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■ . 1 In T h is Is s u e : B a n k in g S tru c tu re in t h e S ix t h D i s t r i c t S t a t e s . . in A l a b a m a . . in F l o r i d a . . in G e o r g i a D is tric t B u s in e s s C o n d it io n s j Federal Reserve Bank Of Atlanta Federal Reserve Station Atlanta, Georgia 30303 Address Correction Requested BULK RA TE U .S . P O S T A G E PAID A tla n ta , G e o rg ia P e rm it N o . 2 9 2 B a n k in g S ix t h S tru c tu re D is t r ic t S t a te s by B. Frank King The number, size, and location of the banks, bank offices, and banking organi zations in an area affect access to bank services and the variety and prices of those services. These factors, generally called banking structure, may also influence economic development and the safety and profitability of banks. For these reasons, many members of the public have a stake in the banking structure of an area and in public and private decisions that influence that structure. Yet basic information on banking structure and its development is not easily avail able, particularly in forms that allow comparisons among areas. This issue of our Review and the next seek a partial remedy for this difficulty by providing descriptions of the banking structure of each state that is entirely or partly in the Sixth Federal Reserve District. (We will refer to these states as Southeast.) The purpose of these descriptions is to provide basic, comparable information that will aid in answering questions related to banking structure and suggest some hypotheses about determinants of banking structure. Causeand-effect generalizations about the relationships between banking structure and bank competition or economic development are avoided because the sample of states is small and some of its features are very special; the reader should exercise caution in his generalizations for the same reasons. Banking structure is usually discussed in terms of the number, size, and geographic distribution of banks and banking organizations, bank deposits and assets, the proportions of deposits in various areas held by certain banking organizations, and bank resources and offices relative to income and population. Monthly Review, Vol. LX, 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. SEPTEMBER 1975, MONTHLY REVIEW TABLE 1 Economic Environment of Southeastern Banks State Per Capita Income 1974 % Population Growth 1964-1974 % population in SMSA’s, 1973 Agriculture % Employed in (Dec. 1974) Mfg. Nonmfg.* $ 4,041 5.4 61.9 12 .2 25.5 62.3 Flo rid a 5,084 39.9 77.4 7.9 12 .2 79.9 G eo rg ia 4 ,5 0 8 14.6 58.7 10 .2 22.8 67.0 L o u isia n a 4,218 9 .2 62.9 12.5 13.4 74.1 A lab am a M ississip p i 3,518 3.7 21.3 2 1 .2 22.7 56.1 T en n essee 4,407 9.5 63.2 10.9 27.8 61.3 U.S. 5,381 10.6 72.7 3.6 23.6 72.8 ♦ In c lu d e s all o th e r n o n a g ric u ltu ra l e m p lo y m e n t The discussion in the succeeding series of articles will concentrate on these measures and on recent changes in them. In introducing these measures, the articles will discuss the legal and economic environ ment influencing the development of banking structure. Banking structure is significantly influenced by the legal and economic environment in which it develops. The capabilities and objectives of actual and potential bank organizations in terms of prices, services offered, location of offices, and marketing strategy are influenced by the economic character istics of the markets in which banks operate. What banking organizations are actually allowed to do is determined by the laws and regulations that outline permissible bank activities. It is within these major influences that banking structure is formed. There is also evidence that this structure affects the economic and legal developments that influence it. Since economic and legal environments in the Southeastern states differ considerably, one should not be surprised to find in the subsequent series of TABLE 2 Legal Restrictions (J u n e 15, 1975) State Branching Law Holding Company Law A lab am a V aries fro m c o u n ty to c o u n ty , ra n g in g fro m c o u n ty w id e b ra n c h in g to u n it b a n k in g . No lim its on n u m b e r of b a n k s u b s id ia rie s . Florida Unit b a n k in g w ith o n e lim ited fa c ility a llo w ed e a c h b an k . No lim its on n u m b e r of b a n k s u b s id ia rie s . G eorgia C o u n ty w id e b ra n c h in g ; n u m b e r of b ra n c h e s p e r b a n k lim ited by c o u n ty p o p u la tio n . M u ltib a n k c o m p a n ie s p ro h ib ite d w ith e x c e p tio n of th re e “ g ra n d fa th e r" c o m p a n ie s t h a t m ay n o t a d d s u b s id ia rie s . L o u isia n a P a ris h w id e b ra n c h in g ; n u m b e r of b ra n c h e s lim ited by c a p ita l of b an k . M u ltib an k c o m p a n ie s p ro h ib ited . M ississip p i R eg io n al b ra n c h in g ; h o m e o ffice p ro te c tio n in sm all to w n s. M ultib an k c o m p a n ie s p ro h ib ited . T en n essee C o u n ty w id e b ra n c h in g . No lim its on n u m b e r of b a n k s u b s id ia rie s ; h o ld in g c o m p a n ie s m ay n o t a c q u ire m o re th a n I 6 V2 p e rc e n t of IPC d e p o s its in th e s ta t e by e x te rn a l e x p a n s io n . FEDERAL RESERVE BANK OF ATLANTA 135 Summary Banking Structure Measures Sixth District States (a s of J u n e 28, 1974) Ala. Fla. Ga. La. M iss. T en n . B an k s 292 690 443 248 184 330 B ank O ffices 679 777 1,045 760 653 1,014 B an k in g O rg a n iz a tio n s 250 307 431 246 184 279 7.9 22.8 11.4 9.9 5.0 11.6 11.7 17.6 9.6 15.6 12.9 12.7 5.3 10.4 4.7 4 .9 3.6 4.1 P e rs o n a l In c o m e p e r B an k O ffice ($ m illion) 21.3 52.9 21.1 2 0 .9 12.5 18.2 P e rc e n ta g e of B an k s in SM SA’s 38.0 77.7 2 8 .4 36.3 12.0 27.6 P e rc e n ta g e of B an k O ffices in SMSA’s 58.0 77.6 55.7 53.7 26.2 51.6 P e rc e n ta g e of B ank D e p o sits in SM SA’s 66.9 87.1 67.1 73.1 35.2 69.2 P e rc e n ta g e of B an k s in M u ltib a n k H o ld in g C o m p a n ie s 19.9 63.0 3.8 1.2 0.0 17.9 P e rc e n ta g e of D e p o sits in M u ltib a n k H o ld in g C o m p a n ie s 59.6 77.7 2 9 .4 .6 0.0 47 .8 P e rc e n ta g e of D e p o sits H eld by 3 L a rg e s t O rg a n iz a tio n s 28.1 D ep o sits of All B a n k s ($ b illio n ) D e p o sits of M edian B an k ($ m illion) P o p u la tio n P e r B an k O ffice (th o u s a n d ) 38.4 25.1 4 0 .4 20.8 28 .4 5 L a rg e s t O rg a n iz a tio n s 53.5 3 7 .’ 47.1 27.0 34.4 43.5 10 L a rg e s t O rg a n iz a tio n s 63.8 54.5 52.4 40.6 43.3 61.9 2 0 L a rg e s t O rg a n iz a tio n s 68.8 69-4 58.2 55.3 53.5 69.7 articles that banking structures have developed differently in each state. Briefly, banks in the Southeast have operated in economic environments with characteristics ranging from above average to very low per capita incomes, rapid to very slow population and income growth, and mainly urban to substantially rural economies. Economic bases range from service-oriented to agricultural economies. Table 1 gives some general indicators of these varying economic environments. The legal environment of banking also varies considerably among the states. Branching law ranged until very recently from restrictive unit banking with limited facilities in Florida to regional branching in Mississippi, with countywide branch ing the general rule in the other four states (see Table 2, col. 2). State holding company law, while allowing one-bank companies and forbidding outof-state multibank holding companies, ranges from unlimited permission for multibank companies in Florida and Alabama to absolute prohibition in 136 Mississippi and Louisiana (see Table 2, col. 3 ).1 Thus with different needs and powers, banking organizations have developed differently in each Southeastern state and banking structures vary con siderably. For example, Georgia and Tennessee, states that allow branches, have many more bank offices than Florida, in essence a unit banking state up until now, though with a much larger population. Florida is a state with many metropol itan areas containing more than three-fourths of its bank offices; Mississippi, a state with few such areas, has only one-fourth of its bank offices there. Many other comparisons are shown in the summary table preceding the series of articles on specific states. The banking structures of Alabama, Florida, and Georgia are analyzed in this issue; Louisiana, Mississippi, and Tennessee are treated in the next issue. ■ ’One Louisiana organization that includes three banks is a multibank holding company by Federal standards but not by Louisiana standards. SEPTEMBER 1975, MONTHLY REVIEW B a n k in g in S tru c tu re A la b a m a by B. Frank King The development of multibank holding companies has changed banking struc ture in Alabama considerably since 1971. Since mc|st of the state's largest banks have been brought into a few multibank companies, a large proportion of deposits has become concentrated in a few large banking organizations. The remainder is spread among many small independent banks. Few medium-sized banking organizations exist. Possibilities for emergence of additional larger organizations are severely limited by this paucity of independent large- and medium-sized banks, by the state's small volume of total deposits, and by relatively slow economic growth. Economy and Banking Laws Alabama has long been characterized by low per capita income, slow population growth, and a relatively large rural population. These characteristics have shown some signs of changing in recent years; nevertheless, large portions of the state continue to lose population, trailing most parts of the country in measures of economic welfare. From 1964 through 1974, population in Alabama grew at ab|)ut one-half the national rate; personal income grew at about the same rate 3s the nation's. Thus, per capita personal income increased relative to the nation, yet in 1974 was still only three-quarters of the nation's. Economic activity has shifted among parts of the state. Since 1960, population and incornle growth has been centered in the Tennessee River Valley in the north, in the southeastern corner of the state, and in peripheral counties of the four largest metropolitan areas. Central and southern rural counties have lost population. Projected population growth through 1980 continues this pattern. Metropolitan areas contain a relatively large proportion of Alabama's popula tion, bank offices, and deposits .1 There are eight standard metropolitan statistical areas (SMSA's) entirely in Alabama, along with one county, Russell, of the Columbus, Georgia-Alab^ma SMSA. These areas contain about 60 percent of the 1* vgj ’ Banking data in this article are as o f |une 28, 1974, unless otherw ise noted; holding company data reflect subsidiaries consum m ated through M ay 31, 1975. FEDERAL RESERVE BANK OF ATLANTA 137 TABLE 1 Summary of Alabama Structure No. B a n k s No. B a n k O ffice s C h an ge 1964-1974 Dec. 1974 C h an ge 1964-1974 June 1974 C h