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FEDERAL statistical RESERVE release B U S . S C I T E C rtl Maxafi mi For immediate release C.4 MEMBER BANK INCOME, 1968 'AUG 1 9 1 9 6 9 A substantial increase in the volume and rate < f retut^df^loStik, well as considerable expansion in U. S. Government and other securities, raised the net income after taxes of the approximately 6,000 Federal Reserve member banks in calendar 1968 despite greater expenses. Net income after taxes, according to preliminary information, rose $196 million, or 7.5 per cent over 1967. The factor most restrictive to higher net income was a $1,201 million increase in the net effect of security trans actions, other profit and loss adjustments on loans and other assets, and changes in valuation reserves. The comparable increase in 1967 had been $736 million. Gross current operating revenue increased $2,959 million, more than 16 per cent, during 1968. Loan revenue contributed $2,015 million, nearly 70 per cent of the total increase, primarily due to expanded loan volume. Sub stantially larger earnings -- up $274 million for U. S. Government securities and $368 million for other securities, from 1967 to 1968 -- overshadowed modest increases in the rate of return on those investments. Total current operating expenses rose nearly 17 per cent, or $2,250 million in 1968. About 45 per cent of the increase, or $1,017 million, was reflected in the moderately higher interest paid on substantially larger holdings of time deposits. The increased cost of salaries, wages, and other employee benefits, at $519 million, was overshadowed by the considerable rise of all other expenses, from $274 million in 1967 to $714 million, accounting for nearly 32 per cent of the 1968 increase in expenses. This was due in part to large interest payments on borrowed money. Net current earnings before income taxes was $5,061 million, up 16 per cent over 1967. The substantial reduction of $1,201 million from the net effect of security transactions and other profit and loss adjustments on loans and other assets was well over the $1,088 million figure for 1967, and even more than the $1,046 million recorded in 1966. The large net reduction was due primarily to increased losses on securities sold. Net income before taxes was $3,860 million, or $244 million more than in 1967. Taxes on net income rose $47 million to $1,054. Net income after taxes rose to $2,805 million. Income and expense reports from these member banks usually represent slightly over 80 per cent of the accounts of all commercial banks in the country. (Over) 1967 1968 Revenue: On U. S. Government securities On other securities On loans 1/ All other MEMBER BANK INCOME, BY CLASS OF BANK, 1968 and 1967 (In millions of dollars, 1968 figures preliminary) All Reserve City Banks member banks New York City City of Chicago 19AR | 1967 196R | 1967 1968 | 1967 20,818 17,859 3,675 3,080 889 763 2,208 1,934 268 245 69 83 1,561 280 1,929 232 72 60 14,143 12,128 2,159 612 2,599 527 2,236 2,539 527 444 121 106 7,777 686 701 5,389 1,000 6,673 611 578 4,598 885 8,478 1,170 875 5,543 890 7,344 1,009 691 4,843 800 Expenses: Salaries, wages, and benefits Interest on time deposits All other 15,757 4,730 7,108 3,919 13,507 4,211 6,091 3,205 2,640 780 1,175 685 2,189 666 1,037 485 642 164 327 153 558 150 274 134 5,950 1,769 2,708 1,471 5,092 1,572 2,331 1,190 6,525 2,018 2,899 1,608 5,667 1,823 2,449 1,396 5,061 4,353 1,035 891 246 205 1,827 1,580 1,953 1,676 263 352 31 20 14 20 103 173 115 138 Losses, charge-offs, and transfers to valuation reserves 3/ 1,464 1,088 332 191 81 36 532 421 520 440 Net income before related taxes 3,860 3,616 734 721 179 189 1,398 1,332 1,548 1,375 Net current earnings before income taxes Recoveries, transfers from valuation reserves, and profits 2/ Other T?68 [~ uuuuuy uanKb | 1967 Taxes on net income 1,054 1,007 228 237 55 58 374 362 397 351 Net Income 2,805 2,609 506 484 124 131 1,024 970 1,151 1,024 284 _____56 52 546 493 Cash dividends declared 320 1,385 1.248 Ratios (per cent): Net current earnings before income taxes to average total capital accounts 17.4 16.0 17.3 Net income to average total capital accounts 9.6 9.6 8.5 Average return on U. S. Govt, securities 4.78 4.48 4.71 Average return on other securities 3.68 3.49 3.83 Average return on loans 6.82 6.39 6.41 - Interest on time to average time deposits ______ 4,5.7.-_____ 4..32- _______5.79 IV 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. (over) 16.1 17.8 16.3 8.7 9.0 10.4 4.60 4.79 4.41 3.67 3.65 3.54 5.81 6.38 5.88 ______!L32_ ______5J5Q___ ____ 4.93 17.6 9.9 4.81 3.74 6.90 _______4-.57. 16.2 463_____ 17.2 420 15.7 10.1 9.9 9.9 4.56 4.77 4.41 3.61 3.60 3.34 6.45 7.01 6.69 _____4.34. _______4.-14— ______3.53,
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