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TABLE OF CONTENTS
Message From the Chairman and President

Strategies For Survival and Growth

The Year

Operations

Statement of Condition

Income and Expenses

Volume of Operations

Bank Holding Company Activity

Directors and Officers

Federal Reserve Bank of Dallas

EI Paso Branch

Houston Branch

San Antonio Branch

Officers

inancial institutions in the

~ Eleventh District states of
Texas, New Mexico, Louisiana and Oklahoma have undergone a number of changes in the
past decade due in part to deregulation and the bank holding
company movement. In particular,
the structure of our financial system
has seen changes regarding the
number and size of institutions and
the distribution of assets and liabilities. Institutions today use a different set of deposit instruments to
attract funds and initiate new uses
for funds once they are acquired.
Furthermore, the events of the past
decade caused some institutions to
develop similar strategies for survival
and growth while forcing others to
diversify. Our 1983 Annual Report
features a special article on this
topic.
This year the Federal Reserve
Bank of Dallas worked toward improving and enhancing the services
we provide to financial institutions
and toward making certain that
these services represent the leading
edge of technology. We developed
several new applications to some of
our services and implemented other
new programs on a pilot basis,
many of which were unique to this
Federal Reserve District. The year
also was one of adaptation to accelerated forces of deregulation
which affected all of us in one way
or another. These developments will
be presented in this Annual Report
as well.

The year 1983 will be
remembered as one of recovery for
the nation's economy: inflation
slowed, business expansion continued, and employment increased.
In fact, economic activity advanced
at a rate faster than most people
were able to predict a year ago. In
this region, gains in housing construction, defense contracts and
retail sales helped boost the
recovery for many of us.
The coming year also will bring a
new chairman of the board to the
Federal Reserve Bank of
Dallas-Bob Rogers, president of
Texas Industries in Dallas. The two
of us want to wish Bob good luck in
this position and thank him for his
willingness to serve this institution.
We also want to continue to encourage participation in our business from all financial institutions in
the Eleventh Federal Reserve
District. Your input and feedback
always is a great asset to us and
helps us keep in touch with
developments in the region. We
hope the coming year will continue
this tradition.
Sincerely,

Gerald D. Hines
Chairman of the Board

Robert H. Boykin
President

A decade of transition changed the way financial institutions do business

{({j/J

anks, savings and loan

i as~ociations ~nd credit.

unions expenenced major
changes between 1970 and 1982.
In the states of the Eleventh Federal
Reserve District-Texas, Oklahoma,
Louisiana and New Mexicochanges during this period were
brought about by a combination of
nationwide forces as well as factors
specific to the Southwest. The rising
level and variability of interest rates
affected the actions of financial institutions everywhere, and many of
the responses in this District were
similar to those elsewhere. But rapid
growth in the economies of the four
states produced changes not duplicated in the rest of the nation.
During the 1970-82 period, all
financial intermediaries underwent a
transition. They moved from an environment in which markets clearly
were segmented to one in which
markets expanded as a result of the
erosion of regulatory and technological barriers. This allowed depository
institutions to pursue new activities:
they now employ a different set of
deposit instruments to attract funds
and have more uses for these funds
once .they have been acquired.
Much of the segmentation along
traditional lines of business already

has weakened-although the transition is not yet complete. Depository
institutions now face increased competition from such nondepository
sources as securities firms and other
financial conglomerates. In addition,
geographic barriers already have
become less significant, even
though formal restrictions on
branching across state lines remain
in place.
Adaptations to a changing environment caused institutions to
develop some common strategies.
For example, all three types of
depository institutions now offer
checkable deposits that pay explicit
interest. and all increasingly are
making loans whose rates vary
automatically with changes in
market conditions. But the courses
adopted by the various types of institutions differed in many respects.
Some became more specialized in
lending and accepting deposits over
the period as others sought to
broaden their portfolios and
clientele. In every case, however,
directions taken by financial institutions during the past decade can be
explained as strategies designed to
increase the probability of survival
and growth.
The Southwest was influenced by
a combination of market transition
and the region's exceptional growth.
An important catalyst to the switch
from a segmented environment to a
less restrictive atmosphere was the
deregulation of interest rate ceilings
on deposits. Interest rate ceilings
were removed more slowly from
small-denomination household ac-

counts than from other types of
deposits. Combined with the upward drift in interest rates that
prevailed throughout the 1970s,
these factors made smail-denomination deposits temporarily less attractive relative to the other nondeposit
instruments available for household
savings.
The traditionally high rate of
economic growth in this region,
driven even higher by energy price
increases in the 1970s, provided
area institutions with the resources
to undergo remarkable expansion.
Because of interest-rate regulation,
wholesale banking-the acquisition
of funds from and the making of
loans to businesses-was targeted
as the activity with the greatest
potential. Consequently, growth in
this region outpaced the nation's by
the widest margin in two areas:
large time deposits and business
lending. The conditions that produced this phenomenon are losing
prominence, however, and growth
rates and portfolios of institutions in
this region should more closely approximate those of depository institutions across the nation in the future.

STRIKING INCREASES
Business and real estate loans grew
50 percent faster in the District.
For banks and savings and loan
associations, growth in lending after
1970 generally was more rapid in
the District than in the nation as a
whole. The increase at banks during
this period reflects the strength of
business loans and real estate
loans. The escalation in loan portfolios at savings and loan associations, on the other hand, reflects the
relative strength of the housing
market in this area. Expansion of
loans outstanding at District credit
unions was just below the national
rate of expansion at similar institutions during the period. Nationally,
however, credit unions grew faster
than either banks or thrifts.
Bank loan growth in the commercial and industrial category and real
estate category was striking. Banks
in the District expanded these types
of loans more than 50 percent faster

than banks across the country. Consumer loans grew at a slower pace
than other loans, and their growth in
this region was only modestly above
national growth. The relatively large
increase in commercial and industrial loans and in real estate
loans produced a substantial
change in loan portfolios in this
region. Commercial and industrial
loans accounted for about half the
growth in total loans. Wholesale real
estate loans-those for commercial
construction, land development and
construction of multifamily
residences-represented another 20
percent of growth in total loans. The
amount of area loan portfolios
allocated to these two categories increased about 10 percentage points
between 1970 and 1982. Nationally,
bank loan portfolios reflected
relatively rapid business loan

growth, but this shift was less pronounced. Wholesale real estate
loans increased as a share of national portfolios, but commercial and
industrial loans did not.
A disproportionate amount of
wholesale lending was concentrated
in large banks-those with assets of
$750 million or more. Texas housed
all of the large banks in the fourstate area in 1970 and 60 percent in
1982. The concentration of loans in
these banks doubled during this
period, while the proportion of loans
at small banks-those with assets
less than $100 million-registered a
sharp decline. The rise in the share
of loans outstanding at large banks
reflects the combination of an increase in the number of banks and
expansions in loan portfolios at
banks that already were large in
1970. The latter group represented

LENDING SURGE

Total loans grew more rapidly at banks and savings and loans in the Eleventh District states than
in the nation overall, as did every category of loans at commercial banks. Business and real
estate lending in particular grew faster in this area. Much of the activity in District bank lending
was concentrated in large banks.
GROWTH IN LOANS OUTSTANDING. 1970-82

GROWTH IN LOANS OUTSTANDING AT BANKS, 1970-82

Percent Average Annual Rate 01 Growth

Percent Average Annual Rate of Growth

DISTRIBUTION OF TOTAL BANK LOANS

• DISTRICT STATES
• UNITED STATES

20
15

BANKS

SAVINGS & LOANS

CREDIT UNIONS

NOTE Cred,1 un.,n data ava,lable only 'rom year-end 1971

DISTRIBUTION OF TOTAL BANK LOANS
DISTRICT STATES, BY SIZE

1970

BUSINESS

WHOLE
RET
REAL ESTATE REAL ESTATE

CONSUMER

DISTRIBUTION OF ASSETS AT SAVINGS AND LOANS

t982

UNITED STATES
1976
1982

DISTRICT STATES
1976
1982

UNITED STATES
1970
1982

DISTRICT STATES
1970
1982

DISTRIBUTION OF ASSETS AT SAVINGS AND LOANS

TEXAS
76
82

OKLAHOMA
76
'82

NEW MEXICO
76
'82

LOUISIANA
'76
82

LIABILITY SHIFT
Time deposits and interest-earning
accounts achieved new significance
as demand deposits lost ground.

DISTRIBUTION OF BANKS IN ELEVENTH DISTRICT STATES
Number of Banks in Each Size Class
(Percentages in Parentheses)
1970
Small
(0-$99m)

Oklahoma ...

Medium
($100-749m)

1982
Large
($750m+)

Small
(0-$99m)

Medium
($100-749m)

Large
($750m+)

428
(98.6)

6
(1.4)

466
(91.2)

40
(7.8)

5
(1.0)

New Mexico ..

63
(95.5)

3
(4.5)

73
(79.3)

17
(18.5)

2
(2.2)

Louisiana .....

214
(92.6)

17
(7.4)

220
(79.1)

51
(18.3)

7
(2.5)

1148
(96.5)

37
(3.1)

5
(0.4)

1373
(85.9)

205
(12.8)

21
(1.3)

1853
(96.5)

63
(3.3)

5
(0.2)

2132
(86.0)

313
(12.6)

35
(1.4)

Texas ...
Four-State
Total ....

over 35 percent of total loan growth
in this region.
The new wave in mortgage lending took place in the rest of the
country as well. Housing construction and mortgage lending surged in
two phases, the first beginning in
1971 and lasting into 1973 and the
second beginning in 1976 and
lasting into 1979. Mortgage lending
was even greater in the District than
in the nation-at an average annual
rate of 13.4 percent, compared with
10.5 percent-primarily because
population growth was faster here.
The period produced a shift in the
distribution of lending at savings
and loan associations that was different from the redistribution that

occurred at banks. Thrifts diversified
somewhat, becoming less dependent on home mortgages for their
income. Savings and loans made
more consumer and construction
loans at the end of the period, and
they held more mortgage-backed
securities while allocating less of
their portfolios to primary mortgages
themselves. This shift was slightly
greater in the District than across
the nation.

Deposits also grew faster in this
region than in the nation. However,
this growth generally was less than
loan growth for banks and thrifts, as
these institutions funded an increased share of loans through nondeposit sources in the 1970s. Credit
union deposit growth in the four
states was just below national
growth, but deposits nationwide increased at a faster pace than they
did at banks and thrifts. In fact,
deposit growth was greater than
loan growth at credit unions-largely
because high interest rates in the
late 1970s and early 1980s weakened consumer loan demand. During this period, credit unions did not
diversify beyond their traditional
emphasis on consumer lending, so
additional deposits were used to
purchase investments.
Since 1970 the major change affecting the liability portfolios of intermediaries in the Eleventh District
was a shift away from non-interestbearing demand accounts and
fixed-rate passbook savings accounts toward sources of funds
whose yields respond quickly to
changes in market interest rates.
This phenomenon also occurred
throughout the nation. The share of
demand deposits declined from
over half of total bank deposits in

TIME DEPOSITS TAKE OFF

At banks and savings and loan associations, time deposits increased in importance while
demand and savings deposits decreased. Total deposits generally grew faster in this region than
elsewhere.
GROWTH IN TOTAL DEPOSITS, 1970-82

DISTRIBUTION OF DEPOSITS AT BANKS

DISTRIBUTION OF DEPOSITS AT SAVINGS AND LOANS

Percent AV9faqe Annual Rate of Growth

20
• DISTRICT STATES
• UNITED STATES

BANKS

SAVINGS
AND LOANS

CREDIT UNIONS

UNITED STATES
1970
1982

DISTRICT STATES
1970
1982

UNITED STATES
1976
1982

DISTRICT STATES
1976
1982

NOTE: Credit unIOn data available only Irom year-end 1971

1970 to approximately one-quarter
of total deposits in 1982 for the four
District states. This decrease is
slightly greater than that which occurred at banks nationwide. The
decline took place steadily through
the 1970s but was accelerated in
1979 by a sharp increase in market
interest rates.
The waning importance of demand deposits was matched by an
increasing reliance on time deposits.
In District banks, time deposits grew
from approximately 30 percent of
total deposits in 1970 to more than
half of all bank deposits in 1982.
Time deposits also became a significant source of funds for savings and
loan associations. Nationally, these
deposits represented about half of
total savings and loan deposits in
1973 and about three-quarters in
1982. Savings and loans in this
District rely somewhat more heavily
on time deposits than do savings
and loans nationwide.
Increased emphasis on time
deposits reflects accelerated competition for business deposits as well
as a change in the kinds of services
offered household customers. About
60 percent of time deposits outstanding at area banks in 1982
were certificates of deposit of
$100,000 or more-including, but
not limited to, "jumbo CDs. These
large time deposits represent a mixture of funds raised regionally and
funds obtained in national money
markets and are an important
mechanism for transferring funds
across state lines. Areas of the
country with strong loan demand
sell more time deposits to acquire
funds from areas with less demand.
Banks in the District had a slightly
larger share of deposits acquired in
this manner than did banks across
the nation. Large banks depended
almost entirely on these kinds of instruments for their time deposit
funds, whereas small- and mediumsized banks relied more heavily on
smaller time deposits marketed to
households. Savings and loan
associations also sold the majority of
their time deposits to households,
although by 1982 District thrifts held
more large certificates than did their
II

national counterparts.
The other category of bank
deposits-often referred to as savings deposits-remained a fairly
stable share of total deposits at
banks during this period. In the
early 1970s, this category contained
mostly passbook savings accounts.
By the early 1980s, however, these
deposits increasingly consisted of
more expensive sources of funds,
such as NOW accounts and money
market deposit accounts (MMDAs).
NOW accounts pay essentially the
passbook savings rate but are more
expensive to offer because checks
can be written on them. MMDAs
pay market-determined yields.
Again, reliance on this category of
funds varied by bank size. Savings
deposits were relatively unimportant
for large banks but accounted for
approximately one-sixth of the funds
in small- and medium-sized banks.
Overall, banks in the District tended
to depend less on this category of
deposits than did banks elsewhere.
The comparable deposit category
for savings and loan associations
behaved in a similar manner. As
was the case for banks, this
category consisted of passbook-type
accounts before 1980 but contained
NOW accounts and MMDAs after
they were authorized. In both the
District and the nation, the share of
thrift deposits represented by this
category was decreased by half between 1976-the first year a
breakdown of thrift deposits was
published-and 1981 . Nationally,
thrifts attracted a larger share of
their funds through these accounts,
so the decline was greater in absolute terms in the nation than in
this region. The introduction of the
MMDA in December 1982 apparently attracted enough deposits to
increase the contribution of "other
deposits" to total deposits between
1981 and 1982.

