Bankers’ optimism about the year ahead grew in the fourth quarter of 2017, as tax reform moved toward the finish line and meaningful legislative regulatory reform came into sight, according to Promontory Interfinancial Network’s Bank Confidence Index. After starting at 50.4 in the first quarter of 2017 (readings over 50 signify expansion), confidence fell below 50 for the second and third quarters before rebounding to 50.5 at the end of the year.
Optimism was especially strong in the South, which recorded an index reading of 53.5. Every region saw optimism increases to end 2017, with a nearly six-point gain in the Northeast. Bankers expressed growing confidence in access to capital and increases in loan demand; nearly 9 in 10 expected to see higher funding costs as well. Eight in 10 bankers expected competition for deposits to heat up in 2018.