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FEDERAL RESERVE BANK
OF NEW YORK

Circular No. 2032
February 28, 1940

Operating Ratios of Member Banks in the Second Federal
Reserve District for the Year 1939 Compared with 1938
To all Member Banks in the
Second Federal Reserve District:

The annual compilation of operating ratios of member banks in this District for
1939 is shown on the following pages, in comparison with the ratios for the year 1938.
Several new ratios have been added for 1939. Among the new items are ratios showing the proportion of principal types of assets to total assets, the relationship of
capital to the total of loans, investments, and real estate assets, and the proportion
of real estate assets to capital. Still another new item indicates the percentage of
cash dividends declared to total capital accounts.
Net profits for all banks in the District averaged 16.1 per cent of total earnings
for 1939, compared with 9.9 per cent in 1938, and 16.2 per cent in 1937. Net current
earnings (before charge-offs, etc.) continued the slightly upward tendency of the past
few years, but larger profits on securities sold and smaller charge-offs on banking
houses and other real estate held were the principal factors causing larger net profits
in 1939 than in 1938. These net profits in relation to capital accounts averaged 4.0
per cent in 1939, compared with 2.2 per cent in 1938, 4.3 per cent in 1937, and 8.9 per
cent in 1936 (when unusual profits resulted from recoveries and profits on securities
sold). Dividends declared in 1939 averaged slightly less than one-half of net profits
for all banks, but in the case of the large New York City banks dividends were equal
to about 80 per cent of net profits.
The average rate of return on loans for all banks remained at 5.4 per cent, while
the average rate of return on investments declined to 3.1 per cent in 1939, from 3.3
per cent in 1938, 3.7 per cent in 1936, and 4.2 per cent in 1934. The rates of income
on loans and investments for the large New York City banks, as usual, were considerably below the average for all banks. The ratio of total current earnings to total
assets for all banks averaged 3.5 per cent in 1939; for the large New York City banks
only 2.0 per cent.
The ratio of capital accounts to total deposits of banks in this District continued
the downward tendency of previous years, especially in the New York City banks,
reflecting the further growth in deposits. To a considerable extent, however, the
growth of deposits in the New York City banks in 1939 was paralleled by an increase
in cash on hand and deposits in the Federal Reserve Bank, so that the ratio of capital to assets subject to possible shrinkage in value probably was not materially
reduced. For all banks the ratio of cash assets to total assets averaged over 24 per
cent in 1939, and for the large New York City banks this ratio averaged nearly 38
per cent. In view of the increasing proportion of uninvested funds, for which no
protection against shrinkage in value is necessary, a new ratio (item 31) of capital
accounts to total invested funds (loans, investments, and real estate owned) has been
prepared to show the margin of protection for such funds. This ratio for all banks
averaged 18.5 per cent in 1939. Another of the new ratios—the ratio of all real estate
assets to capital accounts—averaged 30.9 per cent in 1939.
As usual, space has been provided for the insertion of the figures of any bank
which may wish to compare its operations with those of other banks of similar size
and character of deposits.




GEOEGE L. HABRISON,

President.

Average Ratios of Member Banks Groupe<
All ratios are expressed in percentages and are arithmetical averages of the ratios
MEMBER BANK
GROUP I
BANKS WITH TOTAL DEPOSITS UNDER $1,000,000
Ratio of Time Deposits to Total Deposits
Group
Average
Under 50 %
50% to 69.9% 70% and Up

ALL BANKS

Number of Banks.
Year
RATIOS TO TOTAL CURRENT EARNINGS:
Sources of Earnings
2. Interest and dividends on bonds, stocks, etc
3 Service charges on deposit accounts
4 All other earnings
Incomt from Trust department (included in item 4)%

BANKS WI
Group
Average

ording to Size and Character of Deposits
dual banks in each group, rather than ratios based on aggregate dollar figures
CD OUTSIDE GREATER NEW YORK
GROUP III
BANKS WITH TOTAL DEPOSITS $5,000,0 )0 and Up
Ratio of Time Deposits to Total Dep< )sits
Group
Average
Under 50%
50% to 69.9% 70% and Up