DIFFICUL TY IN PREDICTING
THE FUTURE
Interest rates increased and became
more volatile.

In the 1970s, interest rates continued the steady climb they began
after World War II. On a quarterly
average basis, the level of shortterm interest rates rose from 2%
percent in the 1950s to 4 percent in
the 1960s and 6% percent in the
1970s. After 1970, rates never fell
near what had been their peaks during the 1945-66 period. For
example, the average short-term interest rate between October 1979
and June 1982 was over 12V2
percent.
In addition to overall increases,
the volatility of short-term interest
rates rose dramatically in two
primary stages after 1969. Between
1969 and 1978, short-term rates
varied between 4 and 12 percent.
After that, they fluctuated in a range
between 8 and 20 percent. Longterm rates were more stable than
short-term rates, but they also experienced increases in volatility.
Greater resistance to downward
pressure that produced sharp
plunges in short-term rates accounted for most of the relative
stability of the long-term rates.
Nevertheless, variability in these
rates increased after 1978.
Both dimensions of interest rate
behavior contributed to expansion of

UPWARD TREND
During the 1970s, interest rates still
exhibited the gradual increase
which had been in place for several
decades.
SELECTED INTEREST RATES
Percent
16

1955

1960

1965

1970

1975

1980

the wholesale side of intermediaries'
activities. The rise in volatility made
predicting future interest rates more
difficult, and this led to greater
reliance on short-term and variablerate loans. In addition, the rising
levels of interest rates made
regulatory ceilings on deposit yields
a recurring problem. Because these
ceilings put intermediary institutions
at a greater disadvantage in competing for household savings, turning to the large time deposit markets
proved to be an increasingly attractive approach to raising funds.

MISMA TCHED MA TURITIES
Institutions placed greater emphasis
on short-term and variable-rate
lending.

In an environment where interest
rates are unpredictable, matching
maturities of assets and liabilities
becomes more important. Depository intermediaries tend to have
liabilities with shorter maturities than
their assets, so costs tend to rise
faster than revenues as interest
rates increase. A prolonged climb in
interest rates, such as that which occurred in the 1970s, can threaten
the solvency of institutions whose
portfolios are severely mismatched.
Lengthening the maturity of deposits
is difficult after a rise in uncertainty.
Therefore, an increase in the
variability of interest rates encourages institutions to rely more
heavily on short-term loans and on
loans whose interest rates vary with
those in the market.
Under traditional lending practices, a mismatch in maturities of
assets and liabilities is likely to be
greatest for institutions with heavy
concentrations of home mortgages
in their portfolios. Conventional mortgages are long-term loans made at
fixed interest rates. Maturities of
loans to businesses can be matched
more easily with maturities of
deposits because rates on these
loans typically vary with changes in
the prime rate. Traditional consumer

CONSTRAINED COMPETITION
A history of interest rate restrictions

PROFITABILITY SQUEEZE

Due to rising interest rates, savings
and loan associations experienced a
severe decline in their rate of return.
PROFITABILITY OF SAVINGS AND LOANS
Rate of Return

0.90
0.60
030

000
-030
-0.60

1970

1972

1974

1976

1978

1980

1982

loans lie somewhere between these
extremes, having fixed rates like
conventional mortgage loans but
shorter maturities.
Because interest rates rose more
during the 1970s than had been expected, the profitability of an institution was heavily dependent on the
extent to which it could match the
maturities of its assets and liabilities.
Banks generally make more loans to
businesses and fewer mortgage
loans than other institutions, so their
profitability was relatively high. The
national average return on assets for
banks was 0.86 percent over the
1970-82 period. The return for
banks in this District was 10 basis
points higher.
Savings and loan associations, on
the other hand, typically have
reserved most of their loan portfolios
for home mortgages. Thus, as interest rates rose, the profitability of
thrifts fell. In fact, the return on
assets for thrifts was negative in
1980 and 1981. In the late 1970s
and early 1980s, many thrifts were
forced to merge with stronger institutions to prevent failure. Savings
and loans in this District experienced declines in profitability comparable to those of thrifts in the rest
of the country.

forced a shift to the money markets
for new sources of funds.

While the variability of interest
rates was increasing the risk of
some types of loans, the level of interest rates was affecting the
distribution of liabilities. Interest rate
ceilings on deposits held
predominantly by householdswhich were originally established to
limit competition among the various
types of depository intermediaries-increasingly undermined the ability of these institutions
to compete with Treasury bills and
other nondeposit instruments. Intermediaries were considerably less
constrained in competing for funds
in the large CD markets so, as interest rates increased in the late
1970s, more of their liabilities came
from large time deposits and
nondeposit sources.
Interest rate ceilings proved to be
a greater barrier in attracting
household funds because regulators
were more reluctant to allow ceiling
rates on small-denomination
deposits to increase with market
rates. Interest rate ceilings on large
certificates of deposit (over
$100,000) were removed in two
stages during the credit crunches of
1970 and 1973. In 1970, restrictions
were removed for large CDs with
maturities between 30 and 90 days.
Ceilings on longer-term CDs were
removed in 1973. But restrictions on
small-denomination time deposits remained a factor until December
1982.
The history of interest rate restrictions is noteworthy. In the late 1960s
and early 1970s, regulation of retail
deposits was characterized by a
series of upward adjustments to a
complex structure of fixed ceiling
rates. These adjustments failed to
keep up with increases in market
rates, however, and periods of high
interest rates saw many household
savers shifting funds from deposits
to Treasury bills. In 1978 the money
market certificate-which had a
variable ceiling tied to Treasury bill
rates-was introduced. This instru11

NEW DEPOSIT SOURCES

An increased share of funds came from large time deposits in the
late 1970s, while money market mutual funds skyrocketed.
LARGE TIME DEPOSITS

MONEY MARKET MUTUAL FUNDS

Percent of Tolal DepoSlls

25
20

Billions of Dollars
250

200

150

• BANKS
• SAVINGS AND LOANS

100

1976

1977

1978

1979

1980

1981

1982

ment helped depository institutions
compete for household funds but
did not fully restore their appeal to
household savers because of a
minimum balance requirement of
$10,000. Money market mutual
funds continued to attract funds that
otherwise would have been placed
in banks, savings and loans and
credit unions and experienced rapid
growth until the money market
deposit account was introduced in
1982. This account has been competitive with money market funds
largely because its $2,500 minimum
balance is in line with amounts required to open money market
mutual fund accounts.

1976

1977

1978

1979

1980

1981

1982

The asymmetric treatment of large
and small time deposits was a result
of forces acting on legislators and
regulators during this period. Directing funds to the nation's homebuilding industry while keeping savings
and loans solvent was a major concern of Congress. Meanwhile,
neither Congress nor the regulators
could afford to let this objective curtail the supply of credit to the
nation's major businesses during
periods of financial stress. Interest
rate ceilings quickly were suspended from large certificates of
deposit because banks needed
unrestricted freedom to compete in
the money markets if they were to
continue meeting the credit
demands of businesses. Large
banks contend principally with
nondepository intermediaries for
funds to finance additional business
loans. Because interest rates on
business loans could be changed
quickly to cover changes in the cost
of funds, allowing banks to compete
freely did not reduce their profitability. Furthermore, freedom for banks
in this arena did not jeopardize savings and loans because those institutions did not rely heavily on
large certificates of deposit.

At the same time, funding residential construction without bankrupting
savings and loans required limits on
yield increases for retail deposits at
all depository intermediaries. Portfolios dominated by conventional
mortgages left savings and loans
unable to match increases in their
cost of funds with increases in
interest income. To limit cost increases, regulators combined
below-market, fixed ceilings on traditional core deposit yields with nearmarket, sometimes flexible ceilings
on time deposit yields. The market
for these time deposits was limited
to the more aggressive households-those which might tend to
put their funds into money market
instruments-by imposing high
minimum balances. This combination represented a tradeoff between
the need to keep costs down and
the need to be competitive with
nondeposit instruments. In addition,
regulations held bank deposit yields
that were competitive with yields on
thrift instruments below those at savings and loans to prevent funds
from flowing into banks. The money
market deposit account-which had
few unattractive restrictions and
gave banks the ability to match the
rate paid by thrifts-was not introduced until after federal protection was given to thrifts with large inventories of older mortgages.

DRIVING FORCES
The District's economy generally
outpaced the nation's, but ups and
downs in the oil industry remained
important.
A fast pace of economic growth in
the Eleventh District contributed to
the large expansion of its loan and
deposit portfolios. Between 1970
and 1982, increases in population,
employment and personal income
were higher in the four states than in
the nation. The average annual
growth rates for population and
employment were twice the comparable national rates. Average
growth in real income was 80 percent higher in this region.
Texas had the highest growth
rates of the four states in all three
measures. Growth in employment
and personal income in the other
three states was only a notch below
that in Texas, however. Population
growth was almost as high in New
Mexico but was somewhat lower in
Oklahoma and Louisiana. Never-

theless, all of the states experienced
higher than national average rates
for each measure of economic
growth in every year of the 1970-82
period.
The effect of oil price increases is
apparent in all three sets of growth
rates. Oil prices quadrupled in 1973
and doubled in 1979. The second
price increase had a stronger effect
on the region's economy because
federal controls were removed entirely from the price of crude oil between 1979 and 1981. Controls on
natural gas prices were revised in
1978. In the two years following
each of the oil price increases, differences in growth of employment
and income between District states
and the nation were especially
prominent. The District-national gap
widened later for population in-

creases, but in each case the bulge
in growth lasted about two years.
The decline in oil prices that
occurred in 1982 is evident in a
sharp reduction in the distance between the growth rates for the nation and the four states.
Differences in the effects of oil
price increases on the District states
and on the nation- as a whole are
even more evident in paths of
growth for manufacturing employment. Employment growth in
manufacturing for the states individually indicates that three of the
states-Louisiana, Oklahoma and
Texas-followed very similar patterns. Distinctly different, however,
was employment growth in New
Mexico. New Mexico employment
expanded much more rapidly in the
early 1970s than in the other three

FAST-PACED GROWTH

This region's economic growth in population, employment and personal income outdistanced the
nation during the past decade. The four-state average was higher for each measure during every
year of the period, with Texas displaying the most pronounced growth.
ECONOMIC GROWTH. 1970-62

-_.

