Survey: Banker confidence remains high amid tariffs

Community bankers had a positive economic outlook for the first quarter of this year despite tariff concerns, according to the first quarter Community Bank Sentiment Index..The index, produced by the Conference of State Bank Supervisors, increased two points to 129, a record for the six-year survey. Any score above 100 indicates a positive sentiment. Bankers remained hopeful of fewer regulations, higher profits and higher franchise value. The regulatory reading, which increased 30 points to 130, is higher than 100 for the first time in the history of the survey. The indexes tracking profitability and franchise value reached record highs of 152 and 162, respectively. The monetary policy component fell to 106, but remained positive for the fifth straight quarter. The business conditions reading fell 31 points to 86, and is the only index below 100. The survey included 282 banks in 44 states and was taken before President Donald Trump implemented 10 percent tariffs on all imported goods in early April. Though Trump paused most retaliatory tariffs for 90 days on April 9, he still raised tariffs on goods imported from China to 104 percent. Nearly 60 percent of bankers said the economy was either at the start of, or already in, a recession, up from 41 percent in the fourth quarter. “Many community bankers mentioned the economic uncertainty from the potential impacts from tariffs would restrain economic growth until there is greater clarity,” according to CSBS. “Heightened economic uncertainty from evolving policy discussions in Congress and with the new administration have clouded the 2025 economic outlook,” said CSBS Chief Economist Tom Siems. “At the same time, overall community banker sentiment is being buoyed by expectations that the regulatory environment will be less burdensome in the future, and expectations for greater profitability remain high. The result is a [index] that is essentially unchanged from last quarter.”