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T H U R S D A Y , J A N U A R Y M u t u a l Banking & Finance THE DAILY TRANSCRIPT F u n d Disappointing book-end to solid year sector stock funds while real estate and financial funds M o s t f u n d s e n d e d t h e f o u r t h q u a r t e r o n a s o u r n o t e , t h o u g h e n d - o f - t Shaila Dani AP Business Writer h e - y e a r t u r m o i l w a s n t e n o u g h t o e a t a w a y m o s t o f 2 0 0 7 s g a i n s . A c c o r d i n g t o L i p p e r , 1 8 o f t h e 2 5 l a r g e s t m u t u a l f u n d s d e c l i n e d i n t h e q u a r t e r , w h i l e o n e f u n d w a s f l a t . G r o w t h a n d v a l u e f u n d s i n l a r g e c a p i t a l i z a t i o n , m u l t i - c a p a n d s m a l l - c a p c a t e g o r i e s d e c l i n e d . S m a l l - c a p f u n d s w e r e w e a k e s t , a s t h e c o m p a n i e s t h e y h o l d t y p i - c a l l y d o n t h a v e d i v e r s e o p e r a - t i o n s , i n c l u d i n g u n i t s o v e r s e a s . U . S . c o m p a n i e s w i t h s u b s t a n t i a l f o r e i g n r e v e n u e h a v e b e n e f i t e d f r o m t h e w e a k d o l l a r . " A l o t o f p a r t o f t h e y e a r p e r s i s t e d i n t o t h e f o u r t h q u a r t e r , " s a y s M o r n i n g s t a r s C h r i s t i n e B e n z , d i r e c t o r o f m u t u a l f u n d s a n a l y - s i s . " T h e k e y d i f f e r e n c e w a s t h e f o u r t h the trends we saw for the better q u a r t e r w a s v e r y w e a k . " O n g o i n g c r e d i t a n d h o u s i n g m a r k e t t r o u b l e s t o o k a t o l l o n p e r f o r m a n c e i n t h e l a s t t h r e e m o n t h s o f t h e y e a r , w i t h t h e m a r k e t r e a c t i n g t o s m a l l e r - t h a n - e x p e c t e d c u t s t o t h e F e d e r a l R e s e r v e s f e d e r a l f u n d s r a t e . w h e n s t o c k p r i c e s d e c l i n e w e r e o n e o f t h e f e w g a i n i n g c a t - e g o r i e s f o r t h e q u a r t e r . N a t u r a l r e s o u r c e s f u n d s a l s o r o s e w h i l e g o l d f u n d s g a v e b a c k s o m e o f Funds with a bias toward shorted stocks – which benefit t h e y e a r s g a i n s . U t i l i t i e s , w h i c h t e n d t o p e r f o r m w e l l i n p e r i o d s o f b r o a d e c o n o m i c t u r m o i l , l e d p l u n g e d . M o s t i n t e r n a t i o n a l s t o c k f u n d c a t e g o r i e s , w h i l e s t i l l u p s m a r t l y f o r t h e y e a r , a l s o d e c l i n e d d u r - i n g t h e q u a r t e r . M i r r o r i n g t h e i r d o m e s t i c c o u n t e r p a r t s , i n t e r n a - t i o n a l s m a l l - c o m p a n y s t o c k f u n d s w e r e w e a k e r t h a n l a r g e - c o m p a n y f u n d s . J a p a n e s e f u n d s w e r e d o w n f o r t h e q u a r t e r a n d f u l l y e R E V I E W a r . C h i n a f u n d s s t a l l e d i n t h e q u a r t e r b u t e n d e d t h e y e a r s h a r p l y h i g h e r a m i d t h e r e g i o n s r o b u s t e c o n o m i c g r o w t h . By The Associated Press and Lipper, Inc. Associated Press

4th Quarter 2007

Mutual fund performance, by asset size

Large-Cap

Quarter 1 Year 5 Years 10 Years 15 Years

Saratoga:Lg Cap Gro;I Saratoga:Lg Cap Gro;I Janus Twenty Janus Adv:Forty;S Legg Mason Value Tr;Prm

Mid-Cap G

rowth

Quarter 1 Year 5 Years 10 Years 15 Years

CGM Tr:Focus Fund CGM Tr:Focus Fund CGM Tr:Focus Fund CGM Tr:Focus Fund Fidelity New Millennium

