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>,
FEDERAL
statistical
RESERVE
release
May 13, 1974
For Immediate Release
MEMBER BANK INCOME , 19 73
Income before security gains and losses (after taxes) increased
$687 million, or 15.8 per cent at Federal Reserve member banks during
1973, substantially more than the 1972 increase of $364 million (9.2
per cent). In contrast to net security gains in 1972, member banks
recorded slight net security losses in 1973. Nonetheless, net income of
member banks in 1973 increased $612 million, or 13.9 per cent. The
ratio of net income to average equity capital and reserves was 11.0
per cent in 1973, compared to 10.5 per cent in 1972.
Total operating revenue increased $10,373 million, or 33.1
per cent in 1973. Income from loans, which increased 9.5 per cent in
1972, rose by $9,316 million or 44.8 per cent in 1973. Average loans
outstanding also increased in 1973. Moreover, the average rate of
return on these loans increased substantially in 1973 and reversed the
two consecutive decreases in this ratio recorded in 1972 and 1971.
Income from member banks' investment portfolios increased $446 million
(7.3 per cent), or roughly the same as in 1972. Average investments
at member banks increased 3.0 per cent in 1973 as compared to a 9.3
per cent increase in 1972; and, the average rate of return of these
investments rose. Income on U.S. Treasury securities declined $20
million. Income on "other securities," a major portion of which is
securities of states and political subdivisions, increased $466 million,
or 12.7 per cent, slightly below the percentage increase in 1972. "All
other" operating income, which includes trust department income, service
charges on deposit accounts, and other fees, increased $611 million
or 13.7 per cent during 1973.
Member bank operating expenses increased $9,388 million,
or 36.6 per cent, during calendar year 1973. An increase of $7,633
million in interest on time deposits accounted for 81 per cent of this
overall rise. Higher average amounts held and substantially higher
average interest paid on these deposits contributed to this increase.
Salaries and wages, also an important expense item, increase~ 10.1
per cent, 3.3 percentage points greater than the 1972 increase.
Expense from "all other sources," which includes such items as interest
on borrowed money and capital notes and debentures, decreased $631
million, or 7.9 per cent. This contrasts to a 10.4 per cent increase
in 1972.
Reflecting all of these changes, net operating income (before
income taxes and security gains and losses) increased $985 million, or
17.3 per cent, in 1973 as compared to a 7 per cent increase the previous
year. Applicable income taxes increased $298 million, or 22 percent,
during 1973. Member banks recorded slight security transaction losses
in 1973 as opposed to small gains in 1972; nonetheless, net income
increased $612 million to $5,012 million, a 13.9 per cent increase.
Income and expenses from these member banks usually represent
about four-fifths of the total for all insured commercial banks in the
country.
(over)
I
.
__(-I·
..___,
MEMBER BANK INCOME, BY CLASS OF BANK 1973 and 1972
~1 ------------------------~--~--~----~~--~--~--~~~-(I-n~m~i~l-l_i_o_n_s_o_f~d-o_l_l_a_r_s_) ~~----~~~--~~--------------~~------~~----.•
__
All
.111ember banks·
1973
1972
Itein
New York City
1973
1972
All·
Large banks
Citv of Chicago
1972
1973
other banks
. 1972
1973
Other
1973
1972
11,679
7,999
757
1,148
1, 775
16,249
11,251
1,334
2,252
1,4ll
13,378
8,714
1,318
1,977
1,369
Revenue:
On loans· };;/
On U.S. Treasury securities
0~ other securities
All other
41, 70'8
30,107
2,392
4,139
5,070
31,335
20,791
2,412
3,673
4;459
7,483.
. 5,448
'249
.433
1,352
4,9:92
3,229
260
406
1,098
2,147
1,638
79
159
271
1,285
849
77
141
217
15,829.
ll,769
730
'1,294
2,035
Expenses:
Salaries, wages, and benefits·
Interest on time deposits
All other
35,027
7,806
19,819
7,402
25,639
7,093
12,186
6,360
6,159
1,293
3,611
1,_255
3,915
1,206
1,262
1,447'
1,826
281
1,284
261
1,021
248
418
355
13,548 .
