Recent high-profile bankruptcies of firms relying on private credit financing have raised concerns that relatively opaque and riskier credit could hide broader systemic risk. Several banks announced asset write-downs from exposure to these bankruptcies.

Many of the Eleventh District’s rural counties rely on community bank branches, particularly in Texas and Louisiana. These rural areas are important to the production and support of the cattle, agricultural and energy industries for the district, the U.S. and the world.

How does a bank attract deposits and remain competitive when rates fluctuate and depositors are increasingly mobile? Managing the bank deposit franchise is a cornerstone of bank profitability and stability, and doing so has been challenging during the rapid rise in interest rates in 2022 and the subsequent regional banking turmoil.