Small-Cap

Growth

Quarter 1 Year 5 Years 10 Years 15 Years

Prasad:Growth Fund Lord Abbett Dev Gro;A Winslow Green Gr Wasatch:Micro Cap Neuberger Genesis;Inv

International

Quarter 1 Year 5 Years 10 Years 15 Years

Driehaus:Intl SC Gro Fidelity Canada Oppenheimer Intl Sco;A BlackRock:Intl Op;A Harbor:Intl;Inst

Balanced

Quarter 1 Year 5 Years 10 Years 15 Years

CGM Tr:Mutual Fund CGM Tr:Mutual Fund CGM Tr:Mutual Fund Oakmark Eqty & Inc;I T Rowe Price Cap App

Corporate Bond

Quarter 1 Year 5 Years 10 Years 15 Years

PIMCO:Extend Dur;Inst PIMCO:Extend Dur;Inst Loomis Sayles:Fx In;Inst Loomis Sayles:Bd;Inst Loomis Sayles:Bd;Inst

High Yield Bond

Quarter 1 Year 5 Years 10 Years 15 Years

AFBA 5Star:Tot Rtn;I Pioneer High Yld;A Loomis Sayles:Inst HI;I Fidelity RE/Hi Inc Fidelity Capital & Inc

Government Bond

Quarter 1 Year 5 Years 10 Years 15 Years

Direxion:10Y Bl 2.5x;Inv Direxion:10Y Bl 2.5x;Inv Amer Cent:T2025;Inv Amer Cent:T2025;Inv Amer Cent:T2020;Inv

Science & Technology

Quarter 1 Year 5 Years 10 Years

Internet Infra HOLDRS TA IDEX:Ta Sci&Tech;I Fidelity Sel Wireless Kinetics:Internet;NL

15 Years

Fidelity Sel Software

11.78 37.35 159.32 244.62 545.42

- - - -

12.01 79.97 384.87 917.10 905.38

- - - - -

20.94 35.83 235.71 527.84 728.61

- -

-

10.41

10.82

83.70

-

140.58

-

362.64

-

Top performers in popular categories

Funds that receive checkmarks in these fields provided consistent returns (Cnst.) from year to year or displayed a superior ability to preserve capital in a variety of markets (Prsv.) when compared with similar funds over a three year time horizon. For more information, see www.lipperleaders.com

-

10.07

35.02

-

432.62

-

655.71

755.75

-

% Rtn

Cnst.

-

    • 6.43

      -

    • 38.49

      -

    • 159.57

      -

    • 207.66

      -

467.17

Period Prsv.

Fund

2.39 6.92 117.38 146.27 250.25

11.56 17.80 47.44 121.54 344.89

9.57 32.86 290.05 604.54 875.67

-

Fund Name

Quarter

1 Year

Net assets

(millions)

American Funds Gro;A American Funds CWGI;A American Funds CIB;A Fidelity Contrafund SPDR Trust;1 American Funds ICA;A PIMCO:Tot Rtn;Inst American Funds Wsh;A American Funds Inc;A Dodge & Cox Stock American Funds EuPc;A Vanguard 500 Index;Inv Fidelity Dvsd Intl Dodge & Cox Intl Stock iShares:MSCI EAFE Idx Vanguard T Stk Idx;Inv American Funds NPer;A Vanguard Instl Indx;Inst Fidelity Magellan Fund American Funds FInv;A American Funds Bal;A Vanguard 500 Index;Adm Fidelity Gro Company Fidelity Lw-Prcd Stk Franklin Cust:Inc;A

92196.6 82897.5 81371.3 80335.4 74763.3 69391.8 67283.7 67112.7 65690.8 65036.5 64674.2 57548.5 53479.5 49654 49342.7 45828.9 45094.4 38662.5 38221.8 37519.4 36933.2 35675.8 35104.4 32066.6 31451.5

Fund Name

Qtr.

American Funds Gro;A

-2.72

American Funds CWGI;A

0.28

American Funds CIB;A

-0.90

Fidelity Contrafund

2.53

SPDR Trust;1

-3.36

American Funds ICA;A

-4.33

PIMCO:Tot Rtn;Inst

3.92

American Funds Wsh;A

-5.18

  • -

    10

1-Yr.

