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NATIONAL
HOUSING
AGENCY
TENTH ANNUAL REPORT
FEDERAL HOME LOAN BANK ADMINISTRATION
for the period
July 1, 1941, through June 30, 1942
------
000-----
covering operations of the
Federal Home Loan Bank System
Federal Savings and Loan Associations
Federal Savings and Loan Insurance Corporation
Home Owners' Loan Corporation
United States Housing Corporation
CONTENTS
Page
.
Letter of Transmittal ,********
Introduction
......... *..*.....
I. The Year in Retrospect
e......*....
*...*eeo.
*****.,
***.****
e********
e.******
***
..
*.....°.. .......
..
e...
e.o.oe.......ee......e..
...
2
..
,
,•ee•«
g
,,...,
Residential Construction * ,....•....•*g..
,.......
,...,.....*
The Real Estate Market--Selected Trends .....
e•e•e
•,e•.e••.ee•geee•eg, .g
Real Estate Overhang ,*.........*geg
Building Costs ..... e..**..*e*.........*...*...
*,....*.........**
.....
*******
.***•....*
•.... ..
*..*s
Home Mortgage Lending in 1941
Pomre Mortgage Debt .......................
,.........«..«......
Private Savings ****«****************************** ****6
II.
Federal Home Loan Bank Systema
A.
Operations of Member Institutions .e.e ,.....
B.
of Operations
.eee .,e
g....ge
**g.e.e.go..
Operations of the Federal Home Loan Banks ..
e..
3
4
5
6
9
10
13
,
13
,,,e
Changes in Membership ....
eo................g*
eg ,......
Lending Activity of Member Institutions *..,.ee*e...*,.6
.,g0
Member Institutions in the War Effort .. ,,....*....,.....,,**
.....
.......9
Further Retirement of Government Investments **
Analysis of Condition of Member Associations ........
*,....**
Statement
2
e..
.e........
.. ... ,..e....,
1
eo.egg.
, 13
15
18
21
24
26
gggoe
28
,*..........*,,.
.......
.
.......
.
. .. .. ,
Lending Activity e..,...g...
...........................
Types of Advances ...
Statement of Condition .**.....*
,e*
e*......,
.............. *e,
Income and Expenses of the Federal Home Loan Banks .*,..g,...
28
2e..9.....
29
C.
Examination and Supervision .....
*....ee..*............*
33
D.
Incone and Expenses of the Federal Home Loan Bank
Administration ........
...........
.. ....
*..
............
•
30
33
36
Page
III.
Federal Savings and Loan Associations .............................
Number and Assets ....
..... *.........,..*.....*...*..*............
Current Trends in Share Capital ....
Mortgage Lending Activity ........*........*.............*...
..
Financial Operations .c.........................................
IV.
38
38
39
3............
41
..................
2
45
Federal Savings and Loan Insurance Corporation .*******************
Insurance Settlements
****************************
..
o........
..
6
...
49
Operation of Insured Institutions in Default ...
*,................
Operations of the Insurance Corporation *****......**.....
V,
Home Owners'
Loan Corporation
,******* 50
*
..
*********************************
....
........
**....,*.
Progress in Liquidation .......***...........ec**e
Status of Accounts ***********************
...........
..
..
,..
Loan Service ...
cee................
........................
Foreclosures ********************............
**************
.........
Property Management ...........
.. •
...... ....
•....e
Reconditioning ....
....................................
Appraisals .........
Financial Operations ..............................................
VI.
..
......
c.....
.,.e..ee
...
United States Housing Corporation .6...e...e..e...................
List of Exhibits ..............................
Exhibits
eag e
ogee.
oee
eag
e ceegeece
65
...............
oeecoeeoeec
oa
2
56
5.g
56
59
60
6...e..o.............,...,.e
61
62
63
66
,...,,.
ooo ec
ee c
68
_
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YYIY
INTRODUCTTON
Under the terms of Executive Order 9070,
certain changes were made in
dated February
24, 19L2,
the administrative organization of the Federal
Home Loan Bank Board and its affiliated agencies.
The Order provided for the
administration of the functions, powers, and duties of the Board, the Home
Owners' Loan Corporation, the Federal Savings and Loan Insurance Corporation,
and the United States Housing Corporation, formerly a part of the Federal Works
Agency, in the Federal Home Loan Bank Administration.
The Chairman of the
Federal Home Loan Bank Board was designated Commissioner of the new Administration,
The offices of the other four Members of the Board were vacated.
The creation of the Federal Home Loan Bank Administration was undertaken
as one part of the larger reorganization and consolidation of 16 different
housing agencies into the National Housing Agency, which is now charged with
the general responsibility of coordinating and directing the housing activities
of the Federal Government.
The National Housing Agency consists of three
principal constituent units, of which the Federal Home Loan Bank Administration
is one.
The remaining two are the Federal Housing Administration and the
Federal Public Housing Authority.
In this reorganization, the corporate entities of the Federal Home
Loan Banks, the Federal Savings and Loan Insurance Corporation, and the Home
Owners, Loan Corporation remain intact and their functions and purposes continue
without change.
Likewise, all outstanding obligations and contracts, orders,
rules, regulations, permits, and privileges continue in effect,
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1 -
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THE TEAR IN RETROSPECT
For the past several years, annual reports of this agency have been
introduced with a general discussion of current developments in the fields of
housing,
thrift,
and mortgage finance--the broad fields of activity in which
the Administration and its agencies are primarily concerned.
As a measure
of war-time economy, the current report has been reduced substantially in
size and carries, therefore, no comparable survey section.
Instead, the
following pages will give only a brief resume of major developments during
the 1942 fiscal year.
Residential Construction
The fiscal year 192 saw the first major break in the upward
movement of the building cycle which had proceeded without serious inter
ruption since the low point of 1933.
During the twelve months ending June 30, 19L2, approximately
650,000 new dwelling units were provided by public and private capital in
nonfarm areas, according to building permit data compiled by the Bureau of
Labor Statistics.
This compares with almost 700,000 units for the preceding
fiscal year, and represents a decline of seven percent*
The growing scarcity of critical materials available for housing,
the introduction of a housing priorities system in the fall of 1941, and
finally the virtual cessation of all nonessential building after April 1942
when the War Production Board issued a "Stop-Construction # order, have been
- 2-
-AS=-
reflected in a declining volume of residential construction since October 1941.
Because the demands of the war place a steadily increasing strain on available
supplies of both labor and materials used in the building of homes,
it
is
probable that the present downward trend will continue for the duration.
Number of New Dwelling Units Provided in Nonfarm Areas,
by Quarters, Fiscal Years 1941 and 1942*
Fiscal Year
Fiscal Year
1941
Quarter
1942
Change
Percent
July - September
October - December
171,600
158,100
211,400
135,600
f 23.2
- 14.2
January arch
April - June
145,100
140,600
223,100
161,200
- 3.1
- 27.7
*Sources
U. S. Department of Labor.
The Real Estate Market--Selected Trends
On the whole,
the real estate market continued to show a
satisfactory recovery during the 1942 reporting period.
real estate sales and transfers,
1941,
The volume of
particularly from July through December
reached a new post-depression high.
The decline in
the volume of new
residential construction during the last half of the fiscal year, however,
was reflected to some extent in
a slowing down of real estate sales activity.
Increased demands for existing properties tended to counter-balance this trend
and at the close of the reporting period, general market conditions represented
a distinct improvement over the close of the previous reporting period.
One of the strongest evidences of improving real estate market
conditions was the continued steady decline in
during the reporting period.
the volume of foreclosures
Each month saw foreclosures running from one
fifth to one-sixth below the corresponding month of the preceding year.
During the entire year, nonfarm real estate foreclosures totaled only 49,514
as compared with 68,432 a year previous,
a reduction of almost 28 percento
- 3 -
Foreclosures during the current reporting period were well below
total repossessions in 1926, the year generally considered the low point of
the previous foreclosure cycle.
Improvement in the general foreclosure picture
was widespread throughout the country.
Each of the Federal Home Loan Bank
Districts and all of the States showed a lower number of foreclosures during
the fiscal year 1942 than during the prior reporting period.
The number of
nonfarm real estate foreclosures during the last two fiscal years, by Federal
Home Loan Bank Districts and by States, will be found in Exhibit 1.
Real Estate Overhang
The steady and uniform improvement in the volume of foreclosures
accompanied by a rising volume of sales once more resulted in a very
substantial reduction in the volume of real estate held by mortgage lending
institutions.
During the calendar year 1941, the latest twelve-month period
for which figures are available, it is estimated that the book value of
residential property owned by selected types of financial institutions,
including savings and loan associations, mutual savings banks, commercial
banks, life insurance companies, and the Home Owners' Loan Corporation,
declined from $l,894,089,000* to $1,405,919,000, or almost 26 percent.
Although the current volume of repossessed properties held by
financial institutions in a few areas is still large enough to represent a
liquidation problem of some significance, the current rate of disposition,
coupled with the increasing necessity for a more intensive use of existing
housing facilities in war industry localities, indicates that the real estate
overhang is no longer a national problem of major importance.
Revision of the preliminary figure of $1,863,879,000 given on page 27 of the
Ninth Annual Report of the Federal Home Loan Bank Board.
-4-
Savings and loan associations led other institutions in
The net reduction in
their repossessed property during 1941.
insuttutions was $162,171,000,
or 33 percent.
savings banks declined $100,000,000,
by all
Life insurance companies
Residential real estate held
commercial banks at the end of 1941 amounted to $136,0000
a reduction of $56,000,000,
period.
holdings of these
Real estate owned by mutual
or 25 percent.
show a drop of $108,330,000, or 22.9 percent.
0, representing
or 29e5 percent, during the preceding twelve-month
For the Home Ownerst Loan Corporation,
$63,669,000,
liquidating
or 18,8 percent.
the corresponding drop was
Exhibit 2 contains data on residential real
estate owned by selected financial institutions at the close of 1940 and 1941
Building Costs
The wolesale price index of building materials,
June 192 as copared
Bureau of Labor Statistics, was 122.9 in
the beginning of the reporting period.
took place during the first
In April and May,
Most of the increase in
half of the reporting period*
when the index stood at 122.0,
as reported by the
th 1128 at
this index
After January 19 2,
there was only a fractional upward movement.
as a matter of fact, slight declines occurred as a result
of the imposition of price ceilings on many building materials,
The rise of home construction costs,
up to the time further increases
were arrested by the Office of Price Administration, is
also reflected in the
Federal Home Loan Bank Administrationts index of material and labor costs for
constructing a standard six-room frame house in selected cities.
six months from June to December 19U1,
112.4 tb 119.9.
the Administrationts index rose from
After January, a very slow but steady upward movement brought
the index to 123~5 in
June 192.
Exhibit
3 shows the cost indices on a monthly
basis for the last two fiscal years.
During the
- 5 -
In past years, the index of labor costs in building the standard
six-room frame house advanced more rapidly than did the cost of materials.
During the current reporting period, this relationship was reversed.
The
material index rose from 109.2 to 121.3, while the index of labor costs
increased from 118.6 to 127.8.
Home Mortgage Lending in 1941
During the calendar year 1941, it is estimated that the volume of
new mortgage loans written on nonfarm one- to four-family homes aggregated
$3,893,000,000 as compared with $3,354,000,000 during 1940.
This increase
of 16 percent resulted in a higher annual total than for any year since 1929.
The home mortgage lending activity of all private lenders showed
substantial gains during 191,
Savings and loan associations ranked first by
originating $1,379,000,000 in new loans, a gain of almost 15 percent over the
previous year.
Commercial banks and their trust departments loaned $798,000,00(
a figure 15.8 percent higher than the comparable figure for 1940.
life insurance companies increased 23 percent to $399,000,000.
Loans by
Mutual savings
banks invested $171,000,000 in home mortgage loans as compared with $133,000,00(
the previous year, while individuals and others accounted for $1,083,00,000,,
a rise of 25.2 percent.
Exhibit 4 gives the estimated figures on mortgage
lending activity for the years 1929 through 1941, by type of lender.
Since detailed information on home mortgage lending activity is
available only on a calendar-year basis, it is impossible to project the
foregoing statistics through the fiscal year 1942.
However, information which
is available indicates that the close of the calendar year 1941 may have marked
a turning point in the home mortgage lending activity of all lending instituti on
Up to that time, the record volume of new residential construction and the large
-6-
number of sales of institutionally owned properties constituted a direct
stimulus to the demand for home mortgage credit.
Conversely, the sharp decline
in new construction after the first of the year is reflected in a slowing down
in the volume of home mortgage financing.
This trend is indicated by monthly
statistics on the volume of mortgage recordings of $20,000 or less.
Mortgage recording data have been collected for the last several
years by the Administration's Division of Operating Stattistics
1942,
By June
actual reports which are the basis for estimated totals were received
from approximately 675 counties containing 63 percent of the total nonfarm
population.
These data are received from every State and the District of
Columbia. A word of explanation should be made in connection with any
analysis of recording statisticso
The data include figures both on new
lending activity and on registrations which result from changes in mortgage
contracts as well.
Therefore, they cannot be taken as an accurate measure
of the volume of new lending.
However, the movement of recordings over a
period of time does give an excellent picture of trends in lending and
significant shifts in the activity of various classes of lending institutions.
During the fiscal year 1942, mortgage lenders throughout the country
recorded 1,537,314 nonfarm mortgages of $20,000 or less in the total amount
of $4,519,573,000.
Institutional lenders accounted for 75 percent of the
number and 83 percent of the dollar volume of these mortgages.
in each case was accounted for by individual mortgageeso
The remainder
For the fiscal
year as a whole, there was a slight decline in the number and an increase of
3.6 percent in the dollar volume of nonfarm mortgage recordings as compared
with the previous fiscal year.
- 7-
A slowing down in
six months of the calendar year
the reporting period, comprising the first
1942,
Alf of
the rate of recordings during the second
was the most significant development in the recording series.
month from the period July to December 1941,
For each
the volume was substantially
However,
higher than during the corresponding six-month period a year earlier.
the falling off in
residential construction and the general slowing down of
mortgage financing activity attendant upon the war program resulted in
accelerating downward movement after January 1942.
an
The table below summarizes
nonfarm mortgage recordings over the last two fiscal years by semiannual periods.
Mortgage Recordings of $20,000 or Less on Nonfarm Property,
Fiscal Years 1941 and 1942
Dollar Amount
Number
Fiscal Year
1
194-
Fiscal Year
M
1942
Fiscal Year
Fiscal Year
1941
1942
July-December
766,527
849,676
$2,114,370,000
$2,514,095,000
January-June
778,731
687,638
2,217,865,000
2,005,478,000
4,362,235,000
4,519,573,000
Total
1,55,258
1,537,31
Mortgage recording studies have since their inception shown savings
and loan associations to be the leading type of institutional lender on home
mortgages,
accounting for approximately one-third of the annual totals.
trend for the fiscal year 1942 confirms this general picture.
The
Savings and
loan associations were responsible for 32.4 percent of the number and 30.6
percent of the dollar volume of all nonfarm mortgages of $20,000 or less recorded
during the reporting period.
Banks and trust companies as usual ranked second, accounting for
21.0 percent of total on the basis of number and 23.7 percent on the basis of
dollar volume,
Individuals and miscellaneous lenders,
-8-
insurance companies,
and mutual savings banks followed in
that order.
Mortgage recordings,
Federal Home Loan Bank Districts and by States, will be found in
by
Exhibit 5.
Home Mortgage Debt
The calendar year 1941 was the fifth consecutive year in
nonfarm home mortgage debt has shown an increase.
month period ending with December 1941 is
which the
The gain during the twelve
bringing
estimated at $1,054,000,000,
the aggregate debt outstanding to $20,157,000,000.
This is
the largest annual,
increase since 1929 and the debt outstanding at the end of the year was within
$1,100,000,000 of the peak figure reached in
1930.
Three types of institutions were responsible for practically all of
the increase in home mortgage debt in 1941.
report a rise of
,0o5,000,000;
insurance companies,
Savings and loan associations
commercial banks, $375,00,000; and life
Mutual savings banks and individuals and
$353,000,0 0.
others show only relatively small gains which were more than offset by the
drop in holdings of the Home Owners'
by mutual savings banks is
others at $80,000,000.
Loan Corporation.
The increase registered
estimated at $30,000,000 and by individuals and
Mortgage holdings of the HOLC declined by $179,000,000
during 191, the net effect of increased principal repayments,
and property sales against purchase money mortgages,
on the one hand,
on the other.
The prominent position of savings and loan associations in the home
mortgage field is
directly reflected in the relative volume of home mortgage
debt held by these institutions,
estimated at $4,489,000,000,
Total holdings at the end of 1941 are
or 22 percent of the aggregate home mortgage debt,
Savings and loan associations are exceeded only by the miscellaneous
individuals and others,
December 31, 191.
group,
which held approximately 33 percent of the debt on
The following
summary table shows the total debt outstanding
-9-
on one- to four-family nonfarm homes at the end of the last two calendar years,
A complete survey of estimated home mortgage debt from
by type of mortgagee.
1929 to 1941 is
presented in
Exhibit 6.
Estimated Balance of Outstanding Mortgage Loans on Nonfarm
One- to Four-Family Dwellings
(Millions of dollars)
December 31,
1940
December 31,
1941
$,08k
Type of Mortgagee
$4,489
Percent
Change
Operating Savings and Loan
Associations
t
9.9
Mutual Savings Banks
2,700
2,730
+
Commercial Banks
2,095
2,470
f 17.9
Life Insurance Companies
Home Owners, Loan Corporation
Individuals and Others
1,758
1,956
6,510
2,101
1,777
6,590
+ 19.5
- 9.2
+ 1.2
19,103
20,157
Total
+
1.1
5.5
Private Savings
The aggregate volume of individual long-term savings showed a
substantial over-all gain during the calendar year 1941.
savings represented by accounts in
insurance policies,
bonds is
The increase in
savings and loan associations,
savings deposits in banks, postal savings,
estimated at $3,847,000,000.
This figure is
the gain registered during 1940 and represents,
by life
and sayings
somewhat larger than
except for 1925 and 1926,
the largest annual increase during the last 21 years.
Total long-term savings
are estimated to have been $61,770,000,000 at the end of 1941, a figure well
over three times the 1920 total.
companies and U. S.
gain in
As shown by the table below, life
savings bonds accounted for the bulk of the $3,87,000,000
savings during 1941,
insurance
-
10 -
Volume of Long-Term Private Savings in
(In
Selected Savings Media*
millions of dollars)
December 31,
1940
$25,025
10,618
13,062
$26,877
10,90
13,261
4,594
1,542
Life Insurance Companies
Mutual Savings Banks
Commercial Banks
Savings and Loan Associations
December 31,
1941
Change
+ $1,852
50
-
2
4,750
t
1,555
57,923
Total
f
85
3,195
2-1/2;o Postal Savings Bonds
U. S. Savings Bonds
4,915
1,392
128
199
321
87
Postal Savings
f
61,770
+
3,847
*For detailed information on the distribution of long-term savings from 1935
through 1941, and for an explanation of the source of these figures, see
Exhibit
7.
On a percentage basis, the rise in
48.7 percent.
was again by far the largest,
outstanding U. S.