an ge 1964-1974 292 17.3% 710 144.8% 250 0.4% D epo sits Pop. Per B a n k Office June 1974 ($ m illion ) C h an ge 1964-1974 $7,910.7 199.7% Dec. 1974 (000) 5 .0 state's population and banking offices and over twothirds of its bank deposits. All but one of the state's 16 largest banks has headquarters in an SMSA. (This one exception, Central Bank of Alabama, N.A., Decatur, has offices in three SMSA's, but its head quarters is in a nonSMSA county.) Each of the state's six largest banking organizations, allm ultibank holding companies, has its headquarters in either Birmingham, Mobile, or Montgomery. Alabama has a variety of branch banking laws applicable to individual counties. These laws run from countywide branching at the least restrictive extreme to unit banking at the most. Generally, counties with large populations have some sort of branch banking; those with fewer people usually have either strictly limited branching or unit banking. Bank customers in most parts of Alabama have few banks to choose from; in the past ten years, new banks have opened at a relatively slow pace. Only ten of the state's 67 counties have seven or more banks; 38 counties have four or fewer. From 1964 through 1974, only 43 new banks were orga nized in Alabama, a number about equal to new openings in Louisiana and Tennessee during the same period but well below new entries in Georgia and Florida. Since there are no applicable state laws, multi bank holding companies are allowed in Alabama. These companies may acquire existing banks with out limitation by state law. Whether these companies may acquire newly chartered (de novo) banks, however, is in question. In October of 1973, the Alabama Banking Board instructed the Superin tendent of Banks not to approve de novo charters for bank holding companies. This policy has not yet been tested in the state courts. The Board of Governors of the Federal Reserve System on July 9, 1975, approved acquisition of a newly chartered national bank in Tuscaloosa by Central Bankshares of the South. Opponents of this acquisition have 138 No. O rga n iz a tio n s June 1974 In co m e Per B a n k Office C h an ge 1964-1974 Dec. 1974 ($ m illio n ) -5 7 .3 % C h an ge 1964-1974 $20.4 -5 .1 % argued that it contravenes state law, and there is a possibility that they will take their protests to court. Banking Structure Most discussions of banking structure deal with banking aggregates or with numbers and proportion of banks in various categories. These summary measures are better understood against a back ground of the overall dimensions of banking. Alabama has 292 banks with 679 offices. Total deposits of these banks are almost $8 billion, and total assets are over $9 billion. In all of these dimensions but number of banks, the state ranks fifth, above Mississippi, among the Southeastern states. It has more banks than either Louisiana or Mississippi. Alabama's median bank has deposits of $11.7 million. Despite a substantial decline over the past decade, population per bank office in Alabama remains somewhat above both the national level and those of other Southeastern states except Florida. From 1964 through 1974 new bank offices opened at a rate several times that of population TABLE 2 GEOGRAPHIC DISTRIBUTION OF ALABAMA’S BANKS (a s of J u n e 1974) No. B a n k s in C o u n ty No. C o u n tie s 0 0 1 or 2 13 3 or 4 25 5 or 6 19 7 to 10 8 11 to 15 2 16 o r m o re 0 SEPTEMBER 1975, MONTHLY REVIEW TABLE 3 Alabama Banks by Size and Holding Company Status1 Deposit Size Class ($ million) All Banks Deposits Number ($ million) Banks in Multibank Holding Companies Deposits Number ($ million) Other Banks Deposits ($ million) Number 500 + 1 888.3 1 888.3 0 0.0 250 - 500 7 2,261.5 7 2,261.5 0 0.0 1 0 0 -2 5 0 3 429.1 1 124.4 2 304.7 7 5 -1 0 0 6 495.5 5 4 09.0 1 86.5 5 0 -7 5 5 303.2 4 252.5 1 50.6 2 5 -5 0 32 1,017.7 11 375.3 21 6 42.4 0 -2 5 238 2 ,5 1 5 .4 29 4 02.4 209 2,113.7 292 7,910.7 58 4,713.4 234 3,197.2 Total 'D e p o s its a s of J u n e 28, 1974; h o ld in g c o m p a n y s u b s id ia rie s c o n su m m a te d th ro u g h May 31, 1975. growth; consequently, population per office was cut in half. The number of bank offices increased mainly from addition of branch offices. The head quarters of the 43 new banks established account for only one-tenth of the new bank offices. The rising number of bank offices from 1964 through 1974 more or less kept pace with growth in personal income and deposits in the state. Thus, personal income and deposits per bank office changed very little. Because most new offices were branches, deposits per bank almost tripled. Although Alabama added several banks and bank offices during that time, the number of banking organizations increased by only one because eight multibank holding companies consolidated previously independent banks into their organiza tions. Banks acquired by holding companies have generally been among the largest in the state; consequently, the dispersion in size of the state's banking organizations has increased. Since 1971, multibank holding companies have acquired one-fifth of the banks in Alabama and now hold three-fifths of bank deposits. Multibank holding company acquisitions have left only a few larger independent banks. Only three of the state's 17 banks with deposits of more than $75 million are not subsidiaries of a multibank holding company. These are Union Bank and Trust Company, Montgomery; The First National Bank of Tuskaloosa; and The First National Bank of Florence, the state's ninth, eleventh, and thirteenth largest banks, respectively. Four of the state's five banks in the $50- to $75-million deposit range are multibank company subsidiaries. Multibank companies hold a smaller proportion of the state's medium-sized banks; in this group they have tended to acquire banks in growing FEDERAL RESERVE BANK OF ATLANTA metropolitan areas. In the $25- to $50-million deposit size class/Alabama has 32 banks. Eleven are subsidiaries of multibank companies. Two-thirds of these are in metropolitan areas, while only onethird of independent banks in this size grouping are located in these areas. Two-thirds of the multibank holding company subsidiaries are also in counties in which population rose between 1960 and 1970; half of the independent banks are in such areas. Most banks with deposits of less than $25 million are independent. These smaller institutions account for more than four-fifths of the state's banks but only 30 percent of deposits. Most of these deposits are held by banks that are not owned by holding companies. Smaller banks are usually located out side of Alabama's metropolitan areas; many are in areas of declining population and slow-growing income and bank deposits. Metropolitan banks account for a majority of the state's offices and deposits; they have received most of the attention of multibank holding companies. Almost two-fifths of Alabama's banks, three-fifths of its bank offices, and two-thirds of its deposits are in SMSA's. Multibank holding companies are strongly metropolitan, with two-thirds of their sub sidiary banks in SMSA's; they hold 77 percent of deposits in SMSA's, compared with only 25 percent outside such areas. Multibank holding companies are a relatively new phenomenon in Alabama banking. Although state law never prohibited them, the first application to form one was not filed with the Board of Gover nors of the Federal Reserve System until 1970. This application to form First Alabama Bancshares in volved what were then the state's sixth, seventh, and tenth largest banks. Shortly after this original formation, the Board of 139 TABLE 4 Alabama’s 20 Largest Banking Organizations1 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Organization A lab am a B a n c o r p o ra tio n F irst A lab am a B a n c s h a re s S o u th e rn B an c o r p o ra tio n C en tra l B a n c s h a re s of th e S o u th S o u th la n d B an c o r p o ra tio n F irst B a n c g ro u p A lab am a U nion B an k a n d T ru s t C o m p an y , M o n tg o m ery T h e F irst N atio n al B ank o f T u sk a lo o sa U n ite d A lab am a B a n c s h a re s T h e F irst N atio n al B an k of F lo ren c e C itib a n k G roup F irst N a tio n a l B ank, Jasper T h e P e o p le s B an k a n d T ru st Co., S e lm a A n n isto n N a tio n a l B an k T h e A m erican N atio n al B an k , G a d sd e n E n te rp ris e B an k in g C o m p an y T h e F irst N a tio n a l B ank, S c o tts b o ro First N a tio n a l B an k of F a irh o p e F irst N a tio n a l B ank, R u sse llv ille T h e F irst N atio n al B ank of O pp Banks Offices 1,269.4 12 68 16.1 4.1 10.0 16.1 970.6 13 76 12.3 4.5 11.2 28.3 807.8 11 56 10.2 3.8 8.2 38.4 798.4 9 69 10.1 3.1 10.2 48.6 386.0 2 21 4.9 .6 3.1 53.5 332.2 2 18 4.2 .6 2.7 57.7 188.8 1 6 2.4 .3 .9 60.1 115.9 1 91.1 Deposits % State’s Offices Banks Cumulative % of State’s Deposits Deoosits ($ million) 5 1.5 .3 .7 61.6 16 1.2 1.4 2.4 62.7 86.5 57.7 1 4 9 1.1 .7 .3 1.7 .6 1.3 63.8 64.5 50.6 1 4 .6 .3 .6 65.2 4 5 .4 44.2 1 1 2 1 .6 .6 .3 .3 .3 .2 65.7 66.3 42.3 1 1 .5 .3 .2 66.8 38.8 1 2 .5 .3 .3 67.3 30.6 1 5 .4 .3 .7 6 7.7 29.3 1 4 .4 .3 .6 68.1 29.0 1 4 .4 .3 .6 6 8 .4 28.5 1 1 .4 .3 .2 68.8 ’ D e p o sits a n d o ffic e s a s of J u n e 28, 1974; s u b s id ia rie s a s of May 31, 1975. Governors approved an application by Central and State National Corporation (now Central Bancshares of the South) to form a company that would include what were the state's third and eighth largest banks. By early 1972, Alabama Bancorpora tion and BTNB Corporation (now Southern Ban corporation), owners of the state's two largest banks, had applied to add bank subsidiaries to their existing one-bank holding companies. As a result of these and subsequent formations, eight multibank holding companies presently operate in Alabama. The four largest account for three-fourths of the banks and four-fifths of the deposits controlled by such companies. The largest has 12 subsidiaries and holds deposits of $1.3 bil lion, or 16 percent of deposits in the state; the smallest has 9 subsidiaries and holds 10 percent of deposits. Together the four hold almost half of Alabama bank deposits. These same four companies control four of the five largest banks in the state, as well as the seventh, eighth, and tenth largest. Their common expansion pattern of acquiring medium-sized banks in metropolitan areas has also given them control 140 of seven of the second ten largest banks in the state. The four companies have moved rapidly since 1971 to develop statewide organizations. Each has at least one subsidiary in each of the four largest SMSA's. Three are represented in the Anniston and Florence SMSA's; two have subsid iaries in Gadsden; only one is represented in Tuscaloosa and in Russell County of the Columbus, Georgia-Alabama SMSA. Recently, however, one of these holding companies has received approval to acquire a subsidiary in Tuscaloosa and another has announced plans to acquire a subsidiary there and has applied to acquire banks in Gadsden and Florence; a third has applied to acquire a subsidiary in Russell County. Following the four largest companies in size are two pairs of multibank companies with less deposits, fewer subsidiaries, and less extensive geographic coverage than their larger competitors. There are two medium-sized companies, each with two banks and about 5 percent of the state deposits. These companies are led by The Merchants National Bank, Mobile, and First National Bank of Mobile, SEPTEMBER 1975, MONTHLY REVIEW TABLE 5 Banking In Alabama’s SMSA’s1 No. D e p o sits o/o D e p o sits SMSA____________________ ($ m illion)_________in S ta te _______ B an k s__________O ffices B irm in g h a m M obile M u ltib a n k C o m p a n ie s % D e p o sits H eld by M u ltib a n k C o m p a n ie s 2,254.5 28.5 28 136 6 89.4 8 6 1.4 10.9 14 63 6 92.1 60.3 M ontgom ery 7 3 7.9 9.3 13 46 4 H u n ts v ille 2 52 6 .4 6.7 17 60 6 80.6 F lo re n c e 2 236.8 3.0 10 30 3 30.9 A nniston 224.1 2.8 11 24 3 55.0 T u s c a lo o sa 210.3 2.7 4 13 1 38.7 G ad sd en 2 194.7 2.5 10 10 2 31.2 49.2 .6 4 12 1 28.3 5 ,295.3 67.0 1081 394 R u sse ll C o u n ty Total iD e p o sit a n d o ffice d a ta a re a s o f J u n e 28, 1974; h o ld in g c o m p a n y s u b s id ia rie s a s of May 31, 1975. 