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In T h i s Is s u e :
Southeastern Banking in Recession
and Recovery
The Growth of District Member Bank
Employment, Offices, and Salaries
District Business Conditions

M O N T H L Y R E V I E W
Fe d e ra l R e s e r v e B a n k o f A tla n ta
Federal Reserve Bank Of Atlanta
Federal Reserve Station
Atlanta, Georgia 30303
Address Correction Requested




1 9 7 6
O c to b e r
BU LK RATE
U .S . P O S T A G E

PAID
A t la n t a , G e o r g ia
P e rm it N o . 2 9 2

S u b s c r ip t io n

R e n e w

E x p ir e s -

a l In f o r m

a t io n

B e lo w

Dear Subscriber:
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Z ip C ode

134




O C T O B E R 1 9 7 6 , M O N T H L Y R EVIEW

T h e G ro w th

o f D is tric t

M e m b e r B a n k E m p lo y m e
O f f i c e s , a n d S a la rie s
by John M. Godfrey and Richard B. Lupton
D u r in g the early Seven tie s, e m p lo y m e n t at Sixth D istric t m e m b e r b a n k s incre a se d
at an a ve rag e a n n u a l rate o f m o re than 6 p e rce n t a n d total b a n k w a g e s a n d
salarie s rose at an a n n u a l ave rage o f nearly 13 percent. T h is g ro w th p a ra lle le d the
increase in n e w b a n k offices. T he recent recession , h o w e v e r, sh a rp ly cu rtaile d
the e x p a n sio n o f b a n k p ay ro lls, as p ro fits c a m e u n d e r severe pressure. T he
rise in n e w e m p lo y e e s s lo w e d in 1974, a n d total b a n k e m p lo y m e n t a ctu a lly
d e c lin e d in 1975. T otal b a n k salarie s in 1975 g re w at less than o n e -h a lf the
rate o f the early Seven tie s, a n d the g ro w th o f n e w b a n k o ffic e s a lso slo w e d .
L o o k in g back, e m p lo y m e n t at Sixth D istric t m e m b e r b a n k s g re w rap idly, m a k in g
b a n k in g a real “ g r o w t h " in d u stry in term s o f jo bs. T h e a ve rage a n n u a l rate
th ro u g h 1974 w a s a p p ro x im a te ly 6.2 percent, u p 34.9 p erce n t b e tw e e n D e c e m b e r
1969 an d D e c e m b e r 1974 (see T a b le 1 -A ).1 T h ro u g h 1974, jo b s at Sixth D istric t
m e m b e r b a n k s in cre a se d n early 50 p erce n t faster than the D istric t states' total
n o n fa rm e m p lo y m e n t (in c lu d in g the n o n -S ix th D istric t p o rtio n s o f Lo u isian a,
M is s is s ip p i, a n d T en ne sse e). In 1975, the severe p re ssu re to re d u ce e x p e n se s cut
b a c k e m p lo y m e n t at D istric t ban ks. B a n k in g jo b s d e c lin e d m o re sh a rp ly in 1975
than d id total n o n fa rm e m p lo y m e n t, re fle ctin g the severe effect o f the recession
o n the Sixth D istric t b a n k in g industry.
Sixth D istric t b a n k jo b s g re w u n e v e n ly th r o u g h 1974. F lorid a an d A la b a m a h ad
the h ig h e st g ro w th rate; the Sixth D istric t p o r tio n s o f T e n n e sse e a n d L o u isia n a
h ad the slo w e st (see T a b le 1-A ).
T he g ro w th rates in b a n k in g e m p lo y m e n t varie d a c c o r d in g to the size o f the
bank. “ O t h e r " b a n k s (sm all a n d m e d iu m ) e x p a n d e d e m p lo y m e n t an ave rage
7.7 p erce n t th ro u g h 1974 (see T a b le 1 -C ). Large ban ks, w h ic h in c lu d e the 32
w e e k ly re p o rtin g ban ks, a d d e d jo b s at an ave rage 4.4 p erce n t th ro u g h 1974
(see T a b le 1-B). T hus, the h igh g ro w th rate for all D istric t b a n k s th ro u g h 1974
resulte d m o stly fro m ra p id ly e x p a n d in g jo b s in these sm a lle r banks.
'These employment data were obtained from the annual December Call Report and are end-of-the-year
employment totals.

Note:

John Godfrey is a Senior Financial Economist and Richard Lupton is a Senior
Research Assistant in the Research Department at the Federal Reserve Bank of
Atlanta.

Monthly Review, Vol. LXI, No. 9. 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 Review, 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.
FEDERAL RESERVE BANK OF ATLANTA




135

T a b le

1 -A

E m p l o y m e n t in D i s t r i c t M e m b e r B a n k s

State
Alabama
Florida
Georgia
Louisiana*
Mississippi*
Tennessee*
Total

1969

1970

1971

1972

1973

1974

1975

7,949
17,885
12,020
6,062
2,830
7,098
53,844

8,380
18,452
13,282
6,113
2,903
7,246
56,376

8,666
19,221
13,701
6,375
2,990
7,505
58,458

9,236
21,322
14,277
6,873
3,186
7,972
62,866

9,845
24,065
15,990
7,490
3,613
8,679
69,682

10,959
24,880
16,137
7,772
3,824
9,087
72,659

10,291
23,994
15,261
7,930
3,783
9,087
70,346

P e r c e n t C h a n g e O v e r P r e v io u s Y e a r

1970

Alabama
Florida
Georgia
Louisiana*
Mississippi*
Tennessee*
Total

1971

1972

1973

1974

1975

5.4
3.2
10.5
1.0
2.6
2.1
4.7

10.3

6.6
10.9
4.2
7.8
6.6
6.2
7.5

6.6
12.9
12.0
9.0
13.4
8.9
10.8

11.3
3.4
1.0
3.8
5.8
4.7
4.3

-6.1
-3.6
-5.4
2.0
- 1.1
0.0
-3.2

4.2

3.2
4.3
3.0
3.6
3.7

‘ District portion only
Source: December Call Report of Condition

D istric t b a n k jo b s g re w m u c h m o re s lo w ly in
1974. T h is w a s p a rtic u la rly n o tic e a b le at the large
b a n k s (see T a b le 1-B). G r o w th a lso slo w e d at the
" o t h e r " ban ks, th o u g h n ot as m u c h (see T a b le 1 -C ).
T h is 1974 s lo w d o w n set the stage for the c o n tra c tio n
in the f o llo w in g y ear as p ro fits tu rn e d into actual
lo sse s fo r m a n y ban ks.
Jobs d e c lin e d d u r in g 1975 as b a n k s w e re beset by
actual lo sse s o r sh a rp ly re d u c e d profits. D istric t
b a n k s h ave taken m a n y m e a su re s to im p ro v e profits
sin ce the recession . Faced w ith w e a k lo an d e m a n d ,
they h a ve a d d e d large v o lu m e s o f T re asu ry
se curities. H o ld in g s o f tax-e x e m p t m u n ic ip a ls have
been p are d d o w n . Still, the se m e a su re s fo c u s m a in ly
o n raisin g re ve n u e s a n d n o t o n r e d u c in g expenses.
C u t tin g e m p lo y m e n t w a s an e x p e d ie n t w a y to
im p ro v e profits. Large b a n k s re d u c e d e m p lo y m e n t
3.5 p erce n t; " o t h e r " b a n k s cut b a c k jo b s slig h tly
less. T h e sm a lle st b a n k s (u n d e r $10 m illio n in
d e p o sits) w e re the m o st affe cted b y re d u c e d
p ro fita b ility ; p ro fits at m e d iu m b a n k s d id n o t su ffer
as great an e ro sio n , so that the p re ssu res o n " o t h e r "
b a n k s as a w h o le w e re m itigated.
T h e e m p lo y m e n t p re ssu re s o n the b a n k in g
in d u stry v arie d b y state. L o u isia n a 's m e d iu m a nd
sm all D istric t b a n k s a d v a n c e d 3.1 p e rce n t (see
T a b le 1-A ). H o w e v e r, L o u isia n a 's b a n k s had
relatively stab le p ro fits in 1975 a n d w e re n ot u n d e r
severe p re ssu re as w e re o th e r D istric t banks.
Jobs at A la b a m a 's large b a n k s rose a stro n g 9.1
p e rce n t in 1975 (see T a b le 1-B). Profits at A la b a m a 's
largest b a n k s (d e p o sits o v e r $100 m illio n ) d r o p p e d
o n ly slig h tly lo w e r in 1975 fro m 1974, a g o o d
p e rfo rm a n c e c o m p a r e d to sim ila r b a n k s in m o st
oth e r Sixth D istric t states. O n the o th e r hand,
A la b a m a 's sm a lle r b a n k s cu t b a c k jo b s b y 16.3

136




perce n t in 1975, as p ro fita b ility p lu n g e d d u r in g 1975
(see T a b le 1 -C ).
F lo rid a 's large b a n k s a lso cu t b a c k jo b s
sig n ific a n tly (11.1 percen t) in 1975 as p ro fits
d e c lin e d sh a rp ly (see T a b le 1-B). P rofits at F lo rid a 's
" o t h e r " b a n k s a lso c o n tra c te d in 1975, b u t
e m p lo y m e n t fell o n ly slig h tly (see T a b le 1-C ).
G e o r g ia a n d T e n n e sse e b a n k s refle cted the sa m e
ge n e ral tre nd as in Florida. P rofits w e re lo w e r d u r in g
1975; h o w e v e r, e m p lo y m e n t w a s re d u c e d m o re
se verely at large b a n k s than at " o t h e r " b a n k s (see
T a b le s 1-B a n d 1 -C ).

B a n k in g O f f ic e s

B a n k jo b s g re w a lo n g w ith n e w D istric t b a n k in g
office s, w h ic h in c lu d e m a in offic e s, b ra n c h e s, an d
facilities. D istric t m e m b e r b a n k in g o ffic e s in c re a se d
ra p id ly fro m June 1970 th r o u g h 1974. T h e g ro w th
rate slo w e d c o n s id e r a b ly in 1975 w h e n p ro fits w ere
sq u e e z e d (see T a b le 2-A ).
T he n u m b e r o f n e w Sixth D istric t b a n k in g o ffic e s
fro m June 1970 th r o u g h 1974 rep rese nts sig n ific a n t
ove ra ll gro w th . Bo th G e o r g ia 's a n d M is s is s ip p i's
D istric t b a n k in g o ffic e s in c re a se d m o st rap id ly ;
T e n n e sse e 's g ro w th w a s slo w e st. G e o r g ia an d
F lorida re c o rd e d m o st o f the D istric t's a b so lu te
gro w th (see T a b le 2-A ). M a n y o f G e o r g ia 's n e w
o ffic e s w e re the result o f the n e w c o u n t y w id e
b r a n c h in g a u th o rity gra n te d in 1971.
Large D istric t b a n k s a d d e d b ra n c h e s a n d facilitie s
from June 1970 th r o u g h 1974 at a faster rate
relative to the " o t h e r " b a n k s (see T a b le 2-B).
G e o r g ia 's large b a n k o ffic e s a lm o s t d o u b le d d u r in g
this p eriod .