American Funds Inc;A

-3.38

10.95

Dodge & Cox Stock

-4.78

17.52

American Funds EuPc;A

1.29

10.68

Vanguard 500 Index;Inv

-3.36

19.78

Fidelity Dvsd Intl

-0.41

5.39

Dodge & Cox Intl Stock

-0.65

5.94

iShares:MSCI EAFE Idx

-1.91

9.10

Vanguard T Stk Idx;Inv

-3.31

3.97

American Funds NPer;A

0.00

  • -

    5

  • 0

    5

18.96

American Funds FInv;A

-1.00

13.55

5.39

American Funds Bal;A

-1.97

6.60

16.03

11.71

Vanguard 500 Index;Adm

-3.34

5.47

3.77

Vanguard Instl Indx;Inst

-3.34

5.47

0.14

Fidelity Magellan Fund

1.68

18.83

10.97

Fidelity Gro Company

0.84

19.89

5.49

Fidelity Lw-Prcd Stk

-2.94

3.16

16.04

Franklin Cust:Inc;A

-1.75

5.31

10

15

20

Quarter % Return

1-year % Return

5-year % Return

10 year % Return

15-year % Return

-3.06 -0.03 -2.07 -5.54 -2.88 -1.80 -3.96 -6.70 -2.17 -0.85 -3.19 -9.02 4.41 -1.66 5.10 -3.55 7.10 3.31

5.74 14.17 12.02 0.08 6.43 10.91 4.00 -5.54 14.92 8.81 8.69 -9.18 36.43 11.61 19.53 24.79 39.62 23.43

74.41 74.95 166.84 91.20 88.48 130.35 85.39 102.21 113.97 80.75 107.13 102.18 362.89 195.28 162.08 219.51 288.40 213.13

66.65 66.33 161.07 108.04 107.10 128.03 92.83 135.87 114.49 144.25 118.94 140.96 288.50 206.83 146.89 226.24 377.05 390.82

289.62 250.00 363.11 364.33 369.77 357.80 340.62 413.42 482.35 450.03 329.15 450.25 479.27 541.73 386.62 187.36 905.80 413.30

Total Net Assets ($ mlns.)

Number of Funds

Type of Funds

398713.3 396448.8 980871.5 193171.6 520195.8 364602.5 172554.9 61083.9 45363.4 58101.5 107395.4 120640.6 218054.2 71633.7 24078.2 96734.2 74060.6 37069.6

894 780 1373 477 945 538 291 320 325 205 634 742 305 108 103 215 174 65

Large-Cap Core Funds Large-Cap Growth Funds International Multi-Cap Value Funds Multi-Cap Core Funds Global Funds Equity Income Small-Cap Value Funds Science & Technology Health & Biotechnology Small-Cap Growth Funds Sector Emerging Markets European Region Utility Pacific Region Natural Resources Gold

Mutual fund performance, by fund objective

Latin America Balanced General Taxable Bond High Yield Taxable Bond

4.64 -1.07 0.62 -1.30

Intermediate Term US Treasury/Govt Bond Intmdt Investment Grade Corporate Bond

3.77 1.81

Long Term Investment Grade Corporate Bon1.60

Mortgage

2.25

Short Term Investment Grade Corp Bond Stock & Bond Funds

0.92 -1.71

23782.6

28

808876.0

1680

68390.9

178

143690.5

575

57698.3

225

375974.3

601

127073.6

330

64399.0

158

134196.2

492

330393.3

1380

46.09

627.84

409.21

853.44

5.57

59.62

74.52

241.92

4.32

45.27

69.53

160.97

1.46

55.26

50.29

157.02

8.63

21.66

67.60

131.74

4.71

21.17

66.00

137.78

4.43

25.96

67.01

150.01

5.26

18.24

61.61

119.72

3.99

15.45

53.79

102.23

6.90

77.25

107.26

288.02

Bond funds and equity & bond

funds

Large

LV

LC

LG

Companies,

Large-Cap Value

Large-Cap Core

Large-Cap Growth

XV

XC

XG

Mid-size

Multi-Cap Value

Multi-Cap Core

Multi-Cap Growth

Companies

MV

MC

MG

Mid-Cap Value

Mid-Cap Core

Mid-Cap Growth

SV

SC

SG

Small-Cap Value

Small-Cap Core

Small-Cap Growth

U.S. Diversified Equity Objectives

Capitalization:

Read up and down to find funds that invest in

Read across to find funds that invest in different strategies.