2C en tra l B an k of A labm a, N.A., D e ca tu r, o p e ra te s b ra n c h o ffic e s in th is a re a . 3D oes n o t a d d b e c a u s e o n e b a n k w ith h e a d q u a rte r s in a nonSM SA c o u n ty o p e ra te s o ffic e s in th re e SMSA’s. each of which has deposits of about $300 million. There are also two small companies— one with four subsidiaries, the other with five; each has about 1 percent of deposits.2 As the holding company movement in Alabama has progressed, deposits have become concentrated in fewer organizations. In 1964, the five largest organizations in the state, all independent banks, held 40 percent of deposits; the ten largest held 51 percent. By 1971, before approval of the first multibank holding company formation, the five largest organizations held only 32 percent of de posits and the ten largest, 45 percent. Since 1971, the largest organizations have acquired a greater share of deposits. Presently, the five largest organi zations, all multibank holding companies, hold 54 percent; the ten largest hold 64 percent. Multibank holding companies, led by the four largest, have acquired most of the deposits in the state's four largest SMSA's (Birmingham, Mobile, Montgomery, and Huntsville). They have moved cautiously into the four smaller SMSA's (Florence, Anniston, Tuscaloosa, and Gadsden) and into Russell County, so that they control few banks and less than a majority of deposits in four of these five areas. However, recent expansion moves indicate that the multibank companies are looking closely at these areas. The multibank companies have also been partial to three nonSMSA counties: Dallas; Morgan, where three of the four largest are now represented; and Houston, where two of the four largest and one smaller company are represented. Since multibank holding companies concentrate 2O n e o f the m edium -sized com panies has been given approval by the Board of Governors of the Federal Reserve System to m erge w ith one o f the sm aller companies. The resulting com pany w o u ld have five subsidiaries and be represented in three of the state's four largest SMSA's, as w ell as two nonSMSA counties. FEDERAL RESERVE BANK OF ATLANTA Alabama’s 20 Largest Banking Organizations (Cumulative Percent of State Deposits Held) P ercen t P e rce n t N u m b e r o f O r g a n iz a t io n s on larger banks in these areas of large pools of deposits and relatively rapid growth, the state's present tendency toward a dispersion of bank deposits between a few large organizations repre sented in major economic areas and many small single-bank organizations is likely to continue. Establishing new large organizations will be difficult because few banks large enough to lead such organizations are left. ■ 141 B a n k in g in S tru c tu re F lo r id a by B. Frank King Florida's banking structure has changed radically over the past decade. The state has added more banks and deposits than the Southeast's other states, and the rapid development of multibank holding companies has brought most of its banks and deposits into multioffice organizations, several of which have extensive geographic coverage. Economy and Banking Laws Florida's economic and legal environments have been important influences on banking trends. The state's economy has grown rapidly. Its population grew by 40 percent to 8.1 million in the ten years ending in 1974. Per capita income in 1974 almost equaled that of the United States as a whole. In the previous decade, the growth of per capita income in Florida had substantially exceeded that for the United States. Florida's economic development has shown pronounced regional patterns. The northern third is less affluent and has grown much less rapidly than the central and southern parts of the state. All five Florida counties that lost population from 1960 to 1970 are in the northern part of the state as are all but one of the 13 Florida counties gaining less than 10 percent in population. Most areas that have achieved or are projected to achieve large population and income growth are in central or southern Florida. With the exception of Jacksonville, the large population centers are in the central and southern parts of the state. From 1960 to 1970, the Fort LauderdaleHollywood and West Palm Beach-Boca Raton areas led the large centers in population growth rates. A large proportion of Florida's population lives in the state's 14 standard metropolitan statistical areas (SMSA's). These areas contain about four-fifths of its population, banks and bank offices, and almost 90 percentof its bank deposits .1 Bank holding companies have been partial to these areas; their . o ' ' ’ Banking data in this article are as of June 28,1974, unless otherw ise noted; holding com pany data reflect subsidiaries consum m ated through M ay 31, 1975. 142 SEPTEMBER 1975, MONTHLY REVIEW TABLE 1 Summary of Florida Structure No. Banks No. Bank Offices June 1974 Change 1964-1974 690 6 9.9% Deposits Dec. 1974 837 No. Organizations Change 1964-1974 June 1974 Change 1964-1974 97.4% 286 -2 1 % Income Per Bank Office population Per Bank Office June 1974 ($ million) Change 1964-1974 Dec. 1974 (thousand) Change 1964-1974 Dec. 1974 ($ million) Change 1964-1974 $22,836.7 2 6 5.5% 9.7 - 2 8 .7 % $49.1 59.4% subsidiaries have 80 percent of total deposits in metropolitan areas, compared with 63 percent of total deposits in nonmetropolitan areas. Until a limited facilities law was passed in 1973, Florida was almost entirely a unit banking state. The 1973 law was a slight liberalization of branch banking rules; it allowed each bank one facility for accepting deposits and loan payments within one mile of its main office. The first limited facility was opened early in 1974. As a consequence of Florida's strictly limited branching, local banking markets have more individually chartered banks than one would find in states that allow branching. Florida has 11 of the 14 counties in the entire Southeast with more than 15 banks. In many cases, however, more than one bank in a local market is owned by the same group of shareholders or by a multibank holding company. These commonly owned banks are often operated much like a branch system. A newly promulgated branching law allows each Florida bank to open two branches each year in its home county. This law goes into effect at the beginning of 1977. Multibank holding companies have long been allowed in Florida. There is no limitation in the state's law on number of subsidiaries or amount of deposits such a company can hold. The law does require that the state Comptroller approve any transfer of control of a state bank. Banking Structure The overall dimensions of Florida banking are generally large in relation to other Southeastern states. Florida ranks first in most categories; its third ranking to Georgia and Tennessee in number of bank offices is a notable exception. Six hundred and ninety banks operate 777 offices in the state. Most offices other than headquarters offices are limited service facilities of one sort or another. Florida banks have deposits of $22.8 billion, assets of $27.0 billion, and capital of $2.1 billion. RESERVE BANK OF ATLANTA DigitizedFEDERAL for FRASER Population per bank office in Florida is almost twice the population per bank office in other unit banking states and at least twice this ratio in each of the other Southeastern states except Alabama. Although this ratio declined as the number of new banks increased twice as fast as population during the 1964-1974 decade, it fell much less in Florida than in the other Southeastern states. Personal income per bank office is more than twice that of any other Southeastern state. Despite a doubling of bank offices during the period from 1964 through 1974, this statistic rose by twothirds. Income per office fell slightly in each of the other Southeastern states except Georgia, where it rose slightly. Most Florida areas have high population and income per bank office. This indicates among other things that most Florida areas are still attractive for new bank entry and that they will be attractive for new branches once branching is allowed. W hile the number of banks in the state increased by almost 300 from 1964 through 1974, the number of banking organizations dropped by almost 100 . TABLE 2 GEOGRAPHIC DISTRIBUTION OF FLORIDA’S BANKS (a s o f J u n e 1974) No. Banks in County 0 No. Counties 2 1 or 2 21 3 or 4 15 5 or 6 5 7 to 10 5 11 to 15 8 16 o r m o re 11 143 TABLE 3 Florida Banks by Size and Holding Company Status1 Deposit Size Class ($ million) _________ All Banks___________ Number Deposit ($ million) Banks in Multibank Holding Companies________ _________________Other Banks Deposit ($ million) Number Number Deposit ($ million) 500+ 1 1,283.7 1 1,283.7 0 0.0 2 50 - 500 6 1,880.1 6 1,880.1 0 0 .0 100 - 250 25 3,638.0 20 3,012.9 5 625.1 7 5 -1 0 0 28 2,400.4 22 1,878.1 6 522.3 5 0 -7 5 67 4,087.8 51 3,110.0 16 977.8 2 5 -5 0 144 4,995.7 107 3,8 0 4 .0 37 1,191.7 0 -2 5 419 4,55 1 .0 228 2,778.8 191 1,772.2 Total 690 22,836.7 435 17,747.6 255 5,089.1 'D e p o s its a r e a s of J u n e 28, 1974, h o ld in g c o m p a n y s u b s id ia rie s c o n su m m a te d th ro u g h May 31, 1975. In a d d itio n to th e 435 h o ld in g c o m p a n y s u b s id ia rie s show n h ere, m u ltib a n k h o ld in g c o m p a n ie s o p e n e d 20 b a n k s b e tw ee n J u n e 28, 1974 a n d May 31, 1975. TABLE 4 FLORIDA BANK HOLDING COMPANIES BY SIZE* Deposits ($ billion) No. Companies No. Subsidiaries 1.5 o r m o re 2 40 o r m o re 2 in i-H 144 Banks, Florida National Banks, and Atlantic Ban corporation— can reasonably be called statewide organizations. A few others such as Landmark Banking Corporation and Pan American Bancshares