O C T O B E R 1976, M O N T H L Y R E V IE W

T a b le 1 -B
E m p l o y m e n t in M e m b e r W e e k l y R e p o r t i n g B a n k s

1969

1970

1971

1972

1973

1974

1975

3,461
4,994
7,578
2,541
1,704
5,058
25,336

3,646
4,716
8,908
2,497
1,585
5,157
26,509

3,694
4,760
8,955
2,527
1,590
5,238
26,764

3,953
4,986
9,301
2,665
1,641
5,646
28,192

4,169
5,544
10,340
2,814
1,734
6,304
30,905

4,404
5,494
10,407
2,781
1,874
6,452
31,412

4,803
4,884
9,630
2,782
1,897

1970

1971

1972

1973

1974

1975

Alabama
5.3
1.3
Florida
-5.6
1.0
Georgia
17.6
1.0
Louisiana*
-1.7
1.2
Mississippi*
-7.0
0.3
Tennessee*
2.0
1.6
Total
4.6
1.0
‘ District portion only
Source: December Call Report of Condition

7.0
4.7
3.9
5.5
3.2
7.8
5.3

5.5
11.1
11.2
5.6
5.7
11.7
9.6

5.6
-1.0
1.0
- 1.2
8.1
2.3
1.6

9.1
-11.1
- 7.5
0.0
1.2
- 2.3
- 3.5

State
Alabama
Florida
Georgia
Louisiana*
Mississippi*
Tennessee*
Total

6,304

30,300

P e r c e n t C h a n g e O v e r P r e v io u s Y e a r

T a b l e 1 -C
E m p l o y m e n t in M e m b e r B a n k s O t h e r T h a n W e e k l y R e p o r t i n g B a n k s

1969

1970

1971

1972

1973

1974

1975

4,488
12,891
4,442
3,521
1,126
2,040
28,508

4,734
13,736
4,374
3,616
1,318
2,089
29,867

4,972
14,461
4,746
3,848
1,400
2,267
31,694

5,283
16,336
4,976
4,208
1,545
2,326
34,674

5,676
18,521
5,650
4,676
1,879
2,375
38,777

6,555
19,386
5,730
4,991
1,950
2,635
41,247

5,488
19,110
5,631
5,148
1,886
2,783
40,046

1970

1971

1972

1973

1974

1975

Alabama
5.5
5.0
Florida
6.6
5.3
Georgia
- 1.5
8.5
2.7
6.4
Louisiana*
Mississippi*
17.1
6.2
2.4
Tennessee*
8.5
4.8
6.1
Total
♦District portion only
Source: December Call Report of Condition

6.3
13.0
4.8
16.4
10.4
2.6
9.4

7.4
13.4
13.5
11.1
21.6
2.1
11.8

15.5
4.7
1.4
6.7
3.8
10.9
6.4

-16.3
- 1.4
- 1.7
3.1
- 3.3
5.6
- 2.9

State
Alabama
Florida
Georgia
Louisiana*
Mississippi*
Tennessee*
Total

P e r c e n t C h a n g e o v e r P r e v i o u s P e r io d

N e w o ffic e s o f " o t h e r " b a n k s in c re a se d m o re
s lo w ly fro m June 1970 th ro u g h 1974 than th o se o f
large ban ks. H o w e v e r, the a ve rag e a n n u a l gro w th
rate w a s still fairly h igh . T h e n u m b e r o f n e w
o ffic e s at " o t h e r " b a n k s g r e w ra p id ly in several
D istric t states. M is s is s ip p i a n d G e o r g ia b o th g re w
sig n ific a n tly ; T e n n e sse e 's " o t h e r " b a n k s w e re
c o m p a r a tiv e ly le th a rgic (see T a b le 2-C ).
T h e n u m b e r o f D istric t b a n k o ffic e s in crease d
m u c h m o re s lo w ly d u r in g 1975. F lo rid a b a n k s still
in c re a se d ra p id ly b u t m o re s lo w ly than in 1974.
M is s is s ip p i D istric t b a n k s a d d e d o n ly o n e o ffic e in
1975; G e o r g ia 's b a n k in g o ffic e s a lso g re w
sig n ific a n tly less in 1975. H o w e v e r, A la b a m a 's a n d
L o u isia n a 's D istric t b a n k s in c re a se d their g ro w th
rate in 1975 (see T a b le 2 -A ).

FEDERAL RESERVE BANK OF ATLANTA




Large b a n k o ffic e s a c tu a lly g re w at a b o u t the
sa m e rate in 1975 as in 1974; h o w e v e r, this c a m e
after the very sh a rp s lo w d o w n in large b a n k o ffic e s
d u r in g 1974 (see T a b le 2-B). M is s is s ip p i's large b a n k
o ffic e s g re w at o n ly o n e -th ird the 1974 rate.
F lo rid a 's large b a n k o ffic e s e x p a n d e d w h e n b ra n c h
b a n k in g rules w e re lib e ra liz e d slig h tly (see
T a b le 2-B).
T h e d e c re a se d g r o w th rate o f " o t h e r " b a n k
o ffic e s in F lo rid a a n d G e o r g ia s lo w e d o ve rall
g ro w th d u r in g 1975. B a n k s in A la b a m a a n d
T e n n e sse e h ad o n ly slig h tly less g ro w th in 1975;
M is s is s ip p i s h o w e d a net re d u ctio n . Iro n ic a lly ,
M is s is s ip p i's " o t h e r " b a n k s g re w the fastest fro m
June 1970 th r o u g h 1974. L o u isia n a 's " o t h e r " b a n k s
g re w faster in 1975 than in 1974.

137

T a b le 2 -A
B a n k O f f ic e s , B r a n c h e s , a n d F a c i l i t i e s o f D i s t r i c t M e m b e r B a n k s

S tate

1968**
2 82
222
264
193
117
257

1970**

1971

1972

1973

1974

1975

329
241
344
21 8
1 39
302
1,573

3 48
2 57
378
2 32
151
315
1,681

369
2 85
423
249
171
320
1,817

39 7
3 42
458
262
193
342
1,994

429
394
469

1,335

3 07
2 35
2 73
200
128
279
1,422

1970

1971

1972

1973

1974

1975

A la b a m a
8.9
7.2
F lo rid a
2.6
5.9
G e orgia
3.4
26.0
L o u is ia n a *
9.0
3.6
9 .4
M is s is s ip p i*
8.6
T e n n e sse e *
8.6
8.2
Total
10.6
6.5
‘ D ist ric t p ortion o n ly
* * A s of J u n e
S o u rc e : D e c e m b e r C all R e p o rt of C o n d itio n

5.8
6.6
9.9
6.4
8.6
4.3
6.9

6.0
10.9
11.9
7.3
13.2
1.6
8.1

7.6
20.0
8.3
5.2
12.9
6.9
9.7

8.1
15.2
2.4
7.3
0.5
5.6
6.7

A la b a m a
F lo rid a
G e orgia
L o u is ia n a *
M is s is s ip p i*
T e n n e ss e e *
Total

281
19 4
361
2 ,1 2 8

P e r c e n t C h a n g e o v e r P r e v i o u s P e r io d

T a b le 2 -B
B a n k O f f ic e s , B r a n c h e s , a n d F a c i l i t i e s o f M e m b e r W e e k l y R e p o r t i n g B a n k s

S tate

1968**

A la b a m a
Flo rida
G e orgia
L o u is ia n a *
M is s is s ip p i*
T e n n e sse e *
Total

65
14
108

1970**
71
14
115

42

45

43
1 02
374

52
114
4 11

1971

1972

1973

1974

1975

78
14
162
48
54
129
485

82
14
18 4
53
58
143
534

91
14
219
54
60
14 8
586

94
14
216
57
68
155
604

99
19
21 5
61
71
161
626

P e r c e n t C h a n g e o v e r P r e v i o u s P e r io d

1970

1972

1973

1974

1975

9.2
0.0
6.5
7.1
20.9
11.8
9.9

A la b a m a
Flo rida
G e orgia
L o u is ia n a *
M is s is s ip p i*
T e n n e ss e e *
Total

1971
9.9
0.0
40.9
6.7
3.8
13.2
18.0

5.1
0.0
13.6
10.4
7.4
10.9
10.1

11.0
0.0
19.0
1.9
3.4
3.5
9.7

3.3
0.0
- 1.4
5.6
13.3
4.7
3.1

5.3
35.7
- 0.5
7.0
4.4
3.9
3.6

‘ D istric t p ortion o n ly
* * A s of J u n e
So u rc e : D e c e m b e r C all R e p o rt of C o n d itio n

T a b l e 2 -C
B a n k O ff ic e s , B r a n c h e s , a n d F a c ilit ie s o f D is t r ic t M e m b e r B a n k s O t h e r T h a n W e e k ly
R e p o r t in g B a n k s

S tate

1968**

A la b a m a
Flo rid a
G e orgia
L o u is ia n a *
M is s is s ip p i*
T e n n e sse e *
Total

21 7
208
156
151
74
155
961

1970**
2 36
221
158
155
76
165
1,011

1971

1972

1973

1974

1975

251
227
182
170
85
173
1,088

266
24 3
1 94
179
93
172
1,147

278
271
204
195
111
172
1,231

30 3
32 8
242
20 5
125
187
1,390

33 0
37 5
25 4
220
123
20 0
1,502

P e r c e n t C h a n g e o v e r P r e v i o u s P e r io d

1970
A la b a m a
Flo rida
G e orgia
L o u is ia n a *
M is s is s ip p i*
T e n n e sse e *
Total
‘ D istric t portion o n ly
“ A s of J u n e
S o u rc e : D e c e m b e r C all

138

1971

1972

1973

1974

1975

8.8
6.3
1.3
2.6
2.7
6.5
5.2

6.4
2.7
15.2
9.7
11.8
4.8
7.6

6.0
7.0
6.6
5.3
9.4
- 0.6
5.4

4.5
11.5
5.2
8.9
19.4
0.0
7.3

9.0
21.0
18.6
5.1
12.6
8.7
12.9

8.9
14.3
5.0
7.3
-1 .6
7.0
8.1

R e p o rt of C o n d itio n




O C T O B ER 1976, M O N T H L Y REVIEW

T a b le 3 -A
S a la r ie s a n d W a g e s P a id b y D is t r ic t M e m b e r B a n k s
($ t h o u s a n d s )

