Banking Conditions Survey

Results Summary

Historical data are available from March 2017.

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Downloadable chart

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Respondents were given an opportunity to comment on any issues that may be affecting their business.

These comments are from respondents’ completed surveys and have been edited for publication.

• Lower rates and the outcome of national elections should lead to increased activity and business investment.
• The macro impacts of uncertainty from the election and the future direction of fiscal policies have resulted in depressed loan activity.
• We expect that the Republican election sweep will result in increased capital spending and loan demand due to perception that there will be a more favorable operating climate for businesses.
• Private middle-market C&I [commercial and industrial] firms continue to be burdened by inflation as embedded labor and supply costs are keeping pressure on margins. Small businesses that can't raise prices are closing.
• Middle- and lower-income families are hurting from lack of Federal Reserve action, as are retailers who depend on these segments. The Federal Reserve should continue to aggressively lower rates.
• Continued increases in banking regulations are not sustainable for community banks. Sections 1033 and 1071, to name a few, are going to be very expensive for community banks to implement. Our community bank’s commitment to compliance is strong, but our expenses in personnel and software are tremendous. It will eventually put community banks out of business. Also, the FDIC’s signal not to insure a community bank’s deposits sent a message to consumers and businesses to only bank with the “Too Big to Fail” banks. I guess community banks are “Too Small to Save.”
• We are watching what will actually happen with election results and further rate reductions by the Federal Reserve, particularly when cuts will occur. Consumer debt is affecting borrowing capacity.
• General activity has increased slightly since the election. We are waiting to see if that is a trend.
• We have definitely seen the residential market switch to a buyers’ market, with the number of listings increasing and seller concessions increasing. Prices have remained stable, but active listings are seeing prices being lowered.
• We are concerned about the outcome of the elections and the impact on bank regulation. Tax policy is a concern because of the conversation about an increase, talk of a 28 percent tax rate versus the current 21 percent. The change in tax rates is a detriment to bank valuations and the perceived “investability” of the banking system.