Banking Conditions Survey

Special Questions

May 2025

For this survey, respondents were asked supplemental questions about outlook concerns, commercial real estate and the impact of tariffs. Data were collected May 6-14, and 67 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.

	Nov. '23	Feb. '24	May '24	Aug.'24	Nov.'24	Feb. '25	May '25
	Total (percent)	Total (percent)	Total (percent)	Total (percent)	Total (percent)	Total (percent)	Total (percent)	Rank 1 (percent)	Rank 2 (percent)	Rank 3 (percent)
Financial/economic uncertainty	38.8	31.8	36.2	43.8	38.8	27.5	64.2	38.8	13.4	12.1
Cybersecurity	26.9	27.3	30.4	26.0	28.4	39.1	31.3	4.5	14.9	12.1
Loan demand	17.9	13.6	13.0	24.7	20.9	23.2	29.9	7.5	16.4	6.1
Liquidity/deposit volume	56.7	56.1	50.7	49.3	28.4	42.0	29.9	10.4	9.0	10.6
Regulatory burden	31.3	51.5	43.5	37.0	53.7	37.7	25.4	10.4	3.0	12.1
Competition for loans	9.0	12.1	13.0	9.6	14.9	11.6	23.9	6.0	6.0	12.1
Net interest margin	58.2	42.4	44.9	46.6	49.3	44.9	22.4	9.0	10.4	3.0
Overall profitability	20.9	22.7	26.1	15.1	23.9	27.5	19.4	6.0	6.0	7.6
Noncurrent loans	11.9	13.6	11.6	13.7	11.9	14.5	19.4	4.5	4.5	10.6
Other	1.5	0.0	2.9	9.6	0.0	1.4	11.9	1.5	6.0	4.5
Difficulty hiring and/or retaining employees	6.0	15.2	8.7	11.0	17.9	15.9	9.0	1.5	3.0	4.5
Unrealized losses on securities portfolio	14.9	4.5	8.7	2.7	4.5	5.8	6.0	0.0	4.5	1.5
Commercial real estate risks	3.0	9.1	7.2	6.8	6.0	7.2	6.0	0.0	3.0	3.0

NOTES: 67 responses. This question was also posed in Feb. ’25.

2. 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	16.4	45.9	31.1	4.9	1.6
Industrial	20.0	43.3	30.0	6.7	0.0
Retail	16.4	34.4	32.8	16.4	0.0
Multifamily	18.6	37.3	32.2	8.5	3.4
Office	15.0	25.0	35.0	20.0	5.0
Hotels/lodging	15.0	31.7	35.0	18.3	0.0
Other	22.2	27.8	44.4	5.6	0.0

NOTES: 61 responses. This question was also posed in Feb. ’25.

3a. For the following categories, what net impact have higher tariffs had on loan demand?

	Increased (percent)	No change (percent)	Decreased (percent)
Total Loans	5.9%	64.7%	29.4%
Consumer Loans	8.5%	70.2%	21.3%
C&I Loans	7.3%	65.9%	26.8%
Residential Real Estate	2.4%	75.6%	22.0%
Commercial Real Estate	4.7%	62.8%	32.6%

NOTES: 51 responses. The percents shown exclude those who responded, “Don’t Know” and “Not Applicable.” For those participants to which this question applies, 24.7 percent selected “Don’t know.”

3b. For the following categories, what net impact do you expect higher tariffs to have on loan demand 6 months from now?

	Increased (percent)	No change (percent)	Decreased (percent)
Total Loans	7.1	33.9	58.9
Consumer Loans	5.6	44.4	50.0
C&I Loans	6.4	34.0	59.6
Residential Real Estate	6.1	36.7	57.1
Commercial Real Estate	6.4	34.0	59.6

NOTE: 56 responses. The percents shown exclude those who responded, “Don’t Know” and “Not Applicable.” For those participants to which this question applies, 15.9 selected “Don't Know.”

4a. For the following categories, what net impact have higher tariffs had on loan volume?

	Increased (percent)	No change (percent)	Decreased (percent)
Total Loans	3.6	65.5	30.9
Consumer Loans	3.7	75.9	20.4
C&I Loans	6.7	66.7	26.7
Residential Real Estate	2.0	79.6	18.4
Commercial Real Estate	4.2	68.8	27.1

NOTES: 55 responses. The percents shown exclude those who responded, “Don’t Know” and “Not Applicable.” For those participants to which this question applies, 16.0 percent selected “Don’t know.”

4b. For the following categories, what net impact do you expect higher tariffs to have on loan volume 6 months from now?

	Increased (percent)	No change (percent)	Decreased (percent)
Total Loans	7.1	35.7	57.1
Consumer Loans	5.5	43.6	50.9
C&I Loans	6.4	36.2	57.4
Residential Real Estate	4.1	42.9	53.1
Commercial Real Estate	6.3	35.4	58.3

NOTES: 56 responses. The percents shown exclude those who responded, “Don’t Know” and “Not Applicable.” For those participants to which this question applies, 15.0 percent selected “Don’t know.”

5a. For the following categories, what net impact have higher tariffs had on loan nonperformance?

	Increased (percent)	No change (percent)	Decreased (percent)
Total Loans	8.0	88.0	4.0
Consumer Loans	8.0	90.0	2.0
C&I Loans	5.0	92.5	2.5
Residential Real Estate	2.3	93.2	4.5
Commercial Real Estate	4.5	88.6	6.8

NOTES: 50 responses. The percents shown exclude those who responded, “Don’t Know” and “Not Applicable.” For those participants to which this question applies, 16.3 percent selected “Don’t know.”

5b. For the following categories, what net impact do you expect higher tariffs to have on loan nonperformance 6 months from now?

	Increased (percent)	No change (percent)	Decreased (percent)
Total Loans	48.0	46.0	6.0
Consumer Loans	46.0	50.0	4.0
C&I Loans	46.2	46.2	7.7
Residential Real Estate	39.5	55.8	4.7
Commercial Real Estate	41.5	51.2	7.3

NOTES: 50 responses. The percents shown exclude those who responded, “Don’t Know” and “Not Applicable.” For those participants to which this question applies, 23.8 percent selected “Don’t know.”

Special Questions Comments

Survey participants are given the opportunity to submit comments. Some comments have been edited for grammar and clarity.

It’s important to note it's the "net" impact. Certain industries and businesses will experience higher loan demand, but overall investment and M&A-driven loan demand will be softer unless the impact of tariffs can be minimized or at least moderated. An important thing is certainty.
In regard to question 3a, we are seeing an increase in loan demand on consumer and C&I [commercial and industrial] loans driven by people buying ahead of the tariffs. In regard to question 5a, we cannot correlate loan nonperformance to tariffs at this time. [Loan nonperformance] could be an effect of higher interest rates. Overall, our bank is seeing a general decline in total loans; is this due to tariffs? We are still unsure.
Uncertainty of what actual tariffs will be is having the most negative impact on the economy. Once there is some legitimate direction on what tariffs will be, I believe the economy will begin to settle down and show growth. Regulatory uncertainty with the NCUA [National Credit Union Administration] and the FDIC [Federal Deposit Insurance Corp.] is unknown at this time.
Uncertainty [is the top concern].

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