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PR v%r r - ' ,u I , /I ! ^ ^ e c o n ^58 BOARD OF GOVERNORS OF THE lFEjBSAlltS^8£^6K)§Ti-l E.5 (For Xrnmediate K6Je3!5§)T" '' """’ August 8, 1958 MEMBER BANK EARNINGS, FIRST HALF OF 1958 A preliminary tabulation of member bank earnings indicates that net profits after taxes and profit and loss adjustments amounted to $838 million for t*ie first half of 195$* This was an increase of $269 million over the corres ponding period of 1957 and it reflects, for the most part, larger profits on sales of securities. On ah annual basis the ratio of net profits to the average of total capital accounts was 11,3 per cent compared with 8,2 per cent for the first six months of 1957. A rise of $254 million in gross operating earnings was largely offset by a concurrent rise in operating expenses of $218 million. for Net current earnings be— income taxes were $1,275 million in the first half of the year, up $36 million over the comparable period in 1957* Earnings on loans and earnings on U, S, Govern ment securities advanced $106 million and |62 million, respectively, from the first half of 1957 levels as a result of larger average holdings and higher average rates of return on both. However, the average rates of return on both categories were slightly lower than in the second half of 1957, The net effect of security transactions, other profit and loss adjustments and changes in valuation reserves resulted in an addition to member bank profits of $255 million in contrast to a loss of $179 million in the first half of last year. The last time member banks reported a net gain from this source was in the first half of 1954 when they amounted to $104 million. The larger profits resulted in larger provisions for income taxes which amounted to $692 million, $200 million higher than in the corresponding period last year. Cash dividends declared amounted to $306 million in the first half of 1958, representing a distribution of 37 per cent of net profit's after taxes and an approxi mate yield of 4.1 per cent on average total capital accounts on an annual basis. (Over) MEMBER BANK EARNINGS, BY C U S S OF BANK, FIRST AND SECOND HALVES OF 1957 AND FIRST HALF OF 1958 (in millions of dollars; preliminary) First Second Half Half 1957. 1957 Central Reserve Citv Banks ueoex ve uiwj New York Chicago First First Second First First Second First First1Second Half Half Half Half Half Half Half Half Half 1957 1958 _-19-5-7_l__1957_ 1958 _ 1957 1957 1957_ 1958 3,262 3,509 3,516 551 585 585 131 143 571 2,022 669 597 2,136 726 633 2,127 756 68 349 134 69 378 138 81 353 151 23 81 26 23 91 29 28 81 30 2,022 1,240 2,200 1,309 2,241 1,275 289 262 303 282 318 - 267 67 64 69 73 58 112 604 7 14 87 3 236 1,061 492 419 1,002 403 349 1,530 692 38 232 114 86 210 95 26 Net profits 569 600 838 118 Cash dividends-declared 281 323 306 17*9 8,2 2,47 5*19 18*2 3*3 2.60 5.47 ■17.2 11.3 2.56 5.31 Item Earnings: On U. S, Government securities On loans 1/ All other, Expenses Net current earnings before income taxes ^Recoveries, profits, and transfers from valuation reserves 2/ Losses, charge-offs, and transfers to valuation reserves Profits before income taxes Taxes on net income Ratios - annual basis (in per cent): Net current earnings before income taxes to average total capital accounts Net profits to average total capital accounts Average return on U, S, Govt, securities Average return on loans 1/ 2/ Includes charges on loans other than interest, Does not include recoveries credited to valuation reserves, 2/ Does not include losses charged to valuation reserves. jcariK.o First Half 1958 First Second First Half Half Half 1558 1957- 1957 1,385 1,392 1,301 1,396 1,401 207 816 256 219 877 288 236 864 292 273 775 253 286 840 271 289 829 283 72 66 806 473 860 525 892 500 860 440 967 429 959 442 13 41 21 51 285 27 34 192 329 156 28 39 17 31 55 23 27 80 , 42 77 U7 193 143 433 192 180 604 285 93 374 168 158 305 92 117 517 209 115 173 21 32 38 22A 240 320 206 213 308 70 82 77 15 9 15 115 127 123 81 13.1 8.2 2i41 4.37 18.4 7.5 2.50 4.71 16.8 10.9 2.41 4.39 19.4 6.4 2.31 4.41 21*7 9.3 2,42 4.70 18*9 11.0 2,38 4.53 18*5 8.7 2.45 5,18 19*9 9*1 ..2.62 5.44 18.3 11.7 2.53 5.37 17.1 8*0 2. 51 5.78 138 1,279 105 -___ 22. 6.0 8*0 2»64 6 #04 16.2 11.3 2.64 5.86
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