Banking Conditions Survey

Special Questions

March 2024

For this survey, respondents were asked supplemental questions about deposits, credit standards, commercial real estate lending and liquidity. Data were collected March 19-27, and 68 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)	Feb. '24 (percent)	Mar. '24 (percent)
Increased significantly	0.0	3.0	4.6	4.8	27.3	2.9
Increased slightly	26.2	31.3	27.7	36.5	3.0	45.6
No change	23.0	20.9	20.0	25.4	25.8	26.5
Decreased slightly	45.9	41.8	41.5	31.7	42.4	23.5
Decreased significantly	4.9	3.0	6.2	1.6	1.5	1.5

NOTE: 68 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)	Feb. '24 (percent)	Mar. '24 (percent)
Increase significantly	1.6	3.0	1.5	7.9	42.4	1.5
Increase slightly	30.6	35.8	41.5	49.2	6.1	41.2
No change	33.9	34.3	30.8	28.6	25.8	29.4
Decrease slightly	33.9	26.9	23.1	14.3	25.8	27.9
Decrease significantly	0.0	0.0	3.1	0.0	0.0	0.0

NOTE: 68 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	72.3	26.2	1.5
Commercial real estate	0.0	0.0	66.7	28.8	4.5
Residential real estate	0.0	3.0	90.9	6.1	0.0
Consumer	0.0	0.0	89.4	10.6	0.0

NOTES: 66 responses. This question was also posed in Aug '23, Sep '23 and Dec. '23.

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	1.5	56.9	35.4	6.2
Industrial	0.0	3.1	75.4	16.9	4.6
Retail	0.0	1.5	70.8	24.6	3.1
Multifamily	0.0	1.5	63.1	27.7	7.7
Office	0.0	1.5	56.9	21.5	20.0
Hotels/lodging	0.0	1.6	60.3	25.4	12.7
Other	0.0	1.7	84.5	10.3	3.4

NOTES: 65 responses. This question was also posed in Sep '23 and Dec. '23.

5. To what extent do you anticipate relying on the Federal Home Loan Bank (FHLB) for liquidity in the next 3 months?

	Mar. '24 (percent)
Not at all	43.8
Some extent	50.0
Large extent	6.3

NOTES: 64 responses. A question about previous usage was posed in Dec. ’23.

6. How concerned are you about possible changes in access to FHLB funding on a scale of 1 (not concerned at all) to 5 (extremely concerned)?

	Mar. '24 (percent)
1 (not concerned at all)	25.0
2	14.1
3	25.0
4	14.1
5 (extremely concerned)	21.9

NOTE: 64 responses.

7. As of March 18, the federal funds target rate is in the range of 5.25–5.5. What do you expect the federal funds target range to be at the end of 2024?

	Median	Mode	Range
Mar. '24	4.75-5.0	4.75-5.0	0.25-5.5

NOTE: 61 responses.

8. Over the past three months, how have you changed your loan loss allowance for the following categories?

	Decreased considerably (percent)	Decreased somewhat (percent)	Remain unchanged (percent)	Increased somewhat (percent)	Increased considerably (percent)
Commercial and industrial	0.0	3.1	76.6	18.8	1.6
Commercial real estate	0.0	4.7	62.5	28.1	4.7
Residential real estate	0.0	3.1	86.2	10.8	0.0
Consumer – Auto	0.0	3.0	80.3	15.2	1.5
Consumer – Credit Cards	0.0	1.6	87.5	9.4	1.6
Consumer – Other	0.0	1.5	78.5	18.5	1.5

NOTE: 66 responses.

Special Questions Comments

These comments have been edited for publication.

Regarding Federal Home Loan Bank (FHLB) liquidity, with the end of the Bank Term Funding Program, having multiple options in the marketplace is critical, particularly given the differences in access procedures, collateral and term of products available. Whenever the next crisis presents itself, having more, not fewer, options is of great importance.
FHLB access is only a concern in the fact that Federal Reserve Bank (FRB) systems are antiquated and not user-friendly or fast. Also, the “stigma” of borrowing from the FRB is a big concern, even though people say it's not. It is.

Questions regarding the Banking Conditions Survey can be addressed to Mariam Yousuf at mariam.yousuf@dal.frb.org.