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► In This Issue: T w o D e c a d e s o f R e g io n a l P a r t ic ip a t io n in B o a rd U . S . B a n k in g A c t iv it y o f D ir e c t o r s D is t r ic t B u s in e s s L o a n In f lo w s D is t r ic t B u s in e s s C o n d it io n s M ONTHLY R E V IE W 1976 Federal Reserve Bank of Atlanta March F e d e ra l R e s e rv e B a n k O f A t la n t a F e d e ra l R e s e rv e S t a tio n A t la n t a , G e o rg ia 3 0 3 0 3 A d d re s s C o rre c tio n R e q u e s te d BU LK RA TE U .S . P O S T A G E PA ID A tla n ta , Georgia P erm it N o . 2 9 2 Two Decades of Regional Participation in U.S. Banking Activity b y W illia m N . C o x , III This article measures the participation of Sixth District banks in American banking activity. Measurements span the 20 years from 1955 to 1975, perm itting an examination of changes in Sixth District banks' participation in American banking activity. The statistics presented here provide raw material for raising and testing new questions about the Southeastern economy. The use of semiannual call report data, the standard source encompassing all banks in the Sixth District, limits the features of "banking activity" examined to m ajor balance sheet items (see Appendix). For each of these balance sheet items we have calculated a "participation index" (PI) spanning 20 years of semiannual observations. For each call report date, the index measures the regional share of national economic activity.1 O u r PI can also be interpreted as the volum e of regional business loans per dollar of regional economic activity divided by the volum e of national business loans per dollar of national economic activity. W e chose personal income as an indicator of economic activity, converting state data into a measure of the annual rate of income receipts w ithin Sixth District boundaries on the 1955-1975 call report dates. A PI of 1.0 for business loans w ould suggest that regional banks participate in business loans to about the same extent as banks nationally; a PI of 0.7 w ould suggest banks participate at about seven-tenths of the national rate. The index thus provides a comprehensive measure for looking at regional banking in the context of both national banking activity and the region's share of economic activity. The indices merely describe District banks' participation; they do not explain it. Underparticipation in business loans, for example, a fact defined NOTE: Ruth Goeller, Statistical Analyst, contributed significantly to this article. iC e n e r a lly , for each balance sheet item i and each RB ; » /NB ; f " R N B E - W 7 R T T call report date t, w e define RB: t /RE, - " n b7 J/ n e7 = regional = national = banking data = eco n o m ic data Vol. LXI, No. 2. Free subscription and additional copies available upon request to the Research Department, Federal Reserve Bank of Atlanta, Atlanta, Georgia 30303. Material herein may be reprinted or abstracted provided this R e v i e w , the Bank, and the author are credited. Please provide this Bank's Research Department with a copy of any publication in which such material is reprinted. M o n t h l y R e v ie w , M A RC H 1976, M O N T H L Y R E V IE W by a PI less than 1.0, might result from many reasons. Reliance of regional business borrowers on short-term credit could be less than is typical nationally. Regional reliance on bank credit, as distinct from other short-term sources of credit, could be less than is typical, or the volum e of regional business borrowing from outside banks could more than outweigh the volum e of b orrow ing by outside businesses from regional banks. In developing the study, we hoped for direct evidence on a research question. In the literature of economic development, there is a proposition that as economies become more sophisticated, financial activity occupies an increasingly im portant share of economic activity. (For instance, the simplest kind of barter economy has no finan cial activity at all.) In terms of per capita income, which is the most conventional and reason able measure of economic sophistication, the Sixth District region has become increasingly sophisti cated relative to the nation; between 1955 and 1975 the region's per capita income grew from 72 percent of the nation's to 83 percent. According to this theory, then, many of the District's Pi's would have increased over the period. To the extent that per capita income does measure economic sophistication, we would further expect to find the District indices have increased at a level ls than 1.0. The results generally display such es a pattern, suggesting that the proposition applies to the Sixth District economy. Let us begin by examining the District partic ipation indices for the broad categories of assets, deposits, loans, investments, and capital accounts. Loan, investment and deposit categories are de scribed in more detail later. The Sixth District generally u d r a t c p t s nepriiae in the broadest measures of banking, total assets, and total deposits. In mid-1975, the Sixth District accounted for about 10 percent of the nation's economic activity, but only about 9 percent of its banking assets and deposits. Accordingly, the Pi's for both these measures are 0.9, or ninetenths of parity w ith banks around the nation. Alternatively, these indices show that nationally banks held 75 cents in assets and 61 cents in deposits for each dollar of national personal in come, whereas District banks held 65 cents and 54 cents for each dollar of District income. Since 1955, the District indices for bank assets and deposits have increased from about 0.8 to 0.9. Most of the increase has come since 1968 (see charts). As mentioned, this is broadly con sistent w ith the idea that as the region has approached the nation in per capita income, participation by District banks has increased. Turning to bank loans, we find the current PI is about 0.85, slightly below those for deposits and assets. The region's aggregate loan/deposit and loan/asset ratios, therefore, have been lower FE D ER A L R ESER V E BANK O F A TLAN TA The Sixth District generally underparticipates in the broadest measures of banking activity. Participation Index - 1.00 ’56 ’58 ’60 ’62 ’64 ’66 ’68 ’70 ’72 ’74 Semiannual Call Report Date than the nation's. Correspondingly, a greater share of District banks' asset portfolios are held in the form of investments. Since investments are less likely to be locally generated than loans, we have grounds for supposing that regional credit demands are satisfied less by District banks than is typical in other parts of the country. The loan statistics resemble assets and deposit data in that the PI has increased (from about 0.7 to 0.8) d ur ing the past 20 years and in that most of the in crease has come since 1968. The District loan/ deposit and loan/asset ratios have held steady over the period. In capital accounts, the regional PI is slightly below 0.95, having climbed steadily from about 0.7 in 1955. The region's bank capital per dollar of personal income has increased, from about 4 cents to around 5 cents. Bank capital in the United States (per dollar of income) has remained constant at about 5 cents during the 20-year period. Comparing these figures w ith the bank assets indices mentioned earlier, the aggregate Sixth District capital/asset ratio has been slightly higher than the nation's since about 1961. From available information, we do not know whether this is because District banks tend to be smaller than their national counterparts— smaller banks apparent ly tend to have higher capital/asset ratios— or because District banks are, on average, more con servative in setting aside capital. In any case, the average Sixth District bank was apparently in slightly better shape, based on capital, at midyear 1975 than was its counterpart elsewhere in the country. 