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d u S <& ECOi\ ENOCHPRATTFRE. LIBRARY NOV BOARD OP GOVERNORS OF THE FEDERAL RES n Y m E.5 (For Immediate Release) w 2 p m 1955 m . February 7, 1955 MEMBER BANK EARNINGS, 195*1Preliminary figures on member bank earnings indicate that net profits after taxes amounted to $1,089 million in 1954. The increase of $224 million over 1953 resulted, for the most part, from increased profits on sales of securities. The ratio of net profits to average total capital accounts was 9*3 per cent as compared with J .Q in 1953 * Net current earnings before income taxes were $1,824 million in 1954, $15 million above the previous year. A rise of $222 million in gross operating earnings was largely offset by a concurrent rise of $206 million in operating ex penses. The rise in current earnings reflected an increase in average holdings of loans of about 2 per cent and of United States Government securities of about 7 per cent. Average rates of return on loans and United States Government securi ties were 4.69 and 1 .95* respectively, practically unchanged from the previous year. This is the first year since 19^5 that the average rate of return on loans dM. not increase. Sixty per cent of net current earnings were carried to net profits in 195k compared with about 48 per cent in 1953* This reflects the fact that in creased profits on sales of securities were sufficient to change the net of profits, recoveries, losses, etc., from a loss of $251 million in 1953 to a gain of $68 million in 1954. This was the first year since 1946 in which profits and recoveries have exceeded losses and charge-offs. Because of larger net profits, provisions for income taxes rose $112 million over the previous year despite the removal of the excess profits tax. Cash dividends declared amounted to $45^ million in 1954, representing a distribution of about 42 per cent of net profits after taxes and an annual yield of 3.9 per cent on average total capital accounts; comparable ratios for 1953 were 48 per cent and 3*8 per cent, respectively. (Over) MEMBER BANK EARNINGS, BY CLASS OF BANK, 1953 and 1954 Item (in millions of dollars. 195*4- figures preliminary) All Central Reserve City Banks Member Banks New York Chicago 1954 1954 1953 1954( 1953 1953 ii Earnings On U. S, Government securities On loans l/ All other 4,812 1,063 4,590 1,011 2,700 2,632 947 Expenses Net current earnings before income taxes 778 153 4l8 757 ! 192 56 137 Reserve Country Banks City Banks 1954 , [..1953 . 1954 | 1953 188 1,878 397 1,073 408 1,798 376 1,059 363 1 ,1 1 6 392 1,847 445 1,045 357 1,965 456 206 434 187 44 53 95 40 2,988 2,782 428 4o4 106 102 l,l6l 1,083 1,292 1,19 2 1,824 1,809 349 353 86 86 717 715 672 655 Recoveries, profits, and transfers from valuation reserves 2/ 546 132 111 21 25 15 244 50 167 47 Losses, charge-offs, and transfers to valuation reserves 3/ 478 383 86 61 19 23 215 155 158 145 1,893 1,558 374 312 92 . 78 745 610 681 556 804 692 161 151 39 35 347 282 257 224 1,089 865 213 161 53 43 398 328 424 333 456 419 113 103 20 20 180 167 143 12 $ Profits before income taxes 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 1,049 15.6 9.3 1.95 4.69 16.4 7-8 1.98 4.69 13-2 8.0 1-79 3 <55 13.9 6.3 1.91 3.551f 92 14.8 9-1 1.91 3.57 l/ Includes charges on loans other than interest; these charges are estimated for 1954. 2/ Does not include recoveries credited to valuation reserves. 3/ Does not include losses charged to valuation reserves. (Over) 15.7 7.9 1.94 3.61 17.4 9.6 1.94 4.72 18.5 8.5 1.99 4.75 9.7 2.02 16.0 8 .1 2.00 5.45 5.49 15.4
@FedFRASER