GROUP II
DEPOSITS $1,000,000 to $4,999,999
> of Time Deposits to Total Deposits
>o% 50% to 69.9% 70% and Up

MEMBER BANKS
IN
GREATER NEW YORK
GROUP IV
GROUP V
Total Deposits Total Deposits
Under
$20 000 000
$20,000,000
and Up

757

745

261

242

51

51

159

158

51

33

337

33(

46

170

187

123

103

109

116

27

35

64

63

18

18

27

28

23

23

1938

1939

1938

1939

1938

1939

1938

1939

1938

1939

1938

193

1939

1938

1939

1938

1939

1938

1939

1938

1939

1938

1939

1938

1939

1938

1939

1938

1939

44.8

47.2

49.8

52.9

47.2

48.9

50.4

54.0

50.4

53.8

42.9

45.

48.1

44.5

46.7

40.0

42.8

41.0

42.5

39.8

40.0

41.3

44.1

41.5

41.6

44.9

47.3

35.1

36.6

38.4

34.9

38.9

38.6

37.4

33.2

40.9

37.2

42.3

39.

31.8

40.0

37.2

48.0

45.7

38.4

36.8

35.2

34.6

38.2

35.5

43.7

45.6

26.9

23.1

32.8

6.3

5.4

5.9

7.1

7.0

5.5

6.1

3.6

3.5

5.4

6.

8.5

5.9

6.6

3.8

3.8

4.9

5.4

5.1

6.1

5.1

5.3

3.8

4.3

19.3

19.9

3.1

3.3

9.9

9.9

6.4

6.3

6.8

5.5

6.7

6.7

5.1

5.5

9.4

9.

11.6

9.6

9.5

8.2

7.7

15.7

15.3

19.9

19.3

15.4

15.1

11.0

8.5

8.9

9.7

29.0

28.6

4.3

4.3

2.3

3.1

1.4

X

2.2

3.4

3.0

1.4

2.3

2.

2.9

2.4

2.1

1.7

1.8

5.1

5.1

7.0

6.7

4.8

5.0

3.1

1.9

7.6

7.7

18.1

17.6

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

28.7

28.4

29.6

34.7

35.0

27.7

28.8

24.1

24.5

26.1

27.

31.5

26.2

27.1

23.6

24.9

27.3

28.2

29.8

30.9

27.2

27.5

23.8

25.6

34.1

35.8

38.7

22.1

20.9

19.5

11.8

12.6

21.6

20.4

28.0

26.3

25.2

22.

14.3

23.1

20.6

31.6

28.2

22.7

19.5

14.3

13. J

24.0

20.3

30.8

28.9

10.9

10.6

1.8

1.6

3.2

3.2

2.4

2.5

2.4

2.7

2.5

2.4

2.0

2.2

3.4

3.

3.8

3.5

3.6

3.2

3.2

4.7

4.4

5.0

4.8

4.6

4.3

4.8

4.0

2.7

1.7

2.4

2.7

2 5

2.2

2.7

2.2

2.5

2.1

26

2.8

2 2

2.

1.8

2.1

2.1

2.2

2.1

1.7

1.9

1.5

1.8

1.8

2.0

1.8

1.9

2.2

2.4

3.4

3.1

22.1

19.8

1939

37.3

19.8

1938

100.0

27.7

Total current earnings

Ratio of Time Deposits
to Total Deposits

33.6

5.8

Total Deposits
Group

34.5

39.5

YOUR
FIGURES

26.1

Disposition of Earnings

2 3

2.1

19 6

20.6

19.8

20.9

21.9

21.4

17.7

17.0

18.2

19.

22.6

18.7

19.9

16.4

17.0

20.1

20.4

23.4

23.6

19.5

19.4

16.7

17.3

27.4

28.7

26.4

] 0. Total expenses

74.9

74.4

74.0

74.7

73.5

74.6

74.1

75.1

74.4

72.8

75.1

74.

74.0

73.6

73.3

77.0

75.4

76.5

74.4

74.0

74.2

77.1

73.5

77.9

77.7

77.3

79.2

72.7

70.8

11 Netcurrentearnings.......................................................................

25.1

25.6

26.0

25.3

26.5

25.4

25.9

24.9

25.6

27.2

24.9

26.