1969

1970

1971

1972

1973

1974

1975

45,545
103,793
79,993
3 7 ,607
16,138
3 9 ,7 7 9
3 22,855

50,668
118,761
9 2 ,6 0 8
41,493
18,290
45,367
3 6 7 ,1 8 7

55,948
128 ,6 5 9
103,671
4 4,1 4 6
19,568
49,1 7 5
40 1 ,1 6 7

62,961
146,407
115,332
48,4 9 8
2 1 ,359
54,101
4 4 8 ,6 5 8

6 7 ,9 9 8
170,201
132,994
53,976
25,028
60,631
51 0 ,8 2 8

78,661
197,889
151,625
60,103
27,559
6 8 ,1 3 4
583,971

8 8 ,0 7 9
2 0 7 ,7 8 4
150,033
66,151
3 0,6 1 8
7 6,1 3 6
6 18,801

1970

S tate
A la b a m a
Flo rida
G e orgia
L o u is ia n a *
M is s is s ip p i*
T e n n e ss e e *
Total

1971

1972

1973

1974

1975

11.2
14.4
15.8
10.3
13.3
14.0
13.7

10.4
8.3
11.9
6.4
7.0
8.4
9.3

12.5
13.8
11.2
9.9
9.2
10.0
11.8

8.0
16.3
15.3
11.3
17.2
12.1
13.9

15.7
16.3
14.0
11.4
10.1
12.4
14.3

12.0
5.0
10.0
10.1
11.1
11.7
6.0

P e r c e n t C h a n g e o v e r P r e v i o u s P e r io d

A la b a m a
Flo rida
G e orgia
L o u is ia n a *
M is s is s ip p i*
T e n n e ss e e *
Total

♦ D istric t p ortion o n ly
S o u rc e : R ep o rt of In c o m e

Salaries a n d W a g e s
T h e g ro w th in sa larie s an d w a g e s p a id b y Sixth
D istric t m e m b e r b a n k s th r o u g h 1974 p ara lle le d the
D istric t's rap id gro w th in jo b s a n d b a n k in g offices.
T otal salarie s a n d w a g e s g re w at a very fast 12p e rce n t a ve rage a n n u a l rate th ro u g h 1974, m o re
rap id ly than total b a n k e m p lo y m e n t. T h is im p lie s
that a ve rage b a n k salarie s w ere a lso in c re a sin g a nd
at a faster rate than inflation. T h e p ro fit sq u e e ze
in 1975 c a u se d b a n k s to red uce jo bs, s lo w in g
salarie s a n d w a g e s to less than h alf 1 9 7 4 's gro w th

M is s is s ip p i gre w very rap id ly th ro u g h 1974. T h e y
gre w su b sta n tia lly in all states, h o w e v e r, w h ic h
e x p la in s the very h igh D istric t o v e rall g ro w th rate
for the p e rio d (see T a b le 3-C).
B a n k s' total salarie s g re w fastest d u r in g 1974,
w h e n they a d v a n c e d 14.3 percent. In 1974, b a n k s
raised salarie s in o rd e r to c o m p e n sa te e m p lo y e e s for
rap id inflation. S in c e total b a n k e m p lo y m e n t g re w
o n ly 4.3 p erce n t w h ile salarie s w ere u p o v e r 14 p e r­
cent, ave rage salarie s w o u ld have a d v a n c e d a b o u t 10
percent. T h is is slig h tly less than the in fla tio n rate

(see T a b le 3-B).
Sala rie s a n d w a g e s p aid b y “o t h e r " b a n k s gre w

a n d im p lie s that b a n k e m p lo y e e s d id n o t retain real
p u r c h a s in g p o w e r d u r in g the w o rst o f the inflatio n.
A fte r the sp u rt in 1974, salary a n d w a g e g ro w th
s lo w e d in 1975 in the m id st o f the recession. The
1975 increase represents a su b sta n tial re d u c tio n in
the D istric t g ro w th rate (see T a b le 3-A ). Florida, the
state w ith the stro n g e st g ro w th th ro u g h 1974, h ad
the w e a k e st d u r in g 1975. O n ly M is s is s ip p i's D istric t
b a n k s had a h igh e r g ro w th rate in 1975 than in 1974
(see T a b le 3-A).
T he gro w th rate in salarie s a n d w a g e s at large
b a n k s d r o p p e d sh a rp ly in 1975. F lo rid a 's a n d
G e o r g ia 's b a n k s s h o w e d an actual red uction .
Pa yro lls at G e o r g ia 's large ban ks, w h ic h g re w the
m o st th ro u g h 1974, w e re re d u c e d m o st d u r in g 1975
b y dra stic jo b c u tb a c k s (see T a b le 3-B). T h is is
a ga in c o n siste n t w ith ove ra ll c h a n g e s in tho se

faster than th o se o f the large b a n k s a n d at a h igh e r
a ve rag e a n n u a l rate th ro u g h 1974 than that fo r jo b s
o r n e w b a n k in g o ffic e s (see T a b le 3-C). Salaries and
w a g e s p a id by " o t h e r " b a n k s in F lorid a a n d

states' b a n k e m p lo y m e n t a n d b a n k p ro fit pressures.
T h e recession d id n ot affect " o t h e r " D istric t
b a n k s as se verely as it d id large banks. A lth o u g h
the gro w th rate w a s re d u c e d sig n ific a n tly d u r in g

(see T a b le 3-A).
Sixth D istric t b a n k p a y ro lls g re w sig n ific a n tly
fro m 1969 th ro u g h 1974. F lorida a n d G e o r g ia both
a lm o s t d o u b le d salarie s a n d w a g e s p aid d u r in g this
five -y e a r p e rio d (see T a b le 3-A). T h is g ro w th is
c o n siste n t w ith rapid increase s in b a n k in g office s
a n d jobs. Pa yro lls gre w least at L o u isia n a 's D istric t
banks.
Salaries a n d w a g e s p a id b y large D istric t b a n k s
in cre a se d at a rap id a n n u a l ave rage rate th ro u g h
1974. T h e gro w th o f salaries an d w a g e s at G e o r g ia 's
large b a n k s far o u tstrip p e d that o f o th e r D istric t
ban ks. T h e Sixth D istric t p o rtio n s o f L o u isia n a and
M is s is s ip p i registered the slo w e st p ay ro ll gro w th

FEDERAL RESERVE BANK OF ATLANTA




139

T a b le 3 -B
S a la r ie s a n d W a g e s P a id b y M e m b e r W e e k ly R e p o r t in g B a n k s
($ t h o u s a n d s )
State
A la b a m a
F lo rid a
G e orgia
L o u is ia n a *
M is s is s ip p i*
T e n n e ss e e *
Total

1969

1970

1971

1972

1973

1974

1975

20,243
29,4 3 8
54,5 1 0
16,198
9,430
28,875
1 58,694

22,246
3 1 ,8 2 9
64,933
17,785
10,313
32,9 9 9
180,105

2 4 ,6 7 4
33,273
73,0 0 6
18,693
10,841
3 5 ,4 4 8
195,935

28,3 8 0
36,337
8 0 ,758
2 0 ,2 8 9
11,403
39,773
2 1 6 ,9 4 0

29,871
39,8 1 5
9 2 ,0 8 0
21,871
1 2 ,499
4 5 ,2 0 0
2 4 1 ,3 3 6

33,9 9 0
46,0 5 7
105,395
23,9 0 7
14,061
4 9 ,4 5 9
2 7 2 ,8 6 9

3 8 ,6 5 9
4 4 ,9 0 9
1 01,202
2 5 ,6 2 4
15,464
5 4 ,4 0 7
2 8 0 ,2 6 5

P e r c e n t C h a n g e o v e r P r e v io u s P e r io d

1970

1971

1972

1973

1974

1975

9.9
A la b a m a
8.1
Flo rida
19.1
G e orgia
9.8
L o u is ia n a *
9.4
M is s is s ip p i*
T e n n e sse e *
14.3
Total
13.5
♦ D ist ric t p ortion o n ly
S o u rc e : R e p o rt o f In c o m e

10.9
4.5
12.4
5.1
5.1
7.4
8.8

15.0
9.2
10.6
8.5
5.2
12.2
10.7

5.3
9.6
14.0
7.8
9.6
13.6
11.2

13.8
15.7
14.5
9.3
12.5
9.4
13.1

13.7
-2 .5
-4 .0
7.2
10.0
10.0
2.7

T a b l e 3 -C
S a la r ie s a n d W a g e s P a id b y O t h e r T h a n W e e k ly R e p o r t in g B a n k s
($ t h o u s a n d s )
State
A la b a m a
F lo rida
G e orgia
L o u is ia n a *
M is s is s ip p i*
T e n n e sse e *
Total

1969
2 5 ,3 0 2
74,355
25,4 8 3
2 1 ,4 0 9
6,708
10,904
164,161

1971

1972

1973

1974

1975

3 1 ,2 7 4
95,3 8 6
3 0 ,6 6 5
25,453
8,727
13,727
20 5 ,2 3 2

3 4 ,581
1 10,070
34 ,5 7 4
28,2 0 9
9,956
14,328
2 3 1 ,7 1 8

3 8 ,1 2 7
130 ,3 8 6
4 0 ,9 1 4
3 2 ,105
12,529
15,431
2 6 9 ,4 9 2

44,6 7 1
1 5 1 ,8 3 2
4 6 ,2 3 0
3 6 ,1 9 6
13,4 9 8
18,675
3 1 1 ,1 0 2

4 9 ,4 2 0
1 62,875
4 8 ,831
4 0 ,5 2 7
15,1 5 4
21 ,7 2 9
3 3 8 ,5 3 6

1970
2 8 ,422
86,932
27,675
2 3 ,708
7,977
12,368
187,082

P e r c e n t C h a n g e o v e r P r e v io u s P e r io d

1970

1971

1972

1973

1974

1975

A la b a m a
12.3
Flo rida
16.9
G e o rgia
8.6
L o u is ia n a *
10.7
M is s is s ip p i*
18.9
T e n n e ss e e *
13.4
Total
14.0
♦ D ist ric t portion o n ly
S o u rc e : R e p o rt o f In c o m e

10.0
9.7
10.8
7.4
9.4
11.0
9.7

10.6
15.4
12.7
10.8
14.1
4.4
12.9

10.3
18.5
18.3
13.8
25.8
7.7
16.3

17.2
16.4
13.0
12.7
7.7
21.0
15.4

10.6
7.3
5.6
12.0
12.3
16.4
8.8

1975, o th e r b a n k s ' salarie s a n d w a g e s d id increase
in all states o v e r 1974 (see T a b le 3-C).
Salaries a n d w a g e s at M is s is s ip p i's " o t h e r "
D istric t b a n k s c o n tin u e d their stro n g u p su rg e
d u r in g 1975. In Florida, p a y ro lls at "o t h e r b a n k s "

