Banking Conditions Survey

Special Questions

February 2024

For this survey, respondents were asked supplemental questions on outlook concerns, deposits and commercial real estate lending. Data were collected February 6-14, and 66 bankers responded to the survey.

1. What are the top three concerns around your institution’s outlook over the next six months, if any? Please rank in order of importance.

	May '23	Jun. '23	Aug. '23	Nov. '23	Feb. '24
	Total (percent)	Total (percent)	Total (percent)	Total (percent)	Total (percent)	Rank 1 (percent)	Rank 2 (percent)	Rank 3 (percent)
Liquidity/deposit volume	61.3	54.8	57.4	56.7	56.1	25.8	21.2	9.1
Regulatory burden	35.5	29.0	42.6	31.3	51.5	25.8	7.6	18.2
Net interest margin	46.8	54.8	42.6	58.2	42.4	12.1	25.8	4.5
Financial/economic uncertainty	46.8	43.5	33.8	38.8	31.8	10.6	9.1	12.1
Cybersecurity	22.6	19.4	23.5	26.9	27.3	6.1	6.1	15.2
Overall profitability	17.7	16.1	19.1	20.9	22.7	4.5	9.1	9.1
Difficulty hiring and/or retaining employees	11.3	14.5	11.8	6.0	15.2	1.5	3.0	10.6
Loan demand	19.4	12.9	25.0	17.9	13.6	7.6	3.0	3.0
Noncurrent loans	4.8	11.3	11.8	11.9	13.6	4.5	6.1	3.0
Competition for loans	8.1	3.2	11.8	9.0	12.1	0.0	4.5	7.6
Commercial real estate risks	6.5	12.9	10.3	3.0	9.1	1.5	3.0	4.5
Unrealized losses on securities portfolio	14.5	16.1	7.4	14.9	4.5	0.0	1.5	3.0
Other	1.6	3.2	1.5	1.5	0.0	0.0	0.0	0.0

NOTE: 66 responses.

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

	Jun. '23 (percent)	Aug. '23 (percent)	Sep. '23 (percent)	Nov. '23 (percent)	Dec. '23 (percent)	Feb. '24 (percent)
Increased slightly	26.2	31.3	27.7	29.9	36.5	27.3
Increased significantly	0.0	3.0	4.6	0.0	4.8	3.0
No change	23.0	20.9	20.0	26.9	25.4	25.8
Decreased slightly	45.9	41.8	41.5	40.3	31.7	42.4
Decreased significantly	4.9	3.0	6.2	3.0	1.6	1.5

NOTE: 66 responses.

3. 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)	Nov. '23 (percent)	Dec. '23 (percent)	Feb. '24 (percent)
Increase slightly	30.6	35.8	41.5	40.3	49.2	42.4
Increase significantly	1.6	3.0	1.5	1.5	7.9	6.1
No change	33.9	34.3	30.8	32.8	28.6	25.8
Decrease slightly	33.9	26.9	23.1	23.9	14.3	25.8
Decrease significantly	0.0	0.0	3.1	1.5	0.0	0.0

NOTES: 66 responses.

4. How concerned are you about the performance of the following categories in your commercial real estate (CRE) loan portfolio, on a scale of 1 (not concerned at all) to 5 (extremely concerned)?

	1 (not concerned at all)	2	3	4	5 (extremely concerned)
	Percent of responses
Construction and land development	27.1	37.3	22.0	13.6	0.0
Industrial	25.4	50.8	20.3	1.7	1.7
Retail	19.0	48.3	27.6	3.4	1.7
Multifamily	22.4	44.8	20.7	12.1	0.0
Office	16.9	32.2	28.8	16.9	5.1
Hotels/lodging	29.3	37.9	17.2	12.1	3.4

NOTES: 59 responses. This question was also posed in May '23, Aug. '23 and Nov. '23.

Special Questions Comments

These comments have been edited for publication.

We have minimal amounts of industrial, multifamily and office loans.
Regarding Question 3, we have a seasonal increase in deposits coming from income tax refunds.
We do not make loans in the categories shown, so I am not concerned about loans in these categories (Question 4). If we did make these types of loans, I would be concerned.

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