concerns bankers have had in the previous three quarterly surveys.