Percent Change

Percent Change. Average Annual Rates

•
•

POPULATION GROWTH

ECONOMIC GROWTH. 1970-62

Percent Change. Average Annual Rates

DISTRICT STATES
UNITED STATES

4.0
•
•

LOUISIANA
NEW MEXICO
• OKLAHOMA
• TEXAS

3.0

DISTRICT STATES
UNITED STATES

\ A..d-

2.0

n
2
1

POPULATION

EMPLOYMENT

1.0

II I

POPULATION

REAL
PERSONAL INCOME

NON-AGRICULTURAL WAGE AND
SALARY EMPLOYMENT GROWTH

.1 •
I
EMPLOYMENT

REAL
PERSONAL INCOME

1971

1973

1975

1977

1979

1981

GROWTH IN REAL PERSONAL INCOME

Percent Change

•
•

DISTRICT STATES
UNITED STATES

12
10

-2
1971

1973

1975

1977

1979

1981

1971

1973

1975

1977

1979

1981

OIL PRICES DRIVE EMPLOYMENT GROWTH
The energy industry was important to this District's economy. Employment in manufacturing and
energy-related fields followed ups and downs in oil prices in Texas, Oklahoma and Louisiana. In
New Mexico, however, tourism was more important.
MANUFACTURING EMPLOYMENT

MANUFACTURING EMPLOYMENT

ENERGY EMPLOYMENT

Percent Change From PrevIous Year

20
15

• LOUISIANA
NEW MEXICO
• OKLAHOMA
• TEXAS

30
20
10

-10
• OIL AND GAS EXTRACTION (DISTRICT STATES)

~ • OIL FIELD MACHINERY (TEXAS AND OKLAHOMA)
-5

1970

1972

1974

1976

1978

1980

1982

-30
1970

1972

1974

1976

1978

1980

1982

1975

1977

1979

1981

1970

1972

1974

1976

1978

1980

1982

TOURISM IN NEW MEXICO

OIL AND GAS EXTRACTION EMPLOYMENT
Percent Change From PrevIous Year

30
10

-10
-20
1970

1972

1974

1976

1978

1980

1982

states, and it was much more subdued in the late 1970s. On the other
hand, New Mexico's manufacturing
employment growth did not exhibit
the precipitous drop in 1982 that
employment growth in the other
three states displayed.
Employment in the oil and gas extraction industry and the oil field
equipment manufacturing industry
indicates the ups and downs of the
energy business very dramatically.
This pattern also is reflected in
business loan growth for the four
states. Employment growth in these
two industries reached a peak in
1975, when such growth in the rest
of the country was very low. Following a brief drop in 1976, employment in these industries surged to
an even higher peak in 1981. The
subsequent decline in oil prices sent
employment in these two industries
into a precipitous decline during
1982 and 1983.
The patterns of employment
growth in oil and gas extraction for
the four states individually show that

1969

1971

1973

the energy cycle was about the
same in each state. The principal
exceptions were the higher peak
and lower trough for New Mexico in
the 1974-76 period and the exceptionally large increase for Oklahoma
in 1981, followed by a large drop in
1982 and 1983. The distinctive
behavior of employment growth in
Oklahoma reflects the boom and
bust of the market for very deep
natural gas, and business loan
growth in Oklahoma followed a
similar pattern.
The different pattern of economic
growth in New Mexico reflects a
lesser importance of oil and gas in
that state. Tourism and mining play
a larger role in New Mexico's
economy. The tourist industry
displayed healthy growth in the
early 1970s-until the oil embargo
late in 1973. Tourism plummeted at
that time, but it recovered in the
middle of the decade only to slump
again between 1977 and 1980. The
principal shock to the state's mining
industry was the collapse of the

uranium market after the incident at
Three Mile Island in 1979. The spot
price for uranium fell from over $40
to around $20 in the subsequent
year, and the economy of New
Mexico was weakened slightly by
this development. The departure of
New Mexico's economic growth
from the paths of the other District
states is apparent in most loan and
deposit trends during this period.
Growth in the Southwest's
economy stimulated construction in
the region-generally much stronger
than construction activity elsewhere.
District growth measures for both
residential and nonresidential construction were above comparable
national figures in years when construction growth was particularly
strong. Though growth in the District
occasionally lagged growth in the
nation-especially before 1975-it
never was very far behind. Gaps
were widest in the early 1980s,
when the difference in population
growth also was greatest. In
nonresidential construction, the dif-

DEPOSITS PIVOT
Bank demand deposit balances
steadily declined as time deposits
followed an erratic upward trend.

HIGHER PEAKS FOR DISTRICT CONSTRUCTION

Growth in residential and nonresidential construction in this
region, while following closely that of the nation, became stronger
during peak periods.
GROWTH IN HOUSING STARTS

GROWTH IN HOUSING STARTS

Percent Change

125

100

40
75

-20
-25
1971

1973

1975

1977

1979

1981

1971

1973

1975

1977

1979

1981

GROWTH IN NONRESIDENTIAL CONSTRUCTION

GROWTH IN NONRESIDENTIAL CONSTRUCTION
30
20

-10

-20

1971

1973

1975

1977

1979

1981

ference between growth in the four
states and growth in the nation
peaked in 1981 and narrowed
sharply in 1982. Growth in housing
starts, however, continued to accelerate more here than elsewhere
in 1982.
The growth patterns for residential
and nonresidential construction in
the individual states present quite a
contrast. In residential construction,
year-to-year growth was very similar
in each state, with differences between the states greatest at the
beginning and end of the period.
New Mexico and Louisiana had
sharply higher growth in housing
starts in 1971, and Oklahoma and
Texas showed much more in 1982.
Growth patterns for nonresidential
construction are dissimilar. Nearly all
states shared the declines in
nonresidential construction in 1974

1971

1973

1975

1977

1979

1981

and 1975, and all but New Mexico
were relatively active in 1981. During the rest of the period, however,
the peaks and troughs of the individual states are not well aligned.
New Mexico experienced rapid
growth in nonresidential construction
until 1979, after which growth
slacked off steadily. Overall,
nonresidential construction in each
state exhibited much more volatility
than is reflected in the aggregate.

The lessened dependence on demand deposits as a source of funds
for banks resulted from extremely
low growth in these deposits rather
than from balance declines. During
the 1970-82 period, average
growth in District demaod deposits
was nearly double that of the nation,
and each of the four states came
very near the District average.
Texas experienced slightly higher
demand deposit growth, while Louisiana had less.
Across the nation, time deposits
grew almost five times as fast as demand deposits. Otherwise, the
distribution of growth was similar to
that for demand deposits. Time
deposit growth at banks in the four
states averaged a few percentage
points above such growth nationally,
while growth in the individual states
clustered around the District
average. Texas banks experienced
fewer gains than banks in the other
three states.
During the 1970-82 period, the
lessened significance of demand
deposits was a little more apparent
in this region, although the year-byyear decline followed the national
trend closely. This decline was fairly
steady between 1970 and 1979, but
the share of deposits in non-interestbearing demand accounts dropped
more sharply after that time. Demand deposits in the four states
represented a marginally larger
share of total bank deposits than
elsewhere. However, the share of
these deposits in the District moved
closer to the comparable national
statistic after 1976.
The year-by-year pattern of this
demand deposit decline was about
the same in each of the District
states. The relatively large percentage of total deposits represented by
these balances can be explained
largely by the high proportion of demand accounts in Texas banks.
New Mexico banks had a considerably smaller share, while Oklahoma
and Louisiana fell somewhere in be-

TIME DEPOSITS INCREASE

During the 1970-82 period, average growth in District demand deposits was nearly double that of
the nation. But time deposits grew much faster and gained prominence throughout the decade.
GROWTH IN DEMAND AND TIME DEPOSITS, 1970-82

GROWTH IN DEMAND AND TIME DEPOSITS, 1970-82

DEMAND DEPOSITS AT BANKS

Percent Average Annual Rates of Growth

Percent of Total DePOSIts

• DISTRICT STATES
• UNITED STATES

• LOUISIANA
NEW MEXICO
• OKLAHOMA
• TEXAS

DEMAND

TIME

DEMAND

1969

1971

DEMAND DEPOSITS AT BANKS

TIME DEPOSITS AT BANKS

Percent of Total Deeosns

Percent of Tolal DepoSIts

Percent of Total De

1973

1975

1977

1979

1981

TIME DEPOSITS AT BANKS
SIts

• DISTRICT STATES
• UNITED STATES
60

1969

1971

1973

1975

1977

1979

1981

tween. Also, the share for New Mexico banks generally was below the
comparable figure for the nation.
The gap between the demand
deposit shares in Texas and New
Mexico was most pronounced in the
early 1970s and least in the early
1980s.
The corresponding increase in the
prominence of time deposits was
more erratic than the shift from demand deposits, but it was steadier
in the District than in the nation. For
both, time deposits surged between
1972 and 1974, a period of rapid
economic growth. After that, they
dropped back slightly until 1978,
when another period of exceptionally rapid increases began. The
bulge in the growth path was less
pronounced in the District, however,
and an increased emphasis on time
deposits continued in the four states
during 1982 while leveling off
elsewhere. Time deposits generally
represented a larger share of total
deposits in this region, with the
disparity usually greater in the latter
half of the 1970-82 period.

1969

1971

1973

1975

1977

1979

1981

At banks in the individual states,
the year-by-year rise in the importance of time deposits was similar to
the pattern observed elsewhere,
with differences between bank time
deposit shares generally smaller
after 1977 than before. Until 1977,
when economic growth in New
Mexico was rapid, banks there acquired a greater proportion of
deposit funds through time deposits
than did banks in the other three
states. Louisiana banks acquired a
smaller share this way during nearly
the entire 1970-82 period. In 1982
the emphasis on time deposits increased in three of the states, while
New Mexico registered the slight
decline observed in the rest of the
nation.

• LOUISIANA
NEW MEXICO
• OKLAHOMA
• TEXAS

1969

1971

1973

1975

1977

1979

1981

MARKET INSTRUMENTS BUFFET
PASSBOOK SAVINGS
Financial institutions began to combat attractive market offerings
with nondeposit sources of funds
and higher ceilings on passbook
accounts.

The nation's depository intermediaries entered 1970 in the
middle of a period of disintermediation. During the first half of 1969, interest rates had been in the 6 percent range. In the middle of that
year, they rose to the neighborhood
of 7 percent, and growth in savings
accounts at thrifts gradually declined. Late in 1969, growth in these
accounts at commercial banks
dropped off sharply. By early 1970,
savings and loans were experiencing net outflows of funds.
At this point, several developments occurred that eased the strain
on depository intermediaries. Interest rate ceilings on savings accounts were raised, and the
minimum purchase of Treasury bills
was increased from $1,000 to
$10,000. This increase reduced the
ability of households to transfer
funds from savings accounts to
Treasury bills. Finally, interest rates
dropped a full percentage point between the beginning of the year and
the middle of the summer.
The effect of this episode of
disintermediation was nearly identical for intermediaries in the District
and the nation. At banks, savings

deposits-which at that time consisted almost entirely of passbooktype accounts-were affected the
most. In 1969, savings deposits at
banks, nationally and in the four
District states, fell about 2V2 percent. In 1970, growth in this region
and elsewhere had recovered to
around 5 percent, and by 1971 it
was over 10 percent. Data for savings and loan associations during
this period do not separate
passbook savings deposits from
time deposits. However, changes in
total deposits suggest that the experience of District savings and loan
associations was nearly identical to
that of thrifts elsewhere. Growth was
near zero in 1969, but it rose
moderately in 1970 and was up to
approximately 20 percent in 1971.
The next episode of disintermediation, which lasted from 1973 to early
1975, was much more prolonged.
Short-term interest rates overtook
ceiling rates for passbook savings
accounts late in 1972 and stayed
very high through early 1975. Ceilings were raised in July 1973, but
they remained well below Treasury
bill rates, which reached 9 percent
in the summer of 1974. Because

TREASURY BILL RATES IMPORTANT

The attractiveness of passbook savings accounts depended
primarily on the level of Treasury bill rates.
INTEREST RATE CEILINGS ON PASSBOOK ACCOUNTS
AND 3·MONTH TREASURY BILL RATES

INTEREST RATE CEILINGS ON PASSBOOK ACCOUNTS
AND 3·MONTH TREASURY BILL RATES

Percent

Percenl
16

14
12

• CREDIT UNIONS
SAVINGS AND LOANS
COMMERCIAL BANKS
• 3-MONTH TREASURY BILL

_____v
1969

1970

1971

•

CREDIT UNIONS
SAVINGS AND LOANS
II COMMERCIAL BANKS
• 3·MONTH TREASURY BILL
1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

this period of high interest rates persisted, more alternatives to
passbook deposits emerged. For
example, household savings went
directly to intermediate-term
Treasury securities, which could be
purchased in minimum denominations of $1,000 to $5,000. Growth in
money market mutual funds
gathered momentum as well.
High interest rates had a greater
effect on deposit growth at savings
and loans than at banks, but intermediaries in the District again
fared about the same as their national counterparts. Growth in savings deposits bottomed out in 1973
for commercial banks, whereas total
deposits at savings and loans continued to fall in 1974. For both
banks and thrifts in the four states,
the decline and subsequent rebound in deposit growth was somewhat sharper than for comparable
institutions across the nation. Nevertheless, growth remained slightly
higher throughout the period in this
region.
Deposits at credit unions were
shielded to a large degree from the
effects of high market rates,
although deposit growth did subside
somewhat in 1973. The principal
source of this protection was a
higher ceiling on interest rates
payable for credit union deposits.
Furthermore, when interest rate ceilings were raised, the increases
generally were larger for credit
unions than for banks or savings
and loans.
Patterns of growth for savingstype deposits in the individual
District states are much alike. The
similarities in bank savings deposit
growth particularly are striking for
Louisiana, New Mexico and Texas.
Savings deposit growth in Oklahoma
banks varied more erratically.
Growth in deposits at thrifts followed
a uniform pattern, although growth

SAVINGS AFFECTED BY MARKET
In the early 1970s, savings deposits were affected by periods of disintermediation much the
same in this region and nationally. Credit unions, however, were shielded. Institutions in the four
individual states followed similar patterns of savings deposit growth, although Oklahoma's banks
and credit unions were subject to more erratic growth.
GROWTH IN SAVINGS DEPOSITS AT BANKS

GROWTH IN TOTAL DEPOSITS AT SAVINGS AND LOANS

GROWTH IN DEPOSITS AT CREDIT UNIONS

Percent Change

Percent Change
30

• DISTRICT STATES
• UNITED STATES

20
26
15

1969

1970

1971

1972

1973

1974

1975

GROWTH IN SAVINGS ACCOUNTS AT BANKS
P",cent Change

1969

1970

.
1971

1972

1973

1974

1975

1974

GROWTH IN TOTAL DEPOSITS AT SAVINGS AND LOANS

GROWTH IN DEPOSITS AT CREDIT UNIONS
Percent Change

1975

-60- - •

1973

Percent Change
30

1972

~~s~~~~o

---A.-------

=-50- - : ~:;:~OMA

40
15
30
10
20

-5

10
1969

1970

1971

1972

1973

1974

1975

in Oklahoma generally was lower
and growth in Louisiana failed to
match the growth of Texas and New
Mexico after 1970.