Undoubtedly, the drive to divert
a portion of growing income payments into war bonds is
leading position of this type of savings.
by life insurance companies,
savings.
savings bonds
responsible for the
The next largest increase was scored
which show an increase of 7-4 percent in
private
Savings and loan associations followed closely with a gain of 7.0
percent, while postal savings and commercial banks show increases of
3.7 and
1.5 percent,
respectively.
1.2 percent,
and postal savings bonds outstanding dropped 2.3 percento
Savings deposits in mutual savings banks declined
While private capital invested in
savings and loan associations
throughout the country as a whole grew by $321,000,000,
even more favorable picture is
obtained if
or 7.0 percent, an
trends within the membership of the
Federal Home Loan Bank System alone are considered.
These institutions, which
include a very large majority of all active operating savings and loan
associations,
enjoyed a net increase in private share capital of $357,777,000,
- 11 -
or 10.1 percent during 1941.
The fact that private savings held by operating
nonmember associations declined by 3.5 percent is responsible for the relatively
less favorable picture shown by the industry as a whole.
There is
some indication that the trend of private savings showed
a somewhat different pattern after the close of the calendar year 1941.
first
place,
In the
a much higher proportion of current private savings after "Pearl
Harbor" was properly invested in war bonds and stamps.
months of 1912,
During the first
six
the current redemption value of Series E bonds increased by
$2,537,000,000 to $3,671,000,000,
of dollar volume,
a gain of almost 225 percent.
In terms
sales of Series E war bonds from January to June 1942 far
exceeded sales of both Baby Bonds and Series E war bonds during the entire
year 1941.
On the other hand, partial information which is available shows
a definite slackening in the rate at which private savings are going into
private financial institutions.
Savings deposits held by mutual savings
banks declined from $10,490,000,000 on December 31, 1941, to $10,55,000,000
on June 30, 192.
Insured savings and loan associations, which constitute a
representative group of all operating associations in the country, report a
gain of only $138,733,000,
or 5.3 percent, in private share capital during the
first six months of 19
During the same period of the preceding calendar
year, these institutions enjoyed a net gain of $231,349,000,
or 10.5 percent.
These data indicate that such developments as forward buying, the
transfer of some accumulated savings to war bonds, increased taxation, and a
rapid rise in
the cost of living are causing at least a temporary lull in
steady upward trend in the volume of savings held by private institutions.
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12 -
the
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FEDERAL HOUE LOCAiT BANK SYSTEM
At the close of the past fiscal year, the Federal Home Loan Bank
System rounded out the first decade of its existence.
thvt the Federal Home Loan Bank Act--the first
It was on July 22, 1932,
measure affecting American
home finance to be adopted by the Federal Government--was enacted into law.
During these ten years, the Federal Home Loan Banks have made
cuimulative advances amounting to almost $1,000,000,000.
They have issued
debentures totaling $292,700,000 to tap the general money market for the
benefit of local thrift and home financing institutions.
They have functioned
as depositories for members, holding between $25,000,000 and $35,000,000 of
such deposits in the past three fiscal years.
Through interbank deposits in
the gross amount of over "llL,000,000, they have transferred surplus funds
within the Federal Home Loan Bank System to areas where they were most needed.
Combined assets of the member institutions of the Federal Home Loan
Bank System at the close of the tenth fiscal year, exceeded $5,500,000,000;
and the total (consolidated) resources of the twelve Banks themselves were
more than
'300,000,000.
A.
Operations of Member Institutions
Changes in Membership
Although the membership of the Federal Home Loan Bank System declined
slightly from 3,839 to 3,815 during the 19)2 fiscal year, the combined assets
of these institutions show a gain of $356,795,000, or 6.8 percent during the
same period.
- 13 -
C
For the past five years, membership in the Federal Home Loan Bank
System has remained fairly stable.
During this same five-year period, however,
the total resources of members have grown by more than $1,837,000,000.
At
the present time, therefore, it is apparent that the increasing importance
of the Federal Home Loan Bank System in the Nationts home financing structure
is attributable almost entirely to the growth and strengthening of member
institutions.
The slight contraction in the number of institutions has resulted
principally from mergers and consolidations--a process which has been under
way for a number of years and which is resulting in a group of institutions
better equipped from the standpoint of size and financial strength to meet
the public demand for savings outlets and home mortgage credit.
During the reporting period, 74 thrift
and home financing institutions
were admitted to membership as compared with 69 during the preceding fiscal
year.
Applications for membership which were still pending on June 30,
1942,
totaled 56 as against 66 the year previous.
Terminations of membership during the 1942 fiscal year numbered
98 as compared with 14 during the preceding reporting period.
In 28 cases,
termination was occasioned by merger, consolidation, or sale of assets to
other member institutions and, therefore, did not result in the complete
withdrawal of the assets held by these associations.
The following table
summarizes, by types of institutions, the changes in membership during the
fiscal year 192.
Exhibit 8 gives the number and assets of member institutions
at the close of the last two fiscal years, by Federal Home Loan Bank Districts
and by States.
-14 -
Number and Assets of Member Institutions of the Federal Home Loan
Bank System, June 30, 194, and June 30, 1942
(Dollar amounts in millions)
June 30, 1941
Type of
Member Institution
June 30, 1942
Net Change
Assets
Number
Assets
Number
Assets
3,798
$4,627
3,772
$4, 885
- 26
+ $258
Federally-chartered
State-chartered
1,452
857
2,028
1,126
1,464
2,206
9 12
t
Uninsured associations
1,489
1,473
1,402
1,430
t 87
15
41
660
43
759
* 2
99
12
252
341
29
408
17
26
Number
Savings and loan associations
Insured associations:
Other members
Savings banks
Insurance companies
178
+49
906
123
4,
5
89
3
4+18
10
4,
3,839
Total
Lending Activit
5.287
3,815
5.6J4
- 2!+
357
of Member Institutions
As might be expected from the decline in residential building during
recent months, new mortgage loans made by member savings and loan associations
during the fiscal year 1942 were somewhat under the record level set in the
previous reporting period
Loans by member associations amounted to
$1,063,45,O00 as compared with $t,08l,866,000during the 1941 fiscal year,
a decline of two percent.
Mortgage lending by nonmember savings and loan
associations also dropped from $209,508,000 to $193,890,000.
As a result,
lending activity of all savings and loan associations declined from the peak
figure of $1,294,374,000 during the 1941 reporting period to $1,257,335,000
during the fiscal year 1942.
Exhibit 9 gives the volume of new mortgage loans
made by savings and loan associations for the last six
- 15 -
fiscal years.
More significant than the slight decline in total lending activity
are shifts in the distribution of new loans by purpose.
A close relationship
The
exists between trends in home construction and in mortgage lending.
several years immediately preceding the reporting period showed steady and
substantial increases in the annual volumes of nonfarm residential construction.
It is not surprising, thereforp, that during these same years an increasing
proportion of the funds currently loaned by member savings and loan associations
went to finance the construction of homes.
Conversely, when the first restrictions were imposed on new
construction in the fall of 1941, there was an almost immediate decline in
the volume of construction loans made by savings and loan associations.
Beginning in October 19 1, reports on current mortgage financing activity
show a smaller monthly volume of construction lending then during the corres
ponding month of the previous year, with an insignificant exception in
December 1941.
During June 192, member institutions advanced only
l$4,54,000
to finance the construction of new homes, a figure 6536 percent under June 1941.
So substantial was the falling off in construction lending that
loans for this purpose throughout the entire fiscal year 192 totaled but
$311,039,000, a decline of 20o2 percent when compared with the previous
reporting period.
As might be expected, construction lending suffered more
seriously than did other loan categories.
Consequently, construction loans
of member institutions during the fiscal year 1942 represented only 29.3 percent
of total loans made as compared with
35.9 percent the year previous.
During the first half of the fiscal year 192, i.e., from July
through December 1941,
reached a new peak.
loans to finance the acquisition of existing homes
As a result of improving real estate markets in many
communities, home purchase loans during this period were more than
- 16 -
45 percent
However, the closing months of the reportin
above the last six months of 1940.
period were marked by a rapid slowing down even in
this trend.
By June 1942,
current loans for the purchase of existing homes were slightly under the figure
set in
June 1941.
This leveling off in
purchase lending may be explained in
Not infrequently the
part at least by the earlier decline in new building.
sale of new houses is
followed by a series of sales of existing properties,
the result of a "filtering up" process caused by the moving of families into
In addition, the rapid liquidation of institutionally-held real
new homes.
estate has reduced materially the supply of properties aailable for sale.
Despite the declining volume of home purchase lending by member
associations toward the end of the reporting period,
loans for this purpose
throughout the fiscal year 1942 totaled $77,193,000,
as compared with the previous year.
to make up the loss suffered in
loans in
first
refinancing,
a gain of 22.9 percent
This increase was more than sufficient
construction lending and put home purchase
place among the various loan categories.
However,
loans for
reconditioning, and other purposes, as shown by the table below,
declined both in
dollar volume and in relation to total during the 1942 fiscal
year.
Distribution of New Mortgage Loans Made by All Savings and Loan Members
of the Federal Home Loan Bank System, According to Purpose
Fiscal Year 1940
Purpose of Loan
Construction
Home purchase
Refinancing
Reconditioning
Other
Total
Fiscal Year 1941
Fiscal Year 1942
Dollars
Percent
Dollars
Dollars
85,550,000
33o4
33.2
18.6
5.2
9.6
$389,559,000
388,376,000
168,201,000
49,396,000
89,334,000
894,212,000
100.0
1,084,866,000
$298,628,000
297,243,000
166,191,000
16,600,000
- 17 -
Percent
35*9
8.2
$311,039,000
477,193,000
152,561,000
43,503,000
79,149,000
100.0
l,063,l5,000
35.8
15.5
4.6
Percent
29*3
L4.9
14.3
4.1
7.4
00oo0
Member Institutions in the War Effort
Local thrift and home financing institutions constitute one of the
many types of business enterprises which,
although not in
the front line in
the primary task of production for victory, are nonetheless contributing to
the war effort.
The contributions of member savings and loan associations
include two major activities--first,
industry areas,
and second,
the financing of needed housing in war
direct cooperation in
the Treasury program of
war financing through the sale of war bonds and stamps.
During the fiscal year 1942, member institutions advanced a total
of $831,000,000 in
areas of concentrated war activity.
It
is
approximately $319,500,000 of this amount represented the first
estimated that
permanent
financing of some 106,600 newly-constructed housing units.
The Administration has encouraged member institutions to engage in
the financing of war housing to the limit of their abilities.
To this end,
policies of the Administration governing the lending operations of insured
institutions have been revised to permit these associations,
under certain
conditions, to sell mortgage loans and use the proceeds to finance war housing.
A substantial majority of member savings and loan associations are
actively engaged in the sale of war bonds and stamps.
At the close of the
current reporting period, 2,717 institutions had qualified as issuing agents.
Although this group of institutions represented but 72 percent of the total
membership in
terms of number,
they held over 90 percent of the assets of
all member savings and loan associations.
Recognizing the vital importance of diverting surplus consumer
purchasing power into war savings, the Federal Home Loan Bank Administration
and the officers of the regional Federal Home Loan Banks have carried on a
continuing program to encourage member institutions to devote their most
- 18
-
Tangible results of this activity
intensive efforts to the 'var Bond camrrpaign.
and the wholehearted
reflected in
cooperation of member savings and loan associations are
the i'act th.t
,
amounted to .'5L Q1,001,
sales reported for the r:onrth of July 191:2 alone
an increase of 32 percent over the previous month.
Although the savings and loan industry has not been subject to
the shock:; of a war econoy already suffered by many other peace-time
businesses,
neither has it been left entirely unscathed.
The precipitate
drop in new residential building, as already noted, has brought about a
recession in one of the principal business activities of these institutionsnamely, financing the construction of new homes,
The growing demand for private
savings to help fin&nce the war may mean a slowing down in
money into savings and loan associations.
the flow of new
However, these are small sacrifices
indeed compared writh the losses suffered by many industries unable by their
very nature toreadjust their operations to the all-important demands of the
war.
At the worst it
would appear that thrift
and home financing institutions
may be entering a period of "marking tiex--a period which may well offer these
institutions an opportunity to fortify themselves for the day of post-war
readjustments.
With this end in view, the Federal Home Loan Bank Administration
in cooperation with other supervisory ofiicials and industry leaders is
actively encouraging managing officers and directors to take whatever steps
may be necessary to place their institutions in the strongest possible
financial position.
Rapid strides in this direction have already been made
by the large >ajority of local savings and loan associations.
Nonetheless,
as past experience only too often has proved, it is impossible to prepare
too well for an uncertain future.
- 19 -
Specific recoxmmendations
the strengthening of reservesc
of the Administration include first
of all
The accumulation of adequate reserves on a
systematic basis is perhaps the best method of meeting future losses over
which an individual association may have little
or no control.
Institutions are also urged to dispose of their owned real estate
in as short a time as sound business operations will permit*
The sale of
foreclosed real estate, particularly in war industry areas where housing
accommodations are frequently in great demand, has the dual advantage of
improving the balance sheet of individual associations and making available
needed housing for war workers,
There is always the danger that lending institutions which are
operating in a market where the demand for mortgage financing is falling,
while loanable funds continue in ample quantity, may so lower their lending
standards that marginal or unsound risks will be accepted.
Careful attention
to sound risk analysis and accurate appraisal techniques are more important
than ever at such a timeo
An increasingly competitive market also necessitates
the establishment of interest and dividend rates at levels which will enable
institutions, on the one hand, to obtain and hold sound and safe mortgage
security, and, on the other, to meet local competition for private savings funds.
Local thrift and home financing institutions in a number of cases
are adopting mortgage prepayment plans that permit home purchasers to build up
reserves that will protect them if they are temporarily unable to meet their
monthly payments at some later date.
Mortgage prepayment plans are not only
of obvious value to borrowers--they also operate to protect the risks assumed
by financial institutions, and, to the extent that overpayments are made from
rising current incomes, they have an anti-inflationary influence.
- 20 -
The common aim of the Federal Home Loan Bank Administration and
the industry is
to emphasize the trustee responsibility inherent in the
operation of local savings and loan associations.
there is
character of these institutions,
Because of the mutual
a dual obligation on the part of
managing officers and directors to protect the hard-earned savings of small
investors and to provide an equitable type of mortgage credit to prospective
home owners.
Further Retirement of Governmgnt Investments
During the fiscal year 1942 a substantial reduction was again made
in the volume of outstanding investments of the United States Treasury and the
Home Ownerst Loan Corporation in
On June 30,
the shares of savings and loan associations.
1942, these investments aggregated $186,512,410,
a reduction of
almost ten percent as compared with the close of the preceding fiscal year..
The investment of Government funds in
associations was first
authorized in
the share capital of savings and loan
the Home Owners'
Loan Act of 1933.
of a broad program to strengthen the Nation's home financing resources,
As part
this
statute and subsequent appropriations set aside $49,300,000 of Treasury funds
for investment in
the shares of Federal savings and loan associations.
amendments to the Home Owners,
Later
Loan Act authorized that Corporation to make
investments up to $500,000,000 in the shares of Federal savings and loan
associations and State-chartered institutions which either belong to the Federal
Home Loan Bank System or which are insured by the Federal Savings and Loan
Insurance Corporation.
Under the terms of the statutes authorizing Government share investments
in
savings and loan associations,
no request for retirement may be made by the
Federal Home Loan Bank Aministration for a period of five years from the date
of investment.
Thereafter,
requests are made,
- 21 -
in
the discretion of the Federal
Home Loan Bank Administration,
but in no event in
an amount exceeding in
any
one year ten percent of the total amount invested in the shares of an association.
By the end of the reporting period, the volume of retirements
requested by the Federal Home Loan Bank Administration,
on the basis of a
careful study of the current financial condition of institutions holding
totaled $11,671,850.
Government investments,
aggregate $86,5%4,300,
it
Since cumulative retirements
is evident that voluntary repurchases have been
largely responsible for the decline in total investments.
Investment by the Treasury in the shares of Federal savings and
loan associations was completed in
By June 30,
1956 when the $49,300,000 was exhausted.
192, total Treasury investments had been reduced,
as a result of voluntary repurchases,
principally
to $19,I42,600.
Most of the share capital investments of the Home Ownerst Loan
Corporation were made in
1936 and 1937.
been granted principally in
Since that time,
investments have
connection with rehabilitation programs or to
institutions in war industry areas which are able to demonstrate a need for
additional capital to finance needed war housing.
Home Owners,
$223,756,710.
19l2, the
Loan Corporation had made share investments totaling
Of this amount,
remaining $167,069,810 was still
By June 30,
$56,686,900 had been retired and the
outstanding.
-
22 -
Investmrents by the U. S. Treasury and the Ho,.ie Owners' Loan Corporation
in
cnmber Savings and Losn AssociatioLns, by Fiscal-Year Periods
HOLC Investments in
Savings and Loan Associations
Treasury Investments in
Federal Savings and Loan Associations
Gross
Fiscal
Year
inve stre nt s
(cuul tive) I1e-laepurchra se s
iet
Gross
investment s investiaent s
outstanding (cumrulative)
R.e' archases
(June 30)
(June 30)
Sl
1,036,o00
,o6,300oo
30,606,700
1955
30,606,700
o--
1956
9,00,00oo0
oo
1, ,300,000
tj-,30 000
o
77,000
I9,225,000 $ 65,142;700
.16,300
48,183,700
o
185,o03,000
197,500
47,802,700
211,997,610
219, 149, 10
1937
1939
1959
9,300o,000
l9,.oo,ooo
9,500,ooo
19:10
19i.2
L:),y007000
l9,500,000
1,)
O,300
1,1
Q
L62,900 1
25 0029,1002
45,991,700
,57,tL Oo4
19,1l,2.600
:
20
9
%.
Net
invest..-eii ts
outst ndin *-g
5 ,157,100
27,670,900
220,683,210
222,106,210
22',756,710
12,000
271,000
2,691,000
17,661,000
]
65,12,700
183,021,000
211,7£6,610
216,A5Q,eio
20, 021, 210
59, 256,503o 102,05 ,360
56,686,9005 167,069,610
Of this amount, $671,800 was retired in accordance with Section 5(j) of the
Home Owners' Loan Act.
2Of this amount, $2,759,800 was retired in accordance with Section 5(j) of the
Home Owners' Loan Act.
1 ,213,050 was retired in
Home Owners' Loan Act.
30f this amount,
4Of
accordance with
Section 5(j) of the
this amount, 4,392,800 was retired in accordance with Section 5(j) of the
Home Owners' Loan Act.
50f this amount,
Home Owners'
,7,279,050 was retired in
Loan Act.
accordance with Section 5(j)
of the
Share investments have proved profitable to the Treasury and the
Home Owners'
Loan Corporation.
Cumulative dividends paid to these agencies
through the end of the reporting period totaled $47,654,391.
This sum is
equaivalent to a rate of 5.37 percent per annum on the average investments
outstanding since 1934.
- 23 -
Analysis of Condition of Member Associations
Comparison of the consolidated balance sheet of member savings and
loan associations at the close of the calendar years 1940 and 191, shows a
noteworthy improvement in the financial condition of member institutions.
(Annual financial statements of member institutions are submitted on a calendar
year basis; hence, it is not possible to present the following analysis on a
fiscal-year basis.)
The asset side of the master balance sheet reveals a heavy
reduction in real estate holdings, a stronger liquidity position, and a new
peak in mortgage loan portfolios.
