Bank stability-minded CEOs 2023

Sixty-two percent of CEOs surveyed by Marcum LLP and Hofstra University are somewhat to extremely concerned about the stability of their company’s bank, according to results released this week.

“Despite a substantial number of CEOs expressing concern about their company’s bank’s stability, the vast majority (87.8%) stated that they intended to maintain their current bank relationship,” note the authors of a report detailing the findings. 4% of participants indicated they would be willing to switch institutions, while 9% were unsure.

The poll periodically assesses middle market CEOs’ views on the business climate and their goals and concerns for the future year.

According to the survey, the majority of CEOs (61.2%) prioritize size and stability when selecting a bank for their company, followed by favorable terms (50.6%). Additionally, CEOs consider a bank’s connection to their company’s industry and local community (42.4% and 37.6%, respectively).

As previously reported by McKnight’s Business Daily, regional institutions are experiencing significant disruptions. Beth Burnham Mace, chief economist and director of outreach for the National Investment Center for Seniors Housing and Care, cited difficulties encountered by Silvergate, SVB, and Signature Bank in March, and the sale of First Republic Bank to JP Morgan Chase at the beginning of May.

More than a quarter of respondents (27.1%) reported that it has become more difficult to borrow from financial institutions over the past year. 40% of the CEOs reported that financing has not become more difficult, and 33% reported that they have not borrowed money in the past year.

Jerome Powell, chairman of the Federal Reserve, announced on May 3 the most recent in a series of quarterly rate increases since March 2022, signifying the highest rate in sixteen years.