NEW INSTRUMENTS EMERGE
While the competitive position of
fixed-ceiling accounts continued to
deteriorate, regulators authorized
new accounts in response.

As short-term interest rates declined from early 1975 through early
1977, the competitive position improved for banks and savings and
loan associations with respect to attracting household savings. Savings
deposits at commercial banks and
total deposits at thrifts grew rapidly
in 1975 and 1976. The gaps between growth in the four District
states and growth in the nation
widened a bit. Growth in credit
union deposits was very high in

1969

1970

1971

1972

1973

1974

1975

1975 and dropped off somewhat
in 1976.
Short-term interest rates began to
rise in the spring of 1977, however,
and growth in fixed-ceiling deposits
at banks and savings and loans
began to subside. Credit unions still
were not much affected by this
development, and growth in area
credit union deposits rebounded to
1975 levels. Short-term rates continued to increase until the spring of
1980.
After market rates passed the
maximum rates payable on savings
accounts at banks and thrifts, it
became evident that deterioration in
the competitive position of these
fixed-ceiling accounts could no
longer be treated as a temporary or
cyclical phenomenon. A series of
new deposit instruments was introduced beginning in 1978 and
continuing through the early 1980s.
The most successful of the new instruments was the six-month mo~ey
market certificate of deposit
(MMCD), a short-term account

1972

1973

1974

1975

whose ceiling varied automatically
with changes in 26-week Treasury
bill rates. Savings and loans, as well
as small- and medium-sized banks,
soon began to rely heavily on this
instrument as a major weapon in the
competition for household savings.
At banks, growth in balances held
in the new certificate was similar in
the District to growth nationally.
Texas banks had a smaller share of
deposits in this account in 1982,
while banks in Oklahoma had more.
Small- and medium-sized banks
eventually added MMCDs to the
point that they contributed about 20
percent to total deposits. In New
Mexico and Louisiana, these certificates became an important
source of funds even at large
banks.
The authorization of the money
market certificate made passbook
accounts at banks less attractive, so
growth in these accounts continued
to decline through 1979. In fact,
there was a net outflow of fu nds
from such accounts that year. The

DISINTERMEDIA nON SPURS
DEREGULA nON

After 1975, short-term interest rates
declined and savings deposit growth
improved. Interest rates began to increase in 1977, however, and growth
slowed accordingly. Several new
types of deposits were introduced
for banks and thrifts, beginning in
1978 with the money market certificate. Credit unions were slower
to respond, and growth in accounts
of $10,000 or more declined.
GROWTH IN SAVINGS DEPOSITS AT BANKS
Percent Change
60

-50-----: ~~~~g~~~~~~s - - - 40
30
20
10

-10
1975

1976

1977

1978

1979

1960

1981

1982

GROWTH IN TOTAL DEPOSITS AT SAVINGS AND LOANS
Percent Change
25

1975

1976

1977

1978

1979

1980

1981

1982

GROWTH IN DEPOSITS AT CREDIT UNIONS
30
25

20
15

1975

1976

1977

1978

1979

1980

1981

1982

GROWTH IN LARGE ACCOUNTS AT CREDIT UNIONS

1971

1973

1975

1977

1979

198\

yearly change was about the same
in the District and elsewhere. The
MMCD helped savings and loans attract funds but not enough to stop
the decline in deposit growth.
Growth at thrifts in this region remained above national growth, but
the distance between the two
growth rates narrowed in 1979.
The introduction of the money
market certificate at banks and savings and loans was followed by a
drop in deposit growth at credit
unions. The MMCD was the first
retail account with which banks or
thrifts could offer a higher interest
rate than was available at credit
unions. The National Credit Union
Administration did not authorize a
comparable account until banks and
thrifts already had offered the
MMCD for five months. In addition,
many credit unions were slow to
market this new account. Consequently, growth in credit union accounts of $10,000 or more slowed
sharply in 1978 and 1979, both nationally and in the District. In 1979,
growth in the District fell below national growth. Balances in these
larger accounts actually declined in
New Mexico and Louisiana, while
growth was comparatively strong in'
Texas. This difference apparently is
attributable to prompt marketing of
MMCD-type certificates by large
credit unions in Texas.
Although the introduction of the
money market certificate did
strengthen the competitive position
of depository intermediaries in attracting household savings, it did
not put them on an equal footing
with all nondeposit alternatives. The
minimum balance for MMCDs was
$10,000. This created an attractive
alternative to short-term Treasury
bills-which also required an initial
$10,000 investment-but not a good
substitute for money market mutual
fund accounts. Minimum balances
on these accounts typically were
$1,000 to $2,500, and money
market fund shares were more liquid than the six-month MMCD.
Therefore, savings deposit growth at
banks decreased as interest rates
rose through early 1979. Growth in
total deposits at savings and loan

NEW RETAIL
DEPOSIT INSTRUMENTS
Money Market Certificate
Authorized: June 1, 1978
Interest rate ceiling: Auction rate on 26week Treasury bills·
Minimum maturity: Six months
Minimum denomination: $10,000

Small Saver Certificate
Authorized: July 1, 1979
Interest rate ceiling: 11/4 percentage
points less than the
yield on 4-year Treasury securities·
Minimum maturity: Four years
Minimum denomination: None
Revision: Effective January 1, 1980, the
minimum maturity was reduced
to 2V2 years and the ceiling interest rate was tied to the 21/2
year Treasury yield, less 75
basis points·

NOW Account
Authorized: December 31, 1980
Interest rate ceiling: 5% percent
Minimum maturity: None
Minimum denomination: None
All Savers Certificate
Authorized: October 1, 1981
Interest rate ceiling: 70% of the yield on
52-week Treasury
bills. However, the
interest earned is tax
exempt up to $1,000
for an individual and
$2,000 for a jointly
filed tax return.
Minimum maturity: One year
Minimum deposit: $500

7· to 31-Day Time Deposit
Authorized: September 1, 1982
Interest rate ceiling: Auction rate on 91day Treasury bills,
less 25 basis points·
Minimum maturity: 7 to 31 days
Minimum denomination: $20,000

Money Market Deposit Account
Authorized: December 14, 1982
Interest rate ceiling: None
Minimum maturity: None. Six preauthorized transfers are
permitted per month,
three of which can be
third-party transfers.
Minimum balance: $2,500

Super NOW Account
Authorized: January 5, 1983
Interest rate ceiling: None
Minimum maturity: None
Minimum balance: $2,500
• The Interest rate ceilings at thrift Institutions were
higher on these accounts.

BALANCES IN
MONEY MARKET CERTIFICATES
Percent of Bank Deposits
1978

1980

1982

U.S.
All Banks ....
Small .....
Medium ...
Large .....

2.2
2.7
2.6
1.4

15.1
22.9
17.3
9.9

16.2
25.1
19.1
10.8

Four-State
All Banks ....
Small .....
Medium ...
Large .....

2.4
3.1
2.6
1.0

15.0
23.1
13.9
6.0

15.0
23.0
15.0
5.1

Texas
All Banks ....
Small .....
Medium ...
Large .....

2.4
3.4
2.6
0.8

13.8
22.8
13.5
3.3

13.3
22.0
14·2
3.6

Oklahoma
All Banks ....
Small .....
Medium ...
Large .....

2.6
3.2
2.5
1.3

18.0
26.2
14.1
3.5

20.0
29.8
18.9
3.2

2.7
2.5
3.0

17.4
18.0
16.0
19.2

17.0
18.8
15.3
16.5

16.6
21.8
14.8
11.9

17.4
22.8
15.8
13.3

New Mexico
All Banks ....
Small .....
Medium ...
Large .....
Louisiana
All Banks ....
Small .....
Medium ...
Large .....

2.3
2.4
2.4
1.9

associations continued on a
downward trend through 1981,
although deposit growth at District
thrifts always was above such
growth nationally. In fact, growth increased in 1980 for the District, but
competitive pressures remained a
problem.
The increases in savings deposit
growth for banks and District savings and loans, plus the flattening of
the national downward trend in thrift
deposit growth in 1980, probably
reflect the decline in interest rates
during the short recession that year.
Then came the 1981 introduction of
NOW accounts nationwide. NOW
accounts had been available at
some New England institutions since
1974. These accounts enabled competition with money market mutual
funds on an additional dimension:

transaction capabilities that paid an
explicit rate of interest. They also
gave thrifts the ability to offer a
transaction account for the first time.
Credit unions introduced a comparable deposit instrument-the
share draft account-at about the
same time, and their deposit growth
jumped sharply in 1980.
Intermediaries in the four states
relied about as heavily on NOW accounts as did their counterparts in
the nation. At the end of 1982, the
region's banks had about 6 percent
of total deposits in NOW accounts,
and District savings and loans had
about 3 percent, compared with
about 2112 percent for banks nationwide. New Mexico banks had about
9 percent of total deposits in NOW
accounts.
The year 1981 witnessed some of
the highest short-term interest rates
in history, causing deposit growth at
savings and loans and credit unions
to slow. Thrifts nationwide were
earning a negative rate of return on
assets. The nation entered a major
recession, but economic growth
continued in the four District states.
Interest rates were lower the first half
of 1982 but remained in the neighborhood of 13 to 15 percent. In this
environment, institutions were
authorized to begin offering money
market deposit accounts late in
1982 and super NOW accounts
early in 1983. With these two accounts, intermediaries finally gained
deposit instruments that were fully
competitive with money market
mutual funds. The new accounts
have been aggressively marketed
by most types of institutions and are
becoming an important source of
funds in both the District and the
nation.

NOW AND ATS BALANCES
Percent of Total Deposits
1981

1982

U.S.
All Banks
Small .......
Medium ....
Large ......
S&Ls .........

5.2
6.4
5.8
4.2
1.5

6.0
8.0
6.8
4.6
2.6

Four-State
All Banks .....
Small .......
Medium ....
Large ......
S&Ls .........

4.9
6.2
5.0
3.0
1.8

5.9
8.3
6.2
3.2
1.5

Texas
All Banks ..
Small .......
Medium ....
Large ......
S&Ls .........

5.0
6.7
5.3
2.8
2.0

5.9
8.4
6.4
2.8
2.9

Oklahoma
All Banks .....
Small .......
Medium ....
Large.
S&Ls .........

4.7
6.1
4.8
2.0
2.5

6.0
7.8
6.7
2.2
4.4

New Mexico
All Banks .....
Small .......
Medium ....
Large ......
S&Ls .........

7.5
6.7
7.0
11.8
1.4

9.0
8.2
7.6
12.6
2.9

Louisiana
All Banks .....
Small .......
Medium
Large ..
S&Ls .....

