I n studying the profitability of commercial banks by function it becomes obvious that they need to know much more about cost of funds and price and output behavior if they are to expand service(s) profitably. With the possible exception of university administrators and church leaders, it is highly probable that commercial bankers know less about specific functions within their business than any similar group. Nonetheless, research into this troublesome area has been practically non-existent. Bell and Murphy studied economies of scale by bank function, but relatively little has been published recently about the cost, price and profitability of commercial banks by function [1]. Other profitability studies have been done but they overlook profit by function [2, 3]. This paper is concerned with the cost, price and profit by function. It estimates the profit for real estate, installment, commercial and agricultural loans, and investments for banks stratified by size of deposit. Raw data were obtained from the Federal Re-