Community bankers ended last year optimistic over future conditions, according to the fourth quarter community bank sentiment index..Released Jan. 6 by the Conference of State Bank Supervisors, the index slipped one point to 132 from a record 133 in the previous quarter, but remained well above the neutral level of 100, signaling continued positive sentiment across the sector. The index measuring profitability fell nine points to 136, while the monetary policy component dropped to 120 from a record 130 in the third quarter. For the fourth straight quarter, expectations for future business conditions were relatively low, despite improving slightly to 99 from the prior quarter.“Community bankers’ continued optimism seems to be driven by solid earnings prospects from wider net interest margins that have boosted profitability,” said CSBS Chief Economist Tom Siems. “Moreover, most community bankers are deeply embedded in their local markets and express confidence they can navigate uncertain economic conditions through disciplined credit oversight and their focus on relationship lending.” The quarterly survey collected responses from 246 community bankers in 43 states and the District of Columbia.
