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(For. Immediate Release) March 21, 1966 c.4 MEMBER EANK INCOME, 1965 irted Summaries of preliminary figures for income and by Federal Reserve member banks .for the .calendar year income after taxes rose nearly 10 per cent over the, that more than three-fifths of the increase was din lower income related taxes. A marked increase in gr\ primarily to larger loan portfolios, was largely offs> bank expenses, with interest paid on time and savings for most of the higher costs. The ratio of net current) taxes to average total capital accounts was lower in 196\£fe£n in previousf years; and showed the largest year to year decrease since 1962* The ratio of net income after taxes to average total capital accounts, at 8 .8 per cent was the same as in 1964. Gross current operating revenue increased about 12 per cent, or $1,487 million. Loan revenue accounted for. about .four-fifths of the rise, and came as a result of a substantial increase in average holdings as the average return was slightly below the 1964 level. The $170.million increase in revenue from other securities over the previous year, resulted from a higher average rate of return and some increase in the average holdings of these types of securities. Although the average rate of return on U* S. Government securities increased, average holdings declined so that revenue from this source was $50 million lower than the previous year. Total expenses were nearly 15 per cent, or $1,328 million higher than 1964. Over three-fifths, $836 million, of this increase came as a result of an increase, in interest payments on time deposits. The 25 per cent increase in interest costs resulted from large increases in both the average rate paid on time deposits and in average holdings of these liabilities. Salaries, wages, and other employee benefits rose $218 mil lion and all other expenses, $273 million. Net current earnings before income taxes were $3,650 million, about 5 per cent higher than in 1964. The net effect of security transactions, other profit and loss adjustments on loans and other assets, and changes in valuation reserves was to reduce net income by $659 million the largest since 1959* This compares with a net reduction of $570 million in 1964. Taxes on net income were $884 million, down, from $998 million in 1964. Net income after taxes rose to $2,108 million, $185 million higher than 1964. (Over) MEMBER B A M INCOME, BY CLASS OF B A M , 1965 AND 1964 (in millions of dollars. 1965.figures preliminary) All member banks 1964 1965 Reserve city banks Other City of Chicago 1964 j 1965 [ 1964 1965 New York City 1965 i 1964 Country banks 1964 1965 2 ,017. 214 171 1,300 332 577 60 52 382 82 505 64 - 48 324 69 5,237 549 374 3,614 700 4,739 58O 313 3,205 640 5,764 903 451 3,757 653 5,125 883 379 3,282 581 8,895 3,260 3,384 2,251 1,607 533 713 362 1,345 505 515326 4oi 119 192 90 3^0 114 156 70 3,868 1,300 1,632 936 3,391 1,236 1,3 1 9 836 4,346 1,526 1,684 1,136 3,818 l,4o6 1,394 1,019 3,650 3,491 688 671 175 165 1,368 1,347 l,4l8 1,307 Recoveries, transfers from valuation . reserves, and profits 2/ 324 275 3^ 29 21 131 124 130 98 Losses, charge-offs/ and transfers to valuation reserves 3/ 983 845 C\J 1—1 CJ 122 4o 69 360 334 370 320 2,992 2,921 510 . 581 165 118 1,139 1,137 1,178 1,085 88b 998 131 199 51 37 OO LT\ 413 344 349 Net income 2,108 1,923 379 382 114 81 782 724 833 736 Cash dividends declared Ratios (per cent) : Net current earnings before income taxes to average total capital accounts Net income to average total capital accounts Average return on U.S.Gcvt. securities Average return on other securities Average return on loans Interest on time to average tin^e deposits l,06l 961 240 213 ^5 4l 425 394 351 313 16.0 16.2 1 0 .4 8 .0 13,873 1,692 1,081 9,317 1,783 .L2,386 1,742 911 8,111 1,622 Expenses Salaries, wages, and benefits Interest on time deposits All other . ; 10,223 3,478 4 ,220 2,524 Net current earnings before income taxes Net income before related taxes Taxes on net income . .; 9 15-2 8.8 3-72 3-12 5 .8 7 3-7 4 1 5 -9 8 8 3 63 ■ .3 01 •5 88 - 3 47 14.0 7 .7 3 -3 3 3-23 5.14 4 .2 4 l/ Includes charges on loans other than interest. 2/ Does not include recoveries credited directly to valuation reserves. 2/ Does not include losses charged directly to valuation reserves. : 32 15.7 8.9 3-62 3-12 5.20 3.93 / CO 2,296 180 204 1,563 v. 349. Revenue On U-S. Government securities On other securities On loans 1/ All other 15.6 3*21 3 -0 0 8.9 3.71 3.16 5 .0 7 5.03 5 .8 9 4.00 3 .7 8 3-82 3 -4 8 3.66 (Over) 16.7 9 .0 3-59 3-05 5-91 3-52 15.3 9.0 3 -8 3 3-02 6.33 3.48 15-2 8 .6 3 -6 6 2 .9 2 6.28 3-26
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