2,963
7,884
2,701
9,679
2,691
3,794·
3,195
13,494
3,268
7,041
3,185
ll,023
2,948
5,039
3,034
5,696
1,356
4,340
1,324
393
931
1,077
296
781
321
84
237
264
58
. 205
. 2,281
593
1,689
2,000.
513
1,487
2, 754.
584
2,170
2,355
488
1,867
. -12.
.8
-3
-4
2
·-4
---
60
2,169
1,927
737
688
11.56
11.55
10.86
11.24
.':8.16:
. 5.96
·. 4.85
7.35
5.53
4.62
Income be£ . inc. taxes & sec. gains & losses ..
Applicable income taxes
Income before sec. gains and loss~s
Net gains & credits (+.) or losses & _ch~rges ( ... )
· af:ter ·taxes 1/
-
6,681
1,654
5,027.
-14
60.
.:
Net· ·income
. 5,012 .
.
4;400.
. 919.
788
.. 233
'201
-l~. 839:.·
'353 ·_
" 310
101
122
-~·1;690
1,484
..
... ;
Cash dividends declared
,,
Rat·io$ (per cent): 11.~~
To equity capital (incl. reserves)':-,:
.
Income· (after .taxes) before 'sec.• .. gains ·& · •.'
>
;
A~e~ 0 ~:~~me
Averag~- return on
.
r
:.:
•
·.- 2 018
·_· ·
.·
:•. ,
~
..
...
"
:·\
~:;~t:~~;
.
,
'·.•.,
...
':. ( 10.54 ~-
719 ·.
828.
,•.
:·:
r.
·-ro. Js
.,
'"10.53 ·..
"10.39 ,_.
.:'
... 9.89
.
~
;9.72
.9,;81
'·10~_~0
-10'.34
·9.68 _;_·
·-10.68
;:10.69
6~08
8~5J
~.00 ,'
..
' 10.24
' 10.23
loans
-::
.::; " :··, ·: {8.34,6.9o'.
8.39
·
;.-,
.,
8.46
·_. _:_
on U.S. Tre~,stiry~s~cut:(ti~s
. ·-~r,r.~_:_-,·_ _5 ••·_o
s
. 5.41:
'5,.93 ,!_
.5;53
'. 5~57_ 5.2.6 .
.: 5.51
4 76
'Average_ return on other sec:Urit:!-e~ ·: : -·.- -t•• 5·2 :
4.83· ·
:4.58
4.91
4. 76
: 4.56
,~nteres.t on time deposits to :.-aV>ex:age, time
·- · ·;
·· ...
· depo~:its
: ~ , ·; '>
.,
· .•;:;~82
:: 4. §,1 -· ' 7. 03 :. :·· J'{f-~-51
·' &. 8_9 ··• .·_ ~4. 6s · ' ,. 5. 95 ::
'
!/ Incluties -income on Federal £~ntis ;sold .and charges; on 'loans'lith~r -~h_an~~inFe.rest...
·.
c.
..
- :•
·: --~
2/- Includes p,rimarily net gains•. at).d.-'losses -on sales of_·. securities·,_ -Also included are net miscellanous losses and credits- ' in consolidated subsidiaries7•• ·
.•-.
.. ~
•
~:
~· '· -~
_
·•
·
"
·
:;:
1} The asset.• liability, and;:~capital a_ccount items used in:''calculating these :ra~io~s are averages of the June and December
· calendar year ·artd the December calr date for the preceding year.
4/ Less than~$500,000.
NOTE: ' Details may not add to totals because of rounding.
-~~erage:: return
'•
t~
·6.92~
s.zo·.
4:31
·,:: -c·
·4. 59'
•
.- ~ 5. 26'.
· . ._.,
:'
4.65 .