On the liability side there was a substantial
gain in private capital and a sizable reduction in Government share investments.
Although general reserves and undivided profits declined fractionally in
relation to gross liabilities, these accounts show a dollar gain of over
$24,000,000,1
Assets:
Total assets of member savings and loan associations show
a gain of approximately $387,000,000 during 1941, reaching a new high of
$4,800,000,000
on December 31, 1941.
The greatest increase is noted in the
case of Federal savings and loan associations, which show a gain of 15.9
percent.
State-chartered insured institutions show a growth in total assets
of 12.5 percent, while State-chartered uninsured associations suffered a
decline of nearly $40,000,000, or 2.7 percent.
The transfer of State associa
tions to insured or Federal categories is, of course, largely responsible
for this latter showing.
First Mortgage Loans
On December 31, 1941, first mortgage invest
ments of member associations aggregated $3,919,000,000, an increase of 12
percent as compared with the combined balance sheet a year previous.
The
mortgage portfolio of member savings and loan associations thus represented
over four-fifths (81.7 percent) of aggregate assets.
To those interested in a detailed tabulation of over-all balance-sheet trends,
reference is made to the July 1942 issue of the Federal Home Loan Bank Review.
- 24-
Real Estates
Acquired property held by member savings and loan
This item, which
associations was reduced by over 37 percent during 1941.
at the end of 1936 represented 16 percent of total assets,
1839,000,000,
or less than
4
amounted to only
percent at the end of 1941.
The successful efforts of savings and loan management to dispose
of foreclosed real estate is one of the most important evidences of the
current strong financial position of most associations.
Whereas only a few
short years ago the volume of real estate institutionally held was a matter
of considerable concern to all supervisory authorities, it
is now safe to
conclude that by and large the real estate overhang is a problem of the past.
Cash:
A good indication of the fact that savings and loan
associations are well aware of the advisability of maintaining a sound
liquidity position is found in the growth of cash on hand and in banks from
$242,000,000 to over $278,000,000 during 1941.
There has been a steady
increase in the volume of cash reserves maintained by member institutions
since 1957 and at the end of 1941, cash represented 5.8 percent of total
resources.
In addition to fortifying their cash position, member savings
and loan associations increased their Government bond holdings during 1941.
This secondary liquidity account now amounts to over $75,000,000, a growth
of 64 percent during the year.
Private Repurchasable Capital:
During 1941, private investments in
member savings and loan associations increased by 11 percent to $3,400,000,000.
Although complete information is
not available on the trend of share capital
in all member savings and loan associations after the close of the calendar
year 1941,
data which are available on insured institutions indicate that
- 25 -
the rate at which private investments are being received by savings and loan
associations may have been slowing down temporarily at least.
first six months of 1942,
During the
for example, private capital outstanding in insured
savings and loan associations increased only $138,755,000 as cormpared with
$231,549,000 during the corresponding period a year previous.
The drive to
divert new savings into war bonds no doubt accounts in part at least for this
trend.
A greater volume of repurchases occasioned by forward buying, a rise
in the cost of living, and higher taxes may also have had some influence in
the slowing up process.
Borrowed Moneys
This creditor liability on December 31,
1941,
amounted to $239,22,000, an increase of 10.3 percent as compared with the
close of 1940.
Borrowings as a ratio of total liabilities were 4.99 percent
on December 31, 1941, as compared with 4.92 percent a year previous.
Reserves:
General reserves and undivided profits show a gain of
over $24,000,000, or 8 percent, during 1941.
However, this rate of growth
was somewhat less than gains made in total resources, with the result that the
ratio of reserves and undivided profits to total liabilities declined fraction
ally from 6.88 percent to 6.83 percebnt
Charges to reserves occasioned by a
large volume of real estate sales are primarily responsible for this fact.
Statement of Operations
Consolidations of income and expense statements of member savings
and loan associations are available only for those institutions which report
on a calendar-year basis.
This fact, plus the changes which occur from year
to year in the number of member institutions, makes a comparison of operating
ratios considerably more significant than the dollar changes which may occur,
Nonetheless, it is interesting to note that gross operating income of the
- 26 -
3,536 institutions reporting for the calendar year 1941 totaled $235,569,200.
The comparable figure for the 3,508 institutions reporting in 1940 was
$212,591,o000
The growth in mortgage loans held by member savings and loan
associations during 1941 is reflected-in the fact that interest income on
these investments represented 88.0 percent of gross operating income.
During the previous year, the corresponding ratio was 86.7 percent.
The
decline of 37 percent in owned real estate during the twelve months ending
December 31, 1941, was responsible for the fact that income from real estate
represented only 1.6 percent of gross operating income as compared with 2.4
percent during the previous year.
The distribution of net income by reporting associations during
19l1 is another evidence of the increasing importance which institutions are
attaching to the accumulation of adequate reserves.
Dividend payments
absorbed 71.2 percent of net income as compared with 73.5 percent during
the preceding year and 75.5 percent in 1939.
Transfers to reserves and
undivided profits show a favorable trend with 29 percent of net income going
to these accounts during 1941, as against only 26 percent in 1940.2
For a more detailed discussion of income and expense trends of member savings
and loan associations during 19)1, reference is made to the September 1941
issue of the Federal Home Loan Bank Review.
- 27
B.
Operations of the Federal Home Loan Banks
Lending Activity
Advances to member institutions during the fiscal year 1942 reached
a new high of $155,02,0047,
an increase of 8.5 percent over the previous peak
set during the 1941 reporting period.
Repayments by borrowers were also
higher than during tho preceding fiscal year, amounting to $132,277,501,
1.5 percent above the comparable figure for the previous year.
or
The net
result of these lending operations was a volume of advances outstanding on
4,936.
June 30, 1942, of $192,6 1
It
is
noteworthy that during the 1942 fiscal
year, advances outstanding reached the highest point in the history of the
Federal Home Loan Bank System.
On December 31, 1941, midway through the
reporting period, advances by the Banks amounted to $219,L46,050, a figure
8.9 percent above the previous peak recorded on December 31, 1940.
Total advances made by the Federal Home Loan Banks from the
beginning of operations through June 30, 19L2, amounted to $928,933,902
and repayments of borrowers during the same period aggregated $736,288,966.
Exhibit 10 summarizes, by fiscal years, advances, repayments, and balances
outstanding since the beginning of operations.
Analysis of current lending operations of the twelve Federal Home
Loan Banks shows little uniformity in trends during the 1942 fiscal-year
period.
Eight of the Banks show a higher volume of advances outstanding on
June 30, 1942, as compared with June 30, 1941.
Percentage gains varied from
1.2 percent in the case of the Federal Home Loan Bank of Chicago to 54.6 percent
in the Federal Home Loan Bank of Boston.
The remaining four Banks report
declines ranging from 1.1 percent to 153o5 percent.
- 28 -
The maximum rate which may be charged on Federal Home Loan Bank
advances has been set by the Federal Home Loan Bank Administration at 3 percent.
During the reporting period, the only changes in interest rates actually
The
charged by individual banks were in the Indianapolis and Portland Banks
former reduced its rates on short-term advances to 2 percent and on long-term
advances to 2-1/2 percent, while the latter Bank created a 2-1/2 percent rate
for advances collateralized by negotiable U. S* Government obligations.
As
an additional incentive to their member associations, the Pittsburgh, Indianapolis,
and Topeka Banks established a preferential rate of 2 percent on advances to
members used to purchase United States War Bonds
On July 1, 1922, the Banks
were charging from 2-1/2 to 3 percent on long-term advances and from 1-1/2 to
3 percent on short-term advances.
3
Types of Advances
Once again, a review of the lending operations of Federal Home Loan
Banks during the reporting period shows a gain in the proportion of funds
advanced on a short-term basis.
On June 30, 1942, loans which had been written
for a term of one year or less amounted to $80,121,685, or 41.6 percent of
total advances outstanding, as compared with 38.7 percent a year previous.
It is probable that the lower interest oharge made by several of the Federal
Home Loan Banks on short-term advances, coupled with the difficulty in such
times as these of estimating credit needs very far in the future, are the
principal causes for the growing emphasis on short-term advances.
The distri
bution of outstanding advances, by Federal Home Loan Bank Districts and by term
of loan at the close of the last two fiscal years will be found in Exhibit 11.
For detailed information on the rates charged by Federal Home Loan Banks, see
Exhibit 15 of Ninth Annual Report of Federal Home Loan Bank Board.
-
29 -
The relationship between secured and unsecured advances shows little
change fror
June 30, 1914,
to June 30,
1912.
On the latter date, advances
vhich had been made on the security of mortgage collateral and obligations
of the United States Government amounted to $10,1l35,951, or 72.7 percent of
all outstanding advances.
percent.
A year previous,
the corresponding ratio was 71.8
Collateral supporting secured advances at the close of the reporting
period consisted of 126,605 home mortgages with unpaid balances of $325,075,351;
and obligations of the United States Government, direct or fully guaranteed,
in
the amount of $1,112,900.
In addition, the Banks hold a statutory lien on
the stock holdings of borrowing members in
the amount of $27,041,000, which
stock can, if necessary, be used to protect advances, both secured and unsecured.
On June 30, 1942, except for five borrowers in liquidation, not a
single institution was delinquent over thirty days in its contractual
obligations to the Federal Home Loan Banks.
Four of the liquidating borrowing
members were indebted to the Bank in the amount of $256,349 which was
collateralized by $517,558 in home mortgages, and $53,700 in paid-in Bank
stock.
In no case was the collateral less than 210 percent of an individual
indebtedness.
The one unsecured advance to a liquidating member amounted to
$163,700 and was protected not only by a lien on Bank stock in the amount of
$13,700, but also by $339,143 in land contracts.
No loss is anticipated by
the Banks concerned on the indebtedness of any liquidating borrower.
Statement of Condition
A statement of condition of the twelve Federal Home Loan Banks as
a whole and of each of the individual Banks will be found in
Exhibit 12.
There
follows a brief summary of the more significant balance-sheet trends.
Cash holdings of $47,320,115 on June 30, 1942,
represent a decrease
of 17.3 percent as compared with the close of the previous fiscal year.
- 30 -
However,
secondary liquidity in
the form of U. S.
Government obligations increased from
to $69,367,915 during the reporting period.
063,407,070
Government investments,
therefore,
totaled $116,688,030 and were equivalent
to 37.6 percent of consolidated assets.
securities in
Combined cash and
Cash available for advances 4
and
excess of legal requirements 5 totaled $96,699,367 on June 30,
19L 2.
Advances outstanding to member institutions, as already mentioned,
aggregated $192,6L4,936 and represented 62.1 percent of the consolidated
assets of the Banks.
At the beginning of the current reporting period,
two series of
consolidated debentures were outstanding in the amount of $75,500,000.
Series "G",
a $52,000,000 issue, was retired at maturity on April 15,
19L42.
To provide adequate funds for the peak lending period at the close of 1941,
Series
H,
amounting to $15,000,000,
banks on December
s sold privately to four comercial
24, 1941, and carried an interest rate of 1/2 of 1 percent.
This series matured two months later and was retired in
1942.
full on February 24,
Three additional series were issued during the reporting periodo
Series "I"
was issued on March 5,
19 2, in
the amount of $26,000,000.
This
series bears an interest rate of 3/4 of 1 percent and a maturity date of
September 1,
The first,
1942.
Series "J" and "K" were each issued on April 15,
amounting to $18,000,000,
interest rate of 3/4 of 1 percent.
mature February 1,
1945,
matures December 1,
1942,
1942.
and bears an
Series "K", totaling $24,000,000,
will
and carries an interest rate of 7/8 of 1 percent.
Represents total cash less reserve requirements of 75 percent of members'
demand deposits, 25 percent of members time deposits, total applicants'
deposits on Bank stock, inter-bank deposits, and imprest funds.
5
Represents the face value or principal amount of investments owned above the
necessary legal reserves.
- 31 -
As a result of the foregoing transactions, $91,500,000 in
consolidated
debentures was outstanding on June 30, 19 12.
The total volume of memberst deposits on June 30,
to $27,696,777.
Of this amount,
1942, amounted
$21,353,605 represented time deposits on
which interest at the rate of 1/2 of 1 percent was paid and the remaining
$6,343,172 constituted demand deposits on which no interest is paid.
of members on June 30,
1942,
show a decline of $3,610,093,
or 11.5,percent,
as compared with the close of the preceding reporting period.
beginning of operations,
Deposits
From the
the Federal Home Loan Banks have relied on inter-bank
deposits as one means of maintaining a regional flow of funds from areas of
plenty to areas having a temporary scarcity of funds.
1942,
inter-bank deposits aggregated $17,000,000,
outstanding on June 30,
During the fiscal year
of which $1,750,000 was
1942.
Outstanding paid-in capital stock of the Federal Home Loan Banks
totaled $175,532,650 on June 30, 1942, as compared with $171,283,200 a year
previous.
This increase of 2.5 percent in
the capital stock of the Banks was
attributable entirely to gains in the stock holdings of member institutions.
The amount of stock held by the Federal Government,
$124,741,000,
has not
changed since November 1937.
Reserves and undivided profits of the Federal Home Loan Banks show
a gain of 17.2 percent during the reporting period and totaled $14,105,921 on
June 30, 1942.
The Federal Home Loan Banks,
in
the irterest of sound and
conservative operations, have consistently maintained higher reserves and
undistributed earnings than required by statute.
The reserve and undivided
profit accounts of the Banks which have been built up from the beginning of
operations through June 30, 1912,
are more than twice the amount of the reserves
required by law.
- 32 -
Income and Expenses of the Federal Home Loan Banks
A detailed statement of profit and loss for the reporting period
will be found in
Exhibit 13.
The following summary highlights the financial
operations of the Banks during the reporting period.
Gross income for the fiscal year 1942 totaled $6,559,202 as compared
with $6,031,305 during the 1941 fiscal year.
The increase
as accounted for
primarily by larger interest income fron a higher average volume of advances
outstanding and by earnings on additional investment holdings.
Operating expenses during the fiscal year 1942 aggregated $2,212,090
as compared with $2,2.8,133 the year previous.
funds and members'
avings in
the cost of debenture
deposits were mainly responsible for this decline.
earnings of the Federal Home Loan Banks during the 194
Net
fiscal year totaled
$h,285,630 as compared with $3,696,183 for the previous reporting period.
During the 19L2 fiscal-year period, dividends declared by the Banks
ranged from 1 to 2 percent, with an average rate of 12 oercent as compared
4
with 1. 14 percent during the preceding year*
Divdends actually distributed
during the reporting period aggregated $2,213,701, of which $630,602 was paid
to member stockholders, and the remaining $1,583,099 to the Reconstruction
Finance Corporation which now holds the Government-owned stock.
C.
Examination and Supervision
Each of the twelve Federal Hme Loan. Banks is examined semiannually
by the Federal Home Loan Bank Administration.
These examinations and regular
and special reports on current operations and condition provide the basic data
for the establishment of rules and regulations and general supervision of the
Bankso
- 33 -
In addition, the Federal Home Loan Bank Administration examines
and supervises all Federal savings and loan associations,
In the case of
State-chartered insured associations, supervision, and, in more than three
fourths of the cases, examination are shared with the respective State
Supervisory Departments.
In addition, in a few instances State-chartered
uninsured members of the Federal Home Loan Bank System which are not subject
to regular State examination submit to examination by the Federal Home Loan
Bank Administration,
On June 30, 192,
there were 2,374 insured institutions
under supervision of the Administration.
The Federal Home Loan Bank Administration has for several years
maintained a separation of its examining and supervisory activities,
Actual
experience to date has demonstrated the desirability of this type of
organization.
It has the dual advantage of insuring both a maximum degree
of independence to fact-finding examiners and a detached consideration and
analysis of examination reports by trained supervisory officialso
The examining and supervisory activities of the Federal Home Loan
Bank Administration are increasing in volume and importance.
In the first
place, the number of insured institutions has grown steadily in recent years.
During the last two fiscal years alone, the number of institutions supervised
by the Administration has increased by six percent to 2,37.
An even better
measure of the task of examining and supervising insured institutions is the
volume of assets held by these associations.
From June 30, 1940, to the close
of the reporting period, assets of insured associations grew by 27.8 percent
to $3,61,228,000.
-34 -
Supervision can be defined, in general terms, as an activity which
is undertaken to assure the proper protection of the public interest in the
operation of financial institutions.
Supervision does not extend to actual
participation by Governmental authorities in institutional management.
On
the contrary, the business activities of insured savings and loan associations
are properly the concern of local management and trustee directorates.
The
function of the Administration is rather to establish the basic standards or
rules which judgment and experience indicate will guide institutions to the
goal of sound public service.
Supervisory activities, no matter how well formulated or carried out,
cannot provide the all-inclusive answer to successful financial management and
operation.
In the final analysis, well-trained, efficient, and capable
management is equally if not more important.
The Administration has, therefore,
devoted considerable time and attention to the development, through informal
educational processes, of high standards of association management and operation.
Such continuous supervisory activities are difficult to evaluate in specific
measure, but past experience would indicate that constant effort to prevent
the initial development of weaknesses is perhaps the most effective type of
supervisory guidance.
The Federal Home Loan Bank Administration is assisted in the discharge
of its supervisory responsibilities through conferences with the Federal Savings
and Loan Advisory Council.
This organization was created by statute for the
specific purpose of conferring with the Administration 'on general business
conditions and on special conditions affecting the Federal Home Loan Banks and
their members."
- 35 -
The Council, which is composed of one member elected by each of the
twelve boards of directors of the Federal Home Loan Banks and six members
appointed by the Federal Home Loan Bank Ad-inistration, held two meetings
during the 1942 fiscal year.
Discussions by the Council at these meetings
covered a number of subjects of primary importance to the continued successful
Lending policies
operation of the Bank System, among which were the following:
in
a war economy, sale of War Bonds,
financing of war housing, liquidity,
and dividend and mortgage interest rates.
Reconmmendations of the Council were of substantial help to the
Administration in the formulation and development of policies.
the Council members as of June 30,
D.
A list of
192, will be found in Exhibit 14.
Income and Expenses of the Federal Home Loan Bank Administration
The operating funds of the Federal Home Loan Bank Administration are
obtained from assessments upon the twelve Federal Home Loan Banks, from charges
made against the Home Owners' Loan Corporation and the Federal Savings and
Loan Insurance Corporation for services rendered by the Administration, and
from fees received for the examination of home financing institutions.
All
expenses of the Administration's Examining Division, which represent the largest
portion of the Administrationts annual budget, are reimbursed by the examined
institutions.
During the fiscal year 1942, receipts of the Administration
aggregated $1,608,790 and disbursements totaled $1,95,375.
balance of
Including a cash
2359,959 carried over from the preceding year, a balance of $35,37
was outstanding on June 30,
1942.
Exhibit 15 shows the administrative receipts
and disbursements of the Administration during the last two fiscal years.
-
76
-
The personnel of the Federal Home Loan Bank Administration totaled
131 on June 30,
19 2, including 33 employees on military leave.
Of this
total, 307 employees, or 71 percent of total, constituted the staff of the
Administration's Examining Division.
Exhibit 16 gives a summary of
personnel, by departments, as of the close of the last two fiscal years.
-
57
-
-c
I
_
---i
I
III
TT
IPIIY --..
