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« - - « ^V^«SSW5P!K*i'iS< : '*-'’ S *’*' ' & ECON ;r n x ‘x> W-Y 4 1^1 | BOARD OF GOVERNORS OF THE! FED^RAf* (For Immediate Release) E.5 Febrtiary 15* 19^1 MEMBER BANK EARNINGS, I960 Preliminary figures on member bank earnings indicate that net current earnings before income taxes were $ 3,268 million, an increase of $333 million over last year. Net profits after taxes were $1,686 million or $429 million larger and the ratio of net profits to average total capital accounts rose from 7.9 per cent in 1959 to 10.0 per cent in i960. Earnings on loans rose $700 million as a result of larger average holdings and higher average interest rates and accounted for most of the increase in gross current operating earnings. Earnings on U. S. Government securities rose slightly as a higher average rate of return on these invest ments offset a substantial decline in average holdings. Earnings on loans rose more sharply during the first half, while earnings on U. S. Government securities rose in the second half after a slight decline in the first half of i960. Expenses rose $504 million or 10 per cent over a year ago. The net effect of security transactions, other profit and loss adjustments, and changes in valuation reserves was a loss of $344 million, compared to $904 million in 1959 . Provisions for income taxes amounted to $1,239 million, $464 million more than last year, reflecting both the increase in net current earnings and the smaller net loss on nonoperating transactions. Cash dividends declared amounted to $731 million, representing a distribution of 43 per cent of net profits after taxes and an approximate yield of 4.3 per cent on average total capital accounts. (Over) BANK EARNINGS, BY CLASS OF BANK, i960 AND 1959 (In millions of dollars, i960 figures preliminary) MEMBER All Item Central reserve city banks New York 1 Chicago I960 1959 I ' I960 1 1959 1 member banks - I960 1959 1*306 182 812 312 353 56 225 72 308 60 182 66 699. 181 700 607 296 108 846 1,200 Profits before income taxes 2,925 Taxes on net income Net profits Earrings On~.U. S. Government securities On loans l/ All other 8,913 1,412 5,721 8,075 1>399 1,780 1,655 1,^74 187 ‘ 941 346 Expenses 5,644 5,140 774 Net current earnings before income taxes 3,268 2,935 ' 502 Recoveries, profits, and transfers from valuation reserves 2 / Losses* charge-offs, and transfers to valuation reserves 3 / 5,021 Country banks I960 1959 3,461 3,205 476 508 3,625 693 3,256 649 2,323 2,059 2,232 1,968 699 639 662 638 158 2,174 2,040 2,515 2,243 172 150 1,287 1,16 5 1,109 1,013 63 29 41 197 108 I69 84 170 259 51 99 325 449 300 393 2,032 638 4ll 149 92 1,159 824 979 704 1,239 775 35 529 316 352 252 1,257 171 240 65 1,686 293 344 84 57 630 509 452 175 166 29 28 293 278 627 235 20.3 18.3 7.2 2.84 4.83 22.2 10.8 3.06 20.2 20.6 10 .1 19.6 8.6 5.30 4.85 2.97 5.94 2.74 5.67 Cash dividends declared 690 731 Ratios (per cent): Net current earnings before income taxes to average total capital accounts 19.4 18.5 10.0 Net profits to average total capital accounts ' 7.9 Average return on U.S. Government securities , 3.10 2.79 Average return on loans 5.92 5.65 1 1/ Includes charges on loans other than interest. 2/ Does not include recoveries credited directly to valuation reserves. 3/ Does not include losses charged directly to valuation reserves. Reserve city banks I960 1959 10.0 3.32 5.29 (Over) ' 7.6 2.64 17.4 9*8 3*13 6.27 217 17*2 7*7 2.83 6.16
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