3.9
4.1
3.9
3.8
1.1

4.9
5.4
4.8
4.7
1.6

PRIME AREA FOR GROWTH
Growth in large time deposits was
considerably more rapid in this
region after 1976, with Texas and
Oklahoma banks contributing to
much of this growth. Small time
deposits increased about the same
everywhere.
GROWTH IN LARGE TIME DEPOSITS, 1977-82
Percent Average Annual Rate of Growth

60
50

_ DISTRICT STATES
_ UNITED STATES

30
20
10

TIME DEPOSIT BOOM
Texas banks and thrifts set the pace
toward an emphasis on large
accounts.
Large time deposits ($100,000
and above) are marketed primarily
to businesses, and smalldenomination deposits are sold
mainly to households. An examination of the emphasis on each type of
deposit across various classes of institutions provides some interesting
comparisons. In general, banks rely
on large time deposits to a greater
extent than do savings and loanslarge banks more so than small
banks. Conversely smaIl-denomination time deposits are much more
important to thrifts than to banks
and matter more to small banks
than to larger ones. Compared with
their national counterparts, District
banks and thrifts depend more on
large time deposits.
Growth in large time deposits in
the four District states has been considerably more rapid than elsewhere
in the nation since 1976. Differences
in average growth rates reached
almost seven percentage points for
both banks and thrifts. The exceptionally high rate of growth for savings and loans reflects the very
small amount of these deposits
outstanding at year-end 1976.
Among banks, those in Texas and
Oklahoma accounted for the
relatively fast growth of large time
deposits in the District. Growth in
these deposits in New Mexico and
Louisiana banks was similar to
growth nationally. On the other
hand, savings and loans in all four
states added large time deposits
faster than the national rate. New
Mexico and Louisiana exhibited the
greatest increases in time deposits,
while Oklahoma was behind the
District average.
Growth in small time deposits was
approximately the same in the
District and the nation. Growth at
District banks was slightly above,
while growth at thrifts was almost
identical to, the national figure. The
growth rates were greater for banks
than for savings and loans and were
slightly higher at institutions in
t

BANKS

SAVINGS AND LOANS

GROWTH IN LARGE TIME DEPOSITS. 1977-82
Percent Average Annual Rate of Growth

=---- _ LOUISIANA
50

NEW MEXICO
_OKLAHOMA
- 4 0 - - - - TEXAS

20
10

BANKS

SAVINGS AND LOANS

GROWTH IN SMALL TIME DEPOSITS. 1977-82
Percent Average Annual Rate of Growth

- DISTRICT STATES
_ UNITED STATES

BANKS

SAVINGS AND LOANS

GROWTH IN SMALL TIME DEPOSITS. 1977-82
Percent Average Annual Rate of Growth

25
_LOUISIANA
NEW MEXICO
-OKLAHOMA

-TEXAS
15

BANKS

SAVINGS AND LOANS

LEADING THE WA Y
Heightened reliance on large time
deposits at District banks has been
evident since 1974, while this
region's thrifts began to outpace
the nation in 1980. Texas banks and
savings and loans were leaders in
this trend, and New Mexico thrifts
slightly edged out those in Texas.
LARGE TIME DEPOSITS AT BANKS
Percent of Tolal Deposits

36
33
30
27
24
21
18
1974

1976

1980

1978

1982

LARGE TIME DEPOSITS AT SAVINGS AND LOANS
Percent of Tolal DePOSitS

1976

1977

1978

1979

1980

1981

1982

LARGE TIME DEPOSITS AT BANKS
Percent of Tetal Deposns

40
_LOUISIANA

~~~~:~O

---y''--_

-TEXAS

1974

1976

1978

1980

1982

LARGE TIME DEPOSITS AT SAVINGS AND LOANS
Percent of Tetal

20
_LOUISIANA
15

~~~~~~~O

----7"'------

-TEXAS
10

Oklahoma and Louisiana than in
Texas or New Mexico.
The rapid growth of large time
deposits at institutions in this District
led to a situation where these
deposits represented an increasing
share of total deposits. Heavier
reliance on large time deposits at
District banks has been evident
since 1974. Dependence on these
deposits declined both nationally
and in this region between 1974
and 1976, but the decline was
much larger in the nation. Since
then, reliance on these deposits has
increased each year, and their importance to institutions in this District
has strengthened even more-particularly in 1979 and 1982. At sav-

percentage points lower. New Mexico savings and loans slightly outpaced those in Texas in the shift to
large time deposits. Reliance on
large time deposits by Louisiana
thrifts did not increase as much,
even though they acquired these
deposits at a very rapid pace. The
smaller increase in large certificates
of deposit as a share of total
deposits in Louisiana reflects the
rapid growth in other types of
deposits there. Thrifts in Oklahoma
competed less aggressively in this
market.
The relatively substantial increase
in importance of large time deposits
at banks in the District reflects
greater reliance on these in-

LARGE TIME DEPOSITS

SMALL TIME DEPOSITS

Percent of Total Deposits

Percent of Total Deposits
1976

1978

1980

1982

U.S.
All Banks ..
Small ..
Medium.
Large .....
S&Ls .......

18.9
29.0
19.5
11.7
57.6

18.7
30.0
20.6
10.9
64.7

25.2
39.7
28.9
15.9
71.1

27.8
42.5
32.4
18.9
66.9

34.4
20.7
33.0
51.6
17.5

Four-State
All Banks ....
Small .....
Medium ...
Large ..
S&Ls

17.7
25.4
13.8
6.3
67.9

17.5
25.7
15.1
5.2
72.9

22.0
33.5
20.6
7.2
75.2

22.8
35.0
23.5
8.0
65.6

30.5
16.2
32.2
46.2
12.0

36.7
19.8
34.3
55.8
20.4

Texas
All Banks.
Small .....
Medium ..
Large ..
S&Ls ....

16.8
25.2
12.9
6.2
68.4

16.2
25.2
14.1
4.8
73.1

20.2
32.6
19.8
5.3
73.6

20.5
33.8
22.1
5.7
62.6

23.6
15.4
31.3
39.5
1.6

25.5
16.0
31.6
40.8
4.0

31.9
19.1
31.8
55.2
7.2

Oklahoma
All Banks.
Small ..
Medium ..
Large .....
S&Ls ......

20.8
28.0
12.7
6.7
70.2

21.4
29.0
15.2
6.0
76.6

26.8
38.2
21.4
6.5
81.9

28.1
40.4
28.0
6.0
75.4

24.1
21.2
28.0

24.4
24.1
24.7

New Mexico
All Banks.
Small ...
Medium ...
Large .....
S&Ls .......

18.9
19.2
18.5

7.0

29.1
29.7
31.4
24.6
21.9

19.1
20.3
17.6

3.5

25.2
26.2
24.8
23.2
13.0

65.1

68.5

25.4
25.6
24.6
26.6
72.3

26.2
26.3
25.2
27.7
61.8

20.8
16.1
24.3
22.9
1.7

22.7
18.7
25.7
24.1
2.2

25.4
21.5
29.0
24.9
4.5

27.4
24.4
29.6
27.5
11.4

Louisiana
All Banks ...
Small ....
Medium.
Large .....
S&Ls .......

18.1
24.8
15.4
6.8
65.3

19.0
26.3
16.9
7.2
71.2

24.6
33.3
21.9
15.9
77.7

27.5
35.5
25.5
20.6
72.0

1976

1978

1980

1982

U.S.
All Banks ...
Small ....
Medium ..
Large ....
S&Ls .......

16.3
8.6
14.0
22.7
2.1

20.1
9.9
16.5
28.1
3.4

21.5
11.1
17.6
28.8
8.0

23.9
12.1
17.4
32.2
10.1

Four-State
All Banks.
Small ..
Medium ...
Large ..
S&Ls ....

21.9
13.6
27.2
32.0
3.2

25.9
15.6
29.6
40.2
4.5

28.7
17.3
31.1
42.4
9.9

Texas
All Banks.
Small ....
Medium.
Large .....
S&Ls ...

22.1
12.4
28.0
32.7
3.9

27.2
14.3
31.4
42.6
5.4

Oklahoma
All Banks ....
Small .....
Medium ...
Large. ....
S&Ls .......

21.3
14.1
31.5
34.4
1.4

New Mexico
All Banks ....
Small .....
Medium ...
Large .....
S&Ls .......
Louisiana
All Banks ....
Small ....
Medium ..
Large .....
S&Ls .......

ings and loans, this area's reliance
on large time deposits began to outpace the nation's in 1980. By 1982
the share of large time deposits was
about seven percentage points
higher in the District than elsewhere.
Within the four states, Texas
banks and thrifts were leaders in the
trend toward a heavier emphasis on
large time deposits, and their liability
bases became more concentrated
in these deposits. Texas banks had
no peers among banks in the other
three states in this respect. After
1979, Oklahoma followed Texas'
lead by increasing the percentage
of deposits held in large time
deposits-although the Oklahoma
proportion remained about five

struments by banks of all size
classes. The District-national disparity was particularly evident among
large banks, with the share of total
deposits about nine percentage
points higher in the District in 1976
and more than 19 percentage
points higher in 1982. Similar
changes are observable for smalland medium-sized banks, although
the regional differences are less
dramatic for these institutions.
The experience of large banks in
the four states was dominated by
the behavior of banks in Texas and
Oklahoma. The two large banks in
New Mexico, for example, acted
more like medium-sized banks in the
other states. In Louisiana, large
banks rely less on large certificates
of deposit than do medium-sized
banks.
Patterns of reliance on small time
deposits are largely a mirror image
of those for large time deposits.
Small banks generally depended

more on small deposits than did
large banks, and thrifts acquired
more of their funds in this way than
did banks. Banks in Texas and
Oklahoma stand out against banks
in New Mexico and Louisiana-and
against banks everywhere-as having lower percentages of small time
deposits. Over most of the period,
thrifts in this region increased
dependence on these deposits
more rapidly than savings and loans
elsewhere, but national and District
totals converged by 1982. The importance of these accounts was
remarkably high at thrifts in Loui-

siana throughout the period. In
Texas and New Mexico, however,
these institutions relied less heavily
on small time deposits by 1982
compared with the national average.
A decline in the use of these accounts by thrifts between 1980 and
1982 probably reflects the substitution of large certificates of deposit
and money market deposit accounts
for small time accounts.

ENERGY IMPACT
Business lending takes off with
rising oil prices.
Growth in business loans made
by commercial banks in the four
District states was greater in nearly
every year of the 1970-82 period
than growth at banks throughout the
country. The principal exceptions
were 1973 and 1974, when lending
surged more nationally. The pattern

OIL PRICES BOOST COMMERCIAL AND INDUSTRIAL LOANS
Between 1970 and 1982, bank commercial and industrial lending generally was greater in this
region than elsewhere. Before 1974, the pattern of lending in the District closely followed that of
the nation. After that, however, the effects of oil price increases set the four states apart from
the nation. Growth especially was rapid in New Mexico through 1974 and in Texas and Oklahoma
afterward, with the rise in lending in Texas concentrated at large banks.
GROWTH IN COMMERCIAL AND
INDUSTRIAL lOANS AT BANKS
40

GROWTH IN BUSINESS lOANS AT BANKS

Percent Change
25

Percen! Change
25

.1975-82
• 1970-74

1970

1972

1974

1976

1978

1980

1982

UNITED STATES

DISTRICT STATES

DISTRIBUTION OF COMMERCIAL AND
INDUSTRIAL lOANS BY STATE

GROWTH IN COMMERCIAL AND
INDUSTRIAL lOANS AT BANKS

.1975-132
• 1970-74

TEXAS

OKLAHOMA

NEW MEXICO

LOUISIANA

DISTRIBUTION OF COMMERCIAL AND
INDUSTRIAL LOANS BY SIZE

Percen! Change
50

• LOUISIANA
--::-40------

.~~~A~~;O - - - - J l r - • TEXAS

1970

1972

1974

1976

1978

1980

1982

1970

1974

1982

1970

1974

1982

of loan growth was the same in this
region and the nation except for the
years immediately following
dramatic increases in oil and gas
prices in 1973 and 1979. In 1975
and 1976, business lending was appreciably stronger in the District
than elsewhere, although it fell
slightly below growth for the
previous three years.
Response to the doubling of oil
prices in 1979 produced a much
larger divergence between the
paths of District and national
business loan growth, reflecting the
patterns observed for energy industry employment. Lending rose
sharply in the four states while it
declined for the nation overall. Not
until 1982 did growth in the District
drop to the national level of
business loan growth.
Responses to the two oil price increases can be used to divide the
period into two intervals. In the first
interval-approximately 1970
through 1974-business loan
growth in the Eleventh District was
about equal to growth throughout
the country. In the second interval,
the dramatic growth at area banks
clearly sets the four states apart
from the nation. For the nation,
business loan growth averaged 1V2
percentage points lower in the years
after 1974 than in the preceding
years. Growth at banks in the
District, however, was seven
percentage points higher in the later
period.
The year-by-year growth pattern
varied across the District states.
Before 1975, growth was relatively
low in Texas and was high in New
Mexico. After 1974, growth was
lowest in New Mexico and was high
in Texas and Oklahoma. This
reflects differences in the impact of
oil price increases in the respective
states. Growth in Louisiana remained in an intermediate range,
somewhat above national growth.
Growth in commercial and industrial loans after 1974 was the
most rapid in Texas banks and in
large banks. Through 1974, Texas
banks held about 70 percent of
these loans in the four-state area.
Subsequently, banks in Texas ac-

counted for almost 80 percent of the
region's growth in such loans, and
the concentration of commercial and
industrial loans in Texas rose above
75 percent. Nearly all of a corresponding decline in the share of
this business occurred in Louisiana
banks.
The increase in the concentration
of commercial and industrial loans
at large banks was greater. The proportion of area loans outstanding at
large banks rose from one-fifth to
one-half between 1970 and 1982,
with two-thirds of this increase occurring after 1974. The share at
small banks declined by more than
50 percent, while the share at
medium-sized banks fell about 20
percent. Increases in concentration
at large banks reflect growth in the
number of banks with assets exceeding $750 million as well as
growth in banks that already were
large at the beginning of the period.
Large banks in 1982 provided 35
percent of commercial and industrial
loans in 1970. They also accounted
for 38 percent of the growth between 1970 and 1982 and over 46
percent of growth after 1974.

CONSTRUCTION LOANS BUILD
When growth was high nationally, it
was higher here.