19 sponding national increase (from 33 to 39 cents per dollar of income) has not been as great in percentage terms, but banks throughout the country nevertheless ended the period at a much higher activity level than those in the District. W e have also calculated indices for three selected loan categories— consumer loans, commercial and industrial (business) loans, and loans "to other financial institutions." The patterns for these three categories are quite disparate. In mid-1975, the consumer loan PI was extremely high, whereas the indices were low on both business loans and loans to other financial institutions. O ver the past 20 years, the consumer loan PI has increased sharply, the business loan PI has held steady, and the PI for loans to other financial institutions has dropped sharply. Since these are major bank loan categories, the im plica tion, quite correctly, is that the increase in the District's overall loan PI has come largely from the strength in its consumer loan component. Looking at consumer loans in more detail, we found that in 1955 District banks and their national counterparts were operating at about the same levels of activity, each then showing about 5 cents in consumer loans for each dollar in personal income. In other words, the regional PI for consumer loans was about 1.0. Since then, District banks' consumer loans have more than doubled to 11 cents per dollar of income, whereas national portfolios have risen only to about 8 cents per dollar of income. This has raised the District's PI to about 1.3, the highest index in the study. The big increase came largely in the last ten years. M ajor Loan Categories The participation index for total loans, as noted earlier, rose in the past 20 years from about 0.7 to about 0.85. Both regionally and nationally, there has been a strong expansion in bank loans per dollar of income over that time, but rising indices show that the District's increase has been greater than the nation's. Since 1955 District banks have doubled their loan portfolios in re lation to income, from 18 to 33 cents. The corre 20 Sixth District banks, then, deal much more heavily in consumer loans than do their national counterparts. Assuming that markets for consumer loans are prim arily local, we do not know w hether District consumers borrow more per dollar of in come than consumers nationally or District borrowers have (or think they have) fewer nonbank credit sources from which to borrow or District banks are somehow more effective in competing for consumer loan business than is generally true in the U. S. banking system. The data at hand do not discriminate among these explanations. This District emphasis on consumer loans does not, however, seem to be a business cycle phenomenon; it has frequently been the case over several cycles. W hen we turn to business loans, the picture is strikingly different. District banks have increased their portfolios of business loans over the 20 years (from 7 cents per dollar of income to 9V 2 cents). But this increase has brought District banks only to where banks in the nation were 20 years ago; nationally, banks increased their business loan portfolios from about 10 cents M A RC H 1976, M O N T H L Y R E V IE W per dollar of income in 1955 to 14 cents in 1975. The District PI on business loans, therefore, has held steady at 0.65, significantly below 1.O.2 This is not surprising, since bank borrowing by large firms is w idely thought to be concentrated in such national credit centers as New York and Chicago. It is interesting, however, that alof l the District's strong 20-year increase in business loans per dollar of income has been matched nationwide. O ther financial institutions are savings and loan associations, insurance companies, and securi ties dealers, "o th e r" referring to "o the r than banks." Here the pattern of loans has been dow n ward. This is the only item examined in which District activity per dollar of income has dropped (from about 1V 2 cents in 1955 to about 1 cent in 1975). National activity, on the other hand, has increased from 2 cents to 3 cents. O ver the 20-year span, therefore, this PI has been halved from about.0.7 to about 0.35, the only in dex to show a decline. Semiannual Call Report Date ‘ Includes agency issues. M ajo r Investment Categories In the investment sector, District banks have come roughly into line w ith their national counterparts. This index has increased steadily during the last 20 years, from about 0.85 in 1955 to about 1.05 in mid-1975. The two specific investment categories show very different behavior, even more so than loans. Both in the nation and the District, banks sharply decreased their holdings (per income dollar) of Federal government securities during the 20-year period. In 1955, banks in the nation held about 19 cents worth of government securities; by mid1975 holdings had plummeted to about 5 cents. The drop in the District was not quite so sharp, from 16 cents in 1955 to 5 cents in 1975. The participation coefficient for government securi ties, accordingly, has risen from 0.8 to about 1.0. Bank activity in state and local obligations, on the other hand, has increased sharply, both in the District and the nation. Nationally, holdings per income dollar increased gradually from 4 to about 8 cents over the 20 years. In the District, activity rose from about 4 cents in 1955 to about 9 cents in mid-1975. The indices, accordingly, have drifted up from about 0.9 at the beginning of the period to about 1.10 most recently. By mid-1975, therefore, District banks held a dis proportionately high level of municipal obliga tions in their portfolios. M ajor Deposit Categories As mentioned, the participation index for total 2See this Review, "D istric t Business Loan In flo w s," Joseph E. Rossm an, Jr. FE D ER L R ES ER V Digitized forAFRASERE BANK O F ATLA N TA deposits rose from about 0.8 to about 0.9 over the period. This increase reflects growth relative