seem to be developing the framework for establish ing statewide systems either through acquisitions or mergers. The remaining organizations have con fined their acquisitions to areas in which they were already represented when they formed. The large regional organizations such as First Financial Cor poration and Ellis Banking Corporation, operating in several adjacent markets, are generally located on the west coast and the large, local organizations such as City National Bank Corporation and Broward Bancshares, in the southeast. Along with its multibank holding companies, Florida has several bank chains in which banks are connected by common individual ownership and common directors rather than by common corporate 4 3 0 to 40 4 .5 — 1.0 4 2 0 to 30 1 .25 — .5 9 10 to 20 6 5 to 10 11 1 o The rapid development of multibank holding companies explains this. Nearly two-thirds of Florida's banks, controlling more than threequarters of its deposits, are now owned by multi bank holding companies. Although these companies have concentrated on larger banks, they own a majority of banks even in the under-$25-million deposit class. Each of the state's seven banks with deposits of $250 million or more is the lead bank of a multi bank company. Four-fifths of the banks in the $100to $250-million deposit size class are multibank company subsidiaries. Three Florida multibank companies own three banks with deposits of $100 million or more; two other companies own two banks with deposits of $100 million or more. The largest bank in the state that does not belong to a multibank company has deposits of $146 million; it is the state's sixteenth largest bank. Multibank holding companies own a smaller proportion of banks with deposits under $100 mil lion. All but six of the 28 banks with deposits of $75 million to $100 million are subsidiaries of multibank companies. None of these six is entirely independent; four are subsidiaries of one-bank holding companies; and two are related to smaller banks through common ownership and directors. Three-quarters of the banks in the $50- to $75million deposit size category are holding company subsidiaries, along with three-fifths of the banks with deposits below $50 million. Florida's 31 multibank holding companies range in deposit size from $2.2 billion to $35 million and in number of subsidiaries from 55 to 2. Only the six largest companies— Southeast Banking Corporation, Barnett Banks, Sun Banks, Flagship le s s th a n .25 12 le s s th a n 5 No. Companies 7 * D e p o sits a s of J u n e 28, 1974; re fle c ts a c q u is itio n s of b a n k s e x is tin g on J u n e 28, 1974, c o n s u m m a te d th ro u g h May 31, 1975 SEPTEMBER 1975, MONTHLY REVIEW TABLE 5 Florida’s 20 Largest Banking Organizations1 % S ta te 's R ank O rg a n iz atio n 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 S o u th e a s t B an k in g C o rp o ratio n B a rn e tt B an k s of F lorida Sun B a n k s o f Florida F la g s h ip B an k s F lorid a N a tio n a l B an k s of F lorida A tla n tic B an c o rp o ratio n F irst F in a n c ia l C o rp o ratio n L a n d m a rk B an k in g C o rp o ra tio n o f Florida Ellis B an k in g C o rp o ra tio n P a n A m erican B a n c s h a re s o f F lorida F irst B a n c s h a re s of Florida E x c h a n g e B a n c o rp o ra tio n City N atio n al B an k C o rp o ratio n C h a rte r B a n k s h a re s C o rp o ratio n A m erican B a n c s h a re s , N orth M iami B row ard B a n c s h a re s F lorid a C o m m e rc ial B an k s F irst S ta te B an k in g C o rp o ratio n S o u th w e s t Florida B an k s F irst N atio n al B a n k s h a re s o f Florida D e p o sits ($ m illio n ) 2,2 9 7 .0 1,934.0 1,490.6 1,458.1 1,287.3 1,146.2 962.7 681.7 639.0 558.3 484.3 480.1 4 6 3.4 329.2 308.2 300.3 2 7 0.2 263.1 259.5 239.2 B anks 37 55 39 40 33 30 16 14 21 14 12 13 4 9 10 5 7 5 5 6 O ffices D e p o sits 41 64 47 41 33 31 20 14 26 18 12 15 4 11 13 5 8 6 6 6 10.1 8.5 6.5 6.4 5.6 5.0 4.2 3.0 2.8 2.4 2.1 2.1 2.0 1.4 1.4 1.3 1.2 1.2 1.1 1.1 B an k s 5.4 8.0 5.7 5.8 4.8 4.4 2.3 2.0 3.0 2.0 1.7 1.9 .5 1.3 1.5 .7 1.0 .7 .7 .9 O ffices C um u la tiv e % of S ta t D eposit 5.3 8.2 6.1 5.3 4.3 4.0 2.5 1.8 3.4 2.3 1.5 1.9 .5 1.4 1.7 .6 1.0 .8 .8 .8 10.1 18.6 25.1 31.5 37.1 42.1 46.3 49.3 52.1 54.5 56.6 58.7 60.7 62.1 63.5 64.8 66.0 67.2 68.3 69.4 ’ D ep o sits a re a s o f J u n e 28, 1974, s u b s id ia rie s o p e ra tin g on J u n e 28, 1974, c o n s u m m a te d th ro u g h M ay 31, 1975. ownership. They are found in most parts of the state. No official list of such chains exists; con sequently, their extent can only be estimated. Available information indicates that there are up wards of 45 bank chains with about 120 banks and deposits of $2.7 billion, or about 12 percent of bank deposits in the state. None of the chains is among the state's 20 largest organizations. Adding deposits held by these chains to those held by multibank holding companies brings the total de posits held by multibank organizations to almost 90 percent of state deposits. Regional and local organizations are important features of local markets in Florida. The six statewide companies compete with smaller organi zations in most markets. In many of these local markets, the smaller organizations have greater market shares than the statewide organizations. In three of the six largest SMSA's, organizations other than statewide companies hold the largest share of deposits. The same is true in five of the eight smaller SMSA's. Florida's regional and local com panies are not only potential entrants into other markets but also major competitors of statewide organizations in most markets. Holding company development in Florida in the past decade included the formation of 28 new multi bank companies. These formations have typically involved the corporate reorganization of bank chains; 26 of the 31 multibank companies presently operating in Florida resulted from such reorganiza FEDERAL RESERVE BANK OF ATLANTA tions.2 As mentioned, some of the reorganized chains expanded into statewide or regional organi zations, while others remained confined to their original markets. Geographic expansion by multibank holding com panies has been extensive. In 1963 only one organization was represented throughout the state. Now there are six organizations with substantial statewide geographic coverage. Seven multibank organizations are represented in 11 or more coun ties. In all, 30 counties have subsidiaries of two or more multibank holding companies. On a statewide basis, banking resources have become more concentrated during the last decade of holding company development. In 1964 the ten largest organizations (including bank chains) held 38 percent of deposits in the state; the 20 largest held 53 percent. In 1974 the ten largest held 55 percent and the 20 largest held 69 percent. Even so, rapid deposit growth, chartering of many new independent banks, and holding company formations involving reorganization of existing chains have limited the increase in statewide con centration. Further, the rapid increase in the number 2For a detailed discussion of holding company developm ent in Florida before 1970, see Dudley Salley, "A Decade of H olding Company Regulation in Florida," M onthly Review, Federal Reserve Bank of Atlanta, July 1970. 145 TABLE 6 B a n k i n g In F lo r id a S M S A ’s 1 N u m b e r of % D e p o sits in S ta te B an k s M ulti b a n k C o m p a n ie s 5,209.7 3,7 9 8 .8 2,247.7 1,938.3 1,485.5 1,452.0 7 0 7.0 682.5 5 4 4.4 500.0 40 1 .4 389.7 29 3 .2 216.0 22.8 16.6 9.8 8.5 6.5 6.4 3.1 3.0 2.4 2.2 1.8 1.7 1.3 1.0 90 107 65 46 39 51 19 23 13 21 21 17 12 12 16 18 15 7 9 11 7 8 6 8 7 5 3 5 19,866.2 87.1 536 D e p o sits ($ m illio n ) SMSA M iami T a m p a -S t. P e te rs b u rg Fort L auderd ale-H o lly w o o d J a c k s o n v ille W est P alm B each -B o ca R ato n O rlando S a ra s o ta B arto w -L ak elan d -W in ter H aven F o rt M yers D aytona B ea c h M elbou rn e-T itu sv ille-C o co a P e n s a c o la T a lla h a s s e e G a in esv ille T otal 'D e p o s its b a n k s a n d o ffic e s a r e a s of J u n e 28 Prospective Development Florida's new branching law is likely to combine with its high levels of population and income per bank office and future economic growth to bring about a rapid increase in the number of banking offices during the next few years. This, in turn, will probably lower population, income, and deposits per bank office and increase the convenience of banking services to customers. The branching law is one of several factors that will influence bank holding company developments. The extent of past holding company expansion and the management, asset, and capital problems encountered by several multibank companies will also strongly influence developments. These factors working together are likely to slow the pace of formations and acquisitions for several years to come. New holding company formations by bank chains, the source of most existing companies, are likely to be few and far between. Most remaining chains are small; they have resisted the temptation to form registered holding companies for some time. The existence of several large multibank organizations with expansion goals deters chains considering formation of bank holding companies because the companies already in existence are potentially rival bidders for acquisition candidates. Under Florida's new branching law, some attempts to merge mem 146 81.4 73.6 86.2 87.9 64.3 93.5 84.6 69.0 77.8 92.3 80.6 61.9 65.8 84.0 1974; h o ld in g c o m p a n y s u b s id ia rie s a s of May 31, 1975. of banks and geographic expansion by several multibank companies has reduced deposit con centration in most local banking markets. % D e p o sits H eld by M u ltib a n k C o m p a n ie s Florida’s 20 Largest Banking Organizations (Cumulative Percent of State Deposits Held) P ercen t 0 1 P e rce n t 1 1 1 1 ' i 2 4 6 ‘ i 8 ' 1 10 I 1 I 12 ' 14 I I 16 I I 18 I i I 0 20 N u m b e r o f O r g a n iz a t io n s bers of chains into a single bank with branches are likely to occur. The purchase of chains as a package by one of SEPTEMBER 1975, MONTHLY REVIEW TABLE 7 GEOGRAPHIC DISTRIBUTION OF FLORIDA’S MULTIBANK HOLDING COMPANIES No. C o u n tie s R e p re s e n te d , by C o m p an y No. C o u n tie s C o m p a n y R e p re s e n te d in No. C o m p a n ies m o re th a n 20 2 16 — 20 2 11 — 15 3 6 — 10 5 3— 5 4 1— 2 15 No. SMSA’s R e p re s e n te d , by C o m p an y No. SM SA’s C o m p an y R e p re s e n te d in No. C o m p a n ie s 11 — 14 2 7 — 10 4 4 — 6 5 2— 3 1 9 11 No. C o m p a n ie s R e p re s e n te d , by C ou n ty No. M u ltib an k H olding C o m p a n ie s R e p re s e n te d m o re th a n 10 6 — 10 3— 5 No. C o u n tie s 4 9 10 2 7 1 16 none 21 FEDERAL RESERVE BANK OF ATLANTA the existing holding companies has already become common and could well become even more prevalent in the future. These acquisitions are often attractive to holding companies because they facilitate acquisition of broader geographic cover age than if only one bank were acquired or if the affiliated banks were applied for in sequence. Such acquisitions by statewide organizations have already been approved by the Board of Governors in the Miami, Fort Lauderdale, West Palm Beach, Naples, Tampa, and Tallahassee areas, among others; they have been denied in part in the Vero Beach, Sara sota, and St. Petersburg areas. The forces that lead chains to sell to multibank companies apply to smaller multibank companies and larger independent banks as well. Expansion possibilities for smaller companies have diminished because many attractive banks have been acquired, because some larger companies continue to bid for banks, and because larger companies seem to have some advantages in raising capital. The larger independents face similar problems. The ultimate resolution of forces that limit expansion possibilities of small holding companies and bank chains is likely to be further merger attempts by holding companies. Two mergers of holding companies have already taken place. A third has recently been approved by the Board of Governors. Applications for two others were sub mitted, approved, and then withdrawn. An applica tion for a fifth merger has been submitted. Negotiations on several others have been announced and canceled. The forces behind these mergers added to expansion plans of some organizations and the removal of some branching prohibitions seem likely to engender more alterations in Florida's changing banking structure.