~CYP-L--~ _- C~WIC-I - ~I
----------
FEDERAL SAVINGS AND LOAN ASSOCIATIOI S
Number and Assets
The number of savings and loan associations operating under Federal
charter shows little
1942,
change during the current reporting period.
Federal savings and loan associations numbered 1,461
1,4521 a year previous.
and 13 terminations.
On June 30,
as compared with
This net change of 12 was the result of 25 additions
Only four of the additions during the reporting period
represented newly-organized associations,
The remaining 21 involved converting
associations which had previously operated under State charter.
The 13 terminations were the result of nine mergers and two voluntary
and two involuntary liquidations.
Cancellations resulting from merger and
consolidation of existing institutions do not, of course, represent a with
drawal of assets from the Federal Savings and Loan System.
In providing for the establishment of Federal savings and loan
associations, Congress contemplated that these institutions would serve two
purposes:
First, to provide adequate thrift and home financing facilities
in localities which lacked them, and second, to develop under Federal charter
a group of home financing institutions operating under the highest standards
and practices.
1
Revision necessitated by certain changes in reporting procedure adopted during
the 1942 fiscal year.
38 -
-I
The number of Federal savings and loan associations newly chartered
under the terms of the Home Owners' Loan Act of 1937 has remained virtually
constant for the last six years, and it is not contemplated that any substantial
number of new charters will be issued in the future.
Federal associations on June 30,
There
lcre 640 new
1942, as compared with 84 institutions which
had converted from State to Federal charter,
The total assets of Federal savings and loan associations on June 30,
1942, amounted to $2,205,921,000, an increase of 8.6 percent as compared with
the same figure a year previous.
Although this represents a new high point in
the resources held by Federal savings and loan associations, the gain during
the reporting period failed to equal that of the preceding year, either on a
percentage basis or in dollar amount.
This is not unexpected in view of the
general decline in the rate of growth of all savings and loan associations
as a result of war conditions.
(See
p.
19.)
In comparison with the entire savings and loan industry, Federal
savings and loan associations now represent approximately 21 percent of all
institutions by numbere
On the other hand, as a result of rapid growth and
proved ability to meet local competitive conditions, Federal associations now
hold approximately 36 percent of the assets of all operating associations in
the country.
The number of Federal associations and their assets, by Federal
Home Loan Bank Districts and by States, as of the close of the last two
fiscal years, will be found in Exhibit 19.
Current Trends in Share Capital
The close of the reporting period marked a new peak in the number
of investors in Federal savings and loan associations as well as in the gross
- 39 -
volume of savings entrusted to these institutions*
On June 30, 1942, there
were 1,959,200 individual investors whose total investments amounted to
$1,735,932,000 as compared with 1,805,500 and $1,553,712,000,
a year previous.
Again, it
respectively,
must be noted, however, that in line with other
major trends, the increase in private savings held by Federal associations
took place at a much slower rate than during preceding fiscal-year periods.
The following index figures, based on a comparable group of Federal
savings and loan associations operating for the past eight fiscal years,
indicate
the rapid strides made by these institutions in attracting investments from
the public.
It will be noted that the index shows an increase of only 11
percent during the 1942 fiscal year as compared with a gain of 21 percent
during the previous reporting period.
Index of Private Repurchasable Capital in Comparable
Federal Savings and Loan Associations*
(Average month 1935-1939
Date
June 30, 1935
June 50, 1936
June 30, 1937
Private
Repurchasable
_
75
82
94
100)
Percent
Increase Over
Preceding Year
9
15
June 30, 1938
110
17
June 30, 1939
June 30, 1940
136
169
24
24
June 30, 1941
June 30, 1942
204
227
21
11
*This index eliminates the effect of conversion Qf State-chartered
into Federally-chartered associations, and the addition of newly
established Federal associations during the period. Any growth of
associations resulting from consolidation, merger, or purchase of
assets from other institutions is not reflected in the index.
Federal savings and loan associations report a substantial reduction
in
the volume of Government share investments during the current reporting
period.
On June 30, 19.2,
Loan Corporation and the U.
P169,26,650
a year
with
total outstanding investments of the Home Owners t
S. Treasury amounted to $151,299,700 as compared
previous--a drop of 10.6 percent*
of declining Government investments,
As a net result
on the one hand, and increasing private
investments, on the other, the ratio of Government share capital to total
declined from 10 percent on June 30, 1941, to 8 percent on June 30, 1942.
Mortgage Lending Activity
Mortgage lending activity of Federal savings and loan associations
during the 1942 fiscal year followed the same general trends shown by all member
institutions,
although the falling off in lending volume during the closing
months of the reporting period was even sharper than in
rember institutions.
the case of State
From July through December 1941, Federal savings and
loan associations wrote mortgage loans in the total amount of $3504,51,000,
an increase of 12.6 percent as compared with the same six-month period a year
earlier.
During the six months from January through June 19L2, however,
lending by Federal associations showed a drop of 31.0 percent as compared
with the January-June 19 1 total and amounted to only $210,115,000.
This
decline wvas severe enough to overbalance the gains made during the previous
six months, with the result that the fiscal year as a whole shows a decline
of ~:55,02,000, or 6.h percent, when compared with the 1941 fiscal year.
An analysis of the current mortgage lending activity of Federal
savings and loan associations,
See
pr.
on the basis of the purpose for which loans
15-17.
-41
are granted, shows marked changes during the 1942 fiscal year.
VWhereas loans
to finance the construction of new homes during the 1941 reporting period
amounted to $227,811,000, or 41.4 percent of total loans made, the current
reporting period shows loans for this purpose in the dollar amount of only
$174,035,000, or 33.8 percent of total.
Loans to finance the purchase of
existing homes, on the other hand, increased over one-fifth during the twelve
months ending June 30, 1942.
Home purchase loans aggregated $217,137,000,
or 42.2 percent of total loans written, as compared with $180,834,000, or
32.9 percent of total during the 1941 fiscal year--a change accounted for,
no doubt, by the more intensive demand for existing structures in many
communities.
As the table below indicates,
loans for refinancing, reconditioning,
and miscellaneous purposes show declines both in dollar volume and in relation
to total activity during the reporting period.
Distribution of Loans Originated by Federal Savings and Loan
Associations, by Purpose of Loan, by Fiscal-Year Periods
Amounts in Thousands of Dollars
Purpose of Loan
Construction
Home purchase
Refinancing
1938
1939
1940
1941
Percent Distribution
1912
$95,046 $123,870 $179,141 $227,811 $174,055
84,519
95,161 138,548 180,834 217,137
61,083
67,4
85,320
84,303
74#,75
Reconditioning
17,588
18,542
20,669
22,588
19,002
Other
23,615
28,942
34,138
54,722
30,007
333959 457,816
550,058
Total
281,851
1938
1939
33.7
30.0
21.7
37.0
28*5
20.2
6.2
8.*
514,656 100.0
1940
1941
1942
39.1 41. 33.8
30.3 32.9 42.2
18.6 15 3 14.5
5.6
4.5 4.1 3.7
8.7
7.5 6.3 5.8
0looo 100.0 100.0 100.0
Finanoial Operations
The activities of Federal savings and loan associations just outlined
are reflected in the consolidated balance sheet for all associations at the end
of the calendar years 1940 and 1941.3
3
Total resources increased almost 16 percent
For detailed information on trends shown by consolidated balance sheets for
Federal associations at the end of 1940 and 1941, see the July 1942 issue of
the Federal Home Loan Bank Review.
during this period.
Most of this gain is
first
accounted for by a rise in
mortgage holdings of 17.7 percent and a growth in
cash of 22.
percent.
Real
estate owned was reduced by one-third to $51,819,000 and now represents only
The other side of the balance sheet shows a gain
2.4 percent of total assets.
of 20 percent in private capital,
share investments,
a decline of almost 12 percent in
and an increase of over 22 percent in
Government
general reserves
and undivided profits.
A consolidated statement of operations for all Federal savings and
loan associations for the calendar year 19111 is
given in Exhibit 17.
Gross
operating income of the 1,L56 reporting associations totaled $07,282,600
as
compared with $92,292,000 for the 1,428 associations reporting for the
previous calendar year.
Operating expenses amounted to $30,175,200, or 28.1 percent of
Net income after interest and nonoperating
gross operating income in 194.
items totaled $74,286,600 as compared with $63,L93,000 during 1940.
Reserves
and undivided profits received 29.8 percent of total net income; the remaining
70.2 percent was disbursed in
the form of dividends.
In 1940 the corresponding
ratios were 27.3 and 72.7 percent, indicating that associations are using an
increasing proportion of current income to strengthen their reserves,
The rates at which dividends were paid by Federal savings and loan
associations during 1940 followed the general downward trend of the previous
several years.
The average annual dividend rate in
191, weighted by the
amount of invested capital, was 3.15 percent as compared with 3.25 percent
in
194O and 3.59 percent in
1939.
Each of the Federal Home Loan Bank Districts
-43 -
and practically all of the 48 States show a lower average rate in 1941 than in
1940, indicating that the downward revision in rates is. general throughout the
country.
Exhibit 18 shows the average annual rates paid by Federal associations,
by Federal Home Loan Bank Districts and by States, for the calendar years 1940
and 1941,
u--- I
1-
--
IV
--- --
,-
~-~
=
----~--a~-~-
a~--~---~-----~-
,=
-I
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION
Operations of Insured Institutions
During the fiscal year 1942,
the number of savings and loan
associations insured by the Federal Savings and Loan Insurance Corporation
increased from 2,31
to 2,374.
This increase of 61 was the net result of
73 additions and 12 terminations.
Terminations in 6 cases were the result
of the merger of existing insured institutions, 5 were the result of
liquidation, and one institution voluntarily cancelled its insurance.
On
June 30, 192, insuranoe applications were pending for 378 associations.
The insured savings and loan group includes all 1,464 Federal savings and
loan associations and 910 State associations.
Investors in each of these
institutions are protected by the Corporation against the loss of their
savings, up to a maximum of $5,000.
By the end of the reporting period, institutions enjoying the
protection of the Insurance Corporation represented approximately 63 percent
of the member savings and loan associations of the Federal Home Loan Bank
System.
Their assets were equivalent to more than 70 percent of the
consolidated kesources of all member institutions.
Detailed information on
the number and assets of insured associations will be found in Exhibit 19.
Revision necessitated by certain changes in reporting procedure adopted during
the 1912 fiscal year.
Although the consolidated balance-sheet and operating trends which
reflect the current condition and progress of insured savings and loan
the last
associations did not indicate the rapid advances experienced durin
they nonetheless show continuing improvement for the 1)12
few fiscal years,
Thus,
reporting period.
;301,Lo5,000 to
total assets of insured institutions increased by
191, to June 30,
3,li61,228,000 from June 30,
lFL2.
On
this latter date, the number of insured investors had reached a new high
of 3,217,500.
1he combined mortgage portfolio of all insured associations grew
from 62,555,393,00
on June 30, 1941, to $2,827,956,000 at the close of the
reporting period, a gain of 10.7 percent.
New mortgage lending by insured
institutions during the 19 2 fiscal year aggregated $797,826,000.
Although
this figure failed to equal the peak record of the preceding year, it represents
over 75 percent of the total lending volume of all member institutions of the
Federal Home Loan Bank Systexa,
For the fiscal year as a whole, private savings entrusted to insured
savings and loan associations increased by $502,3553,00 to $2,75
258,o00.
A
reduction in the volume of new investments, coupled with higher repurchases
during the first few months of 19L:2, explains the fact that this net increase
was somewhat smaller than the gain of $4.15,782,000 reported for the 191
fiscal year.
Insurance Settlements
The basic purpose for which the Congress established the Federal
Savings and Loan Insurance Corporation was to bring about a greater degree of
stability in savings and loan operations by spreading the risk of inevitable
losses according to well-accepted insurance principles.
It
was to be expected
that a certain number of problem cases would develop, for in any insuring operation
losses are as much a part of normal operations as premium income.
-46
-
In its eight years of operation, 35 insured associations have
In
experienced difficulties requiring action by the Insurance Corporation.
two of these cases, the Corporation determined after exhaustive study that
no financial assistance was necessary and these associations have continued
normal operations.
In 23 of the remaining 33 cases the Corporation made
net cash disbursements aggregating $4,251,959.51 in order to prevent default.
Recoveries received through June 30, 1942, in the amount of
been deducted
have
530995.35
rom Gross disbursements to arrive at the foregoing figure.
Additional contingent commitments to five of these associations, in the amount
of $21b,374.11, were still outstanding on June 30,
1942,
Three of the savings
and loan associations so far assisted by the Corporation have merged with
other insured institutions, three have liquidated voluntarily, paying all
investors in
cash,
and 17 have continued operations as separate units.
A total of seven institutions have been declared in default and
placed in liquidation, and at the close of the fiscal year 1942, the Insurance
Corporation was studying three cases to determine whether some form of corrective
action should be taken.
The Corporation has made a commitment of $86,000 in
one of these cases contingent upon compliance with certain conditionso
It is estimated that the final losses which will be sustained in
all cases in which the Corporation has made or authorized contributions or
permitted associations to be placed in liquidation will amount to $5,3.2,00.
Analysis of the reasons for the difticulties encountered by the
33
associations with which the Corporation has had to deal indicates that
adverse economic conditions, coupled with weak management, are by far the
most important causes of institutional difficulties.
responsible for 21 of the 33 cases.
These two factors were
Outright dishonesty on the part of
association employees or breach of trust on the part of management accounted
for the difficulties experienced by the remaining 12 institutions.
-
47
-
The Corporation is authorized by statute to adopt several courses
of action when an insurance case is certified to it.
After careful study
and exhaustive analysis of the condition of the association, the Corporation
determines whether it should prevent a declaration of default or whether it
should permit the institution to be liquidated.
A declaration of default can
be prevented by the Insurance Corporation either by purchasing doubtful assets
from the association, by making a loan, or by means of a contribution to the
institution in
difficulty.
Through the close of the fiscal year 19112,
the
Corporation had made no loans to prevent default nor had it purchased assets,
although both of these means of settlement may be employed at some future date.
In each case in which an insured association has been declared in
default and placed in liquidation, the Corporation has offered all insured
shareholders the two optional methods of settlement set forth in the statutes:
(1) a new insured account in an insured association not in default, or (2) ten
percent of the insured account in cash and the remaining 90 percent in
negotiable non-interest-bearing Corporation debentures, 50 percent coming
due within one year and 50 percent within three years.
Practically all of the investors in each of the seven insured
associations which have been placed in liquidation have elected the first
method of settlement, i.e., a new account in an open insured association.
To date, less than one-tenth of one percent of the claims settled have
provided for payment on the cash and debenture basis.
Public confidence in
the insurance program is directly reflected in the fact that of the total
amount made available to insured shareholders in other operating institutions,
approximately 60 percent has been left with these institutions in the form
of savings share accounts.
-48 -
During the fiscal year 19L2, the Corporation extended financial
aid in
the form of contributions totaling $2,754,065*56 to eight associations
which were threatened with default.
In addition the Corporation paid out
$45,000 to two institutions as payments on contingent commitments previously
authorized.
Operation of Insured Instittions
in
Default
Two Federal savings and loan associations with assets of $7,200,000
and two insured State-chartered associations with assets of $514,000 were
placed in liquidation during the 192 fiscal year, bringing the number of
insured associations in default and liquidation to seven, with assets
aggregating $7,680,000, as of June 30, 1942.
The Insurance Corporation is
acting as receiver for each of the four Federal associations in liquidation
and as co-receiver with a State Building and Loan Department in the case of
one insured State-chartered association.
The Corporation, through its
subrogation of insured claims, has a major claim in the proceeds of the
liquidation of two State-chartered associations and takes an active interest
in the liquidation of these institutions which is being carried on by a
State authority.
Comparative statements of condition and operations of these
institutions as of the date of receivership through June 30, 1942, are shown
in
Exhibit 20.
The liquidations are progressing favorably.
Initial
liquidating dividends of 20, 50, and 70 percent were declared in three of
the receiverships during the fiscal year 1942,
*
49
-
Operations of the Insurance Corporation
The balance sheet of the Federal Savings and Loan Insurance
Corporation during the fiscal year 1942 continued to show steady improvement.
Total assets on June 30, 1942, amounted to $154,371,152 as compared with
$150,920,146 a year previous.
Reserves and surplus on June 30, 1942, amounted
to $32,665,905 as compared with $29,388,884 on June 30, 1941.
The Corporation
has since its inception followed the practice of building up its surplus and
reserves as rapidly as possible, recognizing that any insuring operation
requires an adequate cushion against future losses.
The potential insured liability of the Insurance Corporation,
representing the total amount of all insured accounts up to $5,000 each and
all creditor obligations of insured associations totaled $2,772,012,000 on
June 30, 1912, as compared with $2,464,167,000 at the close of the 1941 fiscal
year.
In terms of the relationship of liability to resources of the Corporation,
there was on June 30, 1942, for each dollar of capital, reserves, and surplus
of the Corporation, a potential liability of $20.63.
The current statement of
condition of the Insurance Corporation will be found in Exhibit 21.
Income of the Federal Savings and Loan Insurance Corporation is
derived from annual premiums paid by insured institutions, admission fees
received from associations newly entering the system, and from interest on
investmentso
All income over and above expenses is allocated to reserves, and
disbursements of the Corporation in connection with insurance settlement cases
are charged to these reserve accounts.
- 50 -
Premium income received during the fiscal year 1942 totaled $3,5,34952
as compared with $3,063,115 for the preceding reporting period.
Premiums paid
by insured institutions equal 1/8 of 1 percent of total share and creditor
obligations or an amount which equals approximately 11 cents for each $100 of
assets.
Admission fees, charged on the basis of
4
cents for each $100 of
insurable accounts and creditor obligations, totaled $27,502 during the 1942
fiscal year as compared with $2*,371 in the 1941 reporting periods
The Corporation's income from investments, including $131775 resulting
from profits in the sale of securities, amounted to $3,612,479.
Inoluding
miscellaneous items, the aggregate income of the Corporation thus totaled
$7,175,000 during the reporting period, an increase of $592,807 over the
preceding year.
The Corporation's administrative expenses amounted to $324,931 during
the period under review and nonadministrative expenses, whioh arise principally
from costs inourred in connection with settlement oases, totaled $32,867.
ifter
deduction of these administrative and nonadministrative expenses from gross
income, the net income of the Corporation during the 19
to $6,817,203 as against $6,317,177 the year previous.
fiscal year amounted
A deailed statement
of income and expense for the fiscal year 1942 will be found in Exhibit 22.
Total personnel actively employed by the Corporation on June 30,
1942, numbered 70.
The Corporation is able to operate efficiently with this
small staff because under a cooperative arrangement it is able to utilize
the various service divisions of the Federal Home
an Bank Administration on
a reimbursable basis and does not have to maintain such departments of its own.
At the present time, the Corporation is able to maintain its administrative
expenses at a figure lower than the interest income from its invested reserves.
- 51 -
MOUFM ON -"I
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LOAN CORPORATION
Progress in Liquidation
Since the close of its emergency lending operations in June 1936,
the major responsibility of the Home Owners' Loan Corporation has been the
orderly and economical liquidation of its affairs.
