CSBS: Community bankers maintain ‘rosy’ outlook despite uncertainties

Although sentiment has softened somewhat, local bankers across the country remain largely optimistic about future economic conditions, according to the latest quarterly survey by the Conference of State Bank Supervisors.

Second quarter Bank sentiment index in the community was 129, down slightly from 131 in the previous quarter and four points below the record high of 133 reached at the end of 2025, the CSBS said. Scores above 100 indicate a positive mood.

The profitability indicator returned to its peak of 152 in the second quarter and continued to signal greater future profitability. However, the results showed a continued decline in current policy indicators and regulatory burden.

“The results suggest that regulatory conditions may not ease as much as last quarter’s survey indicated, and bankers have a slightly pessimistic outlook on the future impact of monetary policy,” said CSBS Chief Economist Tom Siems.

“Their primary concern centers on the potential negative macroeconomic outcomes that could arise from geopolitical uncertainties due to the ongoing war in Iran,” he added. “However, they remain optimistic that their loan portfolios in their local economies will lead to greater profitability in the foreseeable future.”