* 147 B a n k in g S tru c tu re in G e o r g i a by Joseph E. R ossm an, Jr. Georgia's current banking structure has been molded over the past 100 years by a combination of economic, social, and legal forces. The Civil War, the economic slump of the Twenties, the depression of the Thirties with its wave of bank mergers and failures, and, more recently, the expansion of Georgia's metropolitan areas have all been important factors. A brief review of Georgia's early banking history from the 1860's to 1960 p rovides a better understanding of th e current stru ctu re.1 F ollow in g the Civil War and the subsequent collapse of the plantation system and its banks came the development of a crop lien system and a need to replace those banks that failed with the Confederacy. Banks increased in size and number through the turn of the century; however, in terms of expansion, the period between 1900 and 1910 may be viewed as the "golden age" of banking. The number of state and national banks increased nearly 400 percent to 644, more banks than are in operation today. Few banks opened in the state from 1910 to 1940. The period between 1920 and 1933 was particularly important, however; it was then that the state's two largest banking organizations established much of their existing structure. Georgia, then heavily dependent upon the agricultural sector and specifically upon cotton, suffered an economic slump during much of the 1920's. Many state-chartered banks, especially dependent upon agriculture, collapsed during this period, while weak national banks, typically larger than state banks, sought merger partners. Blocked by national banking laws that prohibited branching, Trust Company of Georgia, then owned by the Lowry National Bank of Atlanta, obtained a charter for Trusco Investments Company in June 1922. For the rest of the decade, Trusco purchased controlling interests in banks in Augusta, ’ Discussion of early banking history draw n from W illia m S. Dawson's doctoral dissertation en titled “ Entry, Exit, and the Structural Evolution of a M arket: A Case Study o f G eorgia B anking," D u ke, 1967. 148 SEPTEMBER 1975, MONTHLY REVIEW TA B LE 1 Summary of Georgia Structure No. Banks Change 1964-1974 443 4.2% Dec. 1974 Change 1964-1974 June 1974 Change 1964-1974 1,103 126.0% 431 4.4% Pop. Per Bank Office Total Deposits June 1974 ($ million) No. Organizations No. Bank Offices June 1974 Change 1964-1974 Dec. 1974 (000) 207.2% 4.4 $11,430.7 Macon, Rome, and Savannah. Almost concurrent with Trust Company's merger operations, Citizens and Southern Bank, a nonmember state bank (through 1927) and the leading bank in Savannah, achieved through merger a substantial position in the remaining three cities of the state's four largest cities— Atlanta, Augusta, and Macon. The collapse of the Manly Group in 1927, involv ing over 80 small Georgia country banks, produced state legislation prohibiting statewide branching. C&S, prohibited from further expansion by merging with a bank and operating the merged bank as a branch, formed the C&S Holding Company in 1927 and between 1928 and 1930 gained control of banks in Albany, Thomaston, and LaGrange. A merger between Trust Company and Lowry National Bank of Atlanta in 1930 led to a change in title for Trust Company's holding company— from Trusco to the First National Associates. In addition to a name change, the First National Associates became the holding company for the newly named The First National Bank of Atlanta (formerly Lowry National Bank of Atlanta). By 1933, the First National Associates had emerged as a prominent institution in all five leading Georgia cities (Atlanta, Augusta, Columbus, Macon, and Savannah). C&S also became a prominent banking organization, operating branches in the state's four largest cities and controlling other banks through its holding company. Together, the C&S organization and the First National Associates controlled over 80 percent of banking deposits in Atlanta, Savannah, and Macon. Of the state's five largest cities, only Augusta and Columbus had banking markets that were not overshadowed by either C&S or the First National Associates or both. Although C&S had operated a branch in Augusta since 1912, Georgia Railroad Bank and Trust Company, one of the oldest banks in the state, con tinued to be the market's largest bank. Trust Company of Georgia, along with banking FEDERAL RESERVE BANK OF ATLANTA Income Per Bank Office Change 1964-1974 - 49.4% Dec. 1974 ($ million) Change 1964-1974 $19.9 12.4% subsidiaries of The First National Bank of Atlanta's holding company, was separated in 1933 from First National by the National Banking Act and began operating as an independent organization. First National continued as a major banking power in Atlanta, even without representation in other Georgia towns. Bank holding companies made no additional acquisitions from 1933 through World War II. Shortly after World War II, C&S used its holding company to purchase several small Atlanta banks. At the same time, no new holding companies were formed and existing holding companies remained dormant. In 1956, Georgia enacted legislation which prevented the formation of any new multibank holding companies and also limited future acqui sition of bank stock by existing bank holding companies to 15 percent of the bank's stock. The 1956 Act gave "grandfather" privileges to existing multibank holding companies (C&S National Bank and Trust Company of Georgia and Hamilton TA BLE 2 GEOGRAPHIC DISTRIBUTION OF GEORGIA’S BANKS (as of June 1974) No. Banks in County 0 1 or 2 3 or 4 5 or 6 7 to 10 11 to 15 16 or more No. Counties 6 84 52 12 5 1 1 149 TABLE 3 Georgia Banks by Size and Holding Company Status1 De p o sit C la s s ($ m illion ) B a n k s in M u ltib a n k H o ld in g C o m p a n ie s A || B a n k s N u m b er D e p o sits ($ m illion ) 500 + 4 250 - 500 0 100 - 250 6 1,021.3 4,401.7 0 Other B a n k s Num ber D e p o sits ($ m illion ) Num ber 2 2,523.8 2 D e p o sits ($ m illion ) 1,877.9 0 0 0 0 1 133.6 5 887.7 254.0 4 331.0 1 77.0 3 50 - 75 15 935.5 6 378.9 9 556.6 25 - 50 39 1,261.1 7 245.7 32 1,015.4 0 375 3,480.1 426 8,071.7 75 - 100 0 - 25 375 3,480.1 0 Total 443 11,430.7 17 3,359.0 'D e p o s its a s of June 29, 1974; h o ld in g co m p an y su b sid ia rie s co n su m m a te d thro u gh M a y 31, 1975. Bancshares, a Tennessee-based holding company). In 1960, additional legislation further reduced bank stock acquisition by bank holding companies to 5 percent and continued the prohibition of any new multibank holding companies. Legislation was also passed allowing banks to branch within the limits of the city in which their home office was located. Economic and Legal Factors Although shaped by influences stretching over a hundred years, economic and legal forces have greatly changed Georgia's banking structure since 1960. A rapid growth in number of banking offices during the Sixties and Seventies is related to strong population gains. In the ten years ending in 1974, Georgia's population has grown faster than the nation's, increasing some 15 percent against 11 percent in the U.S. The growth was not, however, evenly distributed. Metropolitan areas grew almost three times faster than non-metropolitan areas. Population growth varied widely from county to county during the 1960's. Of Georgia's 159 counties, 46 exceeded the national average, 47 grew more slowly, and 66 lost population. O f the latter, nearly all lost 10 percent or more of their total population. Income, an influence on deposit growth, has also risen sharply in Georgia during recent years. Per capita income nearly doubled in the Sixties, com pared with a national gain of 76 percent; Georgia ranked fourth among the 50 states. Viewed in absolute terms, however, the state's income picture becomes less bright; Georgia's per capita income has historically been below that of the U.S. Even with the strong growth of the Sixties, Georgia's per capita income through 1974 was 84 percent of the U.S. figure. 