to income in both the District and the nation, w ith the District slightly ahead. In 1955, District banks reported 49 cents in deposits per dollar of income; the national figure was 56 cents per dollar. By mid-1975, District banking activity had almost reached the national level of activity of two decades earlier (54 cents) but by this time that had risen to 61 cents. Just as in the case of loans and investments, the picture becomes more diverse when we dis aggregate the deposit figures into their major components, private demand deposits, private time deposits, and deposits of the U. S. government. Private demand deposits have fallen steadily in relation to income throughout the period. Both District and national banks in mid-1975 reported about 18 cents in private demand deposits for each dollar of personal income, so that the PI has come very close to 1.0. In terms of cents per dollar in income, however, District banks began the 20year period at a low er level than their national counterparts. The 1955 District figure was about 28 cents and the national figure about 34 cents, so that the PI then was about 0.8. In other words, the sharper national drop in activity has brought the District's participation coefficient up around 1 .0 . The decrease in private demand deposits per dollar of income is generally thought to reflect the gradual and continuing economization of de mand deposit balances since W o rld W a r II. 21 D e p o s it c o m p o n e n t s v a r ie d w id e ly . Participation Index ’56 ’58 ’60 ’62 '64 ’66 ’68 ’70 ’72 ’74 Semiannual Call Report Date Economization is probably a response to secularly higher interest rates, accentuated and accelerated by new applications of technology to the financial area. Credit cards and computers have enabled both businesses and households to operate with a lower level of money balances relative to income. In technical terms, we may summarize this tendency by saying the income velocity of money (of which private demand deposits are the main component) has increased. O ur interpretation of the PI pattern cited above combines two opposing tendencies. As the region's economy has become more sophisticated relative to the nation, demand deposits per income dollar have tended to increase. At the same time, however, both the nation and the District have 22 been economizing on demand deposits. The net of these two effects, apparently, is that District private demand deposit balances per dollar of income have dropped less than in the nation, which started at a higher level. Each is now at about the same level, so that the current District PI is close to 1.0. W h ile private demand deposit balances per income dollar have been running down, private time deposit balances have been piling up. Call report data on time balances, however, include time deposits of two markedly different types, consumer savings instruments and money market certificates of deposit. Combining these two types, we find that District banks' time deposits per dollar of income have roughly tripled over the past 21 years, from about 9 cents in 1955 to about 26 cents in 1975. Nationally, banks started at a higher 14-cent level in 1955 and have moved up to about 30 cents. Accordingly, the District's partic ipation coefficient has risen, from about 0.65 to 0.85. Most of the District's underparticipation in time deposits is probably concentrated in money market CD's rather than consumer savings instruments. The final major deposit item we examined is deposits of the U. S. government. The indices here are by far the most erratic. However, there does seem to be a general increase in the index, from about 0.635 to 0.69 in mid-1975. Most of the increase appears to have come in the last six or seven years. Four especially interesting facts emerge from the study: (1) Sixth District banks have increased their overall banking activity from 80 percent to 90 percent of national participation levels, an increase consistent with the theory that increased economic sophistication brings a more-thanproportional increase in financial activity; (2) by 1975, District banks were participating in invest ment and demand deposit activity at about the national rate but were below parity in loan and time deposit activity; (3) District banks partic ipate unusually and more and more heavily in consumer loans; and (4) District participation in loans to other financial institutions has declined significantly. ■ M A RCH 1976, M O N T H L Y R EV IEW APPENDIX M ethodology and Data Sources To measure the importance of District banking activity, we began w ith major balance sheet items aggregated over all commercial banks, member and nonmember, w ithin the boundaries of the Sixth Federal Reserve District. The semiannual call report series began w ith the 12/31/55 call and ended w ith the 6/30/75 call, the latest for which tabulations were available. (One item, loans to other financial institutions, was not available until the 12/31/59 call.) W e attempted to adjust the levels given by the District balance sheet totals to take account of both contemporaneous changes in national balance sheet totals and changes in the economic bases underlying regional and national banking markets. To do this, we chose to express our measurements in a “ participation index” defined as the regional share of U. S. banking activity divided by the regional share of U. S. economic activity, or, equivalently, as regional banking activity per dollar of regional income divided by FE D ER A L R ESER V E BANK O F A TLAN TA U. S. banking activity per dollar of U. S. income. W e calculated these participation indices for 13 selected balance sheet items. W e chose personal income as the best available measure of state and national economic activity. Since three of the six District states (Louisiana, Mississippi, and Tennessee) lie only partly w ithin the Sixth Federal Reserve District, we interpolated between census data on county personal income in the census years 1950, 1959, 1967, 1972, and 1973 to derive estimates of personal income w ithin the District portion of these states on dates corre sponding to the semiannual banking data. The results are described in "The Sixth District Share of Personal Income in Mississippi, Louisiana, and Tennessee," M o n th ly Review, August 1975. In analyzing the participation indices, we focused on broad trends rather than narrow fluctuations. As the charts show, the trends were definite and sustained for all items except U. S. government deposits. 23 B o a rd o f D ire c to rs F e d e r a l R e s e r v e B F e b ru a ry a n 1 , k o f A t l a n t a a n 1 9 7 6 ATLA N TA Class A 1 Class B2 John T. O liv e r, Jr.