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Large Majority of Community Banks Have Positive Business Sentiment

Eight-six percent of community bankers have a neutral or positive sentiment of economic and business conditions, with just 14 percent negative. That is one key finding from a research partnership between two Temple University economists and the Conference of State Bank Supervisors (CSBS), who are working together to develop a formal Indicator of Community Bank Sentiment.

To reach the conclusion of a net positive sentiment, Temple Professors William Dunkelberg and Jonathan Scott analyzed the 2018 survey of community banks conducted by CSBS and the Federal Reserve. A white paper describing their findings was released at the sixth annual community bank research conference sponsored by CSBS, the Federal Reserve and FDIC. 

Dunkelberg and Scott found the community bankers who have positive sentiment are:

  • Looking to acquire than be acquired
  • Not changing loan terms due to competitive pressures
  • Prepared to be leaders in technology development
  • Younger CEOs (under age 45)
  • Operating in urban rather than rural markets

CSBS Senior Executive Vice President Michael Stevens summarized the importance of the collaboration between the Temple economists and CSBS: “If we get it right, the Indicator of Community Bank Sentiment will represent an important barometer of the economic health of local communities. To that end, the 2018 analysis is a great first step. Now, the work in front us of is to pursue further data, research and peer review, act on this feedback, and then present a formal indicator.”

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