150 Considering nonSMSA counties, the income gap is even greater, particularly in the southern part of the state. The reasons for the gap are many, and detailed analysis is beyond the intended purpose of this article. However, it should be noted that the four largest employers (industries) of manufacturing workers in Georgia are basically labor-intensive and low-wage industries. These four— apparel, textiles, food, and lumber—-account for roughly 60 percent of the state's manufacturing workers. Strong population increases centered in metro politan areas and greatly relaxed branching laws help to explain the two-fold increase in bank offices since I9 6 0 .1 Extensive revision in Georgia's branch banking laws during 1960 not only relaxed restric tions but also distinguished between different types of branch operations. The 1929 law, in effect until 1960, only recognized and allowed the establishment of branch banks. The 1960 legislation defined and established criteria for establishing a branch office as opposed to a branch bank. Perhaps more important than branch form or structure is that Georgia banks' branching opportunities prior to 1970 were virtually limited to the city or municipal ity in which the parent bank's home office was located. This restriction was removed in 1971 when an amendment allowed county-wide branching. Georgia banks responded by doubling their branches between 1970 and 1974. Although Georgia banks have sharply increased their branching operations since 1960, the number of existing banks has remained virtually constant. This does not mean, however, that no new banks were chartered during this period. Since 1960, some 22 bank mergers have taken place. Almost all of the merged banks were very small, with two-thirds ’ Banking data are as of June 28, 1974, unless otherw ise specified. SEPTEMBER 1975, MONTHLY REVIEW TABLE 4 Georgia’s Twenty Largest Banking Organizations1 R an k 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 N am e T h e C itiz e n s a n d S o u th e rn N a tio n a l B ank F irst N ational H old in g C o rp o ra tio n T ru st C o m p an y B ank T h e F u lto n N a tio n al C o rp o ra tio n T he N a tio n a l B ank of G eorgia F irst R ailro ad a n d B an k in g C o m p an y of G eorgia S a v a n n a h B an k an d T ru st C o m p an y CB&T B a n c s h a re s , Inc. F irst N a tio n a l B ank of C o lu m b u s C o m m e rc ial B ank T ru st C om pany, G riffin F irst N a tio n a l B an k of C obb County, M arietta F irst G eorgia B a n c s h a re s , Inc. H am ilton B a n c s h a re s , Inc. F irst N a tio n a l B ank of G a in esv ille G eorgia B an k a n d T ru st C o m pany, M acon F irst S ta te B an k a n d T ru st C o m pany, A lbany N atio n al C ity B ank of R om e F irst N a tio n a l B ank B ank of Dalton F irst N a tio n a l B an k of A th e n s P e a c h tre e B an k a n d T ru st C o m pany, C h a m b le e C u m u la tiv e nD en - n -■* sitc ($ m illio n ) B an k s O ffices % S ta te ’s D e p o sits B an k s 2,0 8 2 .8 9 119 18.2 2.0 11.4 18.2 1,329.5 1,200.3 1 6 47 69 11.6 10.5 .2 1.3 4.5 6.6 29.8 40.3 5 4 8.4 1 30 4 .8 .2 2.9 45.1 231.5 1 23 2.0 .2 2.1 47.1 22 4 .9 1 13 2.0 .2 1.2 49.1 153.1 145.2 1 1 13 12 1.3 1.3 .2 .2 1.2 1.1 50.4 51.7 133.0 1 10 1.2 .2 1.0 52.9 88.5 1 3 .8 .2 .3 53.7 87.7 1 9 .8 .2 .9 54.5 % of O ffices S ta te ’s D ep o sits 77.8 1 9 .7 .2 .9 55.2 75.9 2 7 .7 .4 .7 55.9 71.8 1 3 .6 .2 .3 56.5 67.2 1 5 .6 .2 .5 57.1 66.2 1 4 .6 .2 .4 57.7 62.6 1 5 .5 .2 .5 58.2 61.8 1 4 .5 .2 .4 58.7 6 1 .0 1 4 .5 .2 .4 59.2 56.1 1 8 .5 .2 .8 59.7 ’ D e p o sits a n d o ffic e s a s of J u n e 29, 1974, s u b s id ia rie s a s of May 31, 1975. having less than $10 million in deposits. Merging activity was often related to consolidation in poor growth areas, while areas of stronger growth attracted new banks. A significant number of the new banks established in Georgia during the Sixties resulted from restrictions on branching beyond some geographic boundary such as a county line or city limit. Large city banks that were unable to establish branches in the growing suburbs outside city limits began to sponsor and to help establish banks in the county in which the suburb was located. Although sponsoring banks were limited to direct ownership of 5 percent of the new bank's stock (from which the term "five FEDERAL RESERVE BANK OF ATLANTA percenter" developed), directors and shareholders of the sponsoring bank often purchased large portions of the remaining stock. Initially staffed by the city bank and with common stockholders, the five percenters acted in many instances as branches of large city banks. Some five percenters became eligible for merger into their sponsoring banks when countywide branching was established in 1971. Some of these have already merged. Others have recently been allowed to merge by a recent U. S. Supreme Court decision supporting the C&S organization's acquisition of five suburban Atlanta banks, estab lished as five percenters. A state court order re- 151 TABLE 5 Banking in Georgia’s SMSA’s 1 N u m b e r of SMSA <yQ D e p o sits H eld M u ltib a n k C o m p a n ie s D e p o sits ($ m illio n ) % D e p o sits in s ta te 5 ,6 4 8 .8 4 9 7 .0 49 .4 4.3 84 9 337 128 2 2 3 5 .4 50.8 428.1 4 1 7.6 38 5.2 181.2 3.7 3.6 3 .4 1.6 6 13 24 31 5 5 11 18 2 2 1 1 43.0 60.4 16.5 42.5 11 0 00.0 A tla n ta S avannah A u g u sta (Ga. p o rtio n ) M acon C o lu m b u s A lbany C h a tta n o o g a (Ga. p o rtio n ) T otal 77.7 .7 7 ,635.6 66.7 B an k s M u ltib a n k C o m p a n ie s O ffices 7 1192 560 ’ D e p o sit a n d o ffice d a ta a r e a s of J u n e 28, 1974; h o ld in g c o m p a n y s u b s id ia rie s a s of May 31, 1975. 2D oes n o t a d d b e c a u s e a b a n k w ith h e a d q u a rte r s in o n e SMSA o p e ra te s o ffic e s in th r e e o th e rs . quiring C&S, its officers and directors and their immediate families to reduce their total stock holdings in 25 banks to 5 percent weakens ties between remaining five percenters and sponsoring banks. Georgia’s 20 Largest Banking Organizations (Cumulative Percent of State Deposits Held) Percent Percent 1964 — ---------- ^ Existing Structure 60 Banking in Georgia today is conducted by over 440 insured commercial banks. These institutions, in addition to their home offices, operate over 600 branches. Nearly three-fourths of these branches are in metropolitan areas, compared with only one-fifth of the total number of banks. Two widely used structural measures, population per banking office and income per banking office, show the state with a population of 4,400 per bank office and an income of $19.9 million per office in December 1974. Compared with other Sixth District states, Georgia has the third lowest population per bank office and the fourth lowest income per office. A breakdown on size distribution, based on mid1974 deposits, shows that most Georgia banks are small. The median bank, compared with that of other Southeastern states, is the smallest (slightly under $10 million in deposits). Only ten banks have deposits greater than $100 million, and approxi mately half of all banks have less than $10 million in deposits. Although few in number, large banks account for a large percentage of banking deposits in the state. The four largest banks, all in Atlanta, account for over two-fifths of total deposits; and the ten largest, for more than half. Although existing Georgia laws prohibit multibank holding company expansion and formation, three multibank and 22 one-bank holding companies own 152 60 f 40 ^ ^ ^ *-*^ 1 9 7 4 / 50 - 50 40 if 30 30 7 20 20 1 10 10 -j— ij-, • i 2 4 i i 6 i i 8 i i 10 i i 12 i i i 14 i i 16 i i 18 i 20 Number of Organizations and control 39 Georgia banks. W holly owned banks of the three multibank holding companies number 17 and account for slightly over one-fourth of state deposits. One multibank holding company is headquartered in Tennessee and owns two Georgia banks under "grandfather provisions" of the 1956 SEPTEMBER 1975, MONTHLY REVIEW state holding company law, since the two banks were acquired in 1930. W hile Georgia's population is almost evenly divided between metropolitan (SMSA) and non metropolitan areas, two-thirds of the state's bank deposits are held by banks headquartered in metropolitan areas. Of the seven SMSA's (Atlanta, Augusta, Albany, Columbus, Macon, Savannah, and Chattanooga) wholly or partially in Georgia, banks in the Atlanta SMSA hold the most deposits, accounting for half of the state's total. Georgia's metropolitan markets, excluding Chattanooga's SMSA, are highly concentrated, with the four largest organizations in each market accounting for at least 80 percent of total market deposits. The state's largest banking organization, C&S, has the greatest market share in four of these metropolitan markets, is second largest in another market but is not represented in the Columbus area. The state's second largest organization, The First National Bank of Atlanta, only competes in the Atlanta area, while the state's third largest organiza tion, Trust Company of Georgia, competes with C&S in four of the six metropolitan areas. In three of these markets (Atlanta, Augusta and Savannah), it occupies a third rank position; in the fourth FEDERAL RESERVE BANK OF ATLANTA market (Macon), it ranks second. Speculations about future development of Georgia bank structure hinge on whether proposed legislation allowing new holding company formations and the expansion of existing holding companies is passed. Narrowly defeated in the last session of the Georgia State Legislature, its passage would allow the remaining large banks not currently part of a multibank organization to form separate multibank holding companies. Operating as a multibank holding company, the largest unaffiliated banks would then be able to enter markets across the state in which they were not represented by acquiring unaffiliated banks in those markets. There are at least three and maybe four of these banking organi zations now capable of supporting a statewide organization. Thus, the passage of holding company legislation would, in all probability, result in the deconcentra tion of Georgia's major banking markets, since multibank organizations usually seek to enter large banking markets. However, should any holding company legislation be passed which prohibits holding companies from starting new banks, state wide concentration will be guaranteed to increase. ■ 153 S ix t h D is t r ic t S t a t is t ic s S e a s o n a lly A d ju s te d (A ll d a ta a r e in d e x e s , u n le s s in d ic a te d o t h e r w is e .] L a t e s t M onth 1975 O ne M onth Ago Tw o M o nths Ago O ne Year Ago L a t e s t M onth 1975 U n e m p lo y m e n t R a te (P e rc e n t of W ork F o rc e )* * * . Avg. W e e kly H rs. in M fg. (H rs .) S IX T H D IS T R IC T IN C O M E A N D S P E N D IN G M a n u fa c tu rin g P a y r o l l s ......................... F a rm C a sh R e c e i p t s ...................................... C r o p s ..................................................................... L iv e s to c k ......................................................... In s t a lm e n t C re d it a t B a n k (M il. $) New L o a n s ......................................................... R e p a y m e n ts .................................................. */1 Ju ly Ju n e Ju n e Ju n e J u ly J u ly 177 .6 176 230 163 606 622 175.5 199 334 94 6 65 r 6 97 r 171 .8 172 227 165 177.7 174 232 159 595 604 676 667 )2 J u ly Ju ly Ju ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly J u ly Ju n e 129.7 108.1 1 07 .8 101.6 100.3 104.6 104.5 122 .4 106.4 1 08 .4 9 6.2 1 13 .9 129.2 108.2 108.1 101.9 129.9 108.1 107.7 103.6 9 9.3 102.7 105.5 123.5 106.4 108.6 94.3 115.3 134.6 118.7 116.0 104.5 113.0 113.7 115 .8 131.3 112 .4 100.2 105.2 103.2 122.8 106.1 108.3 9 4.8 114.9 122.2 110.8 134.9 149.7 154.7 104.7 142.7 79.1 120.5 1 46.9 9 8.6 137 .6 127.5 123.6 134.5 150.1 155.1 105 .9 143.7 7 8.5 131.3 115.5 1 3 4 .4 163.7 104.5 140.2 149 .6 126.9 139.3 154.0 154.0 104.1 139 .2 7 8.4 9.3 10.4 5 .4 100.1 100.8 101.2 118 .4 143.0 101.5 137.3 119.7 117.7 146.0 9 8.7 136.6 122.7 135.3 149 .4 154.4 106 .0 147.1 7 8.5 9.2 122.1 122.2 O ne Year Ago 39.1 8 .7 3 9.3 9 .7 3 9 .2 5 .3 4 0 .0 . J u ly . J u ly . J u ly 264 2 24 291 2 64 287 269 218 283 2 49 208 273 . J u ly . Ju n e 186 .6 179 184 .0 125 178 .3 1 93 .8 . . . . . 