The pattern of growth in wholesale real estate loans by banks in
the District was similar to the pattern
for this type of lending by banks
everywhere else. The difference is
that during periods when growth
was high nationwide, it was even
higher in this area. The gap between growth in the four states and
that in the nation was smallest in the
recession years of 1975 and 1980.
It was greatest in 1976 and 1982.
Dividing the interval into two
subperiods at 1975-the rapid expansion in real estate loans trailed
the surge in commercial and industrial loans by a year-allows
some interesting comparisons. For
the nation the average annual rate

of growth in wholesale real estate
lending was about the same before
and after that year. However, such
lending by banks in this District was,
on average, nearly seven percentage points higher after 1975. The
patterns for the individual states
reveal that banks in Texas and
Oklahoma were more active in this
market, particularly in 1980 and
1981, just as they were in the
market for \business loans. Louisiana
stands out ·as the state in which the
lending pattern more closely
resembled that of banks in the rest
of the nation than banks in the
District. New Mexico's growth set
the pace for the District until 1977,
after which it weakened until 1982.
As was the case with commercial
and industrial loans, wholesale real
estate loans grew fastest in Texas
and at large banks. The change in
the distribution of these loans,
however, was even greater than that
for commercial and industrial loans.
Almost 80 percent of the increase
was concentrated in Texas banks,
and Texas' share of these loans
rose from about 60 percent through
1975 to over 70 percent in 1982.
The share at Louisiana banks fell
sharply after 1975.
Concentration of wholesale real
estate loans at large banks increased from under 10 percent in
1970 to 40 percent in 1982. The
portion of this lending provided by
small banks dropped from over half
to about one-quarter. Banks that
were large in 1982 accounted for
about one-fourth of wholesale real
estate loans in 1970, for 40 percent
of the growth from 1970 to 1982,
and for nearly 44 percent of the
growth after 1975.
During the 1970s, savings and
loan associations increased their activity in the market for wholesale real
estate loans, and growth in theirconstruction lending followed a different pattern from the growth experienced by banks. As was true in
the case of wholesale real estate
loans by banks, growth in construction loans by savings and loans was
quite high in the years immediately
following the 1973-75 recession.
Lending became sluggish in the

REAL ESTA TE LENDING TOPS THE NA TION
Wholesale real estate lending at banks in this District topped national growth, especially after
1975. Texas and Oklahoma banks were the most active in this market, and the loans became
most concentrated in large banks and in Texas banks.
GROWTH IN WHOLESALE REAL ESTATE LOANS AT BANKS

GROWTH IN WHOLESALE REAL ESTATE LOANS AT BANKS

Percent Change
30

Percent Change
30
25

•
•

1976-82
1970-75

20
20

15
10

10
5

1971

1973

1975

1977

1979

UNITED STATES

1981

GROWTH IN WHOLESALE REAL ESTATE LOANS AT BANKS

DISTRICT STATES

DISTRIBUTION OF WHOLESALE
REAL ESTATE LOANS AT BANKS

TEXAS

OKLAHOMA

NEW MEXICO

LOUISIANA

DISTRIBUTION OF WHOLESALE REAL ESTATE LOANS
AT BANKS BY SIZE

Percent Change
50

40
30
20
10

1971

1973

1975

1977

1979

1981

early 1980s for thrifts, however, as
high interest rates weakened demand for financing residential construction projects. But construction
lending at thrifts increased sharply in
1982. Growth in bank wholesale real
estate loans slipped down in 1980,
and growth in these loans did not
increase between 1981 and 1982.

1970

1975

1982

In the four states, growth in construction loans at thrifts generally
was above growth in savings and
loan construction lending nationally,
but the difference was most pronounced in 1982. The sharp pickup
that year was in response to an increase in residential construction
that occurred as interest rates fell.

1970

1975

1982

These loans were funded by the issuance of large time deposits. A
large portion of thrift construction
lending is used to finance residential
construction, and faster growth in
District construction lending in 1982
reflects the strength of this region's
housing market. As a share of total
loans at area thrifts, construction

A VERY GOOD YEAR
Savings and loan associations followed a different pattern in wholesale real estate lending than
did banks. This region advanced much higher in 1982 than the rest of the nation on the strength
of a large increase in housing starts. Texas thrifts increased construction loans 100 percent
that year.
GROWTH IN WHOLESALE REAL ESTATE LOANS
IN THE UNITED STATES

GROWTH IN WHOLESALE REAL ESTATE LOANS
AT SAVINGS AND LOANS

Percent Change
40

Percent Change
100

• DISTRICT STATES
• UNITED STATES

40
20
20

-10

-20
1977

1978

1979

1980

1981

1982

1977

1978

1979

1980

1981

1982

1977

1978

1979

1980

1981

1982

CONSUMER LOANS CONSISTENT

Bank consumer loans grew about the same in the nation, the District and the individual four
states. A 1979 federal interest rate ceiling caused a drop in loan-to-asset ratios at credit unions
everywhere. Credit union loan growth varied widely in the individual states until 1979 when it
dropped significantly in all four.
GROWTH IN CONSUMER LOANS AT BANKS

GROWTH IN CONSUMER LOANS AT BANKS

Year·to-Year Percent Change

Percent Change

GROWTH IN LOANS AT CREDIT UNIONS

• DISTRICT STATES
• UNITED STATES

1969

1971

1973

1975

1977

1979

1969

1981

1971

1973

1975

1977

LOAN TO ASSET RATIO OF CREDIT UNIONS

GROWTH IN LOANS AT CREDIT UNIONS

Percent

Percenl Change

1979

1981

1972

1974

1976

1978

1980

1982

• LOUISIANA

-=-50=------1-\:----1\- • ~~~~~~~O
80

• TEXAS

30
70

• DISTRICT STATES
• UNITED STATES

20
10

1971

1973

1975

1977

1979

1981

financing increased from its historic
level of 6 percent to about 10 percent in 1982. Nationwide, the portfolio share of construction lending
showed little change in 1982.
All four District states registered
sharp increases in construction lending in 1982, although growth by
Texas savings and loans-at nearly
100 percent-was the highest.
Growth in savings and loan construction lending in Oklahoma was
the lowest among the four states
that year. Since 1976 the patterns of
change in growth rates have been
about the same for Texas, New
Mexico and Oklahoma. In Louisiana,
growth was considerably below
growth in the other three states in
1978 and 1979 and was much
above their growth in 1980. The
high 1980 growth presents an interesting contrast to the very low
growth in wholesale real estate
loans outstanding in Louisiana
banks in 1980.

1972

1974

1976

1978

1980

1982

SUPPL Y SIDE CONSTRAINTS
Disintermediation and credit control
brought instability to mortgage and
consumer lending.
Growth in retail loans, which consist largely of consumer loans and
loans to purchase homes, followed
about the same pattern between
1970 and 1982 in the District and
the nation. During the first half of
this interval, loan growth was
weakened in recession years
because the effects of high interest
rates and low income growthwhich normally reduce the demand
for loans-were reinforced on the
supply side by constraints arising
from disintermediation. These supply
constraints tended to limit mortgage
lending by savings and loans more
than lending by banks. Credit
unions largely were insulated from
disintermediation, so loan growth
at credit unions remained fairly
high during the first half of this
period.

After the credit crunch of the middle 1970s, acute disintermediation
no longer forced sharp drops in
lending by depository intermediaries. By the late 1970s,
however, the chronic disadvantage
of these institutions in competing for
household savings-combined with
the effect of high, volatile interest
rates on consumer loan demanddid depress retail lending. In addition, rising interest rates overtook
usury ceilings for particular types of
loans. When this occurred, the affected institutions placed fewer
funds in loans whose interest rates
were capped.
Another factor that generated instability in loan growth was the
credit restraint program of 1980.
High inflation and rising interest
rates prompted the government to

discourage intermediaries from expanding their loan portfolios. This
program was short-lived, but the effect on consumer lending was
dramatic. It was followed by two
years of little or no real economic
growth, and consumer loans have
yet to recover their former vigor.
Consumer loan growth at commercial banks in the Eleventh
District followed a pattern of year-byyear change that was almost identical to that of the rest of the nation.
Growth in the four states dropped a
little more sharply in 1970 and then
tracked growth nationally almost exactly through 1973. After that,
growth here moved somewhat
above national growth in 1974, as
the rebound from the 1973-75
credit crunch began a year earlier in
the District than it did elsewhere.
This probably reflects the greater
strength of this region's economy
after the increase in oil prices in
1973. The growth paths diverged
slightly in 1981 as well, but the effects of oil price increases were
much smaller on consumer lending
than on business lending. The sharp
drop in 1980 caused by the credit
restraint program was of about the
same magnitude in the District and
the nation.
Year-by-year growth in bank consumer lending in the four individual
states followed a pattern very similar
to that of the nation and the District
total. Growth in New Mexico was
comparable to the pattern of that
state's growth in manufacturing
employment and business lending.
It was higher than in other District
states during the early 1970s and
somewhat lower after that. The 1970
decline in growth was very sharp for
Texas and Oklahoma and was
milder for New Mexico and Louisiana. Growth in consumer loans for
the individual states particularly was
consistent at the cyclical peak of
1977, but the drop in 1980 varied
considerably across states. This
drop was very large for New Mexico
and was noticeably smaller for Louisiana. Separation in the growth
paths continued in 1981, but the
paths converged in 1982.
Credit unions represent the other

principal originator of consumer
loans. In the four District states,
loans outstanding at credit unions
ranged from 17.5 percent of bank
consumer loans in 1972 to 21 percent in 1982. The year-by-year
growth pattern for credit union loans
outstanding in this region followed
the path for these institutions nationally during most of the 1972-82
period. Variability was higher in
1975 and 1976, but the growth
rates otherwise were within a couple
of percentage points of one another
until 1982. The absence of any effect of disintermediation is apparent
in the growth rates through 1978,
and the rates remained in the
neighborhood of 20 percent.
In 1979, however, the interest rate
ceiling for loans at all federal credit
unions curtailed consumer lending.
This ceiling was 15 percent, and
credit union loan growth dropped
sharply in both the nation and the

District. The decline in each case
was of about the same magnitude.
Credit unions continued to attract
deposits, so they began placing
funds in investments that were not
regulated. Therefore, the loan-toasset ratio of credit unions fell considerably in 1979. This ratio fell further in the four states than in the nation because the faster deposit
growth here gave District credit
unions more new funds to invest.
Loan growth dropped further in
1980 under the credit restraint program, but this had a lesser effect on
credit unions than on other institutions. The drop again was about the
same in the District and the nation.
Credit union loan growth varied
widely across the individual states
until 1979, when it dropped significantly in all four. A 1975 bulge for
the four-state total reflects increases
in loan growth in Texas and,
especially, Louisiana credit unions.

REGULATORY CLIMATE

A combination of events helped support higher growth in mortgage
lending in this District during 1973 and 1974. In the recovery from
the 1974 slump, both deposits and advances from the Federal
Home Loan Bank Board increased more rapidly in this region than
in the nation, although advances as a percent of total assets were
lower here. In 1979, however, usury ceilings temporarily brought
conventional mortgage lending to a halt in Texas.
GROWTH IN FEDERAL HOME LOAN BANK ADVANCES

FEDERAL HOME LOAN BANK ADVANCES

120

Percent of Total Assets
12

1971

1973

1975

1977

1979

1970

1981

1972

1974

1976

1978

TEXAS USURY CEILING AND CONTRACT INTEREST
RATE FOR MORTGAGES IN THE UNITED STATES

GROWTH IN CONVENTIONAL MORTGAGES
AT SAVINGS AND LOANS

Percent
25

Percent Change
30

(Ouarterly)

1982

• DISTRICT STATES
• UNITED STATES

25
20

1980

• TEXAS USURY CEILING
• MORTGAGE RATE

15
15
10

1970

1972

1974

1976

1978

1980

1982

1973

1975

1977

1979

1981

UPS AND DOWNS
Mortgage lending at District savings and loans tracked national
growth but generally was higher. The four individual states followed similar growth trends. Retail real estate loans at banks increased faster in this region than elsewhere but were subject to
more volatility in growth. The individual state patterns for these
loans were not unique, with the exceptions of New Mexico in the
early 1970s and Texas-Louisiana in 1976.
GROWTH IN MORTGAGES OUTSTANDING
AT SAVINGS AND LOANS

GROWTH IN MORTGAGES OUTSTANDING
AT SAVINGS AND LOANS

Percent Change

30
• DISTRICT STATES

25
20

20
15

10
10

1969

1971

1973

1975

1977

1979

1981

GROWTH IN RETAIL REAL ESTATE LOANS AT BANKS

1969

1971

1973

1975

1977

1979

1981

GROWTH IN RETAIL REAL ESTATE LOANS AT BANKS
Percent Change

• LOUISIANA

-60----:-0:---

.~~~~~;O

---

.TEXAS
20

1969

1971

1973

1975

1977

1979

1981

Growth in Oklahoma was most pronounced before 1979, and both
Oklahoma and New Mexico experienced sharp peaks during this
period: Oklahoma's in 1974 and
New Mexico's in 1978. Before
1979, growth at Texas and Louisiana credit unions was relatively
stable, in the 18 to 25 percent
range.
For District savings and loan
associations, growth in mortgage
lending tracked growth in the nation
very closely until 1972. After that,
year-by-year growth followed a
similar pattern in the nation and the
region but was higher here in
almost every year. The differences
were greater in 1977 and in the
1981-82 period. Mortgage lending
was harder hit in the 1969-70
period of disintermediation than in
the 1974 episode, and growth in the
District in 1974 remained further
above growth in the nation than it