140




gre w at o n ly h a lf their 1975 rate, w h ic h h a d be en
h igh e st in the D istrict. G e o r g ia 's " o t h e r " b a n k s a lso
cu t the g r o w th o f sa larie s a n d w a g e s in h a lf a n d
registe re d the least g r o w th o f a n y o f the D istric t's
" o t h e r " b a n k s d u r in g 1975 (see T a b le 3-C ). ■

O C T O B E R 1976, M O N T H L Y RE V IEW

S o u th e a s te rn

B a n k in g in

R e c e s s io n a n d R e c o v e r y
by Stuart G. Hoffman and Richard A. Hendrix
In re sp o n se to flu c tu a tio n s in e c o n o m ic a n d fin a n c ial c o n d itio n s, c o m m e rc ia l
b a n k s restructure their b a la n c e sheets th ro u g h internal asset a n d lia b ility
m a n a ge m e n t. T h is re stru ctu rin g reflects m a n a g e m e n t's th in k in g as h o w best
to a d a p t to the c h a n g in g e c o n o m ic e n v ir o n m e n t in w h ic h the b a n k s m u st
operate. T h e b a la n c e sheet restru ctu rin g that o c c u rre d at Sixth D istric t m e m b e r
b a n k s d u r in g the m o st recent re ce ssio n ary p e rio d a n d the curren t recovery
to date (June 1976) is the fo c u s o f this study.
A fter the n a tio n 's m o st recent (u n official) b u sin e ss c ycle p e a k in N o v e m b e r
1973, real e c o n o m ic activity d e c lin e d th ro u g h M a r c h 1975. T h e D istric t's
e c o n o m ic activity tu rn in g p o in ts c o in c id e d w ith the n atio n a l e c o n o m ic cycle.
By c o m p a r in g Sixth D istric t m e m b e r b a n k b a la n c e sheet data in M a r c h 1975
to D e c e m b e r 1973, o n e can d r a w in fe re n ce s o f b a n k asset an d lia b ility
restru ctu rin g d u r in g the recession . June 1976 b a la n c e sheet data, c o m p a r e d
w ith M a r c h 1975, are u sed to h ig h lig h t b a n k asset a n d lia b ility restru cturin g
d u r in g the initial stage o f the curren t recovery. T h is a n a ly sis is facilitate d by
fo r m u la tin g a so u rc e s a n d uses o f fu n d s statem en t b o th for large a n d for oth er
m e m b e r b a n k s in each o f the tw o se le cte d tim e p eriods.
It is im p o rta n t to e m p h a siz e that n o a tte m p t is m a d e here to c o m p a r e
D istric t b a n k b e h a v io r in the curren t cyc le w ith that in p re v io u s re c e ssio n /
recovery p e rio d s. A ctu a lly , it is q u ite likely that D istric t b a n k b a la n c e sheet
restru ctu rin g fro m D e c e m b e r 1973 to June 1976 differs from that in p re v io u s
b u sin e ss cyc le s for several reasons. First, the D istric t ex p e rie n c e d a sha rp e r
recession a n d m ild e r initial recovery than d id the nation, con trary to o th e r
p o stw a r cycles. S e c o n d , D istric t b a n k s ' e a rn in gs d e c lin e d in 1974 an d then
p lu n g e d in 1975, c u m u la t in g to a sig n ific a n t d e te rio ra tio n in b a n k p rofitab ility.
T hird, D istric t ban ks, e sp e c ia lly tho se in F lorida a n d G e o rg ia , w ere p la g u e d

Note:

FEDERAL RESERVE BANK OF ATLANTA




Dr. Hoffman is a Financial Economist and Richard Hendrix is. a Statistical Analyst
in the Research Department of the Federal Reserve Bank of Atlanta.
141

T a b le 1
STATEM EN T OF SO U R C ES AND U SE S OF
S IX T H D IS T R IC T L A R G E B A N K S
D E C E M B E R 1973 T O M A R C H 1975
($ m i l l i o n )

FUNDS

Amount

P ercen t of Total

$1,615

75.6

420
100

SO URCES
In c re a se in T im e a n d S a v in g s D e p o s it s
In c re a se in P a s s b o o k S a v in g s
In c re a se in T im e L e s s N e g o tia b le C D ’s
In c re a se in N e g o tia b le C D ’s
D e c re a se in R e se rv e s, C a s h Item s, D ue
from B a n k s
In c re a se in Total C ap ita l

19.7
4.7

129
741
745

$2,1 3 5
U SES

100.0

Am ount

T otal S o u rc e s

P ercen t of Total

$

8 35
313
324
2 13
2 63
160
21
6

39.1
14.6
15.2
10.0
12.3
7.5
1.0
0.3

$2,135

D e c re a se in G r o s s D e m a n d D e p o sits
In c re a se in O th er L o a n s 1
In c re a se in "O t h e r ” S e c u r it ie s 2
D e c re a se in N e t Fed e ral F u n d s P u rc h a s e d
In c re a se in O th e r A s s e t s
D e c re a se in O th e r L ia b ilitie s
In c r e a se in U. S. G o v e rn m e n t S e c u r it ie s
D e c re a se in B o r r o w in g s
D e c lin e in B o r r o w in g s from F R B
In c r e a se in O th e r B o r r o w in g s

100.0

44
(38)

T otal U s e s
'O t h e r lo a n s in c lu d e all lo a n s excep t Fed e ral fu n d s sold.
2“O th e r” s e c u r itie s in c lu d e m o stly state an d local (m u n ic ip a l) o b lig a tio n s.

T a b le 2
STA TEM EN T OF SO U R C ES AND U SES OF FU N D S
S IX T H D IS T R IC T S M A L L - A N D M E D IU M - S IZ E D B A N K S
D E C E M B E R 1973 T O M A R C H 1975
($ m i l l i o n )
SO URCES

w ith large n o n a c c r u in g lo a n s a n d lo an w rite -o ffs
w h ic h lik ely led to a d o p tio n o f a h ig h ly c o n se r v a ­
tive n e w lo an e x te n sio n p o licy . Finally, m a ssiv e
o ffe rin g s o f U. S. T re a su ry se cu ritie s to h elp
fin a n c e the u n p re c e d e n te d n atio n a l d e fic its in
fiscal years 1975 a n d 1976 o ffe re d b a n k s a readily
a v a ila b le alte rn ative e a rn in g asset to b a n k loans.
D e c e m b e r 1973 to M a r c h 1975
From D e c e m b e r 1973 to M a r c h 1975, a tim e of
d e e p re c e ssio n for b o th the U. S. a n d the D istric t
e c o n o m y , D istric t m e m b e r b a n k s in c re a se d their
d o lla r v o lu m e o f lo a n s (see T a b le s 1 a n d 2, b o tto m
half). T h e incre a se in lo a n s o u ts ta n d in g at sm a lla n d m e d iu m -s iz e d b a n k s w a s o v e r tw ice that at
142




60.7
38.6

19

U SES

Total U s e s

P ercen t of Total

0.7

$2,922

T otal S o u rc e s
D e c re a se in O th e r L ia b ilitie s
In c re a se in G r o s s L o a n s
D e c lin e in G r o s s D e m a n d D e p o sits
In c re a se in “ O t h e r " S e c u r it ie s
In c re a se in O th e r A s s e t s
In c r e a se in U. S. G o v e rn m e n t S e c u r it ie s
D e c re a se in B o r r o w in g s

Amount
$1,773
1,130

In c re a se in T im e a n d S a v in g s D e p o s it s
In c re a se in C ap ita l
D e c re a se in R e se rv e s, C a s h Item s, an d
D u e fro m B a n k s

100.0

Am ount
$

P ercen t of Total

8 36
783
49 0
489
15 4
145
25

28.6
26.8
16.8
16.7
5.3
5.0
0.8

$2,922

100.0

the large ban ks. H o w e v e r, lo a n d e m a n d w a s
e s p e c ia lly str o n g at la rge b a n k s in the first h a lf o f
the re ce ssio n p e rio d , h ig h lig h t in g the t e n d e n c y fo r
large b a n k le n d in g a ctivity to la g ge n e ra l e c o n o m ic
c o n d itio n s. T h is la g reflects la rge b a n k s ' relatively
heavy d e p e n d e n c e o n c o m m e r c ia l a n d in d u strial
loans. T h e se lo an s, a lo n g w ith real estate lo an s,
a c c o u n te d fo r v irtu a lly the en tire in c re a se in total
lo a n s (net o f Federal fu n d s so ld ) at D istric t large
b a n k s d u r in g the recent re c e ssio n (see T a b le 5).
In a d d itio n to in c re a sin g lo a n v o lu m e , m e m b e r
b a n k s a lso u se d their a c q u ire d fu n d s to p u rc h a se a
m o d e ra te a m o u n t o f in v e stm e n ts, p a rtic u la rly state
a n d lo cal (m u n ic ip a l) o b lig a tio n s . Large b a n k
h o ld in g s o f U. S. G o v e r n m e n t se cu ritie s as o f M a r c h
1975 w e re v irtu ally u n c h a n g e d fro m b e g in n in g
O C T O B ER 1976, M O N T H L Y REVIEW

T a b le 3
STA TEM EN T OF SO U R C ES AND U SE S OF
S IX T H D IS T R IC T L A R G E B A N K S
M A R C H 1975 T O J U N E 1 9 7 6 *
($ m i l l i o n )

SOURCES

FUNDS

Amount

In c re a se in G r o s s D e m a n d D e p o s it s
D e c lin e in O th er L o a n s 1
D e c re a se in “O th e r” S e c u r it ie s 2
In c re a se in N et Fed eral F u n d s P u rc h a s e d
In c re a se in O th er L ia b ilitie s
In c re a se in Total C ap ita l

$1,083
316
28 3
165
146
154
$2,147

USES
In c re a se in R e se rv e s, C a s h Item s, an d D u e
from B a n k s
In c re a se in U. S. G o v e rn m e n t S e c u rit ie s
In c re a se in O th er A s s e t s
D e cre a se in B o rro w in g s
D e c re a se in B o r r o w in g s from F R B
D e c re a se in O th er B o r r o w in g s
D e c re a se in T im e a n d S a v in g s D e p o sits
In c re a se in P a s s b o o k S a v in g s
D e c re a se in T im e L e s s N e g o tia b le C D ’s
D e c re a se in N e g o tia b le C D ’s

100.0

Amount

Total S o u rc e s

P ercent of Total

864
7 33
272

121

40.2
34.1

12.8
5.6

50
71
157

7.3

$2,147

100.0

(698)
95
760

Total U s e s

'O t h e r lo a n s in clu d e all lo a n s excep t Fed e ral f u n d s sold.
2“ O th e r” s e c u ritie s in c lu d e m o stly state an d local (m u n ic ip a l) o b lig a tio n s.
‘ T ow ard the en d of t h is tim e period, o n e large b a n k co rre cte d a lo n g st a n d in g re p o rtin g error. T h e Ju n e 1976
f ig u r e s are ad ju ste d for t h is re p o rtin g c h a n g e to m a k e the m co m p a ra b le w ith M a rc h 1975 figures.

