Community bankers’ confidence in future business conditions is decreasing, according to the Community Bank Sentiment Index’s (CBSI) first quarter 2025 results.
The Conference of State Bank Supervisors (CSBS), a national organization of financial regulators, polls community banks nationwide regarding seven economic components. A score above 100 is considered a positive outlook while anything below 100 is considered negative.
The business conditions indicator fell 31 points to 86 while the monetary policy component fell to 106.
The majority of bankers, 59 percent, believe the U.S. economy is at the start of, or already in, a recession, 18 percent higher than last quarter. Many community bankers cited economic uncertainty from the potential impacts from tariffs.
“Heightened economic uncertainty from evolving policy discussions in Congress and with the new Administration have clouded the 2025 economic outlook,” CSBS Chief Economist Tom Siems said. “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 CSBI that is essentially unchanged from last quarter.”
Not all results were pessimistic. The regulatory burden component scored above 100 for the first time in the survey’s history, reaching 130.