-~-
and· minority interest
,..
·
•.
'
••
call dates for thi!
··
·
...''
MARKET PERCENTAGES
A~~ lie ant
County
Personal!l ·
Loans
Sales~/
Finance
Cromwell
Sales
Personal
Finance
Loans
Combined
Pers~nal
Loans
Sales
Finance
Elkhart ...
2.30
.14
1.53
2. 98
3.82
3.12
Kosciusko
.38
0
3.68
10.87
4.06
10.87
Lagrange
0
0
7.30
34.2
7.30
34.2
Marsh{ll
1.04
.19
3.44
.49
0
4.57
f~l'\()a.i\)
Nobel
St. Joseph
(_S C!ltA,i=l! 9j ti(D)
12.1
13.53
.03
8. 57
18.6
'.48
!/ Item 6(e) and 6(b)(2) on the.R$port of Condition, Schedule A.
Jl
Item 6(c)(2) on the Report of Condition, Schedule A.
4.48
8.76
5.06
18.6
12.13
14.01
FEDERAL
•,
statistical
RESERVE
release
May 13, 1974
For Immediate Release
l1EMBER BANK INCOME, 1973
Income before security gains and losses (after taxes) increased
$687 million, or 15.8 per cent at Federal Reserve member banks during
1973, substantially more than the 1972 increase of $364 million (9.2
per cent). In contrast to net security gains in 1972, member banks
recorded slight net security losses in 1973. Nonetheless, net income of
member banks in 1973 increased $612 million, or 13.9 per cent. The
ratio of net income to average equity capital and reserves was 11.0
per cent in 1973, compared to 10.5 per cent in 1972.
Total operating revenue increased $10,373 million, or 33.1
per cent in 1973. Income from loans, which increased 9.5 per cent in
1972, rose by $9,316 million or 44.8 per cent in 1973. Average loans
outstanding also increased in 1973. Moreover, the average rate of
return on these loans increased substantially in 1973 and reversed the
two consecutive decreases in this ratio recorded in 1972 and 1971.
Income from member banks' investment portfolios increased $446 million
(7.3 per cent), or roughly the same as in 1972. Average investments
at member banks increased 3.0 per cent in 1973 as compared to a 9.3
per cent increase in 1972; and, the average rate of return of these
investments rose. Income on U.S. Treasury securities declined $20
million. Income on "other securities," a major portion of which is
securities of states and political subdivisions, increased $466 million,
or 12.7 per cent, slightly below the percentage increase in 1972. "All
other" operating income, which includes trust department income, service
charges on deposit accounts, and other fees, increased $611 million
or 13.7 per cent during 1973.
Member bank operating expenses increased $9,388 million,
or 36.6 per cent, during calendar year 1973. An increase of $7,633
million in interest on time deposits accounted for 81 per cent of this
overall rise. Higher average amounts held and substantially higher
average interest paid on these deposits contributed to this increase.
Salaries and wages, also an important expense item, increased 10.1
per cent, 3.3 percentage points greater than the 1972 increase.
Expense from "all other sources," which includes such items as interest
on borrowed money and capital notes and debentures, decreased $631
million, or 7.9 per cent. This contrasts to a 10.4 per cent increase
in 1972.
Reflecting all of these changes, net operating income (before
income taxes and security gains and losses) increased $985 million, or
17.3 per cent, in 1973 as compared to a 7 per cent increase the previous
year. Applicable income taxes increased $298 million, or 22 percent,
during 1973. Member banks recorded slight security transaction losses
in 1973 as opposed to small gains in 1972; nonetheless, net income
increased $612 million to $5,012 million, a 13.9 per cent increase.
Income and expenses from these member banks usually represent
about four-fifths of the total for all insured commercial banks in the
country.
(over)
MEMBER BANK INCOME, BY CLASS OF BANK 1973 and 1972
(In millions of dollars)
Item
All
l!lember banks
1972
1973
New York Citv
1973
1972
Large banks
City of Chicago
1972
1973
Other
1973
1972
All
other banks
1973
1972
Revenue:
On loans !)
