Banking Conditions Survey

Special Questions

December 2023

For this survey, respondents were asked supplemental questions about deposits, credit standards, commercial real estate lending and liquidity. Data were collected December 19-27, and 63 bankers responded to the survey.

1. Over the past six weeks, how has your volume of core deposits changed?

	Jun. '23 (percent)	Aug. '23 (percent)	Sep. '23 (percent)	Dec. '23 (percent)
Increased slightly	26.2	31.3	27.7	36.5
Increased significantly	0.0	3.0	4.6	4.8
No change	23.0	20.9	20.0	25.4
Decreased slightly	45.9	41.8	41.5	31.7
Decreased significantly	4.9	3.0	6.2	1.6

NOTE: 63 responses.

2. Over the next six weeks, how do you expect your volume of core deposits to change?

	Jun. '23 (percent)	Aug. '23 (percent)	Sep. '23 (percent)	Dec. '23 (percent)
Increase slightly	30.6	35.8	41.5	49.2
Increase significantly	1.6	3.0	1.5	7.9
No change	33.9	34.3	30.8	28.6
Decrease slightly	33.9	26.9	23.1	14.3
Decrease significantly	0.0	0.0	3.1	0.0

NOTE: 63 responses.

3. How do you expect credit standards and terms to change over the next three months for the following loan categories?

	Ease considerably (percent)	Ease somewhat (percent)	Remain unchanged (percent)	Tighten somewhat (percent)	Tighten considerably (percent)
Commercial and industrial	0.0	0.0	68.3	30.0	1.7
Commercial real estate	0.0	0.0	52.5	42.4	5.1
Residential real estate	0.0	3.3	86.9	4.9	4.9
Consumer	0.0	4.8	76.2	17.5	1.6

NOTES: 63 responses. This question was also posed in August and September.

4. How do you expect credit standards and terms to change over the next three months for the following categories of commercial real estate lending?

	Ease considerably (percent)	Ease somewhat (percent)	Remain unchanged (percent)	Tighten somewhat (percent)	Tighten considerably (percent)
Construction and land development	0.0	5.0	40.0	46.7	8.3
Industrial	0.0	1.7	63.3	31.7	3.3
Retail	0.0	1.7	54.2	37.3	6.8
Multifamily	0.0	3.4	57.6	28.8	10.2
Office	0.0	1.7	47.5	23.7	27.1
Hotels/lodging	0.0	1.7	51.7	29.3	17.2
Other	0.0	1.9	71.7	22.6	3.8

NOTES: 60 responses. Responses for this question from September 2023 can be found here.

5. This year, to what extent have you relied on the Federal Home Loan Bank for liquidity?

	Sep. '23 (percent)
Not at all	50.8
Some extent	39.3
Large extent	9.8

NOTE: 61 responses.

6. This year, to what extent have you relied on the Bank Term Funding Program for liquidity?

	Sep. '23 (percent)
Not at all	71.0
Some extent	19.4
Large extent	9.7

NOTE: 62 responses.

Special Questions Comments

These comments have been edited for publication.

On the topic of liquidity, the more sources the better. We are greatly concerned about recent regulatory recommendations, which could limit federal sources of liquidity or place burdens on accessing such liquidity. Simply stated, in times of crisis, the more options the better. Having the Bank Term Funding Program available (and preferably extended) was a key point of comfort for our institution during the spring if the banking crisis spread outside of regional banks. The Federal Home Loan Bank (FHLB) programs, including term options and securities pledged, provides a critical option along with the discount window for institutions to be able to select the liquidity source which best fits the situation at play.
It would be helpful if the Bank Term Funding Program continues indefinitely moving forward, as it provides financial institutions an alternative option to the FHLB and other lines of credits available in the marketplace today.
We only had to use FHLB for liquidity for a few days.

Questions regarding the Banking Conditions Survey can be addressed to Emily Kerr at emily.kerr@dal.frb.org.