1969

1971

1973

1975

1977

1979

1981

had in 1970. In part, increased
growth during this period reflects
the higher deposit growth of this
region's savings and loans in 1973
and 1974. It also reflects a more
liberal policy of advances by the
Federal Home Loan Bank Board. In
the recovery from the 1974 slump,
both deposits and advances from
the Home Loan Bank increased
more rapidly in the District than in
the nation, although advances as a
percentage of total assets were
lower in this region. This combination of events helped support higher
growth in mortgage lending in the
four states over the period. Although
growth in deposits leveled off in
1976 and began to decline in 1977,
mortgage lending increased in 1977
for both the nation and the District.
Growth in mortgage lending declined after 1977, however, as high
interest rates curtailed the demand
for mortgages and the profitability of

savings and loan associations nationwide. Growth in loans outstanding in the nation and the region converged in 1979 as usury ceilings
brought conventional mortgage
lending to a halt in Texas. FHA- and
VA-insured mortgages offset some
of this decline. However, District
lending did not again overtake national lending until after passage of
federal legislation voiding all state
usury ceilings on mortgages. The
Texas Legislature subsequently
reestablished a ceiling, but this has
not been binding.
Except for Texas in 1979, each of
the four states followed the national
pattern closely for growth in mortgage loans outstanding, although
there was some diversity in individual years. Thrifts in New Mexico registered the highest growth
before 1979, after which they
dropped to last place. At that point,
Oklahoma savings and loanswhich had experienced slow
growth-began expanding their
mortgage portfolios at a faster pace
than their counterparts in the other
states. In 1982, however, those
thrifts joined New Mexico's as the
slowest-growing institutions. Growth
in Texas generally was high, while
growth generally was low in Louisiana. The growth in these two
states reflected different rates of
population growth.
Commercial bank lending secured
by one- to four-family residences
generally grew faster in the District
than in the nation but also was considerably more volatile. The volume
for this type of lending was approximately one-quarter that for savings
and loan mortgage lending in the
District-slightly below the national
ratio. The year-by-year patterns bear
fairly strong resemblances to the
growth patterns for wholesale real
estate loans: very high growth in
1972, a sharp dropoff in 1975 and
1976, and very high growth again in
1977 and 1978. This region's
growth exceeded growth in the nation by the widest margin during
cyclical peaks.
With the exception of New Mexico, loan growth in the individual
states closely followed the four-state

pattern. A 1976 plunge reflected the
withdrawal from this market by
banks in Texas and Louisiana. In
the early 1970s, growth in retail real
estate loans at New Mexico banks
moved independently from such
growth in the other states, but New
Mexico loan growth was similar to
others in the region after 1975.

THE STAGE IS SET
In the future, diversification and
retail banking will become more
attractive as competitive pressures
increase.

Through the rest of this decade,
the influence is likely to subside for
the two forces that dominated
behavior in the District during the
past ten years: rising interest rates in
conjunction with regulatory ceilings
on deposit yields and energy-driven
surges in economic growth in the
Southwest. Interest rate ceilings
have been removed for most types
of small-denomination deposits, and
there is little room for additional
growth through expansion of noninterest-bearing demand accounts
and passbook-type savings accounts. The time, savings and transaction instruments that pay market
interest rates are the vehicles that
can be used to build profitable
customer bases in the future.
The other dominant factor of the
past decade-economic growth in
the Southwest-also will change.
The 1982 and 1983 declines in oil
prices have shattered the illusions of
those wishing to build empires
based on continuing increases in
energy prices. Economic growth in
the District should remain above that
for the nation, but ups and downs
will follow the fortunes of the national economy more closely in the
future than in the past ten years.
The price of oil again may rise
abruptly, but increases of the
magnitude seen in 1973 and 1979
are unlikely. Furthermore, the
response to a price increase of any
given size should be more re-

strained than reactions to the 1979
oil price increase. The 1982 and
1983 declines in oil prices have
threatened the solvency of many
borrowers, and this sobering experience should influence the
behavior of banks in this region for
some time.
With economic growth returning
to a more normal pace and interest
rate ceilings fading from the picture,
banks in this area will focus greater
attention on the household
customer. This shift should be particularly attractive for large banks in
Texas and Oklahoma, which now
have an exceptionally strong orientation toward wholesale banking.
The incentive to move in the other
direction will be reinforced by new
freedom to engage in additional
business activities. In the future,
banking organizations are expected
to provide a broader array of services-such as brokerage activities
and insurance-to household
customers. They will have an increased ability to serve households
as general financial custodian and
advisor. However, success here will
depend on their ability to attract
these accounts.
A move in this new direction will
lead to a larger share of income
coming from service fees as opposed to interest rate charges on
loans, but banks will not ignore
loans as a source of revenue
growth. In fact, the stage appears to

be set for banks to consider consumer lending as a growth market.
Variable-rate loans of different types
have been in existence for some
time now, and the variable-rate consumer loan may well be a product
whose time will come in the near
future.
Savings and loan associations are
likely to continue the same kinds of
activities as in the past couple of
years, with NOW accounts, small
time deposits and money market
deposit accounts serving as major
sources of funds. Given their comparative advantage in competing for
household deposits, thrifts may
decrease their reliance on large time
deposits.
Recent innovations in mortgage

IN NO VA TlVE LENDING

Variable-rate mortgages have
become increasingly important in
recent years.
ADJUSTABLE RATE MORTGAGES FOR
NEW AND EXISTING HOMES
Percent 01 Loans Closed

60
50
40

30
20

1981

1982

1983

lending also should become standard practice. Mortgages increasingly have featured variable rates,
and savings and loans now sell
mortgages in the secondary market
and hold mortgage-backed securities. This satisfies requirements that
thrifts devote a certain percentage
of their assets to housing. But these
changes also are significant
because they reduce exposure to
interest rate risk as well as increase
the liquidity of savings and
loans-and both innovations should
become more widespread. Substantial increases in construction lending
are not likely to be sustained indefinitely, but area thrifts will continue to look beyond mortgages for
opportunities to diversify. Never-

theless, diversification will continue
to be repressed by legal restrictions
on the amount of nonmortgage
lending allowed. Although thrifts will
remain heavily oriented toward
households, efforts toward
penetrating the business sector will
continue.
With the removal of interest rate
ceilings on most deposits, credit
unions have lost some of their past
advantage over banks and savings
and loan associations. Nevertheless,
credit unions have shown in the
early 1980s that they can continue
to survive even though banks and
thrifts can compete with credit union
rates. Because of their cooperative
structure, credit unions enjoy a
highly favorable tax treatment. Furthermore, the relationship of individual credit unions with specific
groups of employers provides good
access to specialized markets that
they are well prepared to serve.
Consumer loan demand is expected
to rebound with the general
economic recovery, and credit

unions in the District should continue to match the performance of
credit unions nationwide.
But regardless of whether an institution emphasizes wholesale or
retail intermediation, banks, thrifts
and credit unions will face increasing competition through the rest of
the decade from different types of
institutions in all parts of the country.
Changing technology and regulatory
philosophy have transformed the
products of these other institutions
into close substitutes for those of the
traditional depository intermediary.
In addition, some institutions already
have expanded their activities
across state lines. Such competitive
pressure is likely to intensify over
the remainder of this decade and
could become the dominant force
shaping the behavior of institutions
in this District and the nation.

lectronic innovation and
streamlining of processes
,/ were the tools used by the
Federal Reserve Bank of Dallas during 1983 to serve area financial institutions in an atmosphere of
deregulation and accelerated competition. A new department was
established to provide a service
liaison with institutions, while another
continued to address problems
associated with computer and communications networks on a Systemwide basis.
Speed and efficiency in the
payments mechanism function continued to be a major concern at the
Dallas Fed. Automated clearinghouse capabilities were expanded
with later item deposit deadlines and
an option for electronic corporate
trade payments. Later check deposit
deadlines were offered with improved availabilities to accomodate
financial institutions' increasing need
for flexibility.
Of particular significance in 1983
was the implementation of a return
item pilot program at the Dallas Fed.
This experimental project benefits
Eleventh District institutions with a
reduced sorting burden for returns,
expedited collection of return items,
reduced risk of loss through notification of large returns, and reduced
costs for other check processing
services. Phased-in applications
were scheduled for completion in
the first quarter of 1984.

better serve area finan-

rg-, cial institutions in a chang@
0

ing atmosphere, the Dallas
Fed adapted a number of service
offerings and, in January, created a
Corporate Banking Department to
provide a liaison between financial
institutions in this District and the
Dallas Fed.
In April, a 7:00 p.m. deadline for
mixed and other Fed cash letters
was introduced, and nonmachineable cash letter deadlines were extended from 7:00 a.m. to the city
deadline. The mixed program was
offered at the Dallas, Houston and
San Antonio offices. The nonmachineable cutoff was extended at
all offices. These enhancements
were designed to improve availability and promote speed and efficiency for the payments mechanism
function.
By the end of the second quarter
of 1983, noncash collection services
had been expanded. In addition to
accepting for collection matured corporate and municipal coupons on a
cash processing basis, the Dallas
Fed began including matured corporate and municipal bonds
payable in the Eleventh District in its
cash processing procedure. New
joint safekeeping procedures and a
pilot program for the collection of
sight drafts were adopted in August.
An automated clearinghouse pilot
program for electronic corporate
trade payments also was implemented in 1982. The ACH pilot
allowed corporations to originate
ACH payments with almost
unlimited addenda records for payment descriptions and other information. Prior to this innovation,
ACH services were used primarily
for consumer payments such as

salaries, insurance premiums or
mortgage payments. In October,
originators of ACH items were offered the option of deposits being
accepted at a nighttime deadline.
This represented another improvement in availability and made it
possible to accommodate payments
that normally would be processed
during the day but had been
delayed due to operational
problems.
A significant service expansion
during 1983 was the establishment
of several offsite settlement centers
for check processing. An offsite
center operates as a small regional
check processing center-receiving
and sorting checks drawn on institutions in remote areas of the Eleventh
District. These centers are unique to
the Dallas Fed and were begun
originally in the early 1970s. Offsite
centers make it more convenient for
financial institutions to process
checks, and offer the advantages of
earlier availability of credit and faster
presentment of items for payment.
This increase in the efficiency of
check collection has been a major
goal throughout the Federal Reserve
System.

December 31,
1983

December 31,
1982

ASSETS
Gold certificate account'
Special Drawing Rights certificate account2
Coin
Loans to depository institutions
Securities:
Federal agency obligations
U.S. Government securities. . ..
.
Total secu rities
Cash items in process of collection
Bank premises (net)
Other assets
Interdistrict settlement account

.
.
.
.

598,174,516
10,417,528,318

.
.

TOTAL ASSETS

750,000,000
310,000,000
28,176,166
69,600,000

743,000,000
310,000,000
31,811,551
159,700,000
605,772,700
9,191,977,299

.
.
.
.

$11,015,702,834
1,101,371,257
18,197,964
1,185,881,707
(1,247,024,708)

$ 9,797,749,999
1,404,085,127
16,015,519
577,918,963
91,373,584

$13,231,905,220

$13,131,654,743

LIABILITIES
Federal Reserve notes
Deposits:
Depository institutions
Due to other Federal Reserve Banks-collected funds
Foreign
Other

$ 9,943,735,343

$ 9,316,417,905

.
.
.
.

1,984,967,913
10,350,000
29,897,765

2,408,406,887
763,616
13,650,000
44,391,053

Total deposits
Deferred availability cash items
Other liabilities

.
.
.

$ 2,025,215,678
884,465,741
163,189,258

$ 2,467,211,556
1,024,365,314
135,144,768

$13,016,606,020

$12,943,139,543

.
.

107,649,600
107,649,600

94,257,600
94,257,600

TOTAL CAPITAL ACCOUNTS

215,299,200

188,515,200

TOTAL LIABILITIES AND CAPITAL ACCOUNTS

$13,231,905,220

TOTAL LIABILITIES

CAPITAL ACCOUNTS
Capital paid in
Surplus

lThlS Bank's share of gold cerlificates deposited by the U.S. Treasury with the Federal Reserve System.
2Thls Bank's share of Special Drawing Rights Certificates deposited by the U.S. Treasury with the Federal Reserve Bank of New York.

$13,131,654,743

1983

1982

CURRENT INCOME
.
.
.
.
.

$1,141,730,911

Current operating expenses
Federal Reserve currency

.
.

62,675,887

61,399,571
4,755,151

Total current operating expenses
Less expenses reimbursed or recovered

.
.

62,675,887
(3,699,235)

66,154,722
(3,786,618)

Current net operating expenses
Cost of earnings credits

.
.

