Community bankers have become more pessimistic about the economic outlook, according to a quarterly survey by the Conference of State Bank Supervisors.
The CSBC said in a press release that its Community Bank Sentiment Index fell by 10 points to 73 in the second quarter – its lowest level since the index launched in 2019. Roughly 95% of the bankers surveyed said they believe the economy is already in a recession.
“Community banker sentiment has been pessimistic for six straight quarters,” Tom Siems, the conference’s chief economist, said in the release.
“They are navigating the effects of higher interest rates that have stressed liquidity, lending growth and fixed-rate securities portfolios,” Siems added. “Following the high-profile bank failures earlier this year, community bankers are more concerned about regulatory overreach.”
Community bankers said their top concerns for 2023 are government regulation, cyberattacks, inflation, federal debt/deficit and the cost/availability of labor.
Quarterly results are included in the Federal Reserve Economic Data.