T a b le 4
STATEM EN T OF SO U R C ES AND U SE S OF FU N D S
S IX T H D IS T R IC T S M A L L - A N D M E D IU M - S IZ E D B A N K S
M A R C H 1975 T O J U N E 1976
($ m i l l i o n )

SOURCES

T otal S o u rc e s

T otal U se s

recession levels, w h ile o th e r b a n k s a c q u ire d a
sm all a m o u n t o f T re asu ry securities.
D u r in g the recession , m e m b e r b a n k s a cq u ire d
fu n d s b y re d u c in g reserve b a la n ce s, cash item s, an d
d u e fro m b a n k b a la n ce s, by in c re a sin g cap ital, and
fro m a stro n g in flo w o f tim e a n d sa v in g s d e p o sits
(see T a b le s 1 a n d 2, to p half). A t large ban ks,
p a s s b o o k sa v in g s d e p o sit in flo w s w ere m o dest,
bu t tim e d e p o sits w ere u p stro n gly , led by a
$ 7 4 5 -m illio n increase in n e g o tia b le C D 's (n e go tia b le
tim e certificates o f d e p o s it issu e d in d e n o m in a tio n s
o f $100,000 o r m ore). T h e issu a n c e a n d liq u id a tio n
o f large C D 's are m a jo r to o ls o f lia b ility m a n a g e ­
m ent, to o ls p rim a rily u se d b y large ban ks. W it h
lo an d e m a n d e s p e c ia lly stro n g in the first h a lf o f
the recession , b a n k e rs a ctiv e ly b id fo r large C D 's ,
FEDERAL RESERVE BAN K OF ATLANTA




P ercent of Total
62.6
25.6
3.2

$2,406

USES
In c re a se in U. S. G o v e rn m e n t S e c u r it ie s
In c re a se in R e se rv e s, C a sh Item s, a n d D ue
from B a n k s
D e c re a se in C ap ital
In c re a se in G r o s s L o a n s
N o C h a n g e in "O t h e r ” S e c u r it ie s

Amount
$ 1 ,5 0 7
61 6
76
54
153

In c re a se in T im e a n d S a v in g s D e p o sits
In c re a se in G r o s s D e m a n d D e p o s it s
In c re a se in O th er L ia b ilitie s
In c re a se in B o rro w in g s
D e c re a se in O th er A s s e t s

Amount

2.2
6.4

100.0
P ercent of Total

$1,5 8 0

65.7

366
266
194

15.2

0

11.1
8.0
0

$2,406

100.0

d r iv in g rates o n the se d e p o sits u p to re c o rd -h ig h
" d o u b le - d ig it ” levels. M e m b e r b a n k s a ggre ssiv e ly
c o m p e te d for large C D 's to c o m p e n sa te fo r large
d e m a n d d e p o sit d e clin e s. T h is w a s a lso true o f
b a n k s in o th e r parts o f the c ou n try, as in d iv id u a ls,
b u sin e sse s, a n d state a n d lo ca l g o v e rn m e n ts
a tte m p te d to m in im iz e d e m a n d d e p o sit h o ld in g s
in the face o f re c o rd -h ig h interest rates. T he
c o m b in a tio n o f a stro n g lo an d e m a n d a n d re co rd h igh ave rage c o st to b a n k s o n their d e p o sit fu n d s
p u sh e d the p rim e rate u p to 12 p erce n t at m o st
b a n k s b y the su m m e r o f 1974. A t a b o u t this tim e,
D istric t large b a n k lo a n s (net o f Federal fu n d s so ld )
p e a ke d a n d su b s e q u e n tly b e g a n the p r o lo n g e d
d e c lin e that has c o n tin u e d to date (June 1976).
C o n se q u e n tly , the rates p a id on la rge n e g o tia b le
143

T a b le 5
LARG E

BANK

CHANGES
($ m i l l i o n )

IN

L E N D IN G
D ecem ber 1973
to
M a r c h 1975

Total O th er L o a n s 1
C o m m e rc ia l an d In d u stria l L o a n s
Real Esta te L o a n s
L o a n s to N o n b a n k F in a n c ia l In s tit u t io n s
C o n s u m e r In s ta lm e n t L o a n s
S e c u r it ie s L o a n s
A g ric u ltu ra l L o a n s
L o a n s to O th er B a n k s
L o a n s to F o re ig n In te re sts
O th e r L o a n s

M a r c h 19 7 5
to
Ju n e 1 9 7 6 *
— $316

+$313
+218
+ 403
+ 40
+ 12
+
3
- 12
- 28
3
-3 2 0

-2 3 0
+ 50
— 167
+ 19
+
1
+
9
+ 35
- 10
- 23

’Total oth e r lo a n s in c lu d e all lo a n s excep t Fed eral f u n d s sold.
*T o w a rd the e n d of t h is tim e period, on e large b a n k co rre cte d a lo n g s t a n d in g re p o rtin g error. T h e J u n e 197 6
fig u re s are a d ju ste d fo r t h is re p o rtin g c h a n g e to m a k e the m c o m p a ra b le w ith M a r c h 1 9 7 5 figu re s.

C D 's a n d the p rim e rate b e g a n d e c lin in g and, by
the e n d o f the recession , w ere o n ly slig h tly greater
than o n e -h a lf their re c o rd -h ig h levels the su m m e r
before.
M a rc h 1 9 7 5 to Ju n e 1 9 7 6

From M a r c h 1975 to June 1976, the first five
q uarte rs o f the curren t recovery, le n d in g activity
fell o ff sh a rp ly at large D istric t b a n k s (see
T a b le 3). By June 1976, large b a n k lo an v o lu m e
o u ts ta n d in g h ad d r o p p e d b a c k to a p p ro x im a te ly its
p re re c e ssio n level. C o m m e r c ia l a n d in d u strial
lo a n s a c c o u n te d fo r slig h tly m o re than tw o -th ird s of
the d r o p in total lo a n s (net o f Federal fu n d s so ld ),
w ith lo a n s to n o n b a n k fin a n c ia l in stitu tio n s
m a k in g u p the rest o f the d e c lin e (see T a b le 5).
In contrast, sm a ll- a n d m e d iu m -s iz e d m e m b e r
b a n k s c o n tin u e d to increase the d o lla r v o lu m e o f
their lo a n s o u ts ta n d in g , a lth o u g h at a m u c h
re d u c e d p ac e fro m the p re v io u s re ce ssio n ary
p e rio d (see T a b le 4).
M e m b e r b a n k in v e stm e n t p o r tfo lio s g re w faster
d u r in g the early stag e o f recovery than in the
recession , b u t the in v e stm e n t strategy w a s exactly
o p p o s ite ; a c q u is itio n s o f T re asu ry se cu rities
a c c o u n te d for all o f the increase in inve stm en ts.
S m a ll- a n d m e d iu m -s iz e d b a n k s p u rc h a se d a record
$1.6 b illio n , w h ile large b a n k s p u rc h a se d a
siz a b le $733 m illio n o f T re a su ry securities. F u n d s
u sed fo r p u r c h a s in g these se cu ritie s a c c o u n te d
fo r o n e -th ird a n d tw o -th ird s, respectively, o f the
a d d itio n a l fu n d s a v a ila b le to the large an d o th e r
b a n k s d u r in g this p eriod.
W h ile m e m b e r b a n k s a c q u ire d U. S. T re asu ry
se cu rities in all m atu rity classes, their greatest
c o n c e n tra tio n w a s in T re a su ry b ills a n d u n d e r o n e
year c o u p o n s and , to a lesser extent, c o u p o n s o f
fro m o n e to five y e a rs' m aturity. O n ly a sm all
a m o u n t o f c o u p o n s o v e r five years w a s p u rc h a se d
b y D istric t m e m b e r ban ks. E xp e cta tion s o f risin g
sh o rt-te rm interest rates a n d b u sin e ss lo an d e m a n d
as the recovery p ro c e e d e d in d u c e d b a n k s to
144




p u rc h a se o n ly sh o rt-d a te d T re a su ry se cu ritie s to
a v o id su b s e q u e n t cap ital lo sse s a n d e n su re liq u id ity
to a c c o m m o d a te p ro sp e c tiv e b o rro w e rs. B e g in n in g
in the last fe w m o n th s o f the p e rio d , m e m b e r b a n k s
s h o w e d s o m e in c lin a tio n to p u rc h a s e le n g th ie r
c o u p o n s as their n e e d fo r cu rre n t e a rn in g s
h e ig h te n e d a n d their e x p e c ta tio n s c o n c e r n in g
sh o rt-te rm interest rates a n d lo an d e m a n d
re m ain e d u n re alize d .
S m a ll- a n d m e d iu m -s iz e d b a n k s kep t their
h o ld in g s o f " o t h e r " securities, m o stly m u n ic ip a l
o b lig a tio n s, u n c h a n g e d w h ile la rge b a n k s so ld
o ff a m o d e ra te a m o u n t o f the se secu rities. B a n k s
fin d m u n ic ip a l se cu ritie s attractive b e c a u se the
interest e a rn e d o n th e m is e x e m p t fro m Federal
taxes. But, in 1975, D istric t b a n k s as a g r o u p
in cu rre d o p e r a tin g e x p e n se s in e xce ss o f their
taxable o p e r a tin g in c o m e , p artly as a result o f large
lo an lo ss p ro v isio n s. U n d e r the se c irc u m sta n c e s,
m a n y b a n k s h ad n o n e e d fo r ta x -e x e m p t in c o m e
a n d so ld part o f their h o ld in g s o f m u n ic ip a l
securities. T h e relative ly gre ater d e c lin e in
m u n ic ip a l se cu ritie s at la rge b a n k s su g g e sts that
these b a n k s as a g r o u p p r o b a b ly in c u rre d gre ater
o p e r a tin g e x p e n se s p e r d o lla r o f taxa b le in c o m e
than d id the s m a ll- a n d m e d iu m -s iz e d ban ks.
D u r in g the M a r c h 1975-Ju ne 1976 recovery
p e rio d , d e m a n d d e p o sit in flo w s p ro v id e d m e m b e r
b a n k s w ith their tra d itio n a l so u rc e o f fu n d s (see
T a b le s 3 a n d 4, to p half). W it h interest rates d o w n
to m o re n o rm a l levels a n d total D istric t e m p lo y m e n t
a n d p e rso n a l in c o m e risin g m o d e ra te ly , d e m a n d
d e p o sits o n c e a g a in b e g a n to f lo w in to m e m b e r
ban ks. T im e a n d sa v in g s d e p o s it in flo w s c o n tin u e d
stro n g at sm a ll- a n d m e d iu m -s iz e d ban ks. In
con trast, la rge b a n k s re d u c e d the se d e p o sits
$157 m illio n ; they liq u id a te d $760 m illio n in
n e g o tia b le C D 's , s lig h tly m o re than o ffse ttin g
their $ 6 9 8 -m illio n p a s s b o o k sa v in g s d e p o s it in flo w .
W it h lo an d e m a n d slip p in g , q u a lity c o n s c io u s n e s s
in c re a sin g, a n d m o re sta b le a n d g e n e ra lly less
e x p e n siv e d e m a n d a n d p a s s b o o k sa v in g s d e p o sits
O C T O B E R 1976, M O N T H L Y REVIEW

