Community Banks Focus on Deposits as Higher Rates Raise Earnings Concerns

Community banks are focusing on personal service, stronger customer relationships, and improved technology to attract and retain deposits without raising interest rates, S&P Global Market Intelligence reported. They are also looking to attract more deposits from existing customers by expanding services and identifying funds held at other institutions.

Another S&P article noted that analysts expect strong third-quarter bank earnings despite concerns that higher interest rates could increase funding costs, weaken loan performance, and lead to losses on bond holdings.