During its three-year
lending period, the Corporation refinanced the mortgage obligations of
1,017,823 individuals virtually all of whom were in danger of losing their
homes through foreclosure.
It is the assets it holds as a result of these
lending operations plus certain additional amounts it invested in the share
capital of savings and loan associations which the Home Owners' Loan
Corporation is now engaged in liquidating.
nEergency refinancing loans made by the HOLC amounted to
35,0935,1h51321.
As part of its normal servicing activities, the Corporation has found it
necessary from time to time to advance supplemental amounts to its borrowers
primarily for the payment of delinquent taxes.
In addition it has been necessary,
of course, for the Corporation to foreclose certain of the loans originally
granted and in these cases its investment has been increased through the
capitalization into property account of such items as delinquent interest and
taxes, foreclosure and acquisition costs, and reconditioning expenditures.
Through June 30,
192, the amounts advanced to borrowers and capitalized into
property totaled $382,642,477.
Cumulative gross investments in what might be
termed the Corporationts "operating assets," i.e., the mortgage loan, vendee,
- 52 -
and property accounts, resulting from its lending programn,
thus aggregated
$3,476,093,798 through the close of the reporting period.
As shown by the table below, the operating assets at the end of
the fiscal year 1942 aggregated $1,938,195,197, a reduction of $1,537,898,601,
or 4..2 percent.
Over three-fourths of this net reduction has resulted from
principal repayments on original loans.
Another ten percent represents
receipts from property sales and repayments by vendees.
The remaining 15
percent of the total net reduction in operating assets is attributable to
charge-offs and losses.
As will be explained in more detail later, the
Corporation has been able to make up a large proportion of these losses and
charge-offs from its operating income.
Reduction in Operating Assets Through June 30, 19j2
Original amount loaned .....................
Subsequent advances to borrowers,
*..****........
$3,093
451,321
net additions included in capitalized
value of properties, etc.
..
•.....................•.....
Original loans plus advances,
capitalized additions, etc. ...........................
Present balance, original loans
.........
382,62,477
3,*76,093,798
$1,311,850,737
Present balance, vendee accounts and
unposted advances ..........
o............
Present balance, property accounts .......
Total .*....*...*..*.................................
364,037,18*
262,307,276
1,938,195,197
Net reduction in operating assets ........................
1,537,898,601
During the 1942 fiscal year, liquidation progressed somewhat more
rapidly than during any previous reporting period, primarily as the result of
a higher rate of collections on debtor accounts.
The total balance of mortgage
loan, vendee, and property accounts was reduced from $2,189,038,942 at the
beginning of the fiscal year to $1,938,195,197 on June 30, 1942, a decline of
$250,843,745, or 11.5 percent.
- 53 -
The Corporation's investments in the share capital of savings and
loan associationw have also been substantially reduced.
These investments
were authorized by Congress in 1935 as a means of stimulating private home
mortgage lending activity.
Up to June 30, 1942, the Corporation had invested
a total of $223,756,710 in this.manner.
that date aggregated $167,069,810,
The amount still outstanding on
a decline of over 25 percent.
The major
proportion of the reduction in this asset item has been brought about as the
result of voluntary retirements over and above amounts requested by the
Federal Home Loan Bank Administration.
1
The liquidation of the Corporation's debtor and property accounts
and the retirement of investments in savings and loan associations has been
accompanied by a decline in bonded indebtedness.
Total bonds outstanding on
June 30, 1942, amounted to $2,119,317750 as compared with a peak of
$3,047,046,575 on May 31, 1936.
In accordance with the Home Owners'
Loan
Act of 1933, the Corporation segregates all principal repayments by borrowers
for use only in the retirement of bonds.
Certain other receipts of the
Corporation, including cash Droceeds from property sales and funds received
in connection with the repurchase of savings and loan investments,
applied.
are similarly
Cumulatively through the. close of the reporting period, all sums
applicable to the retirement of bonds aggregated $1,403,470,605
As shown
in the table below, funds in this amount had been deposited in a special Bond
Retirement Fund, in the United States Treasury, and have been used either
to retire bonds or are available for future retirements.
1 See
pp. 21-22.
-54-
Disposition of Funds Allocated to Bond Retirement Fund
Applied to retirement of bon s ...
*******........
.****
Deposited with U. S. Treasury for retirement of
matured bonds on which interest has ceased
o..o......*
Available for future bond retirement .***.
******......
.
$1,370,022,855
25,835,525
22,72
1,396,131,122
Balance due Bond Retirement Fund for June 1942
deposited in July 1942 ...............................
7,289,465
1,405,470,605
During the month of June 1942, the Corporation substantially reduced
its
bonded debt.
Series "G' bonds,
bearing an interest rate of 2-i/. percent,
which were outstanding in the amount of $875,
8,625, beoame eligible for
redemption and were called for payment on July 1, 1942.
Of this issue, bonds
amounting to $315,438,625 were retired outright from cash available in the
Corporation's Bond Retirement Fund.
The remaining $560,000,000 was refunded
through the issuance to the Treasury of Series "CQ,
July 1,
1943.
1 percent, bonds due
As a result of this retirement and refunding operation,
substantial savings in
interest charges will be realized.
The average
interest rate on bonds outstanding was reduced from 2.257 percent on June 30,
1941, to 1.928 percent at the close of the 1942 reporting period.
A detailed
statement of the bond transactions of the Corporation will be found in
Exhibit 25.
The liquidating program of the Home Ownerst Loan Corporation has
made possible a steady reduction in personnel and other administrative
expenses during the last several years.
Thus,
alone, the Corporation was able to reduce its
during the 1912 fiscal year
personnel from 7,76
and thereby effect an annual salary saving of $4,921,550.
- 55 -
to 5,228
During the 1912 fiscal year the Corporation was able substantially to
contract its
field organization.
one division office were closed.
number of field stations.
Two regional offices, nine State offices,
and
There was also a net reduction of eight in the
The latter are small offices which are used as operating
centers for field men engaged in
loan servicing and property management.
They are
under the direction of the regional offices of the regions in which they are
located.
As a result of these actions, the total number of offices of the
Corporation on June 30,
1942, was 8 regional offices,
one State office,
and
39 field stations.
Status of Accounts
A substantial rise was recorded during the fiscal year 1942 in the
number of home owners whose loan payments to the Corporation are being met on
schedule.
Loan foreclosures have dropped, and a steady upward trend in
payments by HOLC borrowers in
principal
excess of their contractual obligations has been noted.
The collection record during 1942 was maintained at a higher level than
for any previous fiscal year, totaling $313,852,862,
as compared with $293,456,574
for the fiscal year 1911, and $276,158,266 for the fiscal year 1940.
the continued need for constant,
careful servicing of HOLC accounts is
an analysis of the slow progress of some borrowers in
to the Corporation.
Nevertheless,
evidenced by
reducing their indebtedness
The constant problem of the Corporation is
tu build up equity
balances of borrowers so that the Corporation's loans may become increasingly safe.
Loan Service
From the beginning of opbrations,
the Home Owners'
has serviced its loans on an individual case basis.
Loan Corporation
This handling of delinquent
accounts has enabled the Corporation to discover causes of trouble and
in many thousands of cases has led to the working out of programs to
- 56 -
prevent foreclosure.
calls in
Trained representatives of the Corporation make personal
more serious cases; when the delinquency is
is frequently sufficient.
In all cases, however,
small, direct correspondence
every effort is made to
help the individual borrower to solve his difficulties.
Where it
has obviously been necessary and justified, the Corporation
under current war conditions,
has extended special leniency in
wage earner has been inducted into military service.
cases such borrowers,
in
cases where a
In the majority of
recognition of their military status and reduced
income, are given the privilege of making reduced payments usually in
an
amount sufficient to cover at least interest and taxes.
A major servicing measure of the Corporation which has proved
advantageous both to the Corporation and to its borrowers is the special
procedure which has been set up for the systematic collection of taxes and
insurance on mortgagor properties.
In the normal course of events,
charges
for taxes and insurance are levied on an annual basis and in many cases their
payment in a lump sum represents a severe hardship.
To safeguard the home
owner against the accrual of insurance charges and penalties due to tax
delinquency, arrangements are made for the payment of taxes and insurance
on a systematic monthly installment basis.
due,
When taxes and insurance come
they are paid automatically by the Corporation from the funds paid in
by the borrower in this manner.
At the end of the fiscal year 1942,
a total
of 431,213 such accounts had been established.
This procedure,
in addition to assisting the Corporationts borrowers,
has brought about substantial economies in the Corporation ts administrative
expenses by eliminating the necessity for searching public tax records to obtain
information on tax delinquencies
-
57
-
The Corporation's servicing activities were considerably broadened
in August 1939 with the passage of the Mead-Barry Act.
Under the terms of
this amendment to the Home Owners, Loan Act, the Corporation was authorized,
under certain conditions, to extend the repayment period of borrowers'
accounts to a maximum of 25 years.
For the most part, the bulk of extension
applications submitted to the Corporation had been processed prior to the
current reporting period.
The books of the Corporation show that 251,170
accounts had been extended through June 30, 1942.
The program inaugurated by the Corporation, encouraging certain of
its borrowers to pay their accounts ahead of schedule, made notable progress.
during 1942.
Through this servicing activity, representatives
of the
Corporation in personal interviews have urged individual borrowers to use
the increased incomes they now enjoy either to build up a "prepayment" reserve
to take care of future installments during unfo~seen periods of difficulty,
or, if possible, to apply excess sums as a direct reduction of principal
indebtedness.
One measure of the success of the Corporation's overpayment program
is found in the fact that 87221 borrowers already were paying in excess of
their regular monthly installments on June 30, 1942.
Acceleration in the reduction of mortgage indebtedness has, of
course, a dual advantage to the Corporation and its borrowers.
To the borrower,
any reduction in the indebtedness on his home means a corresponding increase
in his equity and places him in a better position to meet unforeseen
contingencies which may arise before debt-free home ownership is attained.
From the Corporation's standpoint, its security position is.strengthened as
borrowers are able to reduce the principal amount of their mortgage
obligations.
In addition, a third aspect to the program has special significance
under present-day conditions.
Acceleration in debt repayment is anti-inflationary
- 58 -
in
character and to the extent that the Corporation and its
jointly successful in
borrowers are
this new program, the problem faced by the country in
combatting a threatening inflationary spiral is
materially relieved.
Foreclosures
Foreclosures authorized by the Corporation on borrowers,
accounts
after deduction of withdrawals numbered only 3,429 during 1942 as compared
The current low rate
with 13,091 during 1941, a reduction of 73.8 percent.
of foreclosure is
another reflection of the stronger financial position of
many of the Corporations borrowers.
Foreclosure Operations During the Fiscal Year 192, by Months
Month
Authorizations
Withdrawals
1
Net Authorizations
1941
July
880
601
279
August
September
968
856
518
522
October
November
December
919
7144
698
584
450
334
335
428
270
645
577
616
599
438
205
361
216
3540
633
641
306
410
276
245
327
231
8,774
5.345
3,429
483
261
1942
January
February
March
April
May
June
Total
354
Includes 155 redemptions.
From the beginning of operations,
a total of 238,851 foreclosures on debtors,
withdrawn,
leaving a net figure of 199,377.
- 59 -
the Corporation has authorized
loans,
of which 59,474 have been
Property Management
The volume of foreclosed properties owned by the Home Owners? Loan
Corporation again underwent a substantial reduction during the 19 2 fiscal
year.
The number of properties owned and in
192,
37,998 on June 30,
as compared with 4(9,419 a year previous, a decline
of which nearly 82 percent had been sold through the close of th
reporting period.
The combined capital value of properties owned and in
process of acquiring title
amounted to $262,307,276 on June 30, 19L12,
compared with $318,734,001 a year previous,
a total loss of $226,561,520,
as
a drop of 17.7 percent.
Sales of Corporation-owned properties through June 30,
in
was
On a cumulative basis, the Corporation has acquired 190,191
of 23.1 percent.
properties,
process of acquiring title
191.2,
or an average of $1,47 per property.
resulted
These
loss figures represent the difference between capitalized value as shown on
the books of the Corporation,
together with brokerage and sales burden, and
the actual price received at time of sale.
practice,
includes,
Capitalized value,
following standard
in addition to the unpaid principal balance of the foreclosed
loan, delinquent interest and taxes,
foreclosure,
acquisition, and rehabilitation
costs.
The Corporation endeavors to dispose of its
rapidly as possible.
50,122 units in
acquired properties as
Pending sale, most properties owned are rented*
Of the
Corporation properties at the close of the 19L2 fiscal year,
5,675 were unavailable for rental, being in process of repair, held vacant
for sale,
41,538,
or adversely occupied.
Of the ),
I
7 units then avaible for rental,
or 93.5 percent, were rented.
During the 1942 fiscal-year period, the Corporation's gross operating
income from the rental of its
properties amounted to $19,528,528.
Gross expenses
for properties both rented and vacant, exclusive of interest and administrative
6o
6-
overhead,
amounted to $11,586,897.
During the reporting period,
the Corporation received a net operating income of $4,941,631.
therefore,
From the
beginning of operations through the close of the reporting period,
the net
operating income from properties owned by the Corporation totaled $19,356,601.
Reconditioning
During the fiscal year 1942,
reconditioning operations of the
Corporation show a decline from the previous reporting period due to fewer
property acquisitions and a reduced real estate account.
Reconditioning
contracts completed during the twelve months ending June 30, 1942,
21,687 in
the amount of $9,174,051, as compared with 35,982,
numbered
involving an
expenditure of $11,653,483 during the preceding reporting period.
With the growing need for a more intensive use of existing structures
as a result of material scarcities and crowded conditions in war industry
centers, the unusual experience of the Corporationts Reconditioning Section
has been enlisted in
housing problems.
It
an advisory capacity by agencies directly engaged in war
has cooperated with the Homes Registration Offices in
a program to encourage the repair, modernization,
and conversion of private
homes to provide additional housing accommodations for war workers.
After the adoption of the priorities system for defense housing in
the fall of 1941,
the Compliance Branch of the War Production Board requested
the aid of the Corporation's
surveys in
trained field investigators to conduct industrial
the construction field.
During March and April 192,
the
Reconditioning Section made a special investigation of priority compliance
in
284 publicly financed defense housing projects.
in
the process of construction at the time of investigation.
All of these projects were
The survey served
the dual purpose of checking up on actual compliance with regulations of the
War Production Board and emphasizing to contractors and others engaged in building
-
61 -
operations the necessity of conserving scarce materials for more direct war
needs.
A second survey was started in May 192 for the War Production Board
to check general compliance of the construction industry with the provisions
order issued on April 9,
the "stop-constructionn
of Conservation Order L-41,
1942.
The survey continued for a period of sixty days, ending on July 17,
192.
During this period, the Corporation's investigators made over 23,000
contacts in 5,503 cities.
All of the services performed for the War Production Board in
the
aforementioned two surveys were provided on a reimbursable basis, including
salary, per diem, travel, and other expenses.
Appraisals
During the current reporting period, the Corporation completed a
total of 37,125 appraisals as compared with 60,26h during the preceding
fiscal year.
The current work load figure includes 9,953 new appraisals and
27,172 reappraisals or supplemental reviews.
The rapid changes in
property
valuations during recent months have necessitated frequent reviews of
uorporation appraisals in
order to keep this vital and necessary information
as up to date as possible.
As in
the case of the Corporation's reconditioning personnel,
a
number of war agencies have availed themselves of the services of the trained
appraisal staff of the Corporation.
During the 19
2
fiscal year, the War
and Navy Departnents requested appraisals of properties valued at many millions
of dollars.
For the Navy Department,
in process on June 30,
1942.
560 appraisals had been completed or were
An additional 110 projects had been undertaken
for the War Department, and 63 for other Government agencies,
including the
Department of Justice, the Federal Works Agency, and the Procurement Division
- 62 -
of the United States Treasury.
All cooperative appraisal work performed by
the Corporation for other Government agencies is done on a reimbursable basis.
Financial Operations
The progressing liquidation of the Home Owners, Loan Corporation
is reflected in a comparison of the Corporation's balance sheet on June 30,
192 (Exhibit 23) with the balance sheet a year previous.
The asset side of
the balance sheet shows a decrease of 12.6 percent, with the principal
declines occurring in the mortgage loan and property accounts.
The liability
side of the balance sheet shows a decrease in both bonded indebtedness and
the Corporation's net capital.
- 63
Changes in 3iportant Balance-Sheet Items
From June 30, 194,
to June 30,
1942
June 30, 1941
Jqne 30, 19b42
$1,521,06,216
$,o311,850
Change
Assets
Original mortgage loans and
advances thereon eo...-........
- $209.195.479
737
Vendee accounts and advances
thereon
Unposted advances
e,.......,,** e,**.,
.**,,*e... o
Total loan inventory
...
,,
Property owned and in process
of acquiring title
*...*.*****.
Bond Retirement Fund .*,..,,...
Investments ................
Liabilities and Capital
Bonded indebtedness . *
.*
o
Reserve for losses *e. ....
eeee.
Capital stocks
Authorized, issued, and
outstanding .*,,S*.e**. .. *
349,216,315
365,9914,551
+
12,410
L2,63.3
1,675,887,921
+
14,748,236
30,223
-
194,117,020
1,870.304,914
318,734,001
)6,111,498
282,853,360
262,307,276
-
56,926,725
26,158,267
-
19,953,231
15,783,550
24 19,608,800
2,119,317,750
26,885,039
39,759,21s6
+
300,291,050
12,874,207
267,069,810
200,000,000
Losses in excess of net
earnings .ee««..... .....
Reserves for future losses.
Total .......
..
Net capital after losses and
provision for future losses .ee
65,9477,653
26~885oO39
amumqmpm~
69,703,680
39,759,26
109,462,926
t
+
4,226,027
12,874,207
S
i17,loo,234
90,537,074
-
17,100,254
92,93628692~o
Operations during the current reporting period brought a continued
reduction in both the income and expenses of the Home Owners' Loan Corporation.
Operating and other income for the twelve months ending June 50, 1942,
to $106,359,213
as compared with $116,484728 a year previous.
on the other hand, including interest on bonded indebtedness,
amounted
Total expenses,
aggregated
$83,875,27 as compared with $92,867,479 during the 1941 reporting period,
In peroentao terms, this indicates a reduction of 8.7 percent in
income and
9*7 percent in expenses
An income and expense statement for the fiscal year 1942 will be found
in Exhibit 24, and Exhibit 25 gives an operating statement covering the entire
period from the organisation of the Corportion in 1933 through June 30, 1942.
n64
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I
"
I
e
I-
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I-
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--
VI
-
r-=-_l
-----
c-l----r
UNITED STATES HOUSING CORPORATION
Prior to the organization of the National Housing Agency, the United
States Housing Corporation was a part of the Federal Works Agency.
The
Corporation was created in 1918 during World War I for the purpose of housing
workers in congested war industry areas.
After the Armistice, it was decided
that the Corporation should complete projects which were in an advanced stage
of construction and that others should be abandoned and the materials salvaged.
In accordance with this program, the Corporation completed
approxminately 6,000 residential properties located in 26 States and several
large hotels in Seattle, Washington, and the District of Columbia.- Most of
these properties have been sold or otherwise disposed of.