Value $

Core $$$

Growth $$$$$

or Small Companies

Growth: Expensive, high-growth stocks

Value: Cheap, slower growth stocks

Core: Medium growth stocks

AB-Long-Term Bond: Funds that invest in corporate and govern- ment debt issues in the top grades. AU-Gold Oriented: Funds that invest in gold mines, gold-orient- ed mining finance houses, gold coins,orbullion. BL-Balanced: Primary objective is to conserve principal, by maintain- ing a balanced portfolio of both stocks and bonds. EI-Equity Income: Funds that seek high current income and growth of income through investment in equities. EM-Emerging Markets: Funds that invest in emerging market equity securities, where the "emerging market" is defined by a country’s GNP per capita and other econom- ic measures. EU-European Region: Funds that invest in markets or operations concentrated in the European region. GL-Global Stock: Funds that invest in securities traded outside

Othe

of the U.S. May own U.S. securi- ties as well. GM-General Muni: Invest in muni debt issues in the top four credit ratings. GT-General U.S. Taxable: Funds that invest in General Bonds. HB-Health/Biotech: Funds that invest in companies related to

health care, biotechnology.

medicine,

and

HC-High Yield Taxable: Funds that aim for high current yields from fixed income securities. Tend to invest in lower grade debt. HM-High Yield Municipal: Funds that invest in lower rated muni debt issues. IB-Intermediate Bond: Funds that invest their assets in investment grade debt issues (rated in the top four grades) with dollar-weighted average maturities of five to ten years. IG-Intermediate U.S.: Intermediate

  • U.

    S. Government; Intermediate

  • U.

    S. Treasury.

IL-International Stock:(non-U.S.):

r Fund Objectives and footnotes

Canadian; International;

International Small Cap. IM-Intermediate

Muni:

Intermediate-term Muni Debt including single states. LT-Latin American: Funds that invest their assets in markets or operations concentrated in the Latin American region. LU-Long-Term U.S.: General U.S. Government; General U.S. Treasury; Target Maturity. MP-Stock/Bond Blend: Multi-pur- pose funds such as Balanced Target Maturity; Convertible Securities; Flexible Income; Flexible Portfolio; Global Flexible and Income funds, that invest in both stocks and bonds. MT-Mortgage: Adjustable Rate Mortgage; GNMA; U.S. Mortgage. NM-Insured Muni: California Insured Muni Debt; Florida Insured Muni Debt; Insured Muni Debt; New York Insured Muni Debt. NR-Natural Resources: Funds that invest their assets in natural

resource stocks. PR-Pacific Region:

China

Region;

Japanese; Pacific Ex-Japan; Pacific Region. SB-Short-Term Bond: Ultra Short Obligation; Short Investment Grade Debt; Short-Intermediate Investment Grade Debt. SE-Sector: Financial Services; Real Estate; Sector/ Miscellaneous. SM-Short-Term Muni: California Short-Intermediate Muni Debt; Other States Short-Intermediate Muni Debt; Short-Intermediate Muni Debt; Short Muni Debt. SP-S&P 500 Index: Funds that are passively managed, and designed to replicate the performance of the Standard & Poor’s 500 Index on a reinvested basis. SQ-Specialty Equity: Funds that invest in all market capitalization ranges, with no restrictions for any one range. May have strate- gies that are distinctly different from other stock funds. SS-Single-State Municipal: Funds that invest in debt of individual

states. SU-Short-Term U.S.: Short U.S. Treasury; Short U.S. Government; Short- Intermediate U.S. Government. TK-Science & Technology: Funds that invest in science and Technology stocks. Includes Telecommunication funds. UT-Utility: Funds that invest in utility stocks. WB-World Bond: Emerging Markets Debt; Global Income; International Income; Short World Multi-Market Income.

FOOTNOTES:

S - A significant event affected performance.

  • *

    For funds with multiple classes,

only one fund (the biggest by total assets) is shown.

Total return performance and ranking figures based on data received by Lipper, Inc. by 7 p.m. 1/4/08.

Scramble

Continued from Page 5 ing some of the industry’s highest rates on products like CDs: one-year rates are about 5 percent. That pressures other banks to keep their rates up as well. Although that is good news for consumers who get higher returns on their savings, it is bad news for bank profits.

The situation is being exac- erbated by recent strong loan growth.

