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BOARD OF G jry 18, i960 E.5 A preliminary tabulation of member bank earnrftgs reports"indicates that gross operating earnings of all member banks amounted to $8,06l million, $935 million more than in 1958. The increase was partly offset by a rise of $514 million in current operating expenses, resulting in net current earnings before taxes of $2,930 million, $420 million more than for 1958* However, net profits after taxes of $1,252 million were $205 million lower than in 1958, due to a net loss of $898 million resulting from the net effect of security transactions, other profit and loss adjustments, and transfers to and from valuation reserves; in 1958 these transactions resulted in a net gain of $96 million. The ratio of net pro fits to average total capital accounts declined from 9*7 per cent in 1958 to 7*9 per cent. Earnings on loans and on U. S. Government securities increased $682 millien and $128 million, respectively. The larger earnings on loans were due to an $8.1 billion increase in average holdings of loans and a rise in the average rate of return on these assets from 5*35 per cent to 5*63 per cent. The larger earn ings on U. S. Government securities were due entirely to an advanced rate of re turn, from 2.45 per cent to 2.78 per cent, as average holdings of these obli gations declined. Provisions for income taxes were $369 million lower than in 1958, re flecting the shift from a gain to a loss on nonoperating transactions. Cash dividends declared in 1959 amounted to $705 million, representing 56 per cent of net profits and 4.4 per cent of average total capital accounts. 1958 , cash dividends declared represented 44 per cent of net profits and 4.3 per cent of total capital accounts. (Over) In MEMBER BANK EARNINGS, BY CLASS OF BANK, 1959 AND 1958 (In millions of dollars. 1959 figures preliminary) All member banks 1958 1959 Central reserve city banks New York Chicago 1958 1958 1959 1959 1 Reserve city banks 1958 1959 Earnings On U. S. Government securities On loans l/ All other 8,06l 1,164 170 699 295 272 58 157 57 3,190 505 2,049 1,659 4,326 1,534 1,3C6 182 8l4 310 Expenses 5,131 4,617 699 636 Net current earnings before income taxes 2,930 2,510 607 528 293 777 63 Losses, charge-offs, and transfers to valuation reserves 3/ 1,191 681 Profits before income taxes 2,031 Item Recoveries, profits, and transfers frcm valuation reserves 2/ Taxes on net income Net profits Cash dividends declared Ratios (per cent): Net current earnings before income taxes to average total capital accounts Net profits to average total capital accounts ) Average return on U.S. Government securities Average return on loans 3,257 2,856 636 2,835 478 1,759 598 647 1,964 646 560 1,712 584 142 2,031 1,823 2,244 2,016 150 130 1,160 1,012 1,013 840 112 4l 56 108 354 81 255 259 64 99 46 445 313 388 257 2,606 411 576 92 140 822 1,053 707 837 780 1,148 171 276 35 69 315 490 258 313 ' 1,252 1,457 ■ 240 300 ■ 57 - • 71 50T 56$ 448 524 705 646 166 160 28 26 292 258 218 202 18.4 16.6 18.4 16.4 20.2 18.4 19-5 18 .1 17.2 l^.O 10.1 7.6 1,394 5,008 7-9 2.78 5.63 7,127 1,266 9.7 2.45 5.35 7-2 2.84 4.82 9.3 2.39 4..40 l/ 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. Country banfcs 1958 1959 (Over) 308 60 182 66 158 7.6 2.64 4.86 9-9 2.37 4.47 ; 8.5 2.73 5.63 2.45 2.82 5.39 6.15 9.4 2.49 L t 5.94
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