58,976,652
2,579,199

62,368,104

Current net expenses

61,555,851

62,368,104

CURRENT NET INCOME

$1,080,175,060

$1,027,051,508

.
.

1,432,608
11,138

5,851,259
40,300

1,443,746

5,891,559

.
.

31,484,519
136,790

9,724,794
688,177

31,621,309

10,412,971

Interest on loans
Interest on government securities
Income on foreign currency
Income from priced services
All other income
Total current income

50,351,114
1,036,724,272
18,891,868
35,139,599
624,058

15,125,041
1,019,659,201
27,925,967
26,088,093
621,310

$1,089,419,612

CURRENT EXPENSES

PROFIT AND LOSS
Additions to current net income:
Profit on sales of government securities (net)
All other additions
Total additions
Deductions from current net income:
Loss on foreign exchange transactions (net)
All other deductions
Total deductions
Net additions or deductions
Assessment by Board of Governors:
Expenditures
Federal Reserve currency costs

(30,177,563)

.
.
.

NET INCOME AVAILABLE FOR DISTRIBUTION

5,024,200
11,827,012

(4,521,412)
$

4,074,500

$1,033,146,285

$1,018,455,596

DISTRIBUTION OF NET INCOME

6,160,847
1,013,593,438

Dividends paid
Payments to the U.S. Treasury (interest on F.R. notes)

.
.

Transferred to surplus
Surplus, January 1

.
.

13,392,000
94,257,600

Surplus, December 31

$ 107,649,600

5,368,824
1,002,595,672
10,491,100
83,766,500

94,257,600

HEAD OFFICE AND BRANCHES COMBINED
Number of Pieces Handled 1

1983

1982

Currency received and counted ............
Coin received and counted ................
Food stamps redeemed ..................

637,770,000
1,250,069,576
193,873,652

Transfers of funds .......................

1983

1982

577.006,000
1.015.807,000
166,927,000

8,055,781
226,669
796,289

6,594,283
185,917
672,126

4,833,717

4,718,020

6,524,627,000

6.662,648,673

Checks handled:
U.S. Government checks ................
Postal money orders ...................
All other 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39,088,000
9,601,492
909,581,341

41,964.000
9,792.000
870,519,000

39,873,095
749,983
593,353,399

40.081.037
777,917
567,757,147

ACH items handled:
Commercial ..........................
U.S. Government .....................

14,023,590
18,183,267

9,613,336
15,170,201

71,341,597
9,464,762

36,240,667
7,556,324

Collection items handled:
U.S. Government coupons paid ..........
All other .............................

94,365
131,633

99,810
104.761

56,670
424,352

60,167
771,126

Issues, redemptions. and exchanges of
U.S. Government securities:
Definitive ............................
Book-entry ..........................

7,305,400
156,302

8,318.206
149.182

1,645,045
325,252,029

3,305,149
226,064,506

Loans ................................

978

667

76,867,301

10.527.170

1 Packaged

items handled as a single item are counted as one piece.

2Exclusive of checks drawn on the Federal Reserve Banks.

Dollar Amount (thousands)

NUMBER OF BANK HOLDING COMPANIES, BANK AND NONBANK SUBSIDIARIES
December 31,
1983

COMPANIES
One-bank holding companies
Multibank holding companies
Total bank holding companies
SUBSIDIARY BANKS
One-bank holding companies
Multibank holding companies
Total subsidiary banks
NONBANK SUBSIDIARIES
One-bank holding companies
Multibank holding companies
Total nonbank subsidiaries

December 31 ,
1982

.
.

502
105

437
83

607

520

.
.

470*
693

.403*
585

1,163

988

.
.

63
291

58
282

354

340

December 31,
1983

December 31,
1982

.
.

$ 20,981
89,053

$16,701
73,771

$110,034

$90,472

.
.

16.1
68.4

14.6
64.6

84.5

79.2

* These figures are adjusted to reflect ownership of the same subsidiary bank by two bank holding companies.

DEPOSIT DATA FOR SUBSIDIARY BANKS OF BANK HOLDING COMPANIES

DOMESTIC DEPOSITS IN SUBSIDIARY BANKS (millions)
One-bank holding companies
Multibank holding companies
Total
SUBSIDIARY BANKS, PERCENT OF DISTRICT DEPOSITS
One-bank holding companies
Multibank holding companies
Total

he end of 1983 also
marked an end to the
term of Gerald D. Hines as
chairman of the board of directors
of the Federal Reserve Bank of
Dallas. In 1984, that position will be
held by Robert D. Rogers, president
and chief executive officer of Texas
Industries, Inc.
Hines' nine-year association with
the Dallas Fed began in 1975 when
he was elected by member banks
as a director for the head office,
with the past three years spent serving as chairman. As owner of
Gerald D. Hines Interests, an internationally recognized development
company, Hines has earned a
reputation among investors, tenants,
realtors and architects as one of the
nation's outstanding developers by
blending innovative design,
organization and financial
management.
For 26 years, Gerald D. Hines Interests has been active in developing real estate projects known as
much for their outstanding architectural achievements as for their ability
to meet the needs of their tenants.
Examples of these developments include the multi-use Galleria centers
in Houston and Dallas, the Transco
Tower and Texas Commerce Bank
headquarters in Houston.
Hines' association with the
Federal Reserve Bank of Dallas has
spanned a dramatic period in the
history of the Federal Reserve.

.q-

Beginning in 1980 with the passage
of the Monetary Control Act, major
changes took place as the Fed extended its services to all types of
financial institutions and also began
to price these services for the first
time. Throughout his association
with the Bank, those who have
worked closely with him have
benefited from his direction and expertise. According to Robert H.
Boykin, president of the Dallas Fed,
"I feel Gerry's involvement has been
a great as.set for the Bank. And I
know that both the directors who
worked with him and our own
management staff want to express
their appreciation for the time and
effort he gave in serving as a director and as chairman."

GERALD D. HINES
Chairman and Federal
Reserve Agent
Owner
Gerald D. Hines Interests
Houston, Texas

-".,.,
1_
~.

JOHN V. JAMES
Deputy Chairman
Chairman of the
Executive Committee
Dresser Industries, Inc.
Dallas, Texas

KENT GILBREATH
Associate Dean
Hankamer School of Business
Baylor University
Waco, Texas

JOHN P. GILLIAM
Chairman of the Board and
Chief Executive Officer
First National Bank in Valley Mills
Valley Mills, Texas

J. WAYLAND BENNETT

ROBERT D. ROGERS

Charles C. Thompson Professor
of Agricultural Finance and
Associate Dean, College of
Agricultural Sciences
Texas Tech University
Lubbock, Texas

President and
Chief Executive Officer
Texas Industries, Inc.
Dallas, Texas

LEWIS H. BOND

MILES D. WILSON

Chairman of the Board and
Chief Executive Officer
Texas American Bancshares, Inc.
Fort Worth, Texas

Chairman of the Board and
Chief Executive Officer
The First National Bank of Bellville
Bellville, Texas

ROBERT TED ENLOE, III

FEDERAL ADVISORY
COUNCIL MEMBER

President
Lomas & Nettleton Financial
Corporation
Dallas, Texas

TOM C. FROST
Chairman of the Board
Cullen/Frost Bankers, Inc.
San Antonio, Texas

CHESTER J. KESEY
Chairman
C. J. Kesey Enterprises
Pecos, Texas

MARY CARMEN SAUCEDO
Chairman Pro Tem
Associate Superintendent
Central Area Office, EI Paso
Independent School District
EI Paso, Texas

GERALD W. THOMAS
President
New Mexico State University
Las Cruces, New Mexico

S. LEE WARE, JR.
Investor, Oil and Real Estate
Ruidoso, New Mexico

STAN LEY J. JARM IOLOWSKI
Chairman of the Board and
Chief Executive Officer
InterFirst Bank EI Paso, NA
EI Paso, Texas

ERNEST M. SCHUR
Chairman of the
Executive Committee
InterFirst Bank Odessa, NA
Odessa, Texas

DAVID L. STONE
(

..~

re·
•.
t·

President
The Portales National Bank
Portales, New Mexico

•

Replaced Calude E. Leyendecker,
President Mimbres Valley Bank,
Deming, New Mexico, who
resIgned February 1. 1983

PAUL N. HOWELL
Chairman
Chairman of the Board and
Chief Executive Officer
Howell Corporation
Houston, Texas

GEORGE V. SMITH, SR.
Chairman Pro Tem
President
Smith Pipe Companies, Inc.
Houston, Texas

RAYMOND L. BRITTON
Labor Arbitrator and
Professor of Law
University of Houston
Houston, Texas

RALPH E. DAVID
Chairman of the Board and
Chief Executive Officer
First Freeport National Bank
Freeport, Texas

THOMAS B. McDADE
Vice Chairman
Texas Commerce Bancshares,
Inc.
Houston, Texas

ROBERT T. SAKOWITZ
Chairman of the Board
and President
Sakowitz, Inc.
Houston, Texas

WILL E. WILSON
Chairman of the
Executive Committee
First City Bank of Beaumont
Beaumont, Texas

CARLOS A. ZUNIGA
Chairman
Laredo Freight Services, Inc.
Laredo, Texas

LAWRENCE L. CRUM
Chairman Pro Tem
Professor of Banking and Finance
The University of Texas at Austin
Austin, Texas

JOHN H. GARNER
President and Chief
Executive Officer
Corpus Christi National Bank
Corpus Christi, Texas

ROBERT F. McDERMOTT
Chairman of the Board
and President
United Services Automobile
Association (USAA)
San Antonio, Texas

JOE D. BARBEE
President and Chief
Executive Officer
Barbee-Newhaus Implement
Company
Weslaco, Texas

GEORGE BRANNIES
Chairman of the Board
and President
The Mason National Bank
Mason, Texas

CHARLES E. CHEEVER, JR.
Chairman of the Board
Broadway National Bank
San Antonio, Texas

HEAD OFFICE
ROBERT H. BOYKIN

MILLARD E. SWEATI, JR.

WILLIAM M. RETTIE

VERNON L. BARTEE

President

Vice President and
General Counsel

Assistant Vice President

LARRY C. RIPLEY

SAMMIE C. CLAY

E. W. VORLOP, JR.

Assistant Vice President

MARY M. ROSAS

ANDREW W. HOGWOOD,

Assistant Vice President

WILLIAM H. WALLACE
First Vice President

Vice President

JOSEPH E. BURNS
Senior Vice President

CARLA M. WARBERG
Vice President

GEORGE C. COCHRAN, III
Senior Vice President

UZZIAH ANDERSON

ROBERT J. ROSSATO

LUTHER E. RICHARDS

Assistant Vice President

THOMAS H. RUST

SAN ANTONIO BRANCH

Assistant Vice President

JAY K. MAST
Senior Vice President

BASIL J. ASARO

Assistant Vice President

HARRY E. ROBINSON, JR.
Senior Vice President

JESSE D. SANDERS
RICHARD L. BARNES

Assistant Vice President

NEIL B. RYAN
Senior Vice President

Assistant Vice President

Assistant Vice President
and Senior Economist

THOMAS C. COLE

TERRY B. CAMPBELL

W. ARTHUR TRIBBLE

Assistant Vice President

Assistant Vice President
and Assistant Secretary

Assistant Vice President

C. LYNN VICK

BILLY D. FULLER

ANTHONY J. MONTELARO

ROBERT L. WHITMAN
Assistant Vice President

ROBERT D. HANKINS
Assistant Vice President

JAMES E. PEARCE
Vice President and
Associate Director

Assistant Vice President

Assistant Vice President
Assistant Vice President

Vice President

ANTONIO G. VALENCIA, JR.

LYNE H. CARTER

BILLY J. DUSEK
Vice President

JOHN A. BULLOCK
Assistant Vice President

T. GUY BROWN

JACK A. CLYMER
Vice President

Vice President in Charge

EUGENIE D. SHORT

TONY J. SALVAGGIO
Senior Vice President

THOMAS H. ROBERTSON

ROBERT F. LANGLINAIS
Assistant General Auditor

RICHARD D. INGRAM
Assistant Vice President

DEAN A. PANKONIEN
Assistant General Counsel

LARRY J. RECK

JOHNNY L. JOHNSON

Vice President

Assistant Vice President

EL PASO BRANCH

PHILLIP E. SELLERS

LEROY O. LANEY

JOEL L. KOONCE, JR.

Vice President

Assistant Vice President
and Senior Economist

Vice President in Charge

REBECCA W. MEINZER

Assistant Vice President

ROBERT SMITH, III
Vice President and
Secretary

Assistant Vice President

LARRY M. SNELL

BILLY B. MUSGRAVE

Vice President

Assistant Vice President

JAMES L. STULL

JOHN R. PHILLIPS

Vice President and
General Auditor

Assistant Vice President

ROBERT W. SCHULTZ

WILLIAM L. WILSON
Assistant Vice President

HOUSTON BRANCH
J. Z. ROWE
Senior Vice President in Charge

January 1, 1984

Full text of Annual Report of the Federal Reserve Bank of Dallas : 1983 Annual Report

FRASER