T a b le 6
S IX T H D IS T R IC T M E M B E R
B A N K L IQ U ID IT Y M E A S U R E S
(p e rce n t)
Loans
D e p o s it s
U. S. T re a su ry S e c u rit ie s
Total A s s e t s
R e se rv e s, C a sh Item s, D u e from B a n k s,
a n d u n d e r O n e Y e a r T re a su ry S e c u r it ie s
Total A s s e t s
N e g o tia b le C D ’s
Total T im e a n d S a v in g s D e p o sits
A v e ra g e M a tu rity of
N e g o tia b le C D ’s (in m o n th s)

Large Banks
March 1975
June 1976
7 6 .8 *

7 1 .8 *

4.7

Other Banks
March 1975
June 1976
64.8

59.9

7.7

8.1

13.2

14.9

19.9

12.9

15.9

35.8

28.5

n.a.

n.a.

2.5

2.9

n.a.

n.a.

* L o a n s e x c lu d e Fed e ral f u n d s sold , and d e p o sit s e x c lu d e d o m e s tic in te rb a n k d e p o sits.
n.a.— n o t a v a ila b le

f lo w in g in, m o st large b a n k s w illin g ly liq u id a te d
n e g o tia b le C D 's .
O n e p artic u larly n o te w o rth y result o f the b a la n ce
sh e et re stru ctu rin g in the early recovery w a s a

b a n k s' b a la n c e sheet re stru ctu rin g has d o n e m u c h
to im p ro v e b a n k liq u id ity. T h e y are n o w better
p re p a re d to a c c o m m o d a te the rise in lo an d e m a n d
ex p e cted as the recovery p ro gresses.

m a rk e d im p ro v e m e n t in D istric t m e m b e r b a n k
liq u id ity , w h ic h had d im in ish e d d u r in g the recession.
A t the tro u g h , large a n d o th e r b a n k s h ad relatively
h igh lo a n /d e p o s it ratios o f 76.8 a n d 64.8 percent,
re sp e ctiv e ly (see T a b le 6). By June 1976, these
ratios h ad d r o p p e d to the m o re c o m fo r ta b le levels
o f 71.8 a n d 59.9 p e rce n t.1 V a r io u s o th e r m e asu re s
o f b a n k liq u id ity tell the sa m e story. Large b a n k
h o ld in g s o f U.S. T re asu ry se cu rities as a p erce n t
o f total assets rose fro m 4.7 p e rce n t in M a r c h 1975
to 7.7 p e rce n t in June 1976. For sm a ll- an d
m e d iu m -s iz e d ban ks, the c o m p a r a b le figu re s are
8.1 p e rce n t in c re a sin g to 13.2 percent. A n even
better m e asu re o f b a n k asset liq u id ity is the ratio
o f reserves, cash item s, d u e fro m ban ks, a n d u n d e r
o n e year T re a su ry se cu rities to total assets. T h is ratio
rose fro m 14.9 to 19.9 p erce n t at large b a n k s a n d
fro m 12.9 to 15.9 p erce n t at o th e r ban ks, partly
re fle ctin g the c o n c e n tra tio n o f m e m b e r b a n k
T re a su ry se cu rity a c q u is itio n s in b ills a n d u n d e r
o n e year c o u p o n s. In re sp o n se to stro n g loan
d e m a n d d u r in g the recession , large b a n k s in crease d
their d e p e n d e n c e o n n e g o tia b le C D 's to w here,
at the tro u g h , they a c c o u n te d for 36 p e rce n t o f
all tim e a n d sa v in g s de p o sits. H e a v y d e p e n d e n c e
o n n e g o tia b le C D 's red u ces a b a n k 's flex ib ility
b e c a u se o f the interest se n sitivity a n d h e n ce
v o la tile n ature o f these d e p o sits. T he w e a k n e ss
in large b a n k lo a n s in the initial recovery p e rio d
g a v e these b a n k s the o p p o rtu n ity to p ay d o w n
a large a m o u n t o f n e g o tia b le C D 's a n d le n gth e n
their a ve ra g e m aturity. In June 1976, n e g o tia b le
C D 's c o m p r is e d o n ly 28.5 p erce n t o f total tim e
a n d sa v in g s d e p o sits, a n d their a ve rag e m atu rity w as
e x te n d e d to 2.9 m o n th s. T hus, D istric t m e m b e r

1 low loan/deposit ratio indicates greater liquidity than a high
A
one.

FEDERAL RESERVE BANK OF ATLANTA




Sum m ary
D e s p ite the re ce ssio n in the n ation a nd D istrict,
Sixth D istric t m e m b e r b a n k s c o n tin u e d to increase
loan s, w ith real estate a n d c o m m e rc ia l an d
in d u strial lo a n s risin g the m o st at large m e m b e r
banks. Large b a n k s a d d e d to their h o ld in g s o f
" o t h e r " se cu ritie s bu t kept the d o lla r v o lu m e o f their
U. S. G o v e r n m e n t se cu ritie s p o r tfo lio e sse n tia lly
con stan t. S m a ll- a n d m e d iu m -s iz e d b a n k s a lso
in cre a se d their in v e stm e n t p o r tfo lio by a c q u ir in g
b o th U. S. G o v e r n m e n t a n d " o t h e r " securities,
bu t m o re so o f the latter. D e p o s it flo w s to m e m b e r
b a n k s w ere m ix e d d u r in g the recession . Bo th large
a n d o th e r b a n k s e x p e rie n c e d a stro n g in flo w o f
tim e a n d sa v in g s d e p o sits, e sp e c ia lly large C D 's
at the large ban ks, w h ic h m o re than o ffse t a
gro ss d e m a n d d e p o s it o u tflo w .
In the first part o f the recovery, the sm a lla n d m e d iu m -s iz e d b a n k s c o n tin u e d to b e n efit
fro m a stro n g tim e a n d sa v in g s d e p o sit in flo w ,
jo in e d b y an in flo w o f g r o ss d e m a n d d e p o sits.
T h e se fu n d s s u p p o r te d c o n tin u e d e x p a n sio n in
their d o lla r v o lu m e o f lo a n s an d p u rc h a se s of
T re a su ry se cu ritie s in record a m o u n ts. T h ere w as
a lso a b u ild - u p in large b a n k gro ss d e m a n d
d e p o sits, bu t total tim e d e p o sits, m o stly n e g o tia b le
C D 's , w ere liq u id a te d in excess o f the large b a n k s'
in flo w o f p a s s b o o k sa v in g s d e p o sits. A t the sa m e
tim e, these large b a n k s re d u c e d lo a n s o u ts ta n d in g
to a b o u t the p re re c e ssio n level, w ith b u sin e ss
lo a n s d r o p p in g the m ost, a n d a d d e d a record
a m o u n t to their p o r tfo lio o f U. S. G o v e rn m e n t
securities. T h is b a la n c e sh e et re stru ctu rin g has
d o n e m u c h to im p ro v e m e m b e r b a n k liq u id ity
fro m the tigh t c o n d itio n s p re v ale n t d u r in g the
recession . ■

145

S ix t h D i s t r i c t S ta tis tic s
S e a s o n a lly A d ju ste d
(A ll d a t a a r e

Latest Month
1976

One
Month
Ago

n d e x e s,
Two
Months
Ago

One
Year
Ago

Unemployment Rate
(Percent of Work Force)*** . . . . July
Average Weekly Hours in Mfg. (Hrs.) . July

S IX T H D IS T R IC T

INCOME AND SPENDING
M anufacturing Income . . . .
. July
. May
Farm Cash R e c e i p t s ..................
C r o p s ........................................
May
...............................
Livestock
May
Instalm ent Credit at Banks*/1 (Mil. $)
New Loans ...............................
June
Repayments ..........................
June
Retail S a l e s ..........................
. June

139.2
326.2
367.2
292.3

138.2
184.8
216.9
187.3

138.6
189.7
292.6
171.5

120.3
199.3
333.7
94.1

824
779
143.8

815
751
143.7

754
711
141.5

106.7
97.5
98.4
95.7
96.8
97.7
99.0
105.5
105.0
96.3

106.2
97.7
98.9
97.1
95.3
98.8

105.2
92.9
94.0
95.4
88.5
90.0
93.9
103.6
100.4
91.4
83.2
90.5
92.4
93.9

85.1

105.5
104.7
96.3
88.4
89.6
98.4
95.8
108.2
93.4
108.9
79.7
104.4
107.6
112.9
116.9
105.8
117.5
84.7

106.9
98.4
99.6
98.6
96.9
98.8
99.8
105.0
104.8
96.8
89.1
91.6
97.9
96.7
108.3
94.8
109.6
81.1
104.4
108.1
113.1
117.1
105.5
118.9
82.8

7.4

7.4

8.3

8.6

3.8
40.6
205
175
234
79.3
86.3
148.3
147.3
129.7
145.9
133.4
145.0
129.5
163.0
149.8
160.1
135.5
137.7

3.9
40.7
183
170
195
75.3
88.4
149.5
149.0
133.7
150.1
135.9
145.4
132.0
162.5
150.2
161.9
135.7
138.7

3.8
40.9
235
176
292
75.4

157.2
255.9
146.9

161.3
253.7
146.7

150.2
150.9
133.9
148.9
133.8
145.3
132.8
165.0
149.3
161.1
135.4
136.3
102.5
113.0
162.9
248.7
145.4

5.3
39.7
193
146
238
64.4
92.4
141.5
142.7
130.7
137.0
124.2
130.9
127.5
158.3
139.6
141.3
122.9
141.1
98.7

272
218

270
219

265
218

263
224

234
194
344

200

237

222

343

230
187
332

. July
. May

142.5
391.2

138.7
227.3

136.4
208.3

122.1
310.9

.
.
.
.
.