While banks are now col- lecting less interest on loans because of the Fed’s rate reductions, they are still mak- ing the same interest pay- ments to depositors. Banks typically try to fund loans through deposits, which can often be a lower-cost option than borrowing, and their profit is the difference between what they charge borrowers and what they pay out to depositors.

The profit squeeze is likely to surprise investors who have been focused on the credit squeeze that has forced some banks to take big write-downs.

“Everybody is focused on credit quality this quarter, but the secondary issue is mar- gins,” says Joseph Fenech, a managing director at Sandler O’Neill & Partners LP, a bou- tique research and invest- ment-banking firm that spe- cializes in the financial-servic- es industry.

Adding to that surprise is smaller banks that rely on lending for a bigger portion of their profits are likely to get hit hardest. These banks have largely avoided the subprime mortgage mess that has tripped up many larger banks.

The scramble for deposits is just another bad sign for the banking business, which is stumbling after several strong years. In recent months, banks

have set aside billions of dol- lars to cover soured loans. Banks also have been hurt by the weak housing market and exposure to a slew of sophisti- cated financial products that were tied to the subprime mortgage mess.

Both trends are expected to accelerate this year, keeping pressure on bank earnings and stock prices.

Net interest margins are the bread-and-butter of bank- ing, reflecting the money made on the difference between rates paid to deposi- tors and rates charged to bor- rowers. The industry’s aver- age third-quarter margin stood at 3.78 percent, the low- est level since 1991, according to SNL Financial, a Charlottesville, Va., research firm. Indeed, margins have been slipping regularly since early 2006, when they stood at about 4 percent.

The situation is particularly difficult for small and midsize banks, which may derive a substantial amount of their profits from interest income. Small banks may rely on such income for as much as 80 per- cent of their profits, while larg- er entities can rely on fee-gen- erating businesses like invest- ment banking to make up some of the lost income.

In a report issued Monday, Bank of America Corp. (NYSE: BAC) estimates that the industry will likely see fourth-quarter net interest margins drop by 0.05 to 0.15 percentage point.

“Anecdotal evidence holds that competition has kept deposit costs high and has yet to abate,” said the report issued by banking analysts John McDonald and Kenneth Usdin. They also noted that as some rates fall, “customers move toward higher-yielding

products,”

Indeed, several banks already have warned that fourth-quarter results will suffer from a margin squeeze. Cascade Bancorp, a commu- nity bank in Bend, Ore., that operates branches in Oregon and Idaho, last week said that its fourth-quarter mar- gin will shrink to 4.94 per- cent from 5.24 percent three months earlier.

The bank attributed the decline to a combination of weakening credit quality, which deprives banks of inter- est income from assets they have to keep funding; lower interest rates, which make lending less lucrative; and “seasonal changes in deposit composition.”

Deposit trends are often regional. The recent Citigroup survey found that competition has been heating up in the Western part of the country, an

7

EQUITY AND BOND FUNDS*

ProShares:UlS Finl ProShares:UlS Rl Est Mrkt Vctrs:Glbl Alt En Mrkt Vctrs:Agribus First Tr:NASD CE USLiq PowerShares DB MS Oil Matthews Asian:India PowerShares WldHill CE T Rowe Price Afr&ME United States Oil Fund Prasad:Growth Fund Calvert Glb Alt Engy;A ProShares:Uls Cons Sv EM Cap India Gway;A

SQ SQ NR SE NR NR EM SC EM NR SG NR SQ EM

PowerShares DB MS EngyNR ProFunds:UltSh Japan;InvSQ

Eaton Vance Grtr Ind;A MACROshares:Oil Up Tr

EM NR

Mrkt Vctrs:Russia JPMorgan:India;Sel

EM EM

PowerShares DB Cm Idx SQ Alpine:Dynamic Fin Svc SE

World Fds:TM Rus;A ING:Russia;A BlackRock:Gl Res;A

EM EM NR

Top performers By period

Fund Quarter

Objective

Return

27.59 24.57 24.41 24.21 22.95 22.86 22.50 21.90 21.59 20.99 20.94 19.33 19.25 18.51 18.49 18.28 18.13 17.52 17.28 16.36 15.81 15.64 15.33 15.16 15.01

