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Federal Reserve, CSBS Release Findings from 2018 Survey of Community Banks

ST. LOUIS ― The Federal Reserve System and the Conference of State Bank Supervisors (CSBS) today released findings from a national survey of community bankers as part of the sixth annual Community Banking in the 21st Century research and policy conference, taking place today and tomorrow at the Federal Reserve Bank of St. Louis. The conference is sponsored annually by the Federal Reserve System, CSBS and the Federal Deposit Insurance Corp.

The survey report, available on the conference website at, provides a comprehensive view of trends in the community banking industry from the perspectives of bankers nationwide. 

Survey responses were obtained from 521 community banks in 37 states from April through July 2018. In addition to regulatory issues, this year’s survey addressed trends in small business and other lending, banking services, mergers and acquisitions, management succession, and financial technology.

“Creating more awareness and understanding about community banking is a primary focus of this research report and the related conference,” wrote CSBS Chairman Charlotte N. Corley in the report’s foreword.

Following are some key findings from this year’s survey responses:

  • Inferred compliance costs for the overall community banking industry, which had been increasing in previous years, declined to an estimated $4.7 billion. Despite the decline, surveyed bankers cited the cost of regulations as a key factor in considering whether to accept acquisition offers.
  • Management succession was considered at least a moderately important factor by two-thirds of bankers who were weighing acquisition offers.
  • A majority of bankers said they were collecting and analyzing data in preparation for implementation of the Current Expected Credit Loss (CECL) model.
  • The vast majority of bankers said that, in response to competitive pressure for small business loans, they rarely or never eased terms by extending maturity, reducing collateral requirements, requiring fewer covenants or allowing more borrower leverage.

Complementing the national survey findings were “Five Questions for Five Bankers,” summaries of qualitative interviews conducted by state bank supervisors in 28 states over the same three-month period.  Questions addressed trends in industry consolidation, supervision and regulation, differentiation among banks making small business loans, the threat of technological “disruption,” and managing cyber-risk.

Headquartered in St. Louis, with branches in Little Rock, Louisville and Memphis, the Federal Reserve Bank of St. Louis serves the states that comprise the Federal Reserve’s Eighth District, which includes all of Arkansas, eastern Missouri, southern Indiana, southern Illinois, western Kentucky, western Tennessee and northern Mississippi. The St. Louis Fed is one of 12 regional Reserve banks that, along with the Board of Governors in Washington, D.C., comprise the Federal Reserve System. As the nation's central bank, the Federal Reserve System formulates U.S. monetary policy, regulates state-chartered member banks and bank holding companies, provides payment services to financial institutions and the U.S. government, and promotes financial literacy, economic education, and community development.

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