110.4
98.8
115.5
123.1
106.6

109.3
99.0
113.8
123.1
91.9

109.7
99.6
114.2
123.0
93.9

107.6
95.4
113.0
118.0
72.3

Nonfarm E m p lo y m e n t.......................... July
M anufacturing
................................... July
Nondurable G o o d s ........................... July
F o o d ................................................. July
Textiles
........................................ July
Apparel
........................................ July
Paper ............................................ July
Printing and Publishing . . . July
C h e m i c a l s ................................... July
Durable G o o d s ................................ July
Lbr., Woods Prods., Furn. & Fix. July
Stone, Clay, and Glass .• . . . July
•
Primary M e t a l s .......................... . July
Fabricated M e ta l s ....................... July
M a c h i n e r y ................................... . July
Transportation Equipment . . July
,
N o n m a n u fa c tu rin g ................................ July
Construction ................................ July
Transportation
.......................... . July
T r a d e ............................................. July
Fin., ins., and real est. . . . July
S e r v i c e s ................................... ..... July
Federal G o v e rn m e n t................... July
State and Local Government . July
Farm E m p lo y m e n t................................... June
Unemployment Rate
(Percent of Work F o r c e ) ................. . July
Insured Unemployment
(Percent of Cov. E m p .) .................. . July
Average Weekly Hours in Mfg. (Hrs.) . July
Construction C o n t r a c t s * ....................... July
R e s id e n tia l............................................. July
All O t h e r ................................................ . July
Cotton C o n su m p tio n * * .......................... . June
Petroleum P r o d u c ti o n ...................... . July
Manufacturing Production . . . . . June
Nondurable G o o d s ................................ June
Food
........................................ . June
Textiles
................................... . June
Apparel
................................... . . June
Paper
............................................ June
Printing and Publishing . . . June
C h e m i c a l s ............................... ..... June
Durable G o o d s ............................... . June
Lumber and W o o d ....................... June
Furniture and Fixtures . . . . June
Stone, Clay, and Glass . . . June
Primary M e t a l s ...................... . June
Fabricated M e ta l s .................. . June
Nonelectrical Machinery . . . June
Electrical Machinery . . . . June
. June
Transportation Equipment

88.1

90.6
97.9
96.3
108.8
94.3
109.6
80.6
104.2
108.2
112.7
116.5
106.3

121.1

102.0
112.2

100.0

102.2
112.8

88.2

102.0
88.6

109.1
85.3
103.2
107.5
113.1
115.2
106.3
118.6
78.5

111.6

148.7
235.5
129.2

FINANCE AND BANKING
Loans*
All Member B a n k s ...................... . July
July
Large Banks ...................................
Deposits*
All Member B a n k s ...................... . July
Large Banks ................................... . July
July
Bank Debits*/**
...............................

191
306

A LA B A M A

46



Two
Months
Ago

6.6
40.9

One
Year
Ago
7.6
39.6

FINANCE AND BANKING
Member Bank L o a n s ............................... July
Member Bank D e p o s its ...........................July
Bank D e b i t s * * ........................................July

294
243
319

293
247
322

280
241
316

264
224
291

135.8
255.7

134.8
204.6

136.1
255.0

120.3
124.5

109.9
97.9
111.8
62.7
80.3

109.2
98.3
111.0
60.7
75.8

109.9
99.1
61.7
73.8

110.3
94.3
112.9
72.8
77.0

9.1
40.8

9.6
41.0

10.9
40.9

39.7

. July
. July
. July

284
257
368

278
258
348r

280
254
343

286
247
315

M anufacturing I n c o m e ...........................July
Farm Cash R e c e ip t s ............................... May

133.0
261.5

131.0
195.2

135.4
183.8

111
.0

July
July
July
July
June

102.9
96.1
105.6
72.0
90.4

102.2

103.1
96.7
105.6
72.5
84.0

104.2
74.6
103.7

July
July

40.0

6.1

6.9
40.9

8.3
39.3

Member Bank L o a n s ...........................
Member Bank D e p o s i t s ..................
Bank D e b i t s * * ...................................

July
July
July

257
198
407

248
204
406r

249
194
408

241
191
358

Farm Cash R e c e ip t s ...........................

July
May

143.5
596.7

145.1
159.3

143.4
158.1

123.7
323.5

July
July
July
July
June

105.2
100.7
106.0
102.9
78.4

105.6
101.4
106.4
105.7
79.7

106.7

107.6
107.4
79.2

104.4
99.9
105.2
100.5
72.6

July
July

7.8
41.2

7.3
41.8

7.8
41.8

7.4
40.5

July
July
July

242

250

275

295

240
216
268

241
205
263

Farm Cash Receipts

July
May

157.5
344.6

158.6
194.1

155.8
181.7

135.1
293.1

EMPLOYMENT
Nonfarm Employment
M anufacturing
. .
Nonmanufacturing
Construction . .
Farm Employment

July
July
July
July
June

107.2

107.6

103.5
93.8
108.2
89.5
59.6

Manufacturing I n c o m e ...........................July
Farm Cash R e c e ip t s ............................... May
EMPLOYMENT
Nonfarm E m p lo y m e n t...........................July
M anufacturing
....................................July
N o n m an u factu rin g ............................... July
C o n s t r u c t io n ....................................July
Farm E m p lo y m en t................................... June
Unemployment Rate
(Percent of Work Force)*** . . . . July
Average Weekly Hours in Mfg. (Hrs.) . July

111.6

1 .1
0

FINANCE AND BANKING
Member Bank Loans . . . .
Member Bank Deposits . .
Bank D e b i t s * * ......................

197.2

EMPLOYMENT
Nonfarm Employment
M anufacturing
. .

Unemployment Rate
(Percent of Work Force) . . . .
Average Weekly Hours in Mfg. (Hrs.)

6.2

95.6
104.8
70.6
89.1
40.3

99.8

88.6

FINANCE AND BANKING

EMPLOYMENT
Nonfarm E m p lo y m e n t......................
M anufacturing
...............................
N o n m a n u fa c tu rin g ..........................
C o n s t r u c t i o n ...............................
Farm Employment
...........................
Unemployment Rate
(Percent of Work Force)*** . . .
Average Weekly Hours in Mfg. (Hrs.)

101.8

FINANCE AND BANKING
Member Bank L o a n s * ......................
Member Bank D e p o s its * ..................
Bank Debits*/**
...............................

220

220

MISSISSIPPI

EMPLOYMENT
Nonfarm Employment
M anufacturing
. .
Nonmanufacturing
Construction . .
Farm Employment . .

6.9
41.0

One
Month
Ago

727
746
130.4

EMPLOYMENT AND PRODUCTION

INCOME
M anufacturing Income
Farm Cash Receipts .

Latest Month
1976

July
July
July
July
June

INCOME

100.1
110.6
98.6
64.5

106.9

101.1
109.7
99.2
71.3

101.6
110.4
102.2
62.6

O C T O BER 1976, M O N T H L Y REVIEW

One
Two
Latest Month
Month Months
1976________ Ago
Ago
Unemployment Rate
(Percent of Work Force)*** . . . . July
Average Weekly Hours in Mfg. (Hrs.) . July

One
Year
Ago

Latest Month
1976

One
Year
Ago

EMPLOYMENT
5.7
39.6

5.5
39.6

5.7
40.2

7.9
39.6

,
Nonfarm E m p lo y m e n t...........................July
Manufacturing
................................... July
N o n m a n u fa c tu rin g ..............................July

FINANCE AND BANKING
Member Bank L o a n s * .......................... July
Member Bank D e p o s its * ...................... July
Bank Debits*/** ................................... July

One
Two
Month Months
Ago
Ago

274
241
327

286
256
322

136.7
335.0

266
238
303

136.7
176.3

262
225
280

104.1
95.4
108.5

103.8
95.8
107.9

104.3
96.0
108.5

102.3
91.3
108.0

m 'q

IS .

qqq

ocf

................................... 'lUly
...............................
( ^ 7 “ W or? F o r c e ) ..................July
Average Weekly Hours in Mfg. (Hrs.) . July

6.7
40.8

6.4
40.8

7.2
41.0

8.6
39.9

273
229
284

277
235
306

269
226
273

272
219
262

TENNESSEE
I NC OME

. . .

Manufacturing I n c o m e .......................... July
Farm Cash R e c e ip ts ...............................May

_

*For Sixth District area only; other totals for entire six states
•• ‘ Seasonally adjusted data supplied by state agencies.

Note:

.

136.4
182.7

.

120.6
59.1

FINANCE AND BANKING
Member Bank L o a n s * ...........................July
Member Bank D e p o s its * ...................... July
Bank Debits*/** ................................... July

**Daily average basis

fPrelim inary data

r-Revised

N.A. Not available

All indexes: 1967 = 100, except mfg. incom e, em ploym ent, and retail sales, 1972 = 100.

Sources: Manufacturing production estim ated by this Bank; nonfarm, mfg. and nonmfg. 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.
■Data have been bench marked and new trading day factors and seasonal factors computed using December 31, 1974 and June 30, 1975 Report of Condition data as bases.

D e b its to D e m a n d D e p o s it A c c o u n ts
In s u r e 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 i s t r i c t
( In T h o u s a n d s o f D o l l a r s )
Percent Change

Percent Change
Year

June
1976

July
1976

July
1975

July
1976
from
June July
1976 1975

1976
from
1975
Dothan
Selma

STANDARD METROPOLITAN
STATISTICAL AREA’
Birmingham . . . . 5,721,135
Gadsden
. . . .
126,915
Huntsville . . . .
454,105
M o b i l e .................. , 1,366.658
Montgomery . . . . 1,004,816
Tuscaloosa
. . .
311,182
Bartow-LakelandWinter Haven
Daytona Beach
Ft. LauderdaleHollywood . . .
Ft. Myers . . . .
Gainesville
. . .
Jacksonville . . .
MelbourneTitusville-Cocoa
Miami
..................
O r l a n d o ................
Pensacola . . . .
Sarasota
. . . .
Tallahassee . . Tampa-St. Pete
W. Palm Beach
Albany ..................
A t l a n t a ..................
A u g u s t a ................
Columbus . . . .
Macon
..................
Savannah . . . .