— 1976 Rob ert D . H o rn b e c k — 1976 Manager, Tennessee Operations, Aluminum Com pany of America Alcoa, Tennessee U lysses V . G o o d w y n — 1977 Executive Vice President, Southern Natural Resources, Inc. Birmingham, Alabama * G e o rg e W . Jen k in s — 1978 Chairman, Publix Super Markets, Inc. Lakeland, Florida President, First National Bank Jasper, Alabama Jack P. Keith— 1977 President, First National Bank West Point, Georgia *Sam I. Y a rn e ll— 1978 Chairman, American National Bank & Trust Company Chattanooga, Tennessee Class C 3 C liffo rd M . K irtland , Jr. (Deputy Chairman)— 1976 President, Cox Broadcasting Corporation Atlanta, Georgia H. G . Pattillo (Chairman)— 1977 Chairman, Pattillo Construction Company, Inc. Decatur, Georgia Fred A d am s, Jr.— 1978 President, Cal-Maine Foods, Inc. Jackson, Mississippi M EM B ER , F ED ER A L A D V IS O R Y C O U N C IL 4 La w ren ce A . M errig an — 1976 President, The Bank of New Orleans and Trust Company New Orleans, Louisiana A p p o in te d by Board of G o ve rn o rs A p p o in te d by Federal R eserve Bank B IR M IN G H A M B R A N C H W illia m H. M artin, III — 1976 Executive Vice President, Martin Industries Sheffield, Alabama H aro ld B. B lach, Jr. (Chairman)— 1977 President, J. Blach & Sons, Inc. Birmingham, Alabama * Frank P. Sam ford, Jr.— 1978 Chairman of the Board, Liberty National Life Insurance Company Birmingham, Alabama JM ember bank representatives elected by member banks 2Nonbankers elected by member banks 3Nonbankers appointed by Board of Governors, Federal Reserve System 24 C la re n ce L. T u rn ip se e d — 1976 President, First National Bank Brewton, Alabama John M ap les, Jr.— 1976 Executive Vice President, Union Bank & Trust Company Montgomery, Alabama D . C . W a d sw o rth , Jr.— 1977 President, American National Bank of Gadsden Gadsden, Alabama Robert H. W o o d ro w , Jr.— 1978 Chairman of the Board and Chief Executive Officer, First National Bank of Birmingham Birmingham, Alabama 4Not a member of the Board of Directors Note: Expiration dates of terms occur on D ecember 31 of the year beside each name. ^Reappointed or reelected for three year term M A RC H 1976, M O N T H L Y R E V IE W d J A C K S O N V IL L E B R A N C H Egbert R. B eall, (Chairman)— 1976 M a c D o n e ll Tyre— 1976 President, Beall's Department Stores Bradenton, Florida Chairman, Sun First National Bank of Orlando Orlando, Florida G e rt H . W . S ch m id t — 1977 R ichard A . C o o p e r — 1976 Chairman, First National Bank of New Port Richey New Port Richey, Florida C h a u n ce y W . Lever — 1977 Chairman, Florida First National Bank Jacksonville, Florida President, TeLeVision 12 of Jacksonville Jacksonville, Florida *Jam es E. Lyons — 1978 President, Lyons Industrial Corporation Winter Haven, Florida "John T. C a n n o n , III — 1978 President, Barnett Bank of Cocoa, N. A. Cocoa, Florida M IA M I B R A N C H C astle W . Jordan (Chairman)- -1976 President, Aegis Corporation Coral Gables, Florida M ich a el J. Franco — 1976 Chairman of the Board, City National Bank of Miami Miami, Florida D avid G . R o b in so n — 1977 President, Edison Community College Fort Myers, Florida A lv aro Luis Carta — 1978 President, Gulf + Western Americas Corporation Vero Beach, Florida H arry H oo d Bassett— 1977 Chairman of the Board, Southeast First National Bank of Miami Miami, Florida Tho m as F. Flem in g, Jr.— 1978 Chairman of the Board, First Bank and Trust Company Boca Raton, Florida Jean M cA rth u r D a vis — 1978 President, McArthur Dairy, Inc. Miami, Florida N A S H V ILLE B R A N C H Jam es W . Long (Chairman;- -1976 Farmer Springfield, Tennessee Jam es R. Law so n — 1977 Fisk University Nashville, Tennessee T. Scott F ille b ro w n , Jr.— 1976 Vice Chairman, First American National Bank Nashville, Tennessee Fred R. Law so n — 1976 President, Blount National Bank Maryville, Tennessee W . M . Joh nso n — 1977 John C . Bo ling er, Jr.— 1978 Management Consultant Knoxville, Tennessee President, First National Bank Sparta, Tennessee John W . A n d ersen — 1978 President and Chief Executive Officer, First National Bank of Sullivan County Kingsport, Tennessee N EW O R L E A N S B R A N C H G e o rg e C . Co rtright C h a rles W . M c C o y — 1976 Planter Rolling Fork, Mississippi Chairman of the Board and President, Louisiana National Bank of Baton Rouge Baton Rouge, Louisiana *Ed w in J. C a p la n (Chairman)— 1978 President, Caplan's Men's Shops, Inc. Alexandria, Louisiana Vacancy M artin C . M ile r — 1976 Chairman of the Board and President, The Hibernia National Bank New Orleans, Louisiana R. B. Lam pton — 1977 President, First National Bank Jackson, Mississippi W ilm o re W . W h itm o re — 1978 President and Chief Executive Officer, First National Bank of Houma Houma, Louisiana F E D E R A L R ESER V E BANK O F ATLA N TA 25 District Business Loan Inflows b y Jo se p h E. R o s s m a n , Jr. Banks are an im portant source of funds for business firms. W h ile Sixth District firms borrow mostly from local banks, some also borrow from banks located outside the District. On the other hand, District banks lend to both local firms and those outside the District. On balance, we w ould expect to find that the Sixth District, as is typical of a growth region, w ould have a net inflow of business loans. However, the volum e of this net inflow is unknown. In this paper we present estimates of net inflows for the years 1972 and 1974. In addition, we estimate the proportions of total bank funds that different types of District business obtained, net, from banks outside the District. In developing net loan inflow estimates, we had to estimate total bank borrowings by businesses located in the District states.1 This was necessary because business loans are reported according to the location of the bank originating the loan and not by the location of the borrower. So, we first assumed that businesses borrow from banks in proportion to their respective levels of economic activity. If Sixth District business firms accounted for 10 percent of all business activity in the nation, we w ould use 10 percent of the nation's total business loans as an estimate of total borrowings by District business firms. Since there is no single best measure of business activity for our purposes, we used all available indicators— business em ploym ent, business payrolls, number of business firms, and personal income. Second, we estimated net business loan inflow by subtracting the actual loans made by banks in District states from the estimates of total borrowings of District business firms. Since we do have four estimates of the total borrowings of District business firms, we choose to present our inflow findings in the form of a range including them all. 