1 50 .0 117 .7 1 56 .2 135 .4 7 7 .0 148 .8 117 .5 1 54 .8 141 .8 7 2 .7 149 .5 1 17 .6 1 55 .6 1 4 6 .4 7 0 .9 159 .1 129 .3 1 64 .8 2 0 4 .4 8 3 .4 . J u ly . Ju ly 1 0.4 3 9 .9 10.5 3 9 .6 1 2.3 3 9.1 5 .6 4 0 .4 . J u ly . J u ly . J u ly 286 247 315 2 88 2 44 314 2 94 2 48 317 313 2 48 311 159 .7 197 158.1 188 1 64 .2 153 124.1 124 .9 9 9.6 1 3 6 .4 122.3 103 .7 129 .1 1 09 .5 138 .1 1 43 .8 9 3.6 F IN A N C E A N D B A N K IN G M em b er B a n k L o a n s ......................... M em b er B a n k D e p o sits . . . B a n k D e b i t s * * ...................................... 221 212 202 EM P LO YM EN T U n e m p lo ym e n t R a te (P e rc e n t of W o rk F o rc e )- . . A vg. W e e k ly H rs . in M fg. (H rs .) J u ly J u ly J u ly J u ly Ju n e F IN A N C E A N D B A N K IN G M em b er B a n k L o a n s ......................... M a n u fa c tu rin g P a y ro lls ................................J u ly F a rm C a sh R e c e i p t s ............................................ Ju n e 161 .5 178 EM PLO YM EN T J u ly J u ly J u ly J u ly J u ly J u ly Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e Ju n e 5 .6 3 9.6 198 151 245 6 4.4 141 .6 142 .7 1 30 .8 136 .6 124.3 1 30.9 128.4 158.3 139.7 142.1 122.7 1 39 .8 9 8 .9 111.7 1 49 .5 2 35 .3 129.1 6.6 3 9 .4 216 135 296 6 1.4 141.5 142.9 134.2 138.7 119.9 131.1 125 .9 157.6 139.5 140 .7 120 .7 139.3 9 9.1 111.6 148 .7 241.1 1 26.9 6.8 3 9.1 182 134 228 5 6.2 140 .4 142 .4 134 .9 136.0 118.2 131 .4 125.8 159.6 137.8 138 .9 116 .2 137 .4 100.8 111.1 148 .8 2 40 .1 122.0 2 .3 4 0 .6 213 187 239 79.1 150 .8 1 50 .7 135.1 1 48 .9 138.8 138.0 136 .4 164 .4 151.4 155 .0 1 6 0 .9 1 5 9 .4 1 07 .8 1 24 .8 150.9 2 5 2 .5 132 .6 F IN A N C E A N D B A N K IN G Loan s* AH M e m b er B a n k s ................................ L a rg e B a n k s .................................................. D e p o sits* A ll M e m b er B a n k s ................................ L a rg e B a n k s ............................................ B a n k D e b i t s * / * * ................................ Tw o M o nth s Ago . J u ly . J u ly E M P L O Y M E N T A N D P R O D U C T IO N N o n farm E m p l o y m e n t ................................ M a n u fa c tu rin g ............................................ N o n d u ra b le G o o d s ................................ F o o d ............................................................... T e x t i l e s .................................................. A p p a re l .................................................. P a p e r ......................................................... P rin tin g and P u b lis h in g . . C h e m i c a l s ............................................ D u ra b le G o o d s ...................................... L b r ., Wood P ro d s ., F u rn . & F ix . S to n e , C la y , an d G la s s . . . P r im a ry M e t a l s ................................ F a b ric a te d M e t a l s ......................... M a c h i n e r y ............................................ T ra n s p o rta tio n E q u ip m e n t . N o n m a n u f a c t u r in g ...................................... C o n s t r u c t i o n ...................................... T ra n s p o rta tio n ................................ T r a d e ......................................................... F in ., in s ., and re al e st. . . . S e r v i c e s .................................................. F e d e ra l G o v e rn m e n t . . . . S ta te and L o c a l G o v e rn m e n t F a rm E m p lo y m e n t ............................................ U n e m p lo ym e n t R a te (P e rc e n t of W ork F o rc e . . . . In su re d U n e m p lo ym e n t (P e rc e n t o f C ov. E m p . ) ......................... Avg. W e e k ly H rs. in M fg. (H rs .) . . C o n s tru c tio n C o n t r a c t s * ......................... R e s i d e n t i a l ......................................................... A ll o t h e r ............................................................... C otto n C o n s u m p t i o n * * ................................ M a n u fa c tu rin g P ro d u c tio n . . . . N o n d u ra b le G o o d s ...................................... Food ......................................................... T e x t i l e s .................................................. A p p a re l .................................................. P a p e r ......................................................... P r in tin g and P u b lis h in g . . C h e m i c a l s ............................................ D u ra b le G o o d s ............................................ L u m b e r and W o o d ......................... F u rn itu r e an d F ix t u r e s . . . S to n e , C la y , a n d G la s s . . . P r im a ry M e t a l s ................................ F a b ric a te d M e t a l s ......................... N o n e le c tric a l M a c h in e ry . . E le c tr ic a l M a c h in e ry . . . T ra n sp o rta tio n E q u ip m e n t 8.8 O ne M onth Ago J u ly J u ly J u ly J u ly J u ly 263 241 264 241 270 251 222 220 222 276 259 191 306 192 306 193 297 216 185 293 182.2 226 179.6 311 179.8 193 1 86 .7 207 N o n fa rm E m p lo y m e n t . . . . M a n u f a c t u r i n g ................................ N o n m a n u fa c tu rin g . . . . C o n s t r u c t i o n ................................ F a rm E m p lo y m e n t ......................... U n e m p lo y m e n t R a te (P e rc e n t o f W o rk F o rc e )- . . Avg. W e e k ly H rs . in M fg. (H rs .) J u ly J u ly J u ly Ju ly Ju n e 1 23 .4 9 9 .5 134 .4 113.3 103 .7 135 .2 116 .9 1 0 3 .9 J u ly J u ly 9 .0 3 9 .2 3 9.3 10.7 3 9.1 4 .8 3 9 .6 M em b er B a n k L o a n s ............................................ . J u ly M em b er B a n k D e p o sits . . . J u ly B a n k D e b i t s * * ................................ 241 191 360 239 193 3 64 252 195 3 49 270 195 330 169.1 165 165 .7 324 161 .7 131 160.1 154 117 .4 1 03 .4 120 .3 9 5 .5 7 2 .6 117.5 1 04 .0 1 20 .4 9 7 .4 7 5.7 119.5 105 .2 1 22 .5 7 4 .8 117 .2 106 .3 119 .5 9 7.6 7 8.6 8.3 8.2 3 8.3 8 .4 3 8 .0 6 .9 4 0.0 241 205 263 246 205 271 246 206 249 248 191 244 2 0 8 .4 189 202.8 2 93 1 97 .9 173 2 0 1 .4 186 126.1 120.3 128 .7 125 .2 119 .3 128 .0 109 .4 6 3.5 126 .5 119 .8 129 .6 117 .8 5 8.3 131 .1 134 .2 129 .7 138 .5 6 9 .9 100.0 8.8 F IN A N C E A N D B A N K IN G L O U IS IA N A IN C O M E M a n u fa c tu rin g P a y ro lls ................................J u ly F a rm C a sh R e c e i p t s ............................................ J u n e EM P LO YM EN T N o n fa rm E m p l o y m e n t ......................................J u ly M a n u fa c tu rin g .................................................. J u ly N o n m a n u f a c t u r in g ............................................ J u ly C o n s t r u c t i o n ............................................ J u ly F a rm E m p lo y m e n t ...................................................J u n e U n e m p lo y m e n t R a te (P e rc e n t o f W o rk F o r c e ) * ......................... J u ly A vg . W e e k ly H rs. in M fg. (H rs .) . . . J u ly 102.8 F IN A N C E A N D B A N K IN G M em b er B a n k L o a n s * ...................................... J u ly M em b er B a n k D e p o s i t s * ................................Ju ly B a n k D e b i t s * / * * ......................................................... J u ly A LA B A M A M IS S IS S IP P I IN C O M E M a n u fa c tu rin g P a y ro lls . . . . F a rm C a sh R e c e ip t s . . . . J u ly Ju n e EM P LO YM EN T N o n farm E m p lo y m e n t . . . M a n u fa c tu rin g ...................................... ............................... N o n m a n u fa c tu rin g C o n s t r u c t i o n ............................................ F a rm E m p lo y m e n t ............................................ 154 Ju ly Ju ly J u ly J u ly Ju n e 121.0 108.0 127.0 129.4 72.3 IN C O M E M a n u fa c tu rin g P a y r o l l s ................................j Uly F a rm C a sh R e c e i p t s ............................................ Ju n e EM P LO YM EN T 119.0 1 07.4 124.3 128.8 7 3.0 118.9 107.6 124.0 128.8 7 4.6 123.2 118.8 1 25 .2 135.5 7 0.4 N o n farm E m p lo y m e n t . . . M a n u fa c tu rin g ......................... N o n m a n u fa c tu rin g . . . . . . . . J u ly J u ly J u ly J u ly 101.0 5 9.6 SEPTEMBER 1975, MONTHLV REVIEW L a te s t M onth 1975 U n e m p lo y m e n t R a te (P e rc e n t o f W ork F o rc e )* * * . Avg. W e e k ly H rs. in M fg. (H rs .) One M onth Ago Tw o M o nth s Ago O ne Year Ago L a t e s t M onth 1975 O ne M onth Ago One Year Ago Tw o M o nth s Ago E M P LO YM EN T . J u ly . J u ly 8 .5 3 9 .8 8.1 3 9.3 8 .6 3 8 .9 4 .0 3 9.7 M em b er B a n k L o a n s * . . . . M em b er B a n k D e p o sits* . . . B a n k D e b i t s * / * * ...................................... J u ly J u ly , J u ly 261 225 280 260 2 19 266 262 218 257 258 217 2 59 Ju ly J u ly J u ly Ju ly Ju n e 125.2 107.5 135.1 130 .4 8 6.6 125 .2 108.2 134.7 127.1 8 8.0 125.1 107.3 135.1 133 .0 8 8.6 129.2 1 19 .9 134.3 134.1 7 8 .9 Ju ly J u ly 8 .6 40.1 8 .5 4 0 .0 9 .3 3 9.5 5 .4 4 0.1 M em b er B a n k L o a n s * ......................................J u ly M em b er B a n k D e p o s i t s * ......................... ...... J u ly B a n k D e b i t s * / * * ........................................................ Ju ly 272 219 262 271 218 2 57 277 223 2 44 2 68 204 2 70 N o n fa rm E m p lo y m e n t . . . . M a n u fa c tu rin g ................................ N o n m a n u fa c t u r in g ......................... C o n s t r u c t i o n ................................ F a rm E m p lo y m e n t ................................ U n e m p lo y m e n t R a te (P e rc e n t o f W o rk F o rc e )2 . . A vg. W e e k ly H rs. in M fg. (H rs .) F IN A N C E A N D B A N K IN G F IN A N C E A N D B A N K IN G M a n u fa c tu rin g P a y r o l l s ............................... Ju ly F a rm C a sh R e c e i p t s ............................................Ju n e 174.4 158 177.0 181 • F o r S ix th D is t r ic t a re a o n ly ; o th e r to ta ls fo r e n tir e s ix s ta te s * * * S e a s o n a lly a d ju s te d d a ta s u p p lie d by sta te a g e n c ie s . 1 81.4 2 04 “ D a ily a v e ra g e b a s is t P r e lim in a r y d a ta r-R e vise d N .A . N ot a v a ila b le Note: All indexes: 1967 = 100. S o u rc e s : M a n u fa c tu rin g p ro d u ctio n e s tim a te d by t h is B a n k ; n o n fa rm , m fg. a n d non m fg. e m p ., m fg . p a y ro lls a n d h o u rs, a n d u n e m p ., U .S . D ept, o f L a b o r an d c o o p e ra tin g sta te a g e n c ie s ; co tto n c o n su m p tio n , U .S . B u re a u o f C e n s u s ; c o n s tru c tio n c o n t ra c t s , F . W. Dodge D iv ., M cG ra w -H ill In fo rm a tio n S y s te m s C o .; fa rm c a s h re c e ip ts an d fa rm e m p ., U .S .D .A . O th e r in d e x e s b a sed on d a ta c o lle c te d by th is B a n k . A ll in d e x e s c a lc u la te d by t h is B a n k . ’ D ata b e n c h m a rk e d to J u n e 1971 R e p o rt o f C o n d itio n . -R e v is e d to re fle c t 1974 b e n c h m a rk s an d n ew s e a so n a l fa c to rs . D e b it s t o D e m a n d D e p o s it A c c o u n ts Insured Commercial Banks in the Sixth District (In T h o u sa n d s of D o lla r s ) P e r c e n t C h an g e P e r c e n t C h an g e J u ly 1975 fro m Ju ly 1975 Ju n e 1975 J u ly 1974 Ju n e 1975 J u ly 1974 Year to d a te 7 m o s. 1975 fro m 1974 S T A N D A R D M E T R O P O L IT A N S T A T IS T IC A L A R E A S ' B irm in g h a m . . . . G a d sd e n . . . . H u n ts v ille . . . . M o b i l e ......................... . M o ntg o m ery . . . T u s c a lo o s a . . . 