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r s n / ? ' ! A ft FEDERAL statistical RESERVE release Yj O ( F o r Im m e d ia te R e l e a s e ) March 23, 19^7 C.4 MEMBER B A M INCOME, 1966 Summaries of preliminary figures for income and expenses reported hy Federal. Reserve member banks for'bhetjfliecfl^r ;year 1966 Show that net income after taxes rose 5 p^r cent over’ t e d 5*%vious year, m marked increase in gross revenues, due primarily fco larger los^hj^rtfolios and also to a higher average return on loans, wasilarga^h^f'S&t by increases in bank expenses. Interest paid on time and savings deposits was responsible for most of the higher costs. The ratio of net culrent earnings 1 taxes to average total capital accounts rose to l6fc the highest level since 1962. k , 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 $1,0 5 1 milllhJHjTa record net reduction. Greater losses on securities sold accounted for most of the larger net reduction. The ratio of net income after taxes to average total capital accounts, at 8.6 per cent, was down slightly from 1965. Gross current operating revenue increased about 16 per cent, or by $2,232 million. Loan revenue accounted for about.four-fifths of the rise. Although the average rate of return on U. S. Government securities increased, average holdings declined so that revenue from this source was slightly lower than the previous year. The $186 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. Total expenses were nearly 17 per cent, or $1 ,7 2 9 million, higher than 1965. Over three-fifths, $1 ,0 0 1 million, of this increase came as a result of an increase in interest payments on time deposits. The 25 per cent increase in interest paid by banks resulted from large increases fn both the average rate paid on time deposits and in average holdings of these liabilities. Salaries, wages, and other employee benefits rose $323 million and all other expenses $405 million. Net current earnings before income taxes were $4 ,1 3 9 million, about 14 per cent higher than in 1965* After the reduction of $1 ,0 5 1 mil lion for the net effect of non-operating transactions mentioned above, net income before taxes rose only $106 million. Taxes on net income were $886 million, about the same as in 1965* Net Income after taxes rose to $2,2 0 3 million, $100 million higher than I965. (Over) MEMBER BANK INCOME, BY CLASS OF BANK, .1966 AND 1965 (in millions of dollars. 1 9 6 6 figures preliminary) All member banks 19 6 6 r 1965 New York City 1966 1965 Reserve city banks City of Chicago 1966 1965~" 1966 0th?iT r 1965 1966 | 1965 Revenue: tn U.S. Government securities (n other securities Cn loans 1/ All other 16,074 1,702 1,265 11,087 2,020 13,842 1,686 1 ,0 7 9 9,295 1,781 2,775 175 210 1,986 405 2,296 180 204 1,563 349 689 58 52 478 101 576 60 52 382 82 6,035 519 447 4,284 786 5,21*0 5l*9 371* 3,616 700 6,575 950 557 1*,339 729 5,736 897 446 3,73!* 651 Expenses : Salaries, wages, and benefits Interest on time deposits All other 11,935 3,795 5,215 2,925 10,206 3,^72 4 ,214 2,520 1,976 580 447 1,607 533 713 362 V79 133 231 116 4oi 119 192 90 4,500 1,421 1,992 1,087 3,871 1,302 1,632 937 4,980 1,661 2,01*3 1,275 1*, 32T 1,518 1,677 1,131 • 800 688 2C9 175 1,535 1,369 1,595 1 ,1*03 19 3^ 28 29 136 137 92 130 Net current earnings before income taxes ^,139 Recoveries, transfers from valuation ' reserves, and profits 2 / 277 3,635 330; ' 9b9 V". Losses, charge-offs, and transfers to valuation reserves 3/ . .. 1,328 i 982 282 217 77 4o 513 361 456 365 Net Income before related taxes 3,089 2,983 537 506 161 165 1,160 l,l44 1,231 1,168 880 154 131 51 51 351 358 330 31*0 Taxes on net income 886 ■ Net income 2,203 2,103 383 375 110 114 808 787 901 828 Cash dividends declared 1,114 1,058 259 240 49 45 1*53 426 383 ?47 18.1 16.0 Ratios (per cent): Net current earnings before income taxes to average total capital accounts 16.2 Net income to average total capital ■ . 8.6 accounts 1.03 Average return on U.S. Govt, securities Average return on other securities . ; • - 3.2 9 Average return on loans ; 6.2 5 Interest on time to average time deposits 4 .13 15*1 8 .7 3.69 3.1 1 5.85 3.73 15*4 7 .4 3.62 3*^2 5*68 5.0 9 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. 1 4 .1 7 -7 3-32 3.26 5*13 4.2 3 9.5 3.64 3.31 5.64 4.58 10.4 3.38 3*25 5.05 3.99 (C V e r) l6.6 8 .7 3.95 3.37 6.3 3 4.16 15.6 9.0 3.6 9 3*17 5.90 3.81 1 5 .9 9.0 4 .20 3.19 6.55 3-71* 1 5 .1 8 .9 3.80 2-99 6.28 3.1*0
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