26.0

26.4

26.7

23.0

24.6

23.5

25.6

26.0

25.8

22.9

26.5

22.1

22.3

22.7

20.8

27.3

29.2

12. Net charge-offs*

15.2

9.5

15.1

9.7

15.0

9.4

16.8

11.1

9.6

3.5

17.2

10.

4.3

17.8

13.5

17.1

9.0

12.9

7.1

12.9

7.3

14.3

9.1

7.6

(b)0.2

8.4

7.9

6.3

2.0

9.9

16.1

10.9

15.6

11.5

16.0

9.1

13.8

16.0

23.7

7.7

15.

21.7

8.6

13.2

5.9

15.6

10.6

18.5

13.1

18.5

8.6

17.4

14.5

22.5

14.3

12.9

21.0

27.2

7.2

7.6

7.3

7.2

7.2

8.2

6.7

6.4

7.1

6.6

4.8

5.3

4.4

3.8

4.9

1.3

a

3.9

8 Other taxes
9. All other expenses

13. Net profits (after charge-offs, recoveries, etc.)
RATIOS TO TOTAL CAPITAL ACCOUNTS:

7.1

16. Cash dividends declared
RATIOS TO TOTAL LOANS:
17 Interest anddiscountonloans........................................................

7.1

6.8

6.4

6.0

5.4

7.0

6.5

7.1

7.1

7.4

7.

7.3

8.1

8.1

6.7

6.7

2.2

4.0

2.6

3.6

2.2

2.7

2.2

3.4

4.1

5.8

1.5

3.

5.4

2.0

3.5

0.6

4.0

2.6

5.0

3.3

5.1

2.1

4.8

3.6

5.6

4.5

a

1.9

a

1.6

a

1.2

a

1.5

a

2.5

a

1.

1.9

a

1.9

a

2.0

a

2.3

a

3.0

a

1.9

a

2.3

a

5.4

5.4

5.8

5.8

5.9

5.7

5.8

5.8

5.9

5.9

o.o

5.

5.3

5.5

5.4

5.5

5.5

4.8

4.8

4.4

4.4

5.0

5.0

5.0

5.1

5.4

5.3

2.6

2.7

18. Recoveries on loans

0.5

0.5

0.4

0.4

0.4

0.4

0.4

0.4

0.3

0.4

0.5

0.

0.5

0.4

0.4

0.5

0.6

0.6

0.6

0.5

0.5

0.6

0.7

0.6

0.6

0.6

0.4

0.3

0.3

19. Losses on loans

0.9

0.9

0.7

0.7

0.8

0.8

0.8

0.7

0.6

0.6

1.1

0.

0.7

0.9

0.8

0.9

0.6

3.3

3.1

3.6

3.5

3.7

3.7

3.6

3.4

3.7

3.5

3.2

3.

2.9

0 4

0.4

0 3

04

0 3

0.3

0.3

0 4

04

0 6

0 4

0.5

1.0

1.4

0.9

1.3

0.7

1.5

0.9

1.2

1.0

1.3

1.1

1.

2.1

1.9

1.9

1.9

2.2

1.7

2.1

2.1

2.4

1.6

1.6

2.0

1.

3.7

3.5

4.0

3.8

3.8

3.6

4.1

3.9

4.1

4.0

3.7

1.0

0.9

1.1

1.0

1.1

0.9

1.1

1.0

1.1

1.1

0.9

RATIOS TO TOTAL INVESTMENTS:
20 Interest and dividends on bonds, stocks, etc. . ,

23. Losses on securities
RATIOS TO TOTAL ASSETS:
24 Total current earningst

1.1

1.0

0.8

3.4

3.1

2.8

2.6

2.6

2.3

2.8

2.7

3.1

2.8

2.9

2.6

1.9

1.8

0.3

0.4

0.4

0.5

0.3

0.5

0.5

0.6

0.3

0.4

0.4

0.4

0.5

0.4

1.1

1.3

1.3

1.5

1.5

0.9

1.5

1.0

1.0

1.1

1.3

1.8

2.1

1.9

3.

