Banking Conditions Survey

Special Questions

November 2024

For this survey, respondents were asked supplemental questions about outlook concerns and commercial real estate lending. Data were collected November 5-13, and 74 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	May '24	Aug.'24	Nov. '24
	Total (percent)	Total (percent)	Total (percent)	Total (percent)	Total (percent)	Total (percent)	Total (percent)	Total (percent)	Rank 1 (percent)	Rank 2 (percent)	Rank 3 (percent)
Regulatory burden	61.3	54.8	57.4	56.7	56.1	50.7	49.3	53.7	20.9	10.4	22.7
Net interest margin	46.8	54.8	42.6	58.2	42.4	44.9	46.6	49.3	22.4	16.4	10.6
Financial/economic uncertainty	46.8	43.5	33.8	38.8	31.8	36.2	43.8	38.8	14.9	13.4	10.6
Liquidity/deposit volume	35.5	29.0	42.6	31.3	51.5	43.5	37.0	28.4	9.0	10.4	9.1
Cybersecurity	22.6	19.4	23.5	26.9	27.3	30.4	26.0	28.4	9.0	11.9	7.6
Overall profitability	19.4	12.9	25.0	17.9	13.6	13.0	24.7	23.9	9.0	6.0	9.1
Loan demand	17.7	16.1	19.1	20.9	22.7	26.1	15.1	20.9	7.5	9.0	4.5
Difficulty hiring and/or retaining employees	4.8	11.3	11.8	11.9	13.6	11.6	13.7	17.9	1.5	7.5	9.1
Competition for loans	11.3	14.5	11.8	6.0	15.2	8.7	11.0	14.9	1.5	7.5	6.1
Noncurrent loans	8.1	3.2	11.8	9.0	12.1	13.0	13.7	11.9	3.0	3.0	6.1
Commercial real estate risks	6.5	12.9	10.3	3.0	9.1	7.2	6.8	6.0	0.0	1.5	4.5
Unrealized losses on securities portfolio	14.5	16.1	7.4	14.9	4.5	8.7	2.7	4.5	1.5	3.0	0.0
Other	1.6	3.2	1.5	1.5	0.0	2.9	9.6	0.0	0.0	0.0	0.0

NOTE: 67 responses. This question was also posed in May ’23 and Aug. ’24.

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	27.4	41.9	19.4	9.7	1.6
Industrial	29.0	46.8	21.0	3.2	0.0
Retail	16.4	41.0	32.8	9.8	0.0
Multifamily	24.6	41.0	23.0	11.5	0.0
Office	16.4	19.7	34.4	16.4	13.1
Hotels/lodging	25.8	25.8	35.5	11.3	1.6
Other	53.8	15.4	30.8	0.0	0.0

NOTES: 62 responses. This question was also posed in May ’23, Aug. ’23 , Nov. ’23, Feb. ’24, May ’24 and Aug. ’24.

Special Questions Comments

These comments have been edited for publication.

We feel the complexity and volatility of economic scenarios have increased, given the half-percentage-point reduction in the federal funds rate occurred during a time of continued inflation. In addition, both political parties offered inflationary economic policy platforms. We have less confidence in the accuracy of unemployment and inflationary metrics and are concerned the Federal Reserve will move too fast and reignite inflationary pressures. While we think the most likely outcome will be a softening of the fed funds rate to a more traditional yield curve, we have invested in inflationary hedges. We did so to protect against unexpected spikes caused by government stimulus or tariff policies and unforeseen global disruptions from a more dangerous, less predictable world. We feel the Federal Reserve needs to take it slow and make sure they can see the political landscape before committing themselves.

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