ABA survey finds community bank CEOs planning for growth

Nearly half of community bank leaders are somewhat, fairly or completely confident about their bank’s prospects for revenue growth over the next 12 months, according to an ABA survey released today on community bank CEO priorities for 2024. The survey—which is available to ABA members—found that a majority of respondents were confident about the U.S. economy and their local economies. At the same time, 48.9% said they were confident about their bank’s prospects, with the respondents saying they had plans to expand organically within current markets (60.8%); implement new technologies to reduce operating costs (52.8%); and introduce new products or services for consumers or commercial clients (45%).

Community bank leaders were also asked about their greatest concerns. More than four in 10 (43.7%) cited net margin compression as the greatest threat to their bank’s growth prospects, followed by core deposit growth (16.71%) and liquidity (11.6%). Given the option to name other looming issues, several respondents expressed concerns about economic conditions and uncertainty.

The survey found that while artificial intelligence has grabbed the attention of banking regulators, the technology remains out of reach for most smaller banks. Only one in four respondents (23.8%) reported that they plan to use generative AI or machine learning for marketing and customer service (20.8%) or to identify customer needs for developing new products/services (19.5%). There was little interest for other purposes, with more than three-quarters of respondents (76.8%) expecting AI or machine learning tools to cause no change on their bank’s workforce in the next one or two years.