On U.S. Treasury securities
On other securities
All other
41,708
30,107
2,392
4,139
5,070
31,335
20,791
2,412
3,673
4,459
7,483
5,448
249
433
1,352
4,992
3,229
260
406
1,098
2,147
1,638
79
159
271
1,285
849
77
141
217
15,829
ll,769
730
1,294
2,035
ll,679
7,999
757
1,148
1, 775
16,249
ll,251
1,334
2,252
1,4ll
13,378
8, 714
1,318
1,977
1,369
Expenses:
Salaries, wages, and benefits
Interest on time deposits
All other
35,027
7,806
19,819
7,402
25,639
7,093
12,186
6,360
6,159
1,293
3,6ll
1,255
3,915
1,206
1,262
1,447
1,826
281
1,284
261
1,021
248
418
355
13,548
2,963
7,884
2,701
9,679
2,691
3,794
3,195
13,494
3,268
7,041
3,185
ll,023
2,948
5,039
3,034
Income bef. inc. taxes & sec. gains & losses
Applicable income taxes
Income before sec. gains and losses
Net gains & credits (+) or losses & charges (-)
after taxes 2:./
6,681
1,654
5,027
5,696
1,356
4,340
1,324
393
931
1,077
296
781
321
84
237
264
58
205
2,281
593
1,689
2,000
513
1,487
2,754
584
2,170
2,355
488
1,867
-14
60
-12
8
-3
-4
2
-4
---
60
Net income
5,012
4,400
919
788
233
201
1,690
1,484
2,169
1,927
Cash dividends declared
Ratios (per cent): 11
To equity capital (incl. reserves):
Income (after .taxes) before sec. gains &
losses
Net Income
2 018
1 839
353
310
101
122
828
719
737
688
10.38
10.54
10.53
10.39
9. 72
9.81
10.50
10.34
9.89
9.68
10.68
10.69
10.24
10.23
11.56
ll.55
10.86
ll.24
1i.oo
10.97
8.16
8.46
6.92
7.35
6.00
Average return on loans
8.34
6.90
8.39
8.53
6.08
5.51
5.20
5.96
5.53
5.26
5.41
Average return on u.s. Treasury securities
5.80
5.93
5.53
5.57
4.31
4.85
4.62
4.76
4.56
4.52
4.91
Average return on other securities
4.76
4.83
4.58
Interest on time deposits to average time
4.59
5.26
5.82
4.61
4.68
5.95
4.65
7. 03
4.51
6.89
deposits
II Includes income on Federal funds sold and charges on loans other than interest.
ll Includes primarily net gains and losses on sales of securities. Also included are net miscellanous losses and credits and minority interest
in consolidated subsidiaries.
]/ The asset, liability, and capital account items used in calculating these ratios are averages of the June and December call dates for the
calendar year and the December call date for the preceding year.
i/ Less than $500,000.
NOTE: Details may not add to totals because of rounding.
"·
MARKET PERCENTAGES
AJ:!J:!licant
1/·
Sales~/
PersonalFinance
Loans
County
Cromwell
Sales
Personal
Finance ·
Loans
Combined
Personal
Loans
Sales
Finance
2.30
.14
1.53
2.98
3.82
:3.12
.38
0
3. 68
10.87
4.06
10.87
Lagrange
0
0
7.30
34.2
7.30
34.2
Marsh(ll
1.04
.19
3.44
.49
0
4.57
Elkhart
Kosciusko
r~Mu.i~)
Nobel
St. Joseph
(Se~&A.·i-fl
9JtND)
12.1
.03
13.53
8. 57
18.6
"48
!/ Item 6(e) and 6(b)(2) on the.R$port of Condition, Schedule A.
!/
Item 6(c)(2) on the Report of Condition, Schedule A.
/
4.48
8.76
5.06
18.6
12.13
14.01
@FedFRASER