CSBS Releases 2024 Annual Survey of Community Banks

According to the Conference of State Bank Supervisors’ (CSBS) 2024 Annual Survey of Community Banks, community bankers across the nation ranked cost of funds, regulation, and net interest margins their highest external risks. Meanwhile, cybersecurity, technology implementation and costs, and liquidity round out the top three internal risks according to the 2024 respondents. Community bankers continue to view inflation as likely to persist and manageable. This year’s special questions focused on the accessibility and stigma associated with certain funding sources as well expectations for future credit quality by loan type, including commercial real estate.

The complete survey can be found on the CSBS website at: https://www.csbs.org/survey

Other key findings and insights from the 2024 survey include:

• In terms of wholesale funding sources, the biggest shift this year was in brokered deposits; roughly 56% of bankers indicated that they are using or plan to use brokered deposits at or near current levels, up 5 percentage points from last year’s survey.
• Roughly 24% of respondents reported currently receiving instant payments via the FedNow Service, and an additional 44% reported planning to add this service in the next 12 months.
• Community bankers once again viewed e-signature and remote deposit capture as the most important banking technologies for their banks, with these technologies receiving the largest share (more than 65%) of “extremely important” and “very important” classifications.
• When asked about certain commercial real estate property types, most respondents indicated that they expected credit quality to be at least somewhat worse across retail and office CRE property types over the next 12 months.