Pruned-tree structured vectored quantization (PTSVQ) was applied to the lower five gray scale remapped bits of normal and fatty ultrasound liver images. The upper bits were compressed reversibly. This combination of techniques is termed PTSVQ with splitting. The effect of the compression on the difference in texture between normal and fatty liver images was studied at different compression rates and distortions. The changes in texture were measured by changes in the principal components of the covariance matrix of image vectors. The vectors were the same size as those used in the compression technique. There were clear differences in the components of normal and fatty liver images. These differences were largely removed by the PTSVQ with splitting technique even at average single pixel distortions several times smaller than the image noise. These results suggest that the effect of compression on second order statistics should be measured when evaluating algorithms in addition to the first order average distortion.