At the end of
February 1942, when the United States Housing Corporation was transferred from
the Federal Works Agency into the Federal Home Loan Bank Administration, the
books of tne Corporation showed that it held an interest in
445
houses and
54 vacant lots. Some 415 of these houses are located in Philadelphia, Pennsylvania.
Immediately after the issuance of Executive.Order 9070, the necessary
steps were taken to protect the Corporation's interest in these holdings and
the Congress was requested to authorize the Federal Home Loan Bank Administration
to use $173,000 of the Corporation's own funds to wind up its affairs.
This
request was granted on July 2, 1942, just after the close of the current
reporting period.
A program to bring about the speedy liquidation of the
United States Housing Corporation was immediately thereafter put into effect.
- 65 -
~"raars~UBII~L18I~1~a~lll~llrP~
qggl*ili)sa~~ ~
--
LIST OF EXHIBITS
THE YEAR IN RETROSPECT
1.
Nonfarm Real Estate Foreclosures,
and by States
2.
Selected Figures on Residential Real Estate Owned by Financial
Institutions, December 31, 1940, and December 31, 1941
3.
Indices of Total Building.Cost, and of Cost of Materials and Labor
Used in
by Federal Home Loan Bank Districts
Construction of Standard Six-Room Frame House
4. Estimated Volume of Mortgage Loans on Nonfarm One- to Four-Family
Dwellings,
by Type of Lender
5.
Estimated Recordings of Nonfarm Mortgages of $20,000 and Less,
Type of Mortgagee, Fiscal Year 1942
6.
Estimated Balance of Outstanding Mortgage Loans on Nonfarm OneFour-Family Dwellings
7.
Changes in Selected Types of Individual Long-Term Savings,
December 31, 1935, to December 31, 1941
by
to
FEDERAL HOME LOAN BANK SYSTEM
8.
Number and Estimated Assets of Member Institutions,
and June 30, 1942
9.
Estimated Volume of New Mortgage Loans Made by Savings and Loan
Associations, by Type of Association, Fiscal Years 1937-1942
10.
Federal Home Loan Banks--Advances and Repayments for the Periods
Indicated, and the Balance of Advances Outstanding at the Close
of Such Periods
11.
Federal Home Loan Banks--Distribution of Advances Outstanding,
Long-Term and Short-Term Advances, as of June 30, 1941, and
June 30, 1942
12.
Federal Home Loan Banks--Statement of Condition as of June 30, 1942
13.
Federal Home Loan Banks--Statement of Profit and Loss for the
Fiscal Year Ended June 30, 1942
-66
-
June 30,
1941,
by
14.
Members of the Federal Savings and Loan Advisory Council,
15.
Federal Home Loan Bank Administration--Statement of Receipts and Disbursements
of the Administration During the Fiscal Years 1941 and 1942
16.
Federal Home Loan Bank Administration--Comparative Statement Reflecting, by
Offices, the Number of Administration Employees as of the Close of the Fiscal
Years 1911 and 1942
as of June 30,
1942
FEDERAL SAVINGS AND LOAN ASSOCIATIONS
17.
Consolidated Statement of Operations for 1,456 Reporting Federal Savings
and Loan Associations, for the Year Ended December 1941
18.
Average Annual Dividend Rates Declared for the Calendar Years 1940 and 1941
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION
19.
Number and Assets of all Insured Associations,
Districts and by States, June 30, 1942
20.
Statements of Condition and Operation for State-Chartered Insured Institutions
and Federal Savings and Loan Associations in Receivership, June 30, 1942
21,
Statement of Condition as of June 30, 1942
22.
Income and Expense Statement for the Period July 1,
HOME OWNERS'
by Federal Home Loan Bank
1941,
through June 30,
LOAN CORPORATION
23.
Balance Sheet as of June 30, 1942
24.
Statement of Income and Expense for the Fiscal Year 1942
25.
Statement of Income and Expense From the Beginning of Operations,
June 13, 1933, to June 30, 1942
-67
-
1942
EXHIBIT 1
Nonfarm Real Estate Foreclosures, by Federal Home
Loan Bank Districts and by States
Number,
Bank District
and State
UNITED STATES
Number,
Year Ending
June 30, 1941
Year Ending
June 30, 1942
68,432
49,514
1--Boston
Connecticut
7,356
1,120
Maine
5,427
803
663
4,759
No.
Massachusetts
New Hampshire
Rhode Island
Vermont
593
266
481
67
3,508
192
269
62
No. 2--New York
New Jersey
New York
15,620
3,12
12,208
11,192
2,328
8, 864
No.
10,285
8,195
18.
9,598
703
187
7,509
499
3--Pittsburgh
Delaware
Pennsylvania
West Virginia
No. 4--Winston-Salem
7,417
5,663
klabama
916
520
District of Columbia
271
141
Florida
1,317
1,267
Georgia
Maryland
675
1,367
603
981
North Carolina
South Carolina
Virginia
1,241
305
1,325
777
308
1,066
No, 5--Cincinnati
Kentucky
7,172
1,176
4,739
Ohio
4,017
2,651
Tennessee
1,979
1,357
No.
6--Indianapolis
715
2,788
1,94
Indiana
1,122
649
Michigan
1,666
8a5
Bank District
Number,
Year Ending
and State
June 30, 1941
No. 7--Chicago
Illinois
Wisconsin
No.
8--Des Moines
Number,
Year Ending
June 30, 1942
4,273
2,362
3,049
1,911
1,136
1,913
4,063
3,039
517
646
364
510
Missouri
North Dakota
2,56
146
1,836
177
South Dakota
190
152
Iowa
Minnesota
No. 9--Little Rock
AFkansas
Louisiana
Mississippi
New Mexico
Texas
2,565
305
485
231
77
1,467
1,885
210
L422
327
71
855
No. 10--Topeka
ColoradoKansas
Nebraska
Oklahoma
2,843
341
1,098
715
689
1,871
242
572
577
480
964
53
81
369
71
332
58
6144
52
88
161
67
239
37
3,086
2,316
No. 11--Portland
Idaho
Montana
Oregon
Utah
Washington
Wyoming
No. 12--Los Angeles
Arizona
California
Nevada
Sourcet
111
96
2,964
11
2,218
2
Division of Operating Statistics, Federal Home Loan Bank Administration.
- 2-
EXHIBIT 2
Selected Figures on Residential Real Estate Owned by
Finanial Institutions, December 31, 1940, and December 31, 1941
(Amounts in thousands of dollars)
Type of Institution
Savings and Loan
Associations 1
December 31,
1940
$ 492,1715
During 1941
December 31,
Decrease
1941
Amount
Percent
* 330,0006
$162,171
33.0
Mutual Savings Banks 2
400,000
300,000
100,000
25.0
Commercial Banks 2
190,000
134,000
56,000
29.5
Life Insurance Companies 3
473,6415
365,311
108,330
22.9
1,555,812
1,129,311
426,501
27.4
338,277
274,608
63,669
18.8
1,894,089
1,403,919
490,170
25.9
Total Private
HoLo4
Grand Total
Estimate based on reports of operating associations received by the Federal
Home Loan Bank Administration.
2
Estimates based on the reports of the Comptroller of the Currency and the
Federal Deposit Insurance Corporation. The estimate for commercial banks
excludes trust departments, but includes an allowance for investments and
other assets indirectly representing bank premises or other real estate.
3
Estimate of the Federal Home Loan Bank Administration based on a questionnaire
survey of the largest life insurance companies. Excludes company-built housing
projects.
4
Capital value.
5
Revised.
6
Preliminary.
EXHIBIT 3
Indices of Total Building Cost, and of Cost of Materials
and Labor Used in Construction of Standard
Six-Room Frame . House --w 0.1 -_
-.
- ,m
. ,
(Average Month 1935-1939 - 100)
Period
Materials
Labor
Total
July
August
101.2
101*.
103.4
103.6
102.0
102.1
September
October
November
101.9
103.1
10.46
104.8
106.9
109.8
102.9
104.6
106.4
December
105.9
112.5
108.1
Fiscal Year 1941,
1940
19i1
January
106.6
114.5
109.3
February
107.8
115.1
110,2
March
April
May
June
108.0
108.7
108.8
109.2
115.3
116.1
117.0
118.6
110.4
111.2
111.6
112.4
uly
August
110.7
112.6
119.3
120.0
113.6
115.1
September
114a4
120.7
October
116*5
116.0
123.3
118.5
November
December
116.9
117.7
123.9
124.2
119.2
119.9
1942
January
118.6
124.5
120.6
February
119.3
125*0
121.2
March
120.0
126.0
122.0
April
120.5
125.9
122.3
Nay
121.0
126.4
122.8
June
121.3
127.8
123.5
Fiscal Year 192,
194i
Source
Division of Operating Statistics,
Federal Home Loan Bank Administration
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EXHIBIT5
Estimated Reoordings of Nonfarm Mortgages of $20 000 and Less,
by Type of Mortgagee, Fiscal Year 192
(Amounts
shownare in thousands dollars)
of
Savings
and Loan
Associations
Federal Home Loan Bank
District and State
UNITED STATES
Number
498,396
Amount
$1,381,809
Insurance
Banksand Trust
Companies
MutualSavings
Banks
Oompanies
Number
Amount
83,284 0407,383
Number
Amount
Number Amount
323,144 $1,072,87152,192 $206,136
No. 1--Boston
Connectiout
Iaine
Massachusetts
New Hampshire
PRhode Island
Vermont
42,351
4,19
2,496
30,358
1,671
2,489
1:143
14,035 2,978
16,698 2,000
6,304
250
104,032
524
4,416
50
9,549
93
3,036
61
16,935 11,378
11,631 4,497
1,167
1,277
3,137 3,834
232
520
491
874
277
No. 2--New York
New Jersey
New York
31,125
12,817
18,508
108,140 5,372
12,783 2,944
65,357 2,428
28,544 27,591
14,622 15,677
13,922
11,914
No. 3--Pittsburgh
DeIlaware
Pennsylvania
West Virginia
36,804
483
31,952
4,389
95,242 5,379
1,547
325
84,906 4,175
8,789
879
25,621 32,54
1,887
76
19,377 24,763
4,357
7,035
No. 4--ofinston-Salem
Alabama
District of Columbia
Florida
Georgia
IIaryland
North Carolina
South Carolina
Virginia
68,506
2,663
5,555
6,113
9,460
15,629
3,118
11,415
186,241 12,527
4,760
1,767
30,703
975
19,045 5,820
18,960 1,571
43,833
569
35,174 1,384
7,033
532
26,733 1,909
56,809 29,050
7,309
2,913
6,558
953
15,522 3,533
8,271 6,686
3,068 3,056
5,952 3,688
2,728 2,509
7,421 5,712
No, 5--Cinoinnati
85,037
11,o64
70,584
3,589
256,540
27,102
221,901
7,557
8,843
1,519
4,907
2,417
44,981 38,523
6,582 6,120
28,457 25,822
9,942
6,581
122,327 1,721
15,421
88,413 1,721
18,49
-
37,398
25,859
11,539
80,734 9,809
50,803 3,819
29,931 5,990
44,629
38,483
17,019 13,616
27,610 24,867
109,858
39,405
70,53
46382
35,055
31,327
136,128 5,085
103,782 3,776
32,346 1,307
26,647 21,941
20,820 15,660
5,827 8,281
83,717
19,717
29,706
29,705
7,561
1,166
3,358
2,495
>,253 242
1,336
300
14553
Ohio
Tennessee
Number
Amount
Other
Mortgagees
Number
Amount
381,841 $776,256 190,*57 0675,118
43,563 27,814 102,405 30,322
20,004 6,150 25,472 7,673
3,439 2,079
5,073 2,018
14,408 14,829 56,039 16,870
1,542 2,116
6,937 1,160
3,120 1,373
4,776
1,805
1,050 1,267
4,48
796
70,321
19,228
3,285
40,o30
2,429
7,500
4,277
519
1,792
162
3,759
610
1,590
140
Total
Number
Amount
1,537,314
$4,519,573
26,545
16,327
1,257
6,009
445
2,134
373
122,343
28,791
8,639
68,207
5,679
7,244
3,783
403,80L
109,360
20 525
223,655
16,ool
23,789
10o,474
113,529 16,457
66,576 1,460
46,95314,997
74,207 44,297 110,033 o0,424 78,235
6,566 17,152
4,o042 10,395 37,927
67,641 27,145 65,991 10,029 40,308
145,266
60,445
84,821
512,688
212,516
300,172
106,191 3,080
2,925
260
86,998 2,717
16,268
103
11,876 25,488
1,079
905
10,733 20,207
64
4,376
55,847
855
49,864
3,128
117,317
2,989
96,o14
18,14
353,677
10,494
302,856
40,347
75,136
7,268
10,565
12,748
10,115
8,760
8.05
506,042
35,055
67,879
13,197
192,076
16,652
14,015
26,428
31,034
28,452
33,251
9,904
32,360
83,562
6,538
6,449
10,736
12,821
10,548
12,583
5,834
18,255
694
-
694
-
60,900 14,032
2,201
280
50,950 12,220
7,741 1,532
2,777 54.510 101,517 26,989
6,343
9,180 2,966
4,514
13,624 2,018
8,748 19,423 4,21l
8,482 11,742 4,835
2,777 5,685
13,89
2,819
10,107 11,407 3,499
2,278
4,879
1,167
8,153
17,873 5,171
7,068
4,449
77,474
61,909
82,375
72,950
24,923
85,477
7,068
-
28,329
2,794
21,668
3,867
51,784 19,475
5,339
994
42,919 8,769
5,526
9,712
57,234
2,01
30,818
25,572
181,928
22,491
133,471
25,966
539,934
55,258
419,606
65,070
198
198
-
403
403
-
16,539
5,564
10,975
54,470 13,224 50,402
10,209 3,455 10,16
2,261
9,769
0,216
115,651
52,511
65,140
320,496
128,025
192,171
82,224
56,772
25,452
134
134
302
302
26,900
14,802
12,098
62,941 21,446
36,278 18,675
26,663 2,771
9),655
a4,279
9,376
121,086
85,968
35,918
401,897
30l,931
99,966
36,335 26,650
5,218 6,907
14,972 6,139
14,027 11,12
931
673
1,187
1,119
69,633
17,204
13,799
35,491
1,132
2,007
1,435
-
28,877
4,824
8,418
13,832
780
1,025
46,445
19,283
7,850
2,642
15,740 2,505
20,042 15,655
1,296
256
1,517
225
57,157
7,770
3,509
40,088
439
551
119,274
25,004
376
-
54,886
5,251
3,356
294,722
57,759
84,161
139,353
7,051
6,398
53,995 10,343
2,787
1,835
10,238
922
3,208
1,509
1,374
329
37,433 4,703
30,593
3,909
2,448
3,319
5,01
15,904
-
-
27,844
2,953
,704
2,958
1,251
15,978
20,479
50,18
4,065
1,222
9,780 4,328
4,222
1,33
2,218
229
29,863 13,367
62,955
2,698
12,183
5,170
367
44,537
106,302
9,696
21,515
8,582
5,804
62,905
207,658
19,558
65,590
17,371
9,961
175,178
-
-
18,621
7,191
3,029
2,366
6,055
20,400 10,143
13,554 3,258
5,7102,185
3,431 1,106
7,705 3,594
31,291
71,016
16,072
1C,688
12,916
24,140
165,213
6,691
2,790
11,338
15,381
1,752
1,493
5,951
1,234
4,190
781
23,243 10,482
2,494
1,001
256
2,717
8,252 2,511
588
1,964
6,478 5,003
323
1,338
35,792
2,507
730
8,307
1,561
21,594
1,095
63,938
4,395
3,999
15,795
7,913
29,595
2,245
160,560
9,583
9,697
56,988
22,513
52,869
877
51,789
179,517
6,145
171,998
1,376
572,882
16.486
552,720
2,676
6
Io,
-- Indianaolis
Indiana
I ichiCan
No. 7--Chicago
Illinois
wisconsin
1o.
8--Des Moines
Iowa
1linnesota
iIissouri
North Dakota
South Dakota
56,527
9,465
11,981
15,092
1,300
689
376
-
No. 9--Little Rook
Arkosas
Louisiana
Lisissippi
New Mexico
Texas
35,585
2,976
1,796
887
20,578
89,967 12,051
6,099
710
30,941 2,211
3,452
788
2,034
63
47,441
8,279
10--Topeka
29,000
3,804
8,671
6,904
9,621
65,470 3,579
9,962
377
17,121
624
14,232 1,562
22,155 1,016
15,679 10,473
1,723
1,442
2,650 4,179
6,447
978
4,859
3,874
26,375
3,693
10,035
3,211
9,434
No. 11--Portland
Idaho
Montana
Oregon
Utah
Washington
w&yoming
18,622
929
1,359
4,021
2,252
9,331
750
45,562
3,425
163
1,992
193
3,241
10,281 1,266
417
6,905
21,050 1,367
2,093
19
13,423 14,310
698
550
698
849
5,185
1,912
1,519 2,422
7,356
5,088
84
392
36,877 1,718
1,892
2,160
152
4,447
10,364
16,874 1,566
1,140
-
Io. 12--Los Angeles
Arizona
California
levada
31,059
1,208
29,575
278
92,033 6,677
5,549
79
87,674 6,580
810
18
45,785 61,868
34 1,532
45,575 60,012
76
324
No.
Colorado
'
Kansas
Nebraska
Oklahoma
1
Individuals
9,350
248,
5,543
241,422
1,176
-
-
-
-
-
3,435
5,663
516
5,'7
-
-
-
-
-
-
64,953 136,05
14,980
357
2,967
6,183
61,291 128,460 14,542
Gl
675
1,411
10,472
205
32,777
39,4014
P0,207
30,111
55,491
76,251
5,748
Based upon county reports submitted through the cooperation of savings and loan associations, the U. S. Building and Loan League, the Mortgage Bankers Association, and
the American Title Association.
Source:
Division of Operating Statistics,
Federal Home Loan Bank Administration
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$4
Federal Home Loan Bank System
Number and Estimated Assets of Member Institutions,
June 30, 1941, and June 30, 1912
I
-
--
-
--
-
.01
4w -
5
--
w
191
,89
3,815
No. 1--Boston
223
232
48
50
23
124
19
130
No. 2--New York
New York
No.
3-Pittsburg
5
4
Indiana
Michigan
39,383
162,618
330,442
505
488
276,792
409
21
50
56
65
115
43
36
584
94
No. 6--Indianapolis
493,060
5
14
304,935
23
Ohio
Tennessee
481,294
21
22
176,559
29
5--Cincinnati
5,201
902,904
114,370
20,254
613,538
77,522
41,641
5,599
105,122
19,671
532,011
73,159
245
130
Pennsylvania
No.
774,547
$5,643,970
375
West Virginia
District of Columbia
Florida
Georgia
Maryland
North Carolina
South Carolina
Virginia
$50237*175
195,64297
391
267
124
7
467
No. L--Winston-Salem
-
191i
815
3,839
Massachusetts
New Hampshire
Rhode Island
Vermont
--
(In thousands of dollars)
UNITED STATES
Connecut'E o
Maine
.