Matthews Asian:Korea

PR

1149.99

CGM Tr:Focus Fund

MG

917.10

Vanguard Prc M&M;Inv

AU

720.11

JennDry Jenn Ntl Res;A NR

691.73

USAA Precious Metals&MinAU

687.57

BlackRock:Intl Op;A

IL

655.71

Driehaus:Emerg Mkt Gr

EM

650.77

US Glbl:East European

EM

647.18

Kinetics:Internet;NL

TK

604.54

Oppenheimer Dev Mkts;AEM

571.90

Direxion:Cmdty Bl 2x;Inv SQ

87.57

Mrkt Vctrs:Steel

SE

84.36

Direxion:LA Bull 2x;Inv

LT

83.67

CGM Tr:Focus Fund

MG

79.97

iShares:MSCI Brazil

LT

76.59

AIM China;A

PR

74.94

Nationwide:China Op;A

PR

74.02

Matthews Asian:China

PR

70.14

ProFunds:UltraEM;Inv

EM

70.11

Claymore ETF:BNY BRIC EM

68.89

5 years

iShares:MSCI Brazil

LT

1008.39

BlackRock:Latin Amer;A LT

695.32

T Rowe Price Int:Lat

LT

687.64

Eaton Vance Grtr Ind;A

EM

673.20

Fidelity Latin America

LT

652.84

iShares:S&P Lat Am 40

LT

636.66

Fidelity Adv Lat Am;A

LT

624.46

ING:Russia;A

EM

597.15

US Glbl:Global Res

NR

562.97

DWS Latin Am Eqty;S

LT

552.59

BlackRock:Gl Res;A

NR

1500.56

Fidelity Sel Enrgy Ser

NR

1397.90

JennDry Jenn Ntl Res;A NR

1299.85

Vanguard Energy;Inv

NR

1221.98

AIM Energy;Inv

NR

1034.13

Fidelity Sel Brokerage

SE

1015.19

DWS Latin Am Eqty;S

LT

1007.69

Calamos:Growth;A

XG

994.86

Fidelity Sel Defense

SE

978.69

Excelsior:Eng&Nat Rs

NR

928.12

1 year

10 years

15 years

Bottom performers By period

Fund Quarter

Objective Return

ProFunds:UltSh EM;Inv

SQ

-61.37

RMK Select High Inc;I

HC

-59.60

IShares:Dow US Hme CnsSE

-58.00

MACROshares:Oil Dn Tr SQ

-57.95

Direxion:EM Br 2x;Inv

EM

-52.91

5 years

ProFunds:UltSh NAS;Svc SQ

-82.37

Rydex Dyn:Inv OTC 2x;H SQ

-81.50

Frontier:Microcap

SC

-73.85

Direxion:SC Br 2.5x;Inv

SQ

-70.14

American Heritage GrowthXC

-68.17

RMK Select High Inc;I

HC

-38.30

MACROshares:Oil Dn Tr SQ

-36.93

RMK Select Intm Bd;I IB

-36.83

ProFunds:Mobile Tel;Inv TK

-36.22

American Heritage GrowthXC

-36.12

ProFunds:Banks;Inv

SE

-29.10

ProShares:Ult Finl

SE

-27.59

ProShares:Ult Rl Est

SE

-26.83

Fidelity Sel Home Fin

SE

-25.20

ProFunds:Financials;Inv SE

-21.22

Frontier:Microcap

SC

-95.64

American Heritage Fund SQ

-92.76

American Heritage GrowthXC

-86.36

ProFunds:UltraBear;Inv

SQ

-69.84

Apex Mid Cap Gro

SG

-67.31

1 year

10 years

Frontier:Microcap

SC

-98.61

American Heritage Fund SQ

-92.36

Apex Mid Cap Gro

SG

-71.83

Comstock Cap Val;A

SQ

-63.60

Ameritor Security Tr;1

SC

-52.81

15 years

area that usually is among the

n a t i o n s

least

competitive.

Banking Horowitz

analyst

Keith

cited

Wachovia

Corp. (NYSE: WB) as leading the charge, offering money- market teaser rates at 4.85 percent, up 1.5 percentage points since the third quarter.

“This should lead to deposit growth, but will also increase deposit costs,” Horowitz wrote in the report. Elsewhere, the survey found that deposit rates in the Midwest remained high but at steady rates in the third quarter.

“Over the past five years, banks didn’t mind paying a lit- tle more for deposits. Now the real problem is that they’ve got to continue to grow deposits and keep a lid on or reduce the cost of those deposits,” says Jeff Brown, a principal at Deloitte Consulting LLP in Charlotte, N.C.

Source Code: 20080124crl

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