'T h ese estim ates include business in the parts ot Louisiana, M ississippi and Ten nessee lying outside the Sixth Federal Reserve D istrict. M A R C H 1976, M O N T H L Y R E V IE W TA BLE 1 “ P A R T IC IP A T I O N R A T IO S ” A C T U A L T O P R O P O R T IO N A T E S H A R E O F C O M M E R C IA L A N D I N D U S T R I A L L O A N S B Y IN D U S T R IA L C A T E G O R Y Based on 1972 Em ploym ent Ratios Payroll Ratios No. of Reporting Unit! 1972 1974 1972 1974 1972 1974 All M anufacturing .56 .48 .72 .59 .40 .39 M ining .24 .27 .26 .30 .30 .35 Trade .86 .80 .96 .89 .92 .78 W holesale .84 .81 .96 .91 .80 .81 Retail .90 .78 .96 .83 1.04 .76 .52 .48 .60 .54 .48 .41 Transportation .67 .68 .74 .78 .72 .74 Com m unication .32 .30 .38 .35 .26 .24 Other P u b lic U tilitie s .38 .31 .42 .35 .28 .24 Construction .66 .65 .80 .83 .74 .78 Services .98 .89 1.10 .91 .88 .87 .66 .63 .88 .72 .66 .65 Category Transp ortation, Com m unication and Other Pub lic U tilitie s TOTAL O u r findings indicate that in 1972 and 1974, business loans at banks in District states accounted for two-thirds to three-fourths of estimated total bank borrowings by firms headquartered in Sixth District states. Using the remaining one-fourth to one-third as a net inflow estimate, we obtained a range of $4.1 billion to $7.1 billion for 1974 and $2.8 billion to $5.5 billion for 1972. Looking at individual District states, each differed in the relative size of its net business loan inflow, but each had a positive net inflow of business loans during 1972 and 1974. Ranking the District states by size of net inflow shows Mississippi and Alabama w ith the largest proportionate net inflows; Louisiana and Tennessee had the smallest. In order to determine what proportion of total bank borrowings different types of businesses obtain from banks outside the District, we used the reports from 17 large District banks, along with their U. S. counterparts, that report weekly loan information by borrowers' type of business for six major categories— manufacturing, mining, trade, F E D ER A R ESER V E Digitized forL FRASER BANK O F A TLAN TA communication and other public utilities, construction, and services. In addition, loans in nine manufacturing sub categories were estimated in the same way we developed net loan inflows. Using the District states' share of total U. S. employment, payrolls, and number of reporting units for each category, we calculated equivalent loan shares for each category from the corresponding total loans of the reporting U. S. banks." W e then computed ratios of actual loans made by Sixth District banks to the District's proportionate share (based upon each of three economic indicators) of the U. S. total for each category. The smaller the ratio, the greater the indication that type of business is obtaining funds from banks outside the District. Recognizing -Loan data and business activity data used here reflect slightly different industrial classification s. These differences are not significant enough to affect the results. 27 TA BLE 2 M A N U F A C T U R IN G L O A N S B Y I N D U S T R Y Based on 1972 Em ploym ent Ratios Payroll Ratios Value-Added Ratios Capital Expenditure Ratios 1972 1974 1972 1974 .48 .72 .59 .64 .54 .48 .39 .56 .41 .60 .46 .60 .39 .46 .37 T e x tile s, Apparel, and Leather .54 .56 .60 .61 .60 .61 .58 .57 C h em ic als and Rubber .50 .26 .40 .24 .38 .24 .28 .19 Petroleum R efining .96 .59 .75 .61 .80 .61 .44 .33 Other Fabricated M etals .98 .72 1.30 .83 1.28 .83 1.06 .68 M achinery, E le ctrical and Nonelectrical .62 .43 .79 .44 .66 .44 .58 .39 Transportation Equipm ent .70 .61 .80 .76 .82 .76 .76 .70 P rim ary M etals .46 .44 .48 .50 .48 .50 .32 .33 Other Durable and Nondurable Goods .46 .39 .66 .57 .62 .54 .48 .43 1972 1974 .56 Food Processing Category All M anufacturing that possible distortions may have been introduced because the 17 District banks exclude those in areas of Sixth District states lying outside Sixth District boundary lines and because the reported loan figures may not accurately reflect the Sixth District's proportion of business loans on an “ all commercial bank basis," we applied an adjustment factor to each of the loan ratios.3 :lThe correction factor is the product of two com ponents. The first is the volum e of business loans made by all co m m ercial banks in the six-stale region, divided by the volum e of business loans made by those banks lying w ithin Sixth Federal Reserve District boundaries. The second com ponent has as its num erator the proportion of business loans made by U. S. banks included in the industrial breakdow ns; the denom inator is the same proportion for the D istrict. N um erically, the correction factors w ere 2.0 for 1972 and 1.78 for 1974. Digitized 2 8 FRASER for 1972 1974 Looking at the m ajor business loan categories, we found that the more concentrated an industry's market structure, the low er the ratio of its actual loan volum e to its proportionate share of total U. S. loans was likely to be. Thus, firms classified under mining (including oil and gas exploration and drilling) seemed most likely to seek loans outside the District. On the other hand, service firms w ith ratios close to 1 seemed to obtain most of their funds from local banks. Loan ratios were also calculated for individual manufacturing industries. Value added figures and capital expenditure, available only for manufactur ing industries, were used as additional indicators in estimating ratios. As w ith the m ajor classifications, concentrated manufacturing industries (such as chemicals and rubber), had relatively low ratios. Petroleum refining, w ith a higher ratio, was an exception. Unconcentrated manufacturing industries M A R C H 1976, M O N T H L Y R E V IE W L O A N S H A R E P A R T IC IP A T IO N 1972 All Com m ercial B an ks Actual B u sin e ss Loans (M illion s $) State Share of U. S. Industry Em ploym ent 1972 Share of U. S. Ind ustry Payroll Percent A ctual Loans to Em ploym ent Share Estim ate Percent Actual Loans to Taxable Payroll Share Estim ate 1972 1974 (Percent) 1972 1974 (Percent) 1972 1974 Alabam a 1,046 1,431 1.42 59.82 56.86 1.19 71.39 67.85 Florida 2,651 3,908 3.44 62.56 65.12 2.99 71.98 73.77 Georgia 1,851 2,639 2.31 65.06 64.48 2.03 74.04 73.37 Louisiana 1,443 1,949 1.47 79.71 74.81 1.31 89.48 83.94 M ississipp i 580 770 .83 56.77 52.39 .61 77.24 71.28 Tennessee 1,781 2,629 1.99 72.68 74.57 1.69 85.58 87.80 9,352 13,325 11.46 65.62 9.82 123,162 177,184 — All D istrict States U. S. 66.26 100.0 1972 Share of U. S. Num ber of Reporting Units State 100.0 1972 Percent Actual Loans to Reporting Unit Estim ate 77.33 100.0 Share of IndustryRelated Personal Incom e 76.58 100.0 P ercent A ctual Loans to Personal Income Estim ate (P ercent) 1972 1974 1972 1974 1.45 Alabam a 58.59 55.68 1.25 67.96 64.59 Florida 3.92 54.90 56.27 3.06 70.33 72.08 Georgia 2.27 66.20 65.61 2.05 73.31 72.65 Lou isian a 79.11 1.61 72.79 68.30 1.39 84.30 M ississipp i .97 48.57 44.82 .69 68.29 63.01 Tennessee 1.85 78.17 80.20 1.73 83.60 85.71 All D istrict States 12.07 62.31 10.17 62.91 100.0 U. S. showed a mixture of high and low ratios. Several industries im portant to the Southeast's manufactur ing structure, food processing and textiles, apparel and leather goods, had smaller ratios than expected. Conclusion W e recognize that