Assets of Members
Number of
Members
Bank District
and State
--
7
2p893
297,528
3,269
454
250,769
269,902
27
23,130
24,357
415
28
21
672,0o48
18,621
738,819
152,5349
161,881
50
86,755
56
65
4,853
95,232
47,068
84,664
114
44
39
579
87
40
453
39
217
159
58
218
160
58
450
74,702
23,142
207,895
38,527
227,280
48.5346
57,676
906,956
946,952
101,026
768,530
101,232
41,876
37,380
804,110
41,610
298,116
315,550
177,5388
120,728
189,063
126,487
Number of
Members
(In
Assets of Members
thousands of dollars)
Bank District
and State
1941
192
No. 7--Chicago
455
Illinois
,
Wisconsin
No. 8--Des Moines
"owa ----Minnesota
Missouri
North Dakota
South Dakota
No.
9--Little Rock
Arkansas....
Louisiana
Mississippi
New Mexico
Texas
No.
192
454
464,412
480,620
5341
341
333,995
113
130,417
354,535
114
244
70
246
73
249,686
53,441
266,326
56,755
142
107
42
106
70,382
103,528
75,474
110,501
13
12
13
12
11,768
10,567
12,583
11,013
281
281
365,193
392,124
41
67
26
14
41
67
26
14
20,790
100,007
24,635
6,653
22,227
101,260
27,313
7,098
133
133
213,108
2314,226
126,085
226
223
220,973
196,665
Colorado
Kansas
39
101
39
99
34,997
63,125
36,946
60,129
Nebraska
Oklahoma
33
53
32
53
54,9492
68,359
28,226
71,064
133
130
168,502
180,407
8
8
8,435
8,863
Montana
13
14
11,688
12,469
No.
10--Topeka
1941
11--Portland
ITdho
Oregon
29
27
37,056
37,846
Utah
Washington
10
62
10
60
18,152
86,787
20,037
94,#85
Wyoming
10
10
5,938
6,352
Alaska
1
1
446
455
173
3
164
2
174
3
164
2
408,676
5,578
397,533
885
433,015
6,870
419,458
926
4
5
4,680
5,761
No. 12--Los Angeles
Arizona
California
Nevada
Hawaii
Source:
Division of Operating Statistics,
Federal Home Loan Bank Administration
- 2 -
EXHIBIT 9
Estimated Volume of New Mortgage Loans Made by Savings and Loan
Associations, by Type of Association, Fiscal Years 1937-192
Federal
Associations
State Member
Associations
Nonmember
Associations
June 30, 1937
$291,986,000
$360,0o40,000
$216,321,000
$868,347,000
June 30, 1938
281,851,000
347,709,000
191,126,000
820,686,000
June 30, 1939
333,959,000
352,738,000
182,189,000
868,886,000
June 30, 1940
457,816,000
536,396,o000
196,576,000
1,090,788,000
June 30, 1941
550,058,000
534,808,000
209,508,000
1,294,374,000
June 30, 1942
514,656,000
548,789,ooo
193,890,000
1,257,335,000
Fiscal Year Ending
Source:
Division of Operating Statistics,
Federal Home Loan Bank Administration
Total
EXHIBIT 10
Federal Home Loan Banks
Advances and Repayments for the Periods Indicated, and the Balance
of Advances Outstanding at the Close of Such Periods
Balance
Period
Repayments
Advances
Outstanding
Fiscal Yeart
$ 48,894,602.41
1933
19534
62,871,970.22
1935
36,683,308.61
1936
1937
1938
78,195.224.32
114,287,052.41
105,432,157.95
1939
1940
76,659,074.62
108,009,901.23
1941
12,875.563*5
$
1,230,772.82
25,387,45.72
$ 47,663,829.59
85,48.,354.09
42,599,148.52
38,840,900.50
79,232.514.18
118,586,838.00
167,056,886.56
65,817,o003*85
76,264,107.15
103,922,L48.88
196,224,937.36
168,961,563.10
119,574,417.17
157,397,c47.16
130,375,220.91
169,897,389.70
1941
14,619,345.10o
6,389,761.80
7,287,068.03
7,019,227.63
168,45,150o.38
July
August
12,867,105.78
10,872 ,480.00
September
October
12,850,016.21
13,153942.04
November
December
9,929,685*17
40,167,461.97
7.156,781.34
7,805,347.13
219,446,049.84
9,016,755.52
4,856,556.03
7,886,609.13
5,410,766.37
6,884,395.16
21,1435,773.45
22,395,016.86
13,492,025.11
13.814,031*.38
11,617.932.20
11,017,321.26
9,663,642.81
206,067,788.50
197,432.319.42
191,504,897.17
185,297,731.34
181,164,805*24
192,6L4.935.88
155,025,046.83
132,277,500.65
928,9533902.05
756,288,966.17
172,627,868.58
178,190,816.76
184,311,031.17
187,o83,935.oo00
1942
January
February
March
April
May
June
Total, Fiscal Year
1942
Grand Total Through
June 30, 1942
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'
EXHIBIT l
Federal Home Loan Bank System
Members of the Federal Savings and Loan Advisory Council,
as of June 30, 1942
Federal Home Loan
Bank District
Boston
Boston
New York
Pittsburgh
Pittsburgh
Winston-Salem
Cincinnati
Indianapolis
Indianapolis
Chicago
Des Moines
Little Rock
Little Rock
Topeka
Topeka
Portland
Los Angeles
Los Angeles
Name
Sumner W. Johnson
Joseph H. Soliday
Francis V. D. Lloyd
James J. 0 alley
Walter B. Gibbons
W. H. Walker
W. Megrue Brock
W. J. L. Ray
C. T. Fisher, Jr.
Arthur G. Erdmann
George S. Metcalfe
G. J. Casselberry
Will C. Jones, Jr.
George E. McKinnis
Paul Fe Good
T. M. Donahoe
Horace S. Wilson
David G. Davis
Elected or
Appointed
Elected
Appointed
Elected
Elected
Appointed
Elected
Elected
Elected
Appointed
Elected
Elected
Elected
Appointed
Elected
Appointed
Elected
Elected
Appointed
EXHIBIT 15
Federal Home Loan Bank Administration
Statement of Receipts and Disbursements of the Administration
During the Fiscal Years 1941 and 1942
July 1, 1940, to
June 30, 1941
Balance at beginning of fiscal year ...
Receipts:
Assessments upon:
Federal Home Loan Banks ...........
Home Owners' Loan Corporation ......
Federal Savings and Loan Insurance
* *,*Q**o*O*S**
Corporation .......
Examining receipts ..........
Miscellaneous refunds .............
Reimbursement for conservators
expense ........ .. ,........**...
Sale of property ...................
Sale of material ...................
Refund from Treasury Department ...
$
352,671.00
150,000.00
129,1442.40
92,841.58
841,879.13
1,526.19
-0
-0
-0
-0
July 1,
1941,
June 30, 1942
$
239,959.02
300,000.00
18,438.92
197,209.17
1,072,269.54
17,627.41
2,359.76
163.10
9.01
712.69
Total receipts ...................
1,215,689.10
1,608,789.60
Total cash and receipts ...........
1,568,560.10
1,848,748.62
1,053,851.67
9,380.46
78.68
24,0357.43
183,765.71
546.98
17,3544.95
19,127.72
1,146,029.60
12,823.96
95.73
20,673.34
24,675.93
28,894.67
7,960.56
Disbursements:
,.-,
. *.. . ...
Salaries .......
....
..
Supplies and materials
Newspapers and periodicals **********
Communications ..................
Travel ..... ,.................. ,,.
Transportation of things
**********
...
Printing and binding ..
Photographing and duplicating .......
....
,..---..-.
o..
Rents ...........
Equipment, furniture, and fixtures ...
Transferred to administrative
expenses
Federal Loan Agency ................
.
•.• •.
Treasury Department .......
Total disbursements ...............
Balance at end of fiscal year ..........
6,393.55
5,800.00
225,551.10
1,o033.50
16,380.42
25,901.68
6,600.00
2,400.00
3,430.00
1,328,01.08
1,495,374.56
239,959.02
353,374.06
to
EXHIBIT 16
Federal Home Loan Bank Administration
Comparative Statement Reflecting, by Offices, the Number of
Administration Employees as of the Close of the
Fiscal Years 1941 and 19)2
1941
Offices of the Board Members *................
Office of the Commissioner .....................
Office of the Governor:
Governor s Immediate Office ..................
Office of the Comptroller.
e........... ••••.
Office of the Chief Supervisor ...............
Federal Home Building Service Section ........
Total,
Govrnos t s Office ..................
Office of the Secretary *****.**,,............
Office of Public Relations
..........
,........,
Division ofsOperating Statistics
Legal Department ***o*****
«««*«.*.«*.
Review Committee *
.,
.,e,..,......o..
Examining Division
Washington Office
Field ...
®...
.
®....®.
®.®......................
Total, Examining Division .................
Grand Total *1,...*...o...,.........
1942
11
-4
-
12
10
37
27
5
35
81
74
15
10
I..............
13
l4
12
14
29
-
8
11
9
9
8
295
299
304
307
460
3.51
BHIBIT 17
Federal Savings and Loan Associations
Consolidated Statement of Operations for 1,456 Reporting Federal Savings
and Loan Assooiations, for the Year Ended December 191
Item
Grose Operating Income
Interest:
On mortgage loans - ordinary cash colleotions
On mortgage loans - all other
On loans on shares, passbooks, and certifioates
On real estate sold on contraot
On investments and bank deposits
Other
Premium or comission on loans (current only)
Appraisal fees, legal fees, and initial service charges
Other fees and fines
Gross income from real estate owned
Less - cost of repairs, taxes, and maintenanee
Net inomne from real estate owned
Gross icome from office building
Dividends on stock in Federal Home Loan Banks
Other dividends
Miscellaneous operating income
Gross operating income
Less Operating
expense
Compensation to diroctoro, officers, employees
Collection expense (agents, ete.)
Legal services - retainer, travel, a d special
Expense account of directors, officers, and employees
Rent, light, heat, etos
Repairs, taxes, and maintenance of office building
Depreciation of office building
Furniture, fixtures, and equipment, including depreciation
Advertising
Stationery, printing, and office supplies
Telegraph, telephone, postage, and express
Insurance and bond premiums
Federal insurance premium
Audit
Supervising ex minations and assessments
Organization dues
Other operating expense
Total operating expense
Not operating income before interest and other charges
Less Interest Charges
On advanoes from Federal Home Loan Banks
Other borrowed money
Total interest
'Net operating income
Add Nonoperating Inoome
Dividends retained on repurchases and withdrawals
Profit on sale of real estate
Profit on sale of investments
Other nonoperating income
Total nonoperating income
Net incoaie after interest and before charges
Leco Nonoperating Charges
Foreclosure costs and back taxes on real estate acquired
(unless capitalized or oharged to reserves)
Loss on sale of real estate
Toos on sale of investments
Other nonoperating charges
Total nonoperating charges
Net income for the year
Less Transfers for Reserves and Dividends
For bonus on shares
Legal reserves
Federal insurance reserve
For oontingenoies
Real estate reservo
Other
Dividends (Inoluding interest on deposits sad
investment sertifioates)
Balance to undivide lrofite
Sources Division of Operating Statistics,
Federal Home Leoan
Bank Administration
Amount
$96,125,800
197,700
2690,00
3,528,400
430,500
169,500
1,301,300
2,325,500
429,100
5,265,300
4,459,700
805,600
1,048,400
234,600
36,400
382,500
Ratio to
Gross Operating
Income
Ratio to
Net Inoome
89.60%
0.18
0.25
3.29
0.40
0.16
1.21
2.17
0.40
4.91
4.16
0.75
0.98
0.22
0.03
0.36
114.58
107,282,600
100.00
14,065,100
173,600
29,700
449,100
1,537,300
1,142,200
501,900
695,300
2,985,900
890,300
664,200
548,300
2,119,600
234,300
505,900
350,00
2,702,100
13.11
0.16
0.49
0.42
1.43
1.07
0.47
0.65
2.78
0083
0.62
0.51
1.98
0.22
0.7
0.33
2.59
30,175,200
77,107,400
28.13
71.87
103.77
2,776,300
106,000
2,882,300
74,225,100
2.59
0010
2.69
69.18
388
99.89
6,200
1,531,100
306,800
364,600
2,228,700
76,453,800
0.01
1.43
0.28
0.36
208
71.26
95,200
1,423,100
25,100
605,400
2,140,300
74,305,000
0.09
l.33
0.02
0.56
2.00
126,100
69.26
-
40.61
0.01
2.06
0.41
0.52
00
102.09
0.13
1,92
0.0
0.81
2.89
100.00
-
340,300
-
0.17
0.04
5.84
8.8
0.88
0.46
52,129,400
10,112,000
-
70.16
13.61
32,300
i,34XL400
6,56,500
654,200
EXHIBIT 18
Federal Savings and Loan Associations
Average Annual Divi dend Rates Declared for the Calendar Years 1940 and 1941*
Federal Home Loan
Bank District and State
1940
1941
UNITED STATES
3.25
5.15
No. 1--Boston
Connecticut
Maine
Massachusetts
New Hampshire
Rhode Island
Vermont
3.00
2.81+
3.04
2.98
2.95
2.77
3.00
35.00
3.00
2.75
3.16
3.02
No. 2--New York
New Jersey
New York
2.543
2.27
2.86
2.55
2.142
2.26
No. 3--Pittsburgh
"laware
Pennsylvania
West Virginia
3.56
3.38
3*50
3,50
3.50
3.30
3.83
3.74
No. 4--Winston-Salem
,Al-bama
District of Columbia
Florida
Georgia
Maryland
North Carolina
South Carolina
Virginia
No. 5--Cincinnati
Kentucky
Ohio
Tennessee
No. 6--Indianapolis
Indiana
Michigan
No. 7--Chicago
Illinois
Wisconsin
Federal Home Loan
Bank District and State
1940
1941
No. 8--Des Moines
Iowa
Minnesota
Missouri
North Dakota
South Dakota
3.22
3.14
No. 9--Little Rock
jka-nsas
Louisiana
Mississippi
New Mexico
Texas
2.95
2.88
3.*42
3.34
3*658
3*.45
5.65
3.14
3.34
3*51
3.81+
3*77
3.71
3.23
4.03
3.64
No. 10--Topeka
Colorado
Kansas
Nebraska
Oklahoma
3.46
No.
3.87
35.65
3566
3.70
35.20
35.35
3*57
3.23
3.60
3.58
3.536
35.22
3.15
No. 12--Los Angeles
Arizona
California
Nevada
Hawaii
3.58
3*5.95
3.539
35.51
3.71
3.33
3.10
3.71
*3.05
3.61
2.96
2.93
2.92
2.93
3.40
11--Portland
Montana
Oregon
Utah
Washington
Wyoming
Alaska
3 .27
2.98
2.99
3.20
3.531
35.10
*Average weighted by amount of invested capital.
3*.5
3.21
3.34
3*.40
3.36
3.22
35.20
3.09
3.17
3.10
2.72
5.8+
3.64
3*.15
311
35.36
3.67
35.68
3.17
3.04+
35.07
3.70
4.00
3.78
3.50
3.79
4.00
3.50
5.1+
3.05
5.01
3.69
4.00
5.51
3.50
3.51
3.50
3.50
OI!BIT
19
Federal Savings and Loan Insuranoe Corporation
Number and Assets of all Insured Associations,
by
Federal Home
Loan Bank Distriots and by States, June 30, 192
ALL
Number of
Associations
Federal Home Loan Bank
District and State
UNITED STATES
-June 30,
1941
2,313
A aas
June 30,
19142
2,374
FEDERAL
INSURED
Juneo 30,
1911942
$3,159,763,000
Number of
Assooiations
t a
TIISURED
A a a e t a
June 30,
Junoe30,
1941
Juna 30,
192
June 30,
1941
June 50,
1912
$3,#61,2f8,000
1,452
1,64
02,028,138,000
June 30,
1941
2,205,921,000
01,151,625,000
8
6
0
0
7,96o,000
7,128,000
-0-0-
7,525,000
6,617,000
-0
-0
2
0
0
838,000
-0-0-
-0
-0
199,380,000 217,128,000 107
8,859,000 10,092,000 75
190,541,000
207,o36,ooo 32
123
83
121,000,000
70,915,000
50,085,000
126
1
103
22
1135,751,00015b,03,000 70
3352,000
542,000
0
66
94,648,000 114,517,000
18,771,000 20,371,000 4
79
0
6
2,0;2,80000
>,PJ'0,000
218
18
254,011,000 289,524,oo000
54
4
14,21,'.'00
12,15,.00
22,511,000 24,378,000 8
74,289,000 79,986,000 1
8.,7;7,otoo 5,407,000 4
63
8
8
1
29,969,000 16
22,736,000
23,115,000 253295,000 7
28,035,000 30,798,000 5
20
7
6
71,4?,000
1,1)11,000
17,879,000
1,264,000
6,01<,000
8,174,000
18,6,000
6,560,000
l1,09,000
.2,.,000
2,517,000
l,53I0,000
1, 71,000
7,0,o000
5,935,000
21,107,000
6,970,uo0
lI , iO,0u0
124
287,204,000
bi8,?00,000
122
286,730,000
-0-
28,03,000
c
-0
183,596,000
37,226,000
1,483,000
127,202,000
10,981,000
1,912,000
4,762,ooo000
51
15
5
26
2
1
2
52
16
5
26
2
1
2
159,320,000 176,071,000
22,911,000 50,609,000
000
1,48,ooo
1,514,000
120,075,000 127,202,000
8,944,000 10,073,000
1,675,000
1,942,000
No. 2--New York
11e Jersey
New York
180
84
96
197
92
105
52,580,000
79,754,000
240,626,000
3587,661,0oo00
96,705,000
290,956,000
'73
64
74
9
65
Lo. 5--Pittsburgh
Delaare
192
1
165
26
205
1
178
26
154,8014,000
332,000
132,929,000
21,6053,000
186,809,000
L42,000
162,848,000
23,619,000
No. .-- wVinotov-Salem
Alabama
Distriot of Columbia
Florida
Geor ia
Ilaryland
llorth Carolina
South Carolina
Virginia
266
21
11
47
201
26
11
47
325,596,000 371,874,000 212
13s575,000 16,758,000 17
3
40,190,000 43,726,000
46
75,553,000 81,464,ooo
L4
42.,44o,OOO
35,76,000oo
59,185,000 51
49,55,ooo
22
51,076,000
1ii602,o000
50
32,263,000
29,975,000
20
44962,000
39,444,000
;o4 5-Cinoinnati
337
Ohio
Tennessee
34
56
240
38
6--Indianapolis
Indiana
173
129
Kentueky
io.