5,686,324
133,532
499,149
1,399,821
1,063,332
302,658

5,170,596
124,053
406,739
1,512,023
918,624
293,111

+
+

1
5
9
2
6
3

+ 11
+ 2
+ 12

+ 4
+ 8

+ 10
+ 6

. 2,231,504
413,116
282,135
. 6,639,983

2,224,709
414,637
323,934
6,355,099r

1,964,912
406,875
250,956
5,041,127

+ 0
- 0
-1 3
+ 4

+ 14
+ 2
+ 12
+32

+28
- 2
+ 4
+26

434,802
8,746,786
1,900,325
764,597
641,530
. 1,052,835
. 4,586,188
. 1,226,125

513,315
8,463,784r
2,082,657
789,052
662,668
933,833
4,712,939
1,332,697

423,534
7,785,764
1,768,463
555,938
542,581
1,072,849
4,527,062
1,238,881

-1 5
+ 3
- 9
- 3
- 3
+ 13
- 3
- 8

+ 3
+ 12
+ 7
+38
+ 18
- 2
+ 1
- 1

+ 3
+ 13
+ 17
+37
+ 6r
+ 1
+ 8
+ 5

+
-

9
3
1
2
8
8

+ 1
+ 8
+26
+ 3
- 4
+ 34

+ 6
+ 14
+ 9
+ 10
+ 4
+38
+ 8
+ 1
+ 13
+ 12
+ 9

350,428
2,092,284
424,233
322,552
6,076,185

+ 6
+ 0
- 0
+ 10

-10

+ 4
+ 2
+ 15
+ 12
- 1

375,171
2,411,902

390,515
2,170,418

327,324
1,970,327

- 4
+ 11

+20
+22 +20

Chattanooga . . . . 1,357,950
1,916,801
Knoxville . . . .
4,799,057
Nashville . . . .

1,396,409
1,905,797
4,993,958

1,389,649
1,622,208
4,684,317

- 3
- 4

- 2
+ 18
+ 2

+ 3
+ 8
+ 7

163,532

140,945

- 8

+ 6

+ 15

THER CENTERS
Anniston
. . . .

150,092

+ 1

228,385
101,885

205,865
93,164

213,098
89,400
222,625
. .
51,181
. . 1,122,776
2,437,604

231,324
93,975
235,591
52,996
1,094,095
2,528,123

210,719
114,352
220,404
45,720
1,057,230
2,388,692

Athens . . . .
Brunswick . . .
Dalton
. . . .
Elberton . . . .
Gainesville
. . . .
Griffin
. . . .
LaGrange . . .
Newnan . . . .
, ,

-h 2
- 3

342,602
2,115,615
490,502
328,959
6,666,615

Biloxi-Gulfport . .
Jackson ................

231,954
92,364

. . . .
. . . .

+ 9
+ 6

952,991
511,109

364,717
Alexandria . . . .
Baton Rouge . . . . 2,126,090
489,590
Lafayette . . . .
360,544
Lake Charles . .
New Orleans . . . . 5,992,304

July
1975

Bradenton . . .
Monroe County .
O c a l a ................
St. Augustine
St. Petersburg .
Tampa . . . .

-10

970,144
572,426r

225,553
203,450
24,467,462 22,143,628
815,505r
655,544
552,658
527,033
852,116r
884,768
1,087,007
1,578,570

June
1976

+ 9
+ 16
+ 16
- 1
+32
+ 8

987,013
553,832

204,945
23,808,021
825,159
543,208
818,129
1,459,306

July
1976

+ 15

Valdosta

. .
. .

. . .

Abbeville . .
Bunkie . . . .
Hammond . .
New Iberia .
Plaquemine .
Thibodaux . .
Hattiesburg .
Laurel
. . . .
Meridian
. .
Natchez . . . .
PascagoulaMoss Point
Vicksburg . .
Yazoo City . .

.
.
. . .
. . .
.
. . .
. . .
. .
.
.

Bristol* . . . .
Johnson City . . . .
Kingsport . . .

200,177
132,231
189,423
34,516
215,093
81,532
42,693
56,546
171,885
132,193

202,272
141,826
233,025
38,218
199,061
84,838
41,889
58,013
179,317
131,159

178,611
131,546
168,756
30,934
191,853
80,671
39,194
48,591r
182,420
125,187

19,332
14,764
107,404
105,816
28,844
63,741

22,589
14,702
124,181
96,695
22,228
61,815

18,421
16,352
108,450
93,660
33,105
67,773

173,169
105,934
147,344
63,833

171,021
104,366
139,870
68,726

169,275
95,781
55,737
237,071
181,066
397,410

Year
to
July
d ate
1976 7 mos.
from
1976
June July from
1976 1975 1975

2

+ 13
- 1

+18

_ 8
—5
—6
—3
+ 3
- 4

+ 1

+ 3

+ 1
+ 12
+ 6
+ 2

+
+
+
+

+

9

1
7
9
8

14

+ 5

14
+ 9
+ 30
+ 3

- 1
+13
-1 3
- 6

+ 8
- 5
- 5
+ 12
-1 4
- 3

174,348
89,255
143,791
57,762

+ 1
+ 2
+ 5
—7

- 1
+ 19
+ 2
+ 11

+ 14
+ 19
+ 7
+ 16

170,601
98,585
60,893

168,819
86,458
58,638

_ 1 + 0
— 3 + 11
“ 8 - 5

+ 8

217,439
182,487
413,043

157,195
191,599
338,001

+ 9 +51
- 1 - 5
4 + 18

+

. . 106,482,091 107,726,670r 97,734,387r -

Alabama . .
Florida
. . .
Georgia
. .
lo u isian aJ .
Mississippi*
Tennessee2 .

.

12,710,762
33,148,095
.
32,634,807
. . 11,228,392
.
4,632,110
. . 12,127,925

-22 -22

_ 1 + 12 + 15
—7 + 1 + 8
19 + 12 +23
1 + 12 +23
0
+ 8 + 12 + 14
— 4
+ 1 +11
+ 2 + 9 + 16
— 3
+ 16 +14
— 4 - 6 +10
+ 1 + 6 + 10

1
STRICT TOTAL
.
.
.
.
.
.

+20

12,947,326
32,746,926r
33,278,251r
11,837,690
4,477,951
12,438,526

11,920,463
29,412,752
29,820,902r
11,058,167
4,030,631
11,491,472

0 -10

1
2
1
2

_
+
—5
+ 3
- 2

+ 2

+20
+43
+ 5

+22

+ 9

+ 13

+ 7
+ 13
+ 9
+ 2
+ 15
+ 6

+ 11
+14
+15
+ 7
+ 18

+10

■Conforms to SMSA definitions as of December 31, 1972.
! District portion only.
•Changes reflect structural changes in series.

FEDERAL RESERVE BANK OF ATLANTA




147

D is t r i c t B u s in e s s C o n d i t i o n s

— 150
— 140

/v
— 115
— 105

— 10
0
— 250

—6

/v

— 42

*Seas. adj. figure; not an index
Latest plotting: July, except mfg. production and retail sales, June, and farm cash receipts, May.

A m ix e d pattern c o n tin u e s to ch ara cterize the S o u th e a s t 's recovery. C o n s tr u c tio n a ctiv ity stre n g th e n e d ,
w h ile la b o r m a rke t c o n d itio n s s h o w e d so m e e n c o u r a g in g sign s. M a n u f a c t u r in g in c o m e a n d retail sa le s
g a in s slo w e d . H ig h e r c ro p p rice s lifted farm c ash receip ts. B u sin e ss lo a n d e m a n d r e m a in e d slack.

T h e v a lu e o f b o th re sid e n tia l a n d n o n re sid e n tia l
c o n stru c tio n c o n tra c ts r e b o u n d e d in July. R e si­
d e n tial c o n trac ts w e re u p m o d e ra te ly b u t d id n o t
regain A p ril a n d M a y levels. N o n r e sid e n tia l activity
m o v e d u p sharply. Several large p u b lic w o r k s c o n ­
tracts w ere a w a r d e d in F lo rid a a n d G e o rg ia . In flo w s
at sa v in g s a n d lo an a sso c ia tio n s w e re large in July
b u t taile d o ff in early A u g u s t. M o r t g a g e interest
rates c h a n g e d little.
N o n fa r m e m p lo y m e n t ro se in July, w h ile the u n ­
e m p lo y m e n t rate r e m a in e d u n c h a n g e d . G a in s in
c o n stru c tio n a n d o th e r n o n m a n u fa c tu r in g in d u strie s
m o re than o ffse t a lo ss o f m a n u fa c tu r in g jo b s.
C o n str u c tio n e m p lo y m e n t g re w for the first tim e
in six m o n th s, o w in g to im p ro v e m e n t in Florida,
G e o rg ia , a n d T en n e sse e . G o v e r n m e n t a n d trade
jo b s a lso e x p a n d e d sign ific a n tly . D e s p it e a slig h t
d e c lin e in the fac to ry w o rk w e e k , w e e k ly e a rn in g s
grew .
M a n u f a c t u r in g in c o m e d u r in g July rose slig h tly ,
f o llo w in g a m a r g in a l d e c lin e in June. In c o m e g a in s
h ave slo w e d in the last fo u r m o n th s. T otal retail
sale s w ere flat in June, d e sp ite in cre a se d a u t o m o b ile
re gistra tio n s a n d d e p a rtm e n t store sales. C o n s u m e r

p rices d u r in g the first q u a rte r o f 1976 rose m o re
s lo w ly in the S o u th than n a tio n a lly . T h is w a s the
se c o n d q u a rte r in w h ic h the S o u t h 's in fla tio n rate
w as u n d e r the n a tio n 's, after se ven q ua rte rs o f
fa ste r-th a n -n a tio n a l in fla tio n .
Prices o f fa rm p r o d u c t s ro se a b r u p tly in July, re­
fle c tin g sh a rp in c re a se s fo r c o tto n a n d so y b e a n s . In
A u g u s t, d e c lin e s w e re e v id e n t fo r gra in s, h o g s, a n d
cattle. A n u p w a rd re v isio n in the w h e a t c ro p
e stim a te a p p e a re d to trig g e r d e c lin e s in gra in prices.
Farm cash receip ts th r o u g h the first h a lf o f 1976
s h o w e d a 5 -p e rc e n t g a in fr o m a y e a r a g o ; h ig h e r
c o tto n a n d so y b e a n p rice s in d ic a te a fu rth er gain.
In m id -A u g u s t , lo a n s o f b a n k s in a g ric u ltu ra l areas
reache d their h ig h e st p o in t th u s far in 1976, o v e r
13 p e rce n t a b o v e the c o m p a r a b le 1975 level.
T h e p rim e le n d in g rate p o s t e d b y m a n y la rge
D istric t b a n k s d e c lin e d to 7 p e rc e n t in e a rly A u g u s t.
T he a ve rag e interest rate la rge b a n k s c h a r g e d o n
b u sin e ss lo a n s a v e ra g e d 8.1 p e rce n t in early A u g u s t,
u p fro m 7.9 p e rce n t in the s p r in g w h e n the p rim e
rate w a s 6.75 percent. B u sin e ss lo an d e m a n d
re m ain s slu g g ish . R e c e n t d is c o u n t activ ity reflects
se a so n a l b o r r o w in g by se veral sm a ll ban ks.

Note: Data on w h ich statem en ts are b ased have been adjusted w henever p o ssib le to e lim in a te se a so n a l influences.

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O C T O B ER 1976, M O N T H L Y REVIEW