our approach may tend to over estimate total business loans of Sixth District firms since the ratios do not take into account the struc ture and composition of Southeastern industries. There are a high number of industrial firms head quartered outside the District operating plants here. These firms would be expected to borrow from banks in their own areas, since these banks w ould FE D ER A L R ESER V E BANK O F A TLAN TA 100.0 74.45 100.0 73.73 100.0 tend to be more fam iliar w ith the company's operations. Sixth District industrial firms, typically smaller in size than their national counterparts, may also be obtaining more loans from nonbank sources than their national counterparts. Small firms also rely on their equity and credit extended by their suppliers of materials as additional sources of funds. In conclusion, although estimates of net business loan inflows may have been overstated, our expectations that the District has net business loan inflows was supported by every category of busi ness loan examined. In every instance, net positive inflows were indicated. ■ 29 Sixth District Statistics S e a s o n a lly A d ju s t e d (A ll d a t a a r e in d e x e s , u n l e s s i n d ic a t e d o t h e r w i s e . ) Latest Month 1975 One Month Ago Two Months Ago One Year Ago SIXTH DISTRICT Unemployment Rate (Percent of Work Force)*** . . . Dec. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Dec. INCOME AND SPENDING Manufacturing In c o m e........................ Farm Cash Receipts ............................ Crops ................................................ Livestock............................................ Instalment Credit at Banks*/' (Mil. $). New Loans ........................................ Repayments .................................... Dec. Nov. Nov. Nov. 133.8 186.9 212.6 124.4 132.6 223.9 202.9 205.6 130.7 136.5 144.8 178.5 118.2 247.3 328.1 128.4 FINANCE AND BANKING Member Bank L o a n s ........................Dec. Member Bank D eposits........................Dec. Bank Debits**.......................................Dec. Nov. Nov. 124.1 129.4 150.7 N.A. N.A. N.A. 113.7 N.A. 130.9 112.5 113.1 103.9 106.5 114.8 108.3 125.5 109.6 111.8 100.6 114.9 lt)1.3 123.6 147.1 105.9 137.4 123,5 121.4 133.6 150.8 157.7 107.3 144.7 96.7 130.7 111.9 112.5 103.6 106.4 113.9 108.0 124.2 108.9 111.1 99 8 115 7 101.7 121.1 146.5 105.2 137.4 122.2 121.2 134 0 150.5 157.3 107.6 144.3 78.8 130.6 111.7 112.4 103.3 106.7 113.6 107.7 123.7 108.9 110.7 99.5 116.3 101.1 120.6 145.9 104.1 137.3 122.6 120.8 134.4 150.2 156.7 107.6 144.1 60.1 132.6 112.3 111.0 106.4 100.6 111.1 111.0 128.3 110.4 117.8 100.5 124.5 112.2 128.2 158.0 93.7 138.9 144.9 127.7 135.4 153.4 156.2 105.1 140.0 67.2 9.5 9.5 9.6 8.1 4.5 40.6 143.4 124.5 161.8 73.1 88.7 147.3 149.0 133.8 144.7 133.0 144.4 130.1 160.7 144.6 146.2 139.5 145.6 101.8 114.5 146.4 233.0 141.1 4.9 40.4 159.8 134.7 184.5 74.2 88.6 146 6 148.1 131.4 142.5 130.8 144.2 129.6 161.4 144.1 151.2 139.6 144.3 101.6 114.2 143.8 231.7 139.4 4.8 40.6 193.0 145.4 239.7 73.4 90.7 145.9 147.0 128.2 145.5 130.4 140.7 128.4 161.7 144.3 150.0 137.5 146.3 102.6 113.5 145.7 231.3 139.8 5.0 39.0 375.6 128.1 618.2 64.2 97.9 148.4 149.1 132.8 136.5 130.8 137.6 131.2 170.1 147.3 131.9 135.9 150.7 108.2 118.2 156.8 250.0 137.5 . Dec. . Dec. 272 247 266 244 263 240 280 265 . Dec. . Dec. Dec. 229 202 324 226 198 310 223 191 313 214 191 295r ALABAMA INCOME Manufacturing In c o m e.................... . Dec. Farm Cash R eceip ts........................ . Nov. 136.5 162.9 135.2 203.6 133.3 186.6 121.4 334.1 EMPLOYMENT Nonfarm Em ploym ent.................... Manufacturing ............................ Nonmanufacturing .................... C onstruction............................ Farm Employment............................ 122.8 112.3 127.5 140.0 63.6 122.4 111.6 127.2 139.6 61.8 122.0 111.1 126.9 138.5 58.7 120.9 112.8 124.6 138.7 61.0 30 . . . . . 8.8 40.4 One Year Ago 7.5 39.2 FLORIDA EMPLOYMENT AND PRODUCTION Nonfarm Em ployment........................ Dec. Manufacturing ................................ Dec. Nondurable G oods........................ Dec. Food............................................ Dec. Textiles .................................... Dec, Apparel .................................... Dec. Paper ....................................... Dec. Printing and Publishing . . . Dec. Chemicals................................... Dec. Durable G o o d s ............................ Dec. Lbr., Wood Prods., Furn. & Fix. . Dec. Stone, Clay, and Glass . . . . Dec. Primary M e ta ls ........................ Dec. Fabricated Metals . . . . • Dec. M achinery............................ • Dec. Transportation Equipment • Dec. Nonmanufacturing........................ • Dec. C onstruction........................ • Dec. Transportation .................... • Dec. T r a d e .................................... . Dec. Fin., ins., and real est. . . . • Dec. S e r v ic e s ................................ • Dec. Federal Government . . . . • Dec. State and Local Government • Dec. Farm Employment............................ • Dec. Unemployment Rate (Percent of Work Force) . . . . • Dec. Insured Unemployment (Percent of Cov. Em p.)................ • Dec. Avg. Weekly Hrs. in Mfg. (Hrs.) . . • Dec. Construction C ontracts*................ • Dec. Residential.................................... ■ Dec. All o t h e r ........................................ • Dec. Cotton Consumption**.................... • Nov. Petroleum Production */** . . . . • Dec. Manufacturing Production . . . . • Nov. Nondurable G o o d s .................... • Nov. Food .................................... • Nov. T e x t i le s ................................ • Nov. Apparel ................................ • Nov. Paper .................................... • Nov. Printing and Publishing . . • Nov. C h e m ic a ls............................ ■ Nov. Durable G o o d s ............................ . Nov. Lumber and W ood................ • Nov. Furniture and Fixtures . . . . Nov. Stone, Clay, and Glass . . . . Nov. Primary M e ta ls.................... . Nov. Fabricated M e ta ls................ . Nov. Nonelectrical Machinery . . . Nov. Electrical Machinery . . . . . Nov. Transportation Equipment . Nov. FINANCE AND BANKING Loans* All Member B a n k s .................... Large Banks ................................ Deposits* All Member B anks........................ Large Banks ................................ Bank Debits*/**................................ One Two Latest Month Month Months 1975 Ago Ago Dec. Dec. Dec. Dec. Nov. INCOME Manufacturing In co m e........................Dec. Farm Cash R eceip ts............................Nov. EMPLOYMENT Nonfarm Employment........................Dec. Manufacturing ................................Dec. Nonmanufacturing............................Dec. C onstruction................................Dec. Farm Employment................................Dec. Unemployment Rate (Percent of Work Force)*** Dec. