CSBS to Launch New Index of Community Bank Optimism

The Conference of State Bank Supervisors announced today that it will create a new index of community banker sentiment. To be released annually at first, the index will be based on the annual survey conducted by CSBS and the Federal Reserve and will ask 11 questions about competition, new products and markets, technology investments, M&A activities, perspectives on the economy and banking risk factors.

The index value will be calculated by adding the number of positive responses, subtracting the number of negative responses, and then adding 100 for ease of understanding, with 100 representing a roughly neutral level of sentiment. Based on the most recent national survey, released yesterday, only three percent of banks scored less than 95. Eighty-six percent of community banks rated their sentiment at 100 or higher, with 13 percent in the category of greatest optimism (scores of 110 or more).