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BUS & SCON BOARD OF GOVERNORS OF THE FEDERAL REE (For Immediate Release) S E.5 MEMBER BANK EARNINGS, 1958 A preliminary tabulation of member bank earnings indicates that a rise of $345 million in gross operating earnings was more than offset by a $386 million rise in operating expenses. Net current earnings before income taxes were $2,507 million, down $41 million from 1957* However, as a result of larger profits on sales of securities, most of which were taken in the first half of the year, net profits after taxes and profit and loss adjustments amounted to $1,448 million, $279 million more than in 1957* The ratio of net profits to average total capital accounts increased from 8,3 to 9.6 per cent. Earnings on loans advanced $108 million as a result of larger average holdings and a slightly higher average rate of return. Earnings on U, S. Government securities increased $96 million; a substantial increase in average holdings more than offset a decline in the average rate of return from 2,53 to 2,45 per cent. 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 $88 million, in contrast to a reduction of $485 million in 1957, The last time member banks reported a net gain from this source was in 1954 when they amounted to $73 million. Larger profits resulted in larger provisions for income taxes, amounting to $1,147 million in 1958, or $253 million higher than in the previous year. Cash dividends declared amounted to $646 million in 1958, a distribution of 45 per cent of net profits after taxes; this represented a yield of 4,3 per cent on average total capital accounts. (Over) MEMBER BANK EARNINGS, BY CLASS OF BANK, 1953 AND (in millions of dollars, 1957 1953 figures preliminary) All Member Banks 1953 [ 1957 Central Reserve City Banks New York Chn cago 1958 | 1957 1958 1957. Earnings On U, S, Government securities On loans 1/ All other 7,116 1,264 4,316 1,536 6,771 1,168 4,208 1,395 1,164 170 698 296 1,136 137 727 272 272 53 157 57 274 46 172 56 2,332 478 1,752 601 Expenses 4,608 4,222 636 592 142 136 Net current earnings before income taxes 2,507 2,549 528 544 130 Recoveries, profits, and transfers from valuation reserves 2/ 766 170 112 21 Losses, charge-offs, and transfers to valuation reserves 2/ 678 655 64 Profits before income taxes 2,595 2,063 Taxes on net income 1,147 Net profits Item Cash dividends declared Ratios (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, Government securities Average return on loans ' 1/ 2j 1/ oounury d anus 1958 1 1957 2,664 426 1,694 544 2,848 558 1,708 582 2,697 558 1,615 524 1,821 1,666 2,009 1,827 137 1,011 998 839 870 56 16 353 73 245 60 123 46 60 311 221 257 251 576 442 140 93 1,053 849 827 679 895 - 276 209 69 41 489 385 313 260 1,443 1,169 300 233 71 53 563 464 514 419 646 604 160 152 26 24 257 242 202 186 16.6 18,1 16.4 18.2 18.4 20.6 18.1 19.2 15.0 16.5 9.6 2,45 5.34 3,3 2.53 5.32 9.3 2.39 4*40 Includes,charges on loans other than interest, Does not include recoveries credited to valuation reserves, Does not include losses charged to valuation reserves. Reserve City Banks 1953 | 1957 (Over) 7.8 2.46 4.54 9.9 2.37 4.48 7.9 2.36 4,56 10.1 2.44 5.37 8.9 2.53 5.30 9.2 2.48 5.93 8.0 2.57 5.93
@FedFRASER