5 ,1 7 0 ,5 9 6 124 ,0 53 4 0 6 ,7 3 9 1 ,5 1 2 ,0 2 3 9 1 8 ,6 2 4 293 ,1 11 5 ,0 4 0 ,7 4 0 108 ,1 10 38 8 ,9 6 3 1 ,4 0 5 ,9 7 3 8 0 8 ,4 5 0 2 9 0 ,7 7 6 4 ,9 8 7 ,4 3 0 1 17 ,6 93 4 2 2 ,0 1 9 1 ,3 4 4 ,4 1 8 6 4 3 ,6 4 5 2 6 8 ,7 2 5 + 3 + 15 + 5 + 8 + 14 + 1 + 4 + 5 - 4 + 12 + 43 + 9 + 17 + 2 + 11 + 19 +20 + 10 9 52,991 5 1 1 ,1 0 9 8 6 0 ,1 6 8 5 0 4 ,6 95 9 0 1 ,5 4 4 5 0 8 ,2 4 2 + 11 + 1 + 6 + 1 + 7 + 10 . 1 ,9 6 4 ,9 1 2 4 0 6 ,8 7 5 2 5 0 ,9 5 6 5 ,0 4 1 ,1 2 7 1 ,9 1 8 ,8 3 0 4 2 9 ,8 11 2 5 5 ,2 3 0 5 ,1 7 5 ,5 9 1 2 ,1 7 6 ,4 6 3 3 8 7 ,3 9 4 3 0 1 ,2 8 8 4 ,7 6 5 ,7 3 7 + - 2 5 2 3 -1 0 + 5 -1 7 + 6 - 4 + 10 - 2 - 0 . . . 4 2 3 ,5 3 4 7 ,7 8 5 .7 6 4 1 ,7 6 8 ,4 6 3 5 5 5 ,9 3 8 5 4 2 ,5 81 1 ,0 7 2 ,8 4 9 4 ,5 2 7 ,0 6 2 1 ,2 38 ,8 81 4 4 6 ,6 4 6 7 ,1 2 2 ,8 7 9 1 ,7 9 3 ,5 5 5 5 5 5 ,6 7 4 5 2 9 ,2 7 0 9 2 3 ,5 2 2 4 ,4 6 1 ,6 0 0 1 ,1 4 8 ,9 4 3 4 6 6 ,2 0 2 7 ,9 7 0 ,6 6 4 1 ,5 8 0 ,9 2 4 5 3 7 ,9 2 4 5 3 9 ,6 8 2 8 9 3 ,0 9 6 4 ,2 8 2 ,2 7 4 1 ,3 1 5 ,7 5 1 + + + + + + 5 9 1 0 3 16 1 8 - 9 - 2 + 12 + 3 + 1 +20 + 6 - 6 + + + + - A lb a n y ......................... A t l a n t a ......................... A u g u s t a ......................... C o lu m b u s . . . . M acon ......................... Savannah . . . . 2 0 3 ,4 5 0 . 2 2 ,1 4 3 ,6 2 8 6 5 5 ,5 4 4 5 2 7 ,0 3 3 8 7 5 ,7 3 0 1 ,0 8 7 ,0 0 7 2 0 6 ,1 8 4 2 1 ,2 7 9 ,6 7 0 6 3 5 ,1 6 1 4 8 6 ,4 5 1 8 7 2 ,0 8 0 1 ,0 3 2 ,0 1 0 2 0 4 ,4 1 5 1 9 ,1 9 4 ,0 8 1 6 9 5 ,7 7 8 5 2 8 ,9 6 9 8 7 3 ,5 8 4 6 8 2 ,4 3 0 + + + + + 1 4 3 8 0 5 - 0 + 15 - 6 - 0 + 0 +59 - 4 + 8 + 4 + 0 + 8 + 65 A le x a n d ria . . . . B a to n R o u g e . . L a fa y e tte . . . . L a k e C h a r le s . . New O rle a n s . . 3 5 0 ,4 2 8 2 ,0 9 2 ,2 8 4 4 2 4 ,2 3 3 3 2 2 ,5 5 2 6 ,0 7 6 ,1 8 5 3 2 5 ,2 0 9 2 ,1 1 7 ,1 7 2 4 2 3 ,9 3 1 2 7 9 ,8 8 4 5 ,6 8 8 ,2 4 0 3 0 9 ,7 5 4 2 ,1 5 0 ,1 7 5 3 2 0 ,1 5 4 2 8 9 ,0 0 8 5 ,5 9 4 ,7 0 4 + + + + 8 1 0 15 7 + 13 - 3 + 33 + 12 + 9 + 12 +22 +32 + 11 + 12 3 2 7 ,3 2 4 1 ,9 7 0 ,3 2 7 3 0 5 ,4 3 2 1 ,6 7 8 ,9 5 9 2 9 3 ,7 6 9 1 ,7 7 5 ,6 8 4 + 7 + 17 + 11 + 11 + 16 + 7 1 ,3 8 9 ,6 4 9 1 ,6 2 2 ,2 0 8 4 ,6 8 4 ,3 1 7 1 ,2 3 7 ,1 0 7 1 ,4 9 3 ,5 1 7 4 ,2 5 5 ,9 1 8 1 ,4 0 7 ,9 0 6 2 ,3 1 1 ,1 4 1 4 ,4 8 0 ,5 6 8 + 12 + 9 + 10 - 1 -3 0 + 5 - 9 -1 4 + 13 1 4 0 ,9 45 1 23 ,4 00 130 ,1 03 + 14 + 8 + 7 B a rto w -La k e la n d W in te r H aven D a yto n a B e a c h . . F t. La u d e rd a le H o llyw o od . . . F t. M ye rs . . . . G a in e s v ille . . . Ja c k s o n v ille . . . M elb ou rneT itu s v itle - C o c o a M iam i ......................... O r l a n d o ......................... P e n s a c o la . . . . S a ra so ta . . . . T a lla h a s s e e . . . T a m p a - S t. P e te W . P a lm B e a c h . . . B ilo x i- G u lfp o rt . . Ja c k s o n ......................... C h atta n o o g a . . . K n o x v ille . . . . N a s h v ille . . . . O TH ER C E N T E R S A n n isto n . . . . . 1 2 3 10 1 10 2 6 Year to d a te 7 m o s. 1975 J u ly fro m 1974 197 4 J u ly 1975 fro m J u ly 1975 Ju n e 1975 J u ly 197 4 D o th an . . . . S e l m a ........................ 2 0 5 ,8 6 5 9 3 ,1 6 4 1 9 6 ,1 08 8 3 ,7 7 9 2 2 6 ,5 9 4 8 4 ,3 2 2 B ra d e n to n . . . M onroe C o u n ty . O c a l a ......................... S t. A u g u stin e St. P e te rs b u rg . Tam pa . . . . 2 1 0 ,7 1 9 1 1 4 ,3 52 2 2 0 ,4 0 4 4 5 ,7 2 0 1 ,0 5 7 ,2 3 0 2 ,3 8 8 ,6 9 2 2 0 6 ,6 2 9 11 1 ,3 4 4 2 3 2 ,3 8 8 4 5 ,7 1 2 1 ,0 07 ,7 93 2 ,3 9 7 ,8 0 2 2 1 3 ,0 0 7 9 3 ,0 5 4 2 0 8 ,0 9 6 6 2,14 1 1 ,0 8 6 ,2 1 1 2 ,1 4 3 ,1 7 3 A th e n s . . . . B ru n s w ic k . . . D alto n . . . . E lb e rto n . . . G a in e s v ille . . . G r i f f i n ........................ L a G ra n g e . . . N ew n an . . . . R o m e ......................... V a ld o sta . . . . 1 78 ,6 11 1 3 1 ,5 4 6 1 6 8 ,7 56 3 0 ,9 3 4 1 91 ,8 53 80,67 1 3 9 ,19 4 6 8,591 1 8 2 ,4 20 125 ,1 87 1 7 1 ,8 3 8 1 26 ,3 61 1 7 5 ,3 5 4 3 3 ,9 1 5 176 ,7 53 6 8,61 4 40,51 7 5 2,34 4 1 72 ,5 66 1 14,581 A b b e v ille . . . . . . B u n k ie Ham m ond . . New Ib e ria . P la q u e m in e . T h ib o d a u x . . 1 8,421 16,35 2 1 08 ,4 50 9 3 ,6 6 0 3 3 ,1 0 5 6 7 ,7 7 3 H a ttie sb u rg . L a u re l . . . . M e rid ia n . . N a tc h e z . . . . F a sc a g o u la M o ss P o in t V ic k s b u rg . . Y a zo o C ity . . . . . . . . . . . . Ju n e 1975 + 5 + 11 - 9 + 10 - + + + + - 2 3 5 0 5 0 - 1 + 23 + 6 -2 6 - 3 + 11 - 1 + 16 + 10r -2 1 - 4 +10 1 7 2 ,0 0 4 1 1 1 ,0 07 194 ,8 51 2 4 ,6 1 0 172 ,6 75 86,54 6 4 2 ,7 3 4 5 7,571 1 6 3 ,7 7 9 119 ,9 55 + 4 + 4 - 4 - 9 + 9 + 18 - 3 + 31 + 6 + 9 + 4 + 19 -1 3 +26 + 11 - 7 - 8 + 19 + 11 + 4 + 2 + 19 -1 2 + 14 + 10 -1 2 -1 7 + 0 + 6 + 7 1 7,84 3 1 5,51 9 1 0 9 ,7 70 7 9 ,7 1 9 3 1 ,8 4 0 6 3 ,1 0 6 1 7,10 8 15,381 1 0 2 ,0 98 7 6 ,4 7 6 2 7 ,0 5 2 4 0 ,3 8 1 + 3 + 5 - 1 + 17 + 4 + 7 + 8 + 6 + 6 + 29 + 22 +68 + 9 +23 +26 + 31 + 23 +66 1 74 ,3 48 8 9 ,2 5 5 1 43,791 5 7,76 2 1 5 0 ,6 10 7 6 ,7 3 5 1 4 6 ,0 63 5 7 ,9 9 0 150 ,8 75 9 0 ,7 1 6 1 4 0 ,3 20 6 7 ,1 7 9 + + - 16 16 2 0 + 16 - 2 + 2 -1 4 + + - 1 6 8 ,8 1 9 8 6 ,4 5 8 5 8 ,6 3 8 1 7 8 ,3 76 7 8 ,3 3 8 4 6,32 1 1 7 2 ,0 2 6 9 1 ,7 3 8 5 8 ,2 3 9 - 5 + 10 + 27 - 2 - 6 + 1 + 6 -1 0 - 6 - 2 + 11 - 6 - 1 + 3 + 4 + 13 + 1 + 10 5 3 11 3 4 0 . . . . . . B r i s t o l ........................ Jo h n so n C ity K in g sp o rt . . . . . 157 ,1 95 191 ,5 99 3 3 8 ,0 01 1 6 0 ,2 85 1 7 2 ,6 04 3 5 7 ,8 9 6 1 58 ,0 10 1 8 5 ,8 96 3 2 4 ,4 5 7 . . . 9 7 ,8 9 8 ,9 8 0 9 3 ,0 4 4 ,0 8 6 9 4 ,0 4 2 ,5 0 9 + 5 + 4 + 6 A la b a m a . . . . F lo rid a . . . . G eo rg ia . . . . L o u is ia n a - . . . M is s is s ip p i. . T e n n e ss e e * . . . . . . . . . . . . . . 1 1 ,2 9 0 ,8 3 9 2 8 ,5 6 0 ,3 1 3 2 8 ,7 6 6 ,0 2 1 1 0 ,5 5 3 ,2 9 8 3 ,5 8 7 ,5 1 6 1 0 ,2 8 6 ,0 9 9 1 1 ,3 0 7 ,8 4 5 2 9 ,3 6 1 ,2 5 2 2 7 ,5 1 5 ,9 5 4 1 0 ,2 6 2 ,7 3 5 3 ,7 8 2 ,0 1 1 1 1 ,8 1 2 ,7 1 2 + + + + + + + + + + + - + 15 + 1 + 8 + 15 + 5 + 2 D IS T R IC T T O T A L 1 1 ,9 2 0 ,4 6 3 2 9 ,4 1 2 ,7 5 2 2 9 ,9 8 5 ,4 9 5 1 1 ,0 5 8 ,1 6 7 4 ,0 3 0 ,6 3 1 1 1 ,4 9 1 ,4 7 2 6 3 4 5 12 12 5 0 9 8 7 3 JC o n fo rm s to S M S A d e fin itio n s a s o f D e c e m b e r 3 1 , 1972. ^ D istrict p o rtio n o n ly . F ig u re s fo r so m e a re a s d iffe r s lig h tly fro m p re lim in a ry fig u re s p u b lis h e d in “ B a n k D e b its a n d D e p o sit T u rn o v e r” by B o a rd o f G o v e rn o rs of th e F e d e ra l R e s e rv e S y s te m . F E D E Rfor A L FRASER R E SE R V E B A N K O F A T L A N T A Digitized 155 D i s t r i c t B u s in e s s C o n d i t i o n s Unemployment Rate Average Weekly Hours Moving Avg Mfg Payrolls Farm Cash Receipts 1111i i 11111 * S e a s . adj. figure; not an in d ex L a te st plotting: July, excep t m fg. p ro d u c tio n an d farm c a sh receipts, June. T h e S o u th e a ste rn e c o n o m y s h o w s clear s ig n s o f recovery. L a b o r m a rke ts are stro n g e r, a n d b a n k le n d in g a p p ears to b e fla tte n in g ou t. R e sid e n tia l c o n stru c tio n a ctiv ity su sta in e d its recen t sm a ll a d v a n c e s. C o n s u m e r in c o m e s w e re h igh e r, a n d a u to m a rke ts a p p e a re d to stren gthe n . H ig h e r p ric e s o f farm p ro d u c ts b r ig h te n e d farm in c o m e p ro sp e c ts, b u t c o sts a lso rose. A sm a ll rise in e m p lo y m e n t a n d a c o n tin u e d d e c lin e in the u n e m p lo y m e n t rate b rig h te n e d the la b o r m arke t in July. T h e g o v e r n m e n t a n d trade se ctors p ro v id e d stren gth in n o n m a n u fa c tu r in g an d m o re than offset a sm all d e c lin e in the n o n d u ra b le g o o d s se ctor; c o n stru c tio n re m ain e d w eak. Jobs in d u ra b le g o o d s in d u strie s rose for o n ly the se c o n d tim e in 23 m o n th s o n the stren gth o f a sig n ific a n t u pturn in tra n sp o rta tio n e q u ip m e n t. Bo th facto ry h o u rs an d p ay ro lls su stain e d their a d v a n c e for the fourth m o n th , an d in d u strial o u tp u t fo llo w e d the sa m e trend. tor w a s o ffse t b y a d e c lin e in n o n re sid e n tia l c o n tracts. A ll states b u t G e o r g ia a n d L o u isia n a sh a re d in the resid en tial increase. H o m e m o rt g a g e rates crept u p a lo n g w ith o th e r interest rates, bu t in flo w s at thrift in stitu tio n s c o n tin u e d at a h igh rate. M a n u f a c t u r in g w o r k e r s' in c o m e s ro se fo r the fo u rth c o n se c u tiv e m o n th in July. T h e d e c lin e in c o n s u m e r in sta lm e n t c re d it at b a n k s tap e re d off. W h ile total o u ts ta n d in g a u to c re d it fell, the size o f the d e cre ase w a s sm aller. R e p a y m e n ts sh ra n k ; ex te n sio n s gre w , re fle ctin g the re co v e ry o f a u t o m o b ile sales. Pe rson al lo an e x te n sio n s d e c lin e d . P re lim in a ry data fo r A u g u s t su g g e st that lo an s c h a n g e d little in A u g u s t; so m e b a n ke rs n o w expe ct P rice s re c e iv e d b y fa rm e rs rose a g a in in July to reach 8 p e rce n t a b o v e the le vel o f a y ear a g o . H o w ever, p rices p a id by farm e rs w e re u p 11 p e rce n t d u r b u sin e ss lo an d e m a n d to p ic k u p in the c o m in g m o n th s. By late A u g u s t, m o st large b a n k s h ad raised in g the sa m e p e rio d . Prices o f b roilers, h o gs, w heat, a n d c o tto n led the u p w a rd m o v e m e n t in p rices re their p rim e le n d in g rate to 73A percent, in line w ith c eived, a n d p re lim in a ry data in d ic a te that these p rices have c o n tin u e d to increase in A u g u s t. In the B a n k lo a n s p o ste d a sm a ll increase d u r in g July. m a jo r b a n k s in o th e r areas. D istric t b a n k s are c o n tin u in g to p u rc h a se siz a b le a m o u n ts o f n e w T re asu ry se cu rities a n d m u n ic ip a l o b lig a tio n s. T h e v a lu e o f c o n stru c tio n c o n trac ts d ip p e d in July as c o n tin u e d m o d e s t stren gth in the resid en tial se c first half o f 1975, farm cash receip ts w e re 8 p erce n t a b o v e the c o m p a r a b le 1974 level, w ith o n ly T e n n e s see a n d M is s is s ip p i n o t sh a rin g in the increase. G r o w in g c ro p s re m a in e d in g o o d c o n d itio n th r o u g h A u g u st. Note: Data on which statements are based have been adjusted whenever possible to eliminate seasonal influences. 156 SEPTEMBER 1975, MONTHLY REVIEW
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