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Dec. FINANCE AND BANKING Member Bank L o a n s............................Dec. Member Bank D eposits........................Dec. Bank Debits** ....................................Dec. 275 235 304 271 230 288 269 226 295 130.7 228.5 130.3 310.1 130.1 106.1 221.9 146.6 119.3 151.8 131.0 85.8 146.3 118.5 151.6 129.4 80.2 146.8 119.1 152.2 131.8 87.0 153.2 123.5 158.9 181.7 76.1 12.6 40.4 12.3 40.4 40.3 11.8 9.7 39.4 288 252 345 285 250 325 285 247 324 127.9 288.7 128.9 329.1 126.7 237.4 108.4 355.1 126.5 105.4 136.2 117.8 65.2 126.9 105.6 136.6 118.1 62.7 126.6 104.8 136.6 117.6 57.4 127.5 103.6 138.4 138.7 70.3 9.3 40.8 8.9 8.9 7.8 38.7 250 196 383 244 194 376 240 193 364 145.8 217.6 142.8 196.6 138.1 128.4 131.2 260.6 119.7 104.4 122.9 102.3 124.5 119.8 104.4 123.0 100.7 52.5 119.6 104.5 119.0 105.8 121.7 103.2 69.2 8.2 40.3 8.7 265 208 271r 122.1 311 238 310r GEORGIA INCOME Manufacturing In c o m e........................Dec. Farm Cash R eceipts............................Nov. EMPLOYMENT Nonfarm Employment........................Dec. Manufacturing ................................Dec. Nonmanufacturing............................Dec. C onstruction................................Dec. Farm Employment................................Dec. Unemployment Rate (Percent of Work F o r c e )................Dec. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Dec. FINANCE AND BANKING Member Bank L o a n s............................Dec. Member Bank D eposits........................ Dec. Bank D e b its* * .................................... Dec. 265 189 339r LOUISIANA INCOME Manufacturing In c o m e........................Dec. Farm Cash R eceip ts............................Nov. EMPLOYMENT Nonfarm Employment........................Dec. Manufacturing ................................Dec. Nonmanufacturing ........................ Dec. Construction................................Dec. Farm Employment................................Dec. Unemployment Rate (Percent of Work Force)*** . . . . Dec. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Dec. FINANCE AND BANKING Member Bank L o a n s* ........................Dec. Member Bank D ep osits*....................Dec. Bank Debits*/** ................................ Dec. 122.8 100.2 48.6 7.5 39.7 256 196 247r 265 215 266 258 241 207 279 INCOME Manufacturing In co m e........................Dec. Farm Cash R eceip ts............................Nov. 139.4 73.3 136.8 138.8 135.9 70.4 109.2 179.0 EMPLOYMENT Nonfarm Employment........................ Dec. Manufacturing ................................Dec. Nonmanufacturing............................ Dec. C onstruction ................................ Dec. Farm Employment................................ Dec. 130.7 128.2 131.8 124.3 131.0 129.8 127.2 131.0 118.4 54.3 129.0 126.2 130.2 116.2 55.2 127.4 118.1 131.7 134.6 57.4 253 211 MISSISSIPPI M A R C H 1976, M O N T H LY R E V IE W Latest Month 1975 One Two Month Months Ago Ago One Year Ago Unemployment Rate 6.0 40.7 FINANCE AND BANKING Member Bank L o a n s* ......................... Dec. Member Bank D eposits*..................... Dec. Bank Debits*/**................................... . Dec. 6.3 39.9 6.9 40.0 5.6 37.9 270 235 270 259 228 267 257 225 267 263 217 262 132.6 153.2 130.1 137.7 127.8 115.2 119.9 194.8 Latest Month 1975 One Two Month Months Ago Ago Dec. Dec. Dec. Dec. Dec. 128.4 112.6 137.2 130.7 111.0 127.9 111.0 137.3 130.1 124.5 127.6 111.2 136.8 131.2 60.6 127.9 113.7 135.8 146.0 65.7 . . . Dec. . . . Dec. 7.7 40.6 8.2 40.6 8.9 40.3 7.6 38.9 FINANCE AND BANKING Member Bank Loans* . . . . . . . Dec. Member Bank Deposits* . . . . . . Dec. Bank Debits*/**........................ . . . Dec. 276 228 271 272 224 254 271 218 273 281 212 277 EMPLOYMENT Nonfarm Employment . . . . Manufacturing .................... Nonmanufacturing . . . . Construction.................... Farm Employment.................... Unemployment Rate (Percent of Work Force) . . Avg. Weekly Hrs. in Mfg. (Hrs.) . . . . . . . . . . . . . . . One Year Ago TENNESSEE Manufacturing In c o m e.................... . Dec. Nov. Farm Cash R eceip ts........................ **Daily average basis *For Sixth District area only; other totals for entire six states ***Seasonally adjusted data supplied by state agencies. fPreliminary data r-Revised N.A. Not available All in d exes: 1967 = 100, except mfg. incom e, 1972= 100. Sources: Manufacturing production estimated by this Bank; nonfarm, mfg. and non mfg. emp., mfg. income and hours, and unemp., U.S. Dept, of Labor and cooperating state agencies; cotton consumption, U.S. Bureau of Census; construction contracts, F. W Dodge Div., McGraw-Hill Information Systems Co.; pet. prod., U.S. Bureau of . Mines; farm cash receipts and farm emp., U.S.D.A. Other indexes based on data collected by this Bank. All indexes calculated by this Bank. iData benchmarked to June 1971 Report of Condition. NOTE: All employment data have been revised to reflect updated seasonal factors. The manufacturing payrolls series previously calculated and reported by this Bank was based upon the state personal income estimates compiled by the U.S. Department of Commerce. Because of changes in that series, the manufacturing income estimate currently reported includes proprietor’s income as well as labor income. Debits to Demand Deposit Accounts In s u re d C o m m e r c i a l B a n k s in t h e S i x t h D is t r ic t (In T h o u s a n d s o f D o lla r s ) Nov. 1975 Dec. 1975 Dec. 1974 Bartow-LakelandWinter Haven Daytona Beach . . Ft. LauderdaleHollywood . . . Ft. Myers . . . . Gainesville . . . Jacksonville . . . MelbourneTitusville-Cocoa Miami ................ O rlando................ Pensacola . . . . Sarasota . . . . Tallahassee . . . Tampa-St. Pete W Palm Beach . A lb a n y ................ A tla n ta ................ A ugusta................ Columbus . . . . Macon.................... Savannah . . . . 4,483,725 109,854 397,253 1,281,929 828,627 255,377 4,851,497r 110,416 447,417 1,395,695 802,317 253,101 + 27 + 17 + 11 + 15 + 15 + 4 + 19 + 6 + 8 +21 + 11 + 14 +22 +26 +22 + 14 + 15 + 13 . 1,013,432 511,906 772,218 393,294 909,201 440,892 +31 +30 + 11 + 16 + 6 + 6 . 2,471,944 410,262 284,158 . 5,851,607 1,994,372 347,040 226,050 5,275,290 2,085,361 384,107 281,356 5,238,135 +24 + 18 +26 + 11 + 19 + 7 + 1 + 12 + + 707,964 9,365,594 2,070,209 800,688 685,291 998,707 . 4,967,292 . 1,268,165 428,942 6,828,452 1,424,363 670,509 538,011 797,086 3,966,144 1,015,465 454,616 8,542,448 1,646,524 575,730 554,141 699,673 4,376,017 1,237,014 +65 + 56 + 4 +37 + 10 - 1 +45 +26 + 6 + 19 +39 + 17 +27 + 24 - 0 +25 +43 + 16 +25 + 14 + 5 +25 + 3 - 8 190,342 213,404 229,296 23,685,771 20,085,021 19,698,113 663,499 591,866 654,963 454,894 478,037 529,256 900,468r 916,070 756,840 1,037,448 861,070 1,292,972 +20 + 18 + 11 + 16 +21 +25 + 7 + 20 - 1 + 11 + 2 + 50 2 8 4 2 - 2 + 12 - 3 + 9 + 5 + 59 301,027 1,833,112 386,347 262,126 5,087,184 318,791 2,038,430 379,506 301,240 5,634,077r + 15 + 8 + 11 + 11 - 0 + 14 + 19 +21 +27 +21 + 6 + 9 +25 + 13 + 12 344,569 2,020,269 298,702 1,751,968 291,479 1,998,206 + 15 + 15 + 18 + 13 + 1 + 1 Chattanooga . . . . 