ORLANDO — The gap between deposit growth and loan demand has gone from being an “annoyance” into a “full-fledged crisis” for community banks, a survey report by the American Bankers Association says.

“The time for talking about what you’re going to do has passed,” said Steve Cocheo, executive editor of the ABA Journal, which administered the survey. It asked banks from 49 states about everything from technology to employee retention to acquisitions to liquidity. Of the 1,034 respondents, 65.6% said deposit growth has failed to keep pace with loan demand, against 48.2% in the previous year’s survey and only 39% two years ago.

The survey results were released here Sunday, kickoff day of the ABA’s annual conference for community bankers.

Ross Waldrop, a senior financial analyst with the Federal Deposit Insurance Corp.’s research and statistics division, said the findings did not surprise him.

“The proportion of bank assets that are funded by deposits is declining,” he said. “Deposits are growing, but not fast enough to keep up with loans.”

Mr. Waldrop added that larger banks rely less on deposits to fund loans. At insured commercial banks with assets of less than $100 million, 73% of funding comes from core deposits. At banks with assets topping $10 billion, 39% comes from core deposits.

Nearly 68% of the bankers said they priced more aggressively in an attempt to bring in more deposits, against 42% in the 2000 survey and only 23.7% two years ago. Mr. Waldrop said this is an important issue for banks given that the Internet enables consumers to comparison-shop for high yields in mutual funds and other investment products.

One banker has found a way to buck this trend through the most conventional of methods — advertising.

Thomas Bailey, president of $225 million-asset Brentwood Bank in Bethel Park, Pa., said Brentwood runs 120 commercials on local cable television channels each week, for about $20 a spot. The campaign, aimed squarely at boosting deposits, began four years ago, and Brentwood’s deposits have risen 36% in that period. The bank also runs spots on radio 39 weeks a year (three weeks on, one off).

Mr. Bailey said the ads never talk about Brentwood’s interest rates. Instead they focus on businesses that have borrowed from the bank.

“If you mention rates, all you get is the hot money that goes wherever the rate is lowest,” he said. “We’re trying to show that the money isn’t in the bank, it’s in the neighborhood.”

Brentwood, however, is atypical. Though the FDIC’s Mr. Waldrop speculated that changes in the economy could make the safety of bank deposits attractive, most banks are seeking alternative funding.

More than half look for nontraditional funding such as Federal Home Loan Bank advances, Fed funds, and repurchase agreements. Federal Home Loan Banks advances are used by 81.8% of banks. This is up significantly — from about 63% in the survey three years ago — and may rise even more because of changes in the Home Loan Bank System. While 77.8% of banks belong to a Federal Home Loan Bank, 25.4% of those that do not say they will join one once the system accepts small-business and farm loans as collateral.

“We feel it’s an indication of the value that Federal Home Loan advances provide for liquidity to smaller members of the system,” said Bill Glavin, spokesman for the Federal Housing Finance Board, which regulates the Home Loan Banks. Even in the current banking environment, Mr. Cocheo said, taking action for action’s sake can be a mistake.

“When people talk about ‘doing,’ sometimes activity is mistaken for progress,” he said. “It’s like a smorgasbord: If you try to put everything that is there on your plate, you get indigestion.”

To avoid this, Mr. Cocheo said, bankers need to make use of strategic plans. While almost three-quarters of the 1,034 banks surveyed use formal strategic plans, in most banks it only involves upper management. Only 36.1% use outside help in formulating a plan, which makes it top-heavy and leads to missed opportunities, Mr. Cocheo said.

“The CEO can’t be an expert in everything,” he said. “As banks get into more areas, they will have to put more faith in their front-line people.”

John Lane, associate director of the FDIC’s supervision division, said smaller banks should keep it simple. “In the community bank area, the strategic plan is more about who they are and why they are there,” he said. “They’re there to serve their community — that is their strategy.”

In other findings from the survey:

• Eighty-one percent of the bankers said they missed their target efficiency ratios, against 86.1% the previous year.

• Only one-third said they budget for technology.

• About a third said Internet banking is their top priority.

• The proportion of family-owned community banks remained steady, at about 34%.

• Banks are trying to retain employees primarily by increasing their salary scales. More than 73% raised the scale, versus 67.9% in the previous survey.

• Acquisitions were down. Only 6.2% reported that they had bought another bank’s branches, against 8% in 1999, and only 4.7% said they had bought another bank, down from 7.5%.

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