Four in five bank execs plan to increase or keep headcount stable in next six months

Majority of bankers expect to see the biggest hit to their loan portfolios from commercial loans

CHICAGO, Jan. 11, 2010 – According to Grant Thornton LLP’s 17th Bank Executive Survey, conducted in conjunction with Bank Director magazine, 82 percent say that the number of people their bank employs will either increase or remain the same in the next six months. The same amount (80%) feel that the U.S. economy will either improve or remain the same in the next six months and that their local economy will either improve or remain the same in the next six months (82%). This is a huge improvement over last year’s numbers, when 86 percent of bankers were pessimistic about the state of the U.S. economy.

“Bankers’ opinions on the economy have certainly shifted compared to this time last year,” said John Ziegelbauer, managing partner of Grant Thornton’s Financial Institutions practice. “We still have a long way to go, but they are moving in the right direction.”

In regards to their bank’s loan portfolios in the coming year, the majority reported that they expect to see the most loan losses in their commercial loan portfolios – commercial loans (17%) and commercial real estate loans (55%) – with the next largest category being residential real estate loans at 12 percent.

“A deeper look into the regional data shows that bankers in the Southeast region are more pessimistic about expected losses in commercial real estate loan portfolios (65%) compared to the bankers in the Northeast region (45%),” said Rick Huff, Financial Institution partner in Grant Thornton’s Philadelphia office. “Additionally, bankers in the Northeast responded that they expect to see more losses in single and multi-family real estate loans (22%) compared to bankers in the Southeast (10%). It appears that Southeast bankers believe that the worst of the residential real estate losses is over; while Northeast bankers seem to be predicting that the worst is yet to come for residential portfolios.”

Do you feel that the U.S. economy will improve / remain the same / get worse in the next six months?
Improve	24%
Remain the same	56%
Get worse	20%

Do you feel that your local economy will improve / remain the same / get worse in the next six months?
Improve	22%
Remain the same	59%
Get worse	18%

Do you expect the number of people you employ at your bank to increase / remain the same / decrease in the next six months?
Increase	18%
Remain the same	63%
Decrease	18%

In what part of your loan portfolio do you expect the most losses in the next 12 months? (Select one)
Commercial real estate loans	55%
Commercial loans	17%
Single/multi-family real estate loans	12%
Construction loans	8%
Consumer loans	5%
None	2%
Other	3%

* Percentages may not total 100 due to rounding.

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About the Survey
Grant Thornton LLP and Bank Director magazine conducted this national survey of bank CEOs and CFOs from Nov. 17 through Dec. 3, 2009, with 246 respondents. Sixty-one percent of the respondents were from small banks (those with less than $500 million in estimated assets at the end of 2009), while the remaining 39 percent were from large banks (those with more than $500 million in estimated assets at the end of 2009). Regarding ownership structure, 37 percent report that they are public institutions, 42 percent are private and 21 percent are mutual.

About Grant Thornton LLP
The people in the independent firms of Grant Thornton International Ltd provide personalized attention and the highest quality service to public and private clients in more than 100 countries. Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd, one of the six global audit, tax and advisory organizations. Grant Thornton International Ltd and its member firms are not a worldwide partnership, as each member firm is a separate and distinct legal entity.

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