3.4

3.7

3.5

3.6

3.4

3.4

3.2

3.2

0.

0.9

1.0

1.0

0.9

0.8

0.8

0.8

0.8

36.0

a

31.5

a

37.3

a

36.9

29.

31.8

37.0

a

35.9

a

36.7

a

40.2

42.

28 Real estate assets

a

3.8

a

3.3

a

3.4

a

3.3

a

3.0

4.

29. Cash assets

a

24.2

a

23.6

a

29.1

a

22.6

a

19.8

1.9

a

31.1

35.4

a

41.2

a

47.6

a

43.3

a

4.7

a

4.3

a

3.4

a

4.7

a

£3.

&. 9

a

23.2

a

21.9

a

23.2

a

15.4

13.4

13.0

17.2

16.5

21.3

20.6

27.2

25.6

20.0

19.3

19.2

19.4

15.4

15.

15.9

31. Total capital accounts to total loans, securities, and real estate..

a

18.5

a

22.2

a

28.1

a

20.7

a

20.0

a

17.

18.6

32. Real estate assets to total capital accounts

a

30.9

a

21.6

a

19.7

a

22.4

a

20.7

a

35.

38.3

58.4

57.0

57.9

56.6

33.4

34.3

60.6

60.2

74.0

74.0

64.4

«.

40.9

a

1.4

a

1.5

a

1.3

a

1.5

a

1.6

a



1.2

3.1

a

(a) Not computed for 1938.
(b) Net recoveries.
I Average covers only those banks having Trust departments if more than three banks in group.
* Total charge-offs (including those on banking house, furniture and fixtures, etc., as well as on loans and
investments) less recoveries and profits on securities sold,
t Ratios for 1938 are to total available funds rather than to total assets (available funds comprise capital
 total deposits, and borrowed money).
accounts,

1.1

0.5

a

34. Interest paid on time and savings deposits to amount of such
deposits

1.0

3.2

40.1

OTHER RATIOS:

1.1

0.5

31.6

CAPITAL RATIOS:

1.1

1.1

a

a

1.0

0.9

a

a

1.0

1.

Figures of earnings, expenses, losses, recoveries, prof
dividends declared, used in computation of the ratios, wer
two semiannual earnings and dividends reports submitted
of loans, investments, deposits, cash, real estate, and tot
amounts shown in the banks' official condition reports for

1.3

15.1

14.7

26.9

a

15.3

a

28.3

a

14.4

1.9

1.4

1.5

1.4

1.6

1.2

1.1

3.0

3.5

3.3

3.5

3.2

4.1

3.8

2.2

2.0

0.8

0.8

0.9

0.8

0.8

0.9

0.8

0.6

0.6

a

29.6

a

26.3

a

34.5

41.9

a

42.0

a

50.6

a

4.7

a

5.0

a

3.7

a

25.7

a

23.0

a

19.1

a

26.8

13.2

13.1

17.7

a

24.8

30.9

a

35.0

2.5

a

1.6

31.1

a

37.6

12.9

13.4

13.3

a

16.6

a

17.1

a

15.0

a

15.7

a

14.9

a

13.9

a

19.9

a

18.2

a

38.0

a

28.1

a

44.4

a

44.0

a

48.1

a

32.4

a

18.7

a

17.0

40.4

7.9

6.7

a

0.4

62.5
a

61.9
1.3

ies sold, net profits, and
ich items included in the
anks each year. Figures
counts were averages of
dates each year.

73.6
a

75.0
1.4

56.5
a

54.6
1.3

37.0
a

37.4
1.2

59.4
a

58.6
1.3

75.5
a

74.4

39.3

1.4

a

16.0

1.2

14.7

12.7

Capital accounts comprise capital stock, capital notes and debentures, surplus, undivided profits, reserves for contingencies, and other
capital reserves; demand deposits include deposits of other banks, certified and officers' checks outstanding, etc., and Government deposits as
well as individual deposits payable on demand; real estate assets include bank premises owned, furniture and fixtures, real estate owned other
than bank premises, and investments and other assets indirectly representing bank premises or other real estate; cash assets include cash,
balances with other banks (including reserve with Federal Reserve Bank), and cash items in process of collection.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102