Iichigan
No.7--Chioago
Illinois
Wisoonsin
No. 8--Des Moines
low
linnesota
1xissouri
llorth Dakota
South Dakota
47
40
38
37
25
49
42
43
37
26
44
152,631,000
163,151,ooo
74
101,127,000 107,697,000 60
51,554,000 55,434,000 14
77
65
14
282
197
85
289
201
88
139
33557,229,000 367,278,000
l00
271,411,000
245,837,000
91,392,000 95,867,000 39
159
100
39
143
185,736,000 199,654,ooo000
155,951,000 168,220,000 97
46
29.785,000 31,434,ooo000
150
101
151,495,000
89,886,000
61,607,000
167,62L,ooo
49
161
159
111
201,258,000
185,394,000
26,953,oo00o30,893,000 52
50
69,456,ooo
64,508,ooo
90,940,000 39
84,870,000ooo
6
7,064,000
6,311,000
4
2,905,000
2,752,ooo
112
33
50
39
6
4
50
136,181,000 149,474,000
24,556,000
10
21,338,000
6?,475,ooo 68,314,000 4
16,379,000 51,119,000 51
8
3,o46,ooo000 ,508,000ooo
1,9
1,997,000 3
47
49,21,0ooo
51,784,000
166
33
13
21
7
92
166
33
13
21
7
92
103,902,000 110,517,000
94
4.,b95,ooo 15,455,000 4
14,820,000ooo
14,962,000 55
6,981,000
8,175,000 2
2,968,000 6
2,680,000
68,757,000 27
64,926,000
97
S
55
* 151,974,ooo000 154,490,ooo
35,5
2,000
51,,000
6
45,761,000
ooo
,4 ,000
11,264,000
10,631,000
63,933,000
61,294,000
100
23
30
15
32
99
23
29
15
32
115,491,000 115,661,o00 56
21,873,000 25,491,000 8
31,432,000 27,654,ooo 34
8,692,000
9,159,000
14
53,397,000 10
51,94,000
55
8
154,052,000
139,642,000
8,863,000
8,435,000
11,788,000
10,113,000
20,500,000
19,366,000
19,850,000
17,961,000
87,954,000
79,086,000
4,662,000
4,235,000
455,000
446,000
86
8
3
23
6
36
9
1
85
8
3
22
6
36
9
1
101,574,000 111,305,000 26
8,435,000
8,863,000 0
1,054,000
1,211,000 5
0
19,366,000 20,500,000
9,270,000 10,415,000
58,768,00o0 65,199,000 18
4,662,ooo000 0
4,235,000
0
455,000
L46,000
28
0
38,063,000
-o-
7
9,059,000
10,577,000
302,090,000
6,870,oo00
290,205,000
802,000
4,213,000
80
2
76
1
1
80
165,993,ooo 176,807,000 57
5,701,000 1
4,553,000
158,085,ooo000
167,454,oo 54
0
802,000
758,000
2,597,000
2,370,000 2
59
1
55
10,38oo,000
1,025,000
11,557,000
125,283,000
42
34
70
8
7
45
54
68
8
6
156
31
64
19
42
154
31
62
19
No. 11--Portland
112
8
8
23
9
113
8
10
22
9
9
1
9
1
137
3
150
1
35
139
3
151
1
37
37
42
54
Source: Divisionof OperatingStatistics,
Federal Home Loan Bank Administration
S
100
69
31
No. 10-Topeka
Colorado
Kansas
Nebraska
Oklahoma
California
ITevada
Havwaii
9
J.1,882,000 99
226,113,00ooo0
153,323,000 69
142,712,000
83,401,000 88,559,000 30
68
24
13
121
No. 12--Los Augeles
Arizona
25
51,775,000
-0
00,5o1,00
177
152
45
68
23
13
119
Alaska
i6
1,11,ouo
-0-
32,21,000
7~5
170,553,000
86,633,000
85,90,000
po"0,.8,000
62,01o9,000
121
67,617,000 70,959,000 2
23,302,000
2553,924,000
119
33,199,000 57,156,000 0
265
---
22
40
90n,000
121
38
260
itdaho
99
4,401,000
0
2
0
4,762,ooo 0
)1,255,507,000
21
660,519,000
68,091,000 71386,000ooo 5
551,977,000 121
526,052,000
38
37,156,000
33,199,000
56
243
38
No. 9--Little Rock
Arkansas
Louisiana
Hississippi
New Mexico
Texas
Montana
Oregon
Utah
Washington
122
1
June 30,
1942
910
167,286,000
p ,039,000
1,314,000
120,075,000
9,782,000
1,675,000
.41,000
Pennsylvania
West Virginia
e t a
June
,
1941
9
7
60
22
5
26
4
1
2
9
A a
30
June 30,
1912
861
60
2R
5
26
4
1
2
No. 1--Boston
Connectiout
Maine
Massaohusetts
New Hampshire
Rhode Island
Vermont
STATE
Number of
Associations
627,322,000
237,586,000
16,86o0,ooo
100,123,000
7,814,000
6,o2,0ooo
106,747,000
286,377,000
5,578,000
276,612,000
758,000
3,599,000
249,719,000
18,032,000
101,354,000
9,440,000
6,398,000
114,515o000
2
76
1
1
5,000
5
0
10
4
29
2
2
3
6
29
35
4
10
0
35
18
0
0
u
:
73,1,52,000
41,505,000oo
1,047,000
5,615,OUO
1,03,000
38,491,000
3,265,ooo000
809,000
153,681,Oo0
2,3565,oo0
85,303,000
83355,000
3,562,000
L1,821,000
56,8,o000oo
7,713,000
17,031,000
1,959,000
9,800,000
-0,691,000
20,518,000
-0-0-
-0802,000
78,751,ouo
5,626,000
33,125,000
103,191,000
6,435,000
6,537,ooo
1,312,000
39,821,000
53,556,000
908,000
139,402,000
2,577,000
86,372,000
1,265,000
53, 0,000
Li5,758,000
58,829,000
8,041,000
18,127,000
2,125,000
10,536,000
L2,747,000
-o
-0
9,L,5,0ooo0
22,735,000
-0
-0
1,169,000
122,771,000
-0
1,545,000
H)
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EEMIBIT 21
Federal Savings and Loan Insurance Corporation
Statement of Condition as of June 30, 1942
ASSETS
Cash in United States Treasury
Special deposit account *********************
Available for administrative
expenses
1941 .......................
Available for administrative
expenses - 1942 ........
o.......
.....
$ 4,561,276.72
2.574.i7
5,466.64 $ 4,369,517.53
Accounts Receivable
Insurance premiums - Payments
due
...
$ 3.o*********...
55,818*11
Insurance premiums - Payments
deferred ... .. ,.., .. .........
925,543*88
Due from receiver for
institutions in liquidation .,............,o*
Miscellaneous
*e*******
*,***eee
«
961,361.99
1.796.22
133*32
**.e,,.
963,291.53
Investments
U. S. Government obligations and
securities fully guaranteed by
the U. S. (par value) ............
Net unamortized premium and
122,481,500.00
...
235,146.92
discount on investments .. «...........,..
Accrued Interest on Investments
***.********,****«*««
**,,,
..
Subrogated Accounts in Insured Institutions
*«
in Liquidation **.***** *« *.*..*6****6**
o*************
***
*«
565,907.86
6,492,509.73
Less allowance for losses . ... ,.......,
Total Assets
122,716,6h6.92
736,521.40
******
.** **o....
5,755,988.33
$153,371,152.17
LIABILITIES AND CAPITAL
Accounts Payable ..........................................
*******
Estimated Expenses Incurred and Not
Billed at Close of Fiscal Year
Ended June 30, 192 *..*
**.*......**...*.......*
*
........
$
117.69
5,897.28
,....
Deferred Income
Unearned insurance premiums *****************
Prepaid insurance premiums
$
.*******************
1,699#212*68
1,699,232.70
20.02
Capital
.******...
.
100,000,000.00
Reserve fund as provided by law .e.e..ee......
Special reserve for contingencies ............ ,
21,000,000.00
132,665,904.50
Total Liabilities and Capital ......................
$1534,371,152.17
Capital stock
Note.
..
,-...........
11,665,90.50
The Corporation has approved commitments aggregating
$332,374.11 in order to prevent default of certain insured
associations and there are estimated losses of $196,)62.38
in connection with other pending cases.
EXHIBIT 22
Federal Savings and Loan Insurance Corporation
Income and Expense Statement for the Period
July 1, 191, through June 30, 1942
Income
*
3,534,952.40
Insurance premiums earned . ......... * *...•..
27,501.72
** *****.....
.. ****
Admission fees earned ...
Interest earned on U. S. Government
obligations and securities fully
*.
......
guaranteed by the U* S.
..
Miscellaneous ........
.....
0
.0.... 000
0***
,...
9
3,480,703.32
67.37
$7,043,224.81
Administrative Expenses
Personal services oo.......o........
$157,823.06
1,192.19
°..•*.
Supplies and materials ......
.e..e..
Telephone and telegraph 6.
......
0...
Travel expense ..........
Printing and binding ...•••*•.** •
907.65
4,5329.26
3,393.81
1,834.52
3,110.99
.o..****....
Miscellaneous **.....*
,.
Furniture and fixtures **...•..
Services rendered by Federal Home
Loan Bank Administration .. **.. .*e
Administratorts Office - Federal
150,676.52
960.00
Loan Agency ......o........,*.o00«
Audit by Home Owners' Loan
Corporation
702.69
Total Administrative Expenses
..............
324,930.69
Nonadministrative Expenses
Personal services ............. ,.
Supplies and materials °e.,,9,......
o
Telephone and telegraph ...........
,..,.,...o,°,,.
Travel expense ..
Printing and binding .............
9
Miscellaneous .......o.......
Attorney fees and expense .o..o....°
*o.......*...
Examination expense ..
20,649.98
293.88
1,499.45
6, 196.84
733.22
171*70
997.85
2,323.86
32,866.78
Total Nonadministrative Expenses ...... e.......
Net Income From Operations ...
.......
,..........o........
357,797.47
6,685,427.34
Other Income
Profit on sale of securities
.e****.**
*************************.*
Net Income For Period **.****************************O*9@
Adjustments of net income for prior years * ....................
******e.*
$6,801,814 .29
DISTRIBUTION OF NET INCOME
To special reserve for contingencies *...
$3,000,000.00
To reserve fund as provided by law ......
3,801,814.29
Tota
..............................
6,817,202.71
15,388.42
Net Income .,*o*..o..o.....oo..........*o......*....o......of...
131,775.37
*$6*
01,814.29
EXHIBIT 23
Home Owners' Loan Corporation
Balance Sheet as of June 30, 1942
ASSETS
Mortgage loans, vendee accounts and advances--at
present face value ................................................
0,...
**..*****.
,...,
*.*,***,***
Interest receivable
Property l
Owned ....... **............
...
*.
...............
In process of acquiring title
... ..............
*
$1,675,887,920.88
*******.***.
$253,234,075.65
9,073,199*95
*..........*....**......o.............,**
Less reserve for losses ..
L,772,207.59
262,307,275.60
1,942,967,405.87
39,117,514.88
1,903,850,058.99
Investments--at cost:
Federal Savings and Loan Insurance Corporation
(entire capital)
100,000,00.00
*..............................
Savings and loan associations ....
Bond Retirement Funds
*..............
167,069,810.00
267,o69,810.00
Cash (including $5,478,300.00 deposited with
U. S. Treasury for retirement of matured bonds
and $20,5357,225.00 for retirement of 2-1/%
bonds called for payment July 1, 1942) ..............
Cash:
26,158,266.50
,..........
Operating funds (includes $7,289,483.*7 payable
to Bond Retirement Fund in July 1942; and
$22,474,316.82 deposited by borrowers--(see
contra)) ...............................
*........*
Special funds held by U. S. Treasury for
payment of interest coupons (see contra) o.o.....
Fixed assets:.
Home Office land and building--at cost ...........
Furniture, fixtures and equipment--at cost o......
Total fixec assets ........*...................
Less reserve for depreciation ....................
Other assets:
Accounts receivable ........
**.**.................
Treasury bonds accepted as repayments (to be
retired in July 1942) ••
..
•..•...•<.....
Deferred and unapplied charges ****9*******************
+0,686,351.77
2,0 )6,176.753
42,732,528*50
2,987,819.93
2,121,116.88
5,108,936.81
2,439,275 66
2,669,661.15
514,785.04
5000
~*......
Total assets ................................................
514, 835.04
50,847.47
2,23,0L6 ,007,65
LIABILITIES AND CAPITAL
Bonded indebtedness (guaranteed as to principal
and interest by the United States, except
$185,925.00 of unpaid matured 4% bonds guaranteed
as to interest only):
Bonds outstanding--not matured 2 •.•.••. •.••.••
. 2,08L ,82,225.00
Bonds called for payment as of July 1, 1942 ......
29,*57,225.00
Bonds matured--on which interest has ceased ******
5,478,*00.00
2,119,317,750.00
Accounts payables
Interest due July 1, 19L2* and prior
$
thereto (see contra) .aa.a®aae.ea®aaa.o©®.....e..
Special deposits by borrowers
Miscellaneous
,aaaa,,aaa
...
****a«a
.......
o.....
e.
****ea,,
****
*e
2,047,350.58
22,474,316.82
411,186.58
Accrued liabilities§
Accrued interest on bonded indebtedness ...........
®
o*®®®*®****®*®,,®<
Other accrued liabilities
I
24,932,853.98
4,836,520.78
253,379.02
5,089,899.80
1,002,962.70
1,523.566.00
2,526,528.70
250,000.00
391,901.45
641,901.45
Deferred and unapplied credits:
......
*
Unamortized premium on bonds sold .a.®@B
*
a**
**a*a*a*a*a*e
Miscellaneous .....
a.6a..
aa**a**
Reservest
Fidelity and casualties
Fire and other hazards
aa®®*®**®
a.a@®os®..
.*®
*a*®
... o....9o
**®*aa
®*a~,
.a.a.
Capital stock less deficits
Capital stocks
Authorized, issued and outstanding .. • ......
®
Losses in excess of net earnings*.*............
Reserves for future losses 4 ..........
.
**.*
,•
200,000,000.00
69,703,679.95
39,759,26.33
109,462,926.28
Total liabilities
and capital **,*.,*********.,,
**,.......
...
90.537,073.72
2,2,45,046,007.65
iProperty owned and property in process of acquiring title
are stated at values represented
by unpaid balances of loans and advances, unpaid interest to date of foreclosure sale or
judgment, foreclosure costs, net charges prior to date of acquisition, and permanent
additions, initial
repairs and reconditioning subsequent to acquisition.
Unpaid interest
included in these values amounts to $12,697,271581
2
Total bonded indebtedness shown includes unmatured bonds, which are guaranteed as to
principal and interest by the United States, as follows:
3% bonds due May 1, 1952 *aa$
.
eaa ..
1-1/2% bonds due June 1, 197 *a.***..
1% bonds due July 1, 1943 oooaoa.....a
$778,578,200
754,904,025
551,00oo000
5The figure shown above refleots the Corporation's actual losses sustained in the sale of
its acquired properties, on mortgage loans and other losses, on fire and other hazards,
and on fidelity and casualties in excess of its
cumklative net earnings.
The reserve for losses is being accumulated at an annual rate which, on the basis of
careful estimates, will approximate the total losses which may be sustained in the
liquidation of mortgage loans, interest and property. The figure shown above reflects
the reserves which have been provided to date for such future losses#
Note:
Except for property transactions which are recorded on a cash basis,
major items of income and expense are recorded on an accrual basis.
Therefore, no asset value has been recognized with respect to
uncollected rentals or prepaid taxes nor liability
for accrued taxes.
- 2 -
EXHIBIT 24
Home Owners? Loan Corporation
Statement of Income and Expense for the Fiscal Year 1942
Operating and other income:
Interests
*********************
Mortgage loans and advances ........
accounts and advances ..............................
Vendee
Total
e
e************<
Property income ....
e
****e®*e**
e<
****®*®®
$ 63,974,356.83
16,206,972.82
80,181,329.65
******®*o*e***
19,528,528.69
*ee.*.*.*..***********************e**
..
Dividends received from savings and loan associations *******
*.e
*
*o******...
*....
....***
Miscellaneous .....
Total income
106,359,213*23
**o******.**********.***********************
Operating and other expense:
Interest on bonded indebtedness *******............*******************.........
Less amortization of premium on bonds sold ................
53,.06,588.92
203,831.81
53,202,757.11
Administrative and general expenses:
Administrative expenses--current fiscal year ..............
Administrative expenses--first preceding fiscal year ......
15,498,908.14
4,187.L44
222.581
Administrative expenses--all other fxscal years ...........
General expenses
Property expense
****..**. ** **
oe......o. eo*.**
***.**
Total expenses
**e**.*.**.
.*oeee*e«e«
e.*************..*..
4*e*****
5,588,9o083
1,060,4l..06
.******...
**.ee**
.
e
*..........e
e
Net income before provision for losses which may be
sustained in the liquidation of assets o.*o................,
582,899.66
14,586,897.29
85,875,127.06
22,483,786.17
Provision for lossest
On mortgage loans, interest and property ......... ,•........
For fidelity and casualties *************************......,
For fire and other hazards ******.**..*******..............
40,000,000o00
94,332.98
240,319.00
40,334,651.98
Loss for fiscal year **..******
Deficit at July 1,
*.....o*****...****************
1941 ...................................
Total ******** ee
ee*********e*****************************
Surplus adjustmentst
Reduction of reserve against fire and
other hazards *..................,*.....*...*...
Other
e.......e...
*...........**...........*..
Deficit at June 30,
1
Net
credit.
1942 ....
o.@...e............e...........
$750,000.00
631.0
17,850,865.81
92,362,691.87
110,213,557.68
750,631.40
109,462,926.28
EXHIBIT 2 5
Home Owners' Loan Corporation
Statement of Income and Expense From the Beginning of Operations,
June 13, 1933, to June 30, 19L2
Operating and other incomes
Interest:
Mortgage loans and advances *............
Vendee accounts and advances *...........
$849,006,803.50
46,761,358.35
895,768, 161.85
202,061.81
Special investments .....................
***...$895,970,223*.66
*.*0*e***.*....
..
Total .°............*.**
*.o..
,.,.*
o..o,«.,o«0«o..@**«>*,
Property income ......
113,22,679.29
Dividends received--Federal Savings and
*..
*.**.*.**....*.... 3,035,326.09
Loan Insurance Corporation ...
savings and loan
Dividends received from
35,334o,761.53
associations o.**..**e*e*oee***eeo**********e**e***e*.**
e. ,
*
,,ee*************e**
*
e*
Miscellaneous eeo.« *e*e*e.**
3,562 ,450.9
Total
********
e9,,,. ***,*******e
*
@******
****
Operating and other epxenses
Interest on bonded indebtedness ...........
Less amortization of premium on bonds
sold
..... e
.*
o@e..,@e,
. *8
e #*4@
*
1,051,145,441.51
547,080,254.67
e
*
615,904.73
Amortization of discount on
refunded bonds
*e..,,.,,,..
°*******..**..
Administrative and general expense
Property expense *.******
e.......
******.
**.***
7-,158,529.31
245,907,910.41
95,886,078.61
893,416,668.27
which
Net income before provision for lsses
may be sustained in the liquidation of assets
157,728,773.24
Provision for lossess
On mortgage loans, interest and property
(computed in accordance with Board
Resolution of November 15, 1938) ..... 0...
266,137,153*25
1,204, 726.52
593,065.50
For fidelity and casualties ...............
For fire and other hazards ***************............
267,934,945*27
Loss for period June 13, 1933, to June 30, 1942 o.............
Less:
110,206,172 05
33,780.04
Add unlocated payments ****..*,.**........
Unidentified payments.. $12,828.75
Repayments unallocatedunidentified difference 14,197.04
27,025.79
6,754.25
110,212,926.28
Deduct reduction of the reserve against
fire and other hazards .o..o.o.o..,o
...
.Deficit at June 30, 1942 *****
**,,,..*
«** o«o.,**.*..***
o*,.*.°,,.
«*«,«e.
750,000.00
109,462,926.28