1,338,255 1,702,443 Knoxville . . . . Nashville . . . . . 4,973,005 1,110,331 1,352,365 4,155,581 1,435,724 2,124,632 4,529,023 +21 + 26 +20 - 7 - 7 -2 0 -1 8 + 10 + 9 122,005 122,706 + 17 + 16 Alexandria . . Baton Rouge . Lafayette . . . . Lake Charles . . New Orleans . . 345,818 . . . 2,035,494 458,869 . 318,366 . . 6,356,194 Biloxi-Gulfport . . Jackson ................ OTHER CENTERS Anniston . . . . Dec. 1975 142,697 + 9 Nov. 1975 Dec. 1974 Dec. 1975 from Nov. Dec. 1975 1974 Year to date mos. 1975 From 1974 12 237,989 126,529 213,683 87,596 199,850 91,896 + 11 +44 +19 +38 Bradenton . . . Monroe County . O c a la ............... St. Augustine St. Petersburg . Tampa . . . . 184,049 99,269 240,567 50,702 . 1,126,511 . 2,637,691 165,354 98,300 203,679 37,957 945,593 2,154,610 221,643 142,663 193,201 42,633 995,423 2,239,918 + 11 + 1 + 18 +34 + 19 +22 -1 7 - 5 -3 0 + 1 +25 + 10 + 19 -1 5 + 13 + 0 + 18 + 12 Athens . . . . Brunswick . . . Dalton . . . . Elberton . . . Gainesville . . Griffin . . . . LaGrange . . . Newnan . . . . R o m e ................ Valdosta . . . 195,852 135,800 204,612 39,837 195,302 81,675 42,908 68,776 280,258 118,780 166,358 112,473 163,036 29,468 169,781 68,351 42,943 46,229 247,684 102,818 Abbeville . Bunkie . . Hammond . New Iberia Plaquemine Thibodaux . 19,452 18,009 97,395 109,923 20,594 70,079 Dothan Selma STANDARD METROPOLITAN STATISTICAL AREAS' Birmingham . , . 5,676,415 126,604 Gadsden . . . . 473.154 Huntsville . . . . 1,552,640 Mobile ................ Montgomery . . . . 1,009,018 291,516 Tuscaloosa . . . Percent Change Percent Change Year to Dec. date 1975 12 mos. from 1975 Nov. Dec. From 1975 1974 1974 . . . . . . . . + 3 + 2 169,010 + 18 119,634 +21 170,217 +26 27,659 +35 170,444 + 15 75,201 + 19 40,188 - 0 52,041 +49 150,522 + 13 121,697 +16 + 16 + 14 +20 +44 + 15 + 9 + 7 +32 +86 - 2 + 4 + 19 - 5 +24 + 10 - 5 -1 0 - 9 +26 + 2 17,767 18,655 86,721 87,005 21,015 58,564 23,680 16,891 106,149 98,642 29,400 66,750 + 9 - 3 + 12 +26 - 2 +20 -1 8 + 7 - 8 + 11 -3 0 + 5 + 8 + 13 + 13 +23 + 1 +50 173,481 92,259 144,711 72,156 156,133 79,036 129,230 61,739 141,083 79,785 137,611 70,106 + 11 + 17 + 12 + 17 +23 + 15 + 16 + 2 + 5 + 3 + 3 + 3 . . 175,709 100,178 59,556 164,446 92,786 39,353 156,048 79,348 55,189 + 7 + 13 + 5 + 8 +26 - 8 +51 + 8 + 4 Bristol . . . . Johnson City Kingsport . . . 162,396 188,652 406,064 127,869 164,758 328,015 146,893 159,114 309,715 +27 + 15 +24 + 11 + 19 +31 - 1 + 14 + 11 87,403,053r 95,848,458r +24 + 12 + 6 +21 +32 +20 +20 + 15 +22 + 12 + 16 + 16 + 10 + 7 - 1 + 13r + 1 +10 + 13 + 4 - 1 . . . . . . . Hattiesburg . Laurel . . . . Meridian . . Natchez . . . . PascagoulaMoss Point Vicksburg . . Yazoo City . . . . . . . . . DISTRICT TOTAL . . 108,026,715 Alabama . . . Florida . . . . Georgia . . . . Louisiana2 . . . Mississippi- . . Tennessee2 . . . 12,798,074 10,539,330 35,211,792 26,773,786 32,633,604 27,266,102 9,465,968r . 11,355,351 . 4,135,277 3,605,268 . 11,892,617 9,752,599 ll,062,521r 30,460,765 28,142,550r 10,311,731 3,870,559 12,000,332 ■Conforms to SMSA definitions as of December 31, 1972. 2District portion only, r-revised Figures for some areas differ slightly from preliminary figures published in "Bank Debits and Deposit Turnover" by the Board of Governors of the Federal Reserve System. F E D ER A L R ESER V E BAN K O F A TLA N TA 31 District Business Conditions — 10 1 — 250 — 150 A/ — 350 - 6 /v — 42 — 150 — 38 1 111111 r n r 1976 *Se as. adj. fig ure; not an index Late st plotting: Decem ber, except mfg. production and farm cash receipts, Nov. Favorable signs dominate the news from the region's economy. Employment and m anufacturing incomes increased. Both loan demand and savings deposits rose as banks' reserve positions eased. Departm ent store sales increased. The good news is tempered by faltering new car registrations and construction contracts and the farm sector's higher prices and low er incomes. Nonfarm em ploym ent rose moderately in Decem ber for the fourth straight m onth; the unem ploy m ent rate was unchanged. M ajor job increases were in manufacturing, where strong gains in fabricated metals and printing and publishing more than offset losses in prim ary metals and stone, clay, and glass. Led by Florida, Louisiana, and Mississippi, construct io n job gains were the strongest since an upward trend began in September. Nonmanufacturing em ploym ent was unchanged. The factory w orkw eek moved back up to its October level after dropping in November. The value of construction contracts retreated further in December, w ith both residential and nonresidential sectors losing ground. The losses were w idely distributed. December completed a year of almost uninterrupted large inflows at sav ings and loan associations. Interest rates on resi dential mortgages continued their slow decline. Manufacturing incomes increased substantially in November, but tw o m ajor components of consump tion spending showed divergent movements. D e partment store sales posted a very large gain. However, new auto registrations and auto credit extended by banks slipped. Bank purchases of dealer autom obile paper declined further. Home improvem ent loans continued to rebuild, w hile m obile home and personal loan extensions fell. 32 Most large Atlanta banks w ere posting a 63 /4percent prime lending rate in late January; however, banks in the District's other large cities were gen erally at 7 percent or higher. Loan demand strength ened during December and was concentrated at the larger banks in both business and securities loans. Continuing rapid savings deposit growth was paced by a gain of nearly $100 m illio n in business savings accounts during the first two months they were offered. District member banks' reserve posi tions eased some more, causing a further reduction in both discount activity and net Federal funds purchases. Prices received by farmers rose in December, as increases in citrus and vegetable prices m ore than offset declines for most other crops. Prelim inary data for January indicate that sharp increases in prices of eggs, fats, and oils have interrupted the downward trend in spot market prices of foodstuffs. Cum ulative farm cash receipts through November of 1975 were sharply low er than the comparable 1974 level in Mississippi and Tennessee; reduced crop income slowed growth of cash receipts in other states. Farmers plan to increase acreage of cotton and corn but to reduce soybean plantings in 1976. W heat acreage is down slightly, but im proved yields are expected to increase total produc tion. M A RC H 1976, M O N T H L Y R E V IE W
