Though they are not immune, community banks' deposit franchises may prove stickier than those of their larger brethren if AI agents like Meta's Muse push depositors towards better rates. Zero-cost deposits at smaller banks fared better during the 2022–2023 hiking cycle, although any margin hit could be amplified by the group's increased reliance on spread revenue. While commercial-focused banks like Banc of California are probably shielded from changes in customer behaviour, low-deposit-beta institutions like Community Financial might be less affected by interest-bearing deposit fees.
