In its monthly banking conditions survey the Dallas Fed saw increases in both loan demand and loan volume as loan prices rose sharply in the Eleventh Federal Reserve District.
According to the survey 51%of respondents noted an increase in loan demand and 54% an increase in loan volume. Concurrently 52% of respondents observed an increase in loan pricing.
The number of non-performing loans decreased with 24% of respondents reporting a decline and 10% reporting a rise. Growth was strongest in commercial real estate loans in the Eleventh District comprising Texas, northern Louisiana and southern New Mexico.
Opinions were mixed on the economic prospects of the region.
“Wage inflation and labor shortage are issues in the marketplace,” noted one respondent. “Rising rates will begin to impact some business loans in both production of new loans and in the credit quality of the existing portfolio.”