In fact, since November the number of firms expecting an increase in sales exceeds those expecting a decline by more than 30 percentage points. The survey hasn't shown that wide a margin with such a positive outlook for four years. At this point, the available indicators suggest that banks' earnings prospects are favorable.
The market seems to share that outlook, perhaps one reason why bank stock valuations have been improving. Ongoing consolidation in the industry also plays a role, and we have seen a recent wave of merger announcements among the largest bank holding companies. Based on what I hear from community bankers, mergers and acquisitions among big institutions have historically created opportunities for community banks.