Member banks of the Eighth District experienced a moderate increase in net income in 1976. Net income of District member banks increased 9 percent from 1975 to 1976, about the same rate as it did the previous year. However, unlike 1975 in which operating income and expenses posted slight gains, both operating income and expenses registered increases exceeding ten percent in 1976. Loans outstanding, the major factor contributing to the higher income, posted a solid increase, after rising slightly in 1975. Increases in the amount of interest paid on deposits, the principal factor in the rising expense, reflected a large inflow of time and savings deposits.