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FEDERAL RESERVE BANK OF DALLAS Dallas, Texas, February 28,1950 THE CONDITION AND EARNINGS OF MEMBER BANKS ELEVENTH FEDERAL RESERVE DISTRICT To Member Banks of the Eleventh Federal Reserve D istrict: The comparative statement of condition and the comparative statement of earnings and expenses of all member banks in the Eleventh Federal Reserve District, presented on the inside pages of this letter, show a further growth in all major asset and liability accounts and an increase in net profits during 1949. An expansion of total loans amounting to $195,000,000 and additional investments in Government securities totaling more than $111,000,000 account for virtually all of the $809,000,000 increase in the loans and investments of the District’s member banks during 1949. Changes in holdings of obligations of states and political subdivisions and of other securities were not significant. The trend of loans tended to move in response to the strength of business activity, declining rather steadily until midsummer, but then rising sharply during the last quarter of the year to reach a year-end record level of $2,030,000,000. The increase in investment in Government securities was an outgrowth of the combination of lower reserve requirements, comparatively easy money market con ditions, and a declining loan demand during the first seven months of 1949. On December 31 the ag gregate Government securities portfolio of the District’s member banks amounted to $2,234,000,000. Total deposits of member banks were $6,439,000,000 on December 31, representing a record year-end total and an increase of $300,000,000 during the year—a much larger increase than occurred during 1948. A rapid expansion of deposits during the last quarter of the year was responsible for the record total. Appraisal of the substantial growth in deposits, however, should be tempered some what by the fact that interbank deposits, which declined during 1948, rose during 1949 by $138,000,000. Moreover, although demand deposits of individuals, partnerships, and corporations rose during 1949, the amount of the increase, $86,000,000, was approximately equal to the increase of $87,000,000 reported during the preceding year. The sale of new stock, favorable earnings, and generally conservative dividend policies enabled member banks to add more than $29,000,000 to their total capital accounts during 1949. This in crease, which raised the total capital accounts of the District’s member banks to $372,000,000, was more than 20 percent larger than the $24,000,000 increase reported in 1948. Member banks reported net profits after taxes of $33,700,000 during 1949, an increase of $5,100,000 over profits of the preceding year. Net profits during 1949 also represented a slightly larger percentage of total capital accounts than in 1948, the increase being from 8.34 percent in 1948 to 9.06 percent in 1949. This improvement in the profits of the District’s member banks was principally the result of an increase in total earnings from current operations amounting to $13,300,000 as compared with an increase in total current operating expenses of $8,500,000; in addition, smaller net losses and charge-offs and transfers to valuation reserve accounts contributed to the increase in profits as compared with those of 1948. Cash dividends declared in 1949 amounted to $13,800,000, an increase of about $700,000 over declarations in 1948. During 1949, however, cash dividends declared represented a smaller percent age of net profits and of total capital accounts than in 1948, the comparative figures being 40.9 percent of net profits and 3.7 percent of total capital accounts in 1949 and 45.7 percent and 3.8 per cent, respectively, in 1948. Yours very truly, R. R. G IL B E R T President This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) COMPARATIVE STATEMENT OF CONDITION OF MEMBER BANKS ELEVENTH FEDERAL RESERVE DISTRICT December 31, Member banks in Eleventh District....... Loans, including overdrafts..................... U. S. Government obligations direct and guaranteed.............................................. Obligations of states and political sub divisions................................................. Other securities_______;.......................... TOTAL LOANS AND INVESTMENTS Individual— Demand deposits.................. Individual—Time deposits........................ Deposits of U. S. Government, including postal savings......................................... Deposits of states and political sub divisions................................................. Deposits of banks........... ........ ............. Other Deposits........... ..... ......................... TOTAL DEPOSITS - .... ......... ................ TOTAL CAPITAL ACCOUNTS......... Cash and balances due from banks......... Borrowings from Federal Reserve Bank All other borrowings................................: Ratio of loans to total loans and invest ments...................................................... Ratio of cash and exchange to total deposits.................................................. November 1, December 31, 1949 p Item 1949* 1948r 623 2,030,411,000 623 1,884,196,000 618 1,835,718,000 2,233,643,000 2,235,172,000 2,122,615,000 261,632,000 52,819,000 4,578,505,000 4,141,289,000 530,891,000 262,144,000 52,688,000 4,434,200,000 4,059,990,000 525,348,000 249,464,000 61,385,000 4,269,182,000 4,055,431,000 506,314,000 79,354,000 71,643,000 71,243,000 613,841,000 947,648,000 125,756,000 6,438,779,000 371,606,000 2,172,456,000 —o— — o— 566,673,000 756,580,000 51,770,000 6,032,004,000 378,110,000 1,915,976,000 401,000 105,000 562,890,000 810,089,000 132,853,000 6,138,820,000 342,390,000 2,164,652,000 — o— —o— 44.3% 42.5% 43.0% 33.7% 31.8% 35.3% r—Revised, p—Preliminary. PRINCIPAL ASSET AND LIABILITY ITEMS OF MEMBER BANKS, 1939-49 ELEVENTH FEDERAL RESERVE DISTRICT (In thousands of dollars) December 31 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948r 1949p r— Revised, p— Preliminary. Total Deposits Total Loans Total Investments Total Loans and Investments Total U.S. Gov. Secs. Total Capital Accounts 1,576,444 1,738,390 2,051,770 2,867,889 3,557,172 4,521,001 5,738,464 5,385,973 5,940,501 6,138,820 6,438,779 496,359 579,639 663,215 599,354 666,375 815,977 1,138,936 1,319,153 1,579,758 1,835,718 2,030,411 425,330 445,887 532,411 1,092,898 1,726,506 2,272,535 2,863,853 2,472,547 2,562,907 2,433,464 2,548,094 921,689 1,025,526 1,195,626 1,692,252 2,392,881 3,088,512 4,002,789 3,791,700 4,142,665 4,269,182 4,578,505 279,450 294,480 369,689 939,929 1,588,403 2,149,906 2,702,604 2,246,267 2,280,836 2,122,615 2,233,643 167,220 175,880 183,916 188,169 200,785 222,182 253,741 292,167 318,953 342,390 371,606 COMPARATIVE STATEMENT OF EARNINGS AND EXPENSES OF MEMBER BANKS ELEVENTH FEDERAL RESERVE DISTRICT (Am ounts in thousands o f dollars) Item 1949P 41,325 Interest and dividends on securities___________________ 87,269 Interest and discount on loans________________________ Service charges on deposit accounts___________________ 7,537 All other earnings___________________________________ 16,673 TOTAL EARNINGS FROM CURRENT OPERATIONS 152,804 Salaries and wages__________________________________ 46,067 Taxes other than net income__________________________ 8,795 All other expenses_______________ ___________________ 37,088 TOTAL CURRENT OPERATING EXPENSES_______ 91,950 60,854 NET EARNINGS FROM CURRENT OPERATIONS Total recoveries, transfers from valuation reserves, and profits_____________________________________________ 5,717 Total losses and charge-offs, and transfers to valuation reserves___________________________________________ 18,653 Profits before income taxes___________________________ 47,918 Taxes on net income_________________________________ 14,261 NET PROFITS______________________________________ 33,657 Cash dividends declared1 _____________________________ 13,757 Number of banks____________________________________ 623 1948r Net Change 1949 over 1941 39,496 77,437 7,008 15,610 139,551 41,241 7,726 34,445 83,412 56,139 1,829 9,832 529 1,063 13,253 4,826 1,069 2,643 8,538 4,715 6,781 — 1,064 21,934 40,986 12,430 28,556 13,051 618 — 3,281 6,932 1,831 5,101 706 5 1—Includes interest on capital notes and debentures, r—Revised, p— Preliminary. PRINCIPAL ITEMS OF EARNINGS AND EXPENSES OF MEMBER BANKS, 1939-49 ELEVENTH FEDERAL RESERVE DISTRICT (Am ounts in thousands o f dollars) Year 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948r 1949p Total Earnings from Current Operations Total Current Operating Expenses* 46,535 48,376 53,716 53,973 60,829 72,343 84,576 105,947 119,929 139,551 152,804 31,518 33,700 37,367 38,598 40,839 46,000 53,860 62,574 73,015 83,412 91,950 Net Total Total Earnings Recoveries Losses from Current and Profits2 and Operations* 15,017 14,676 16,349 15,375 19,990 26,343 30,716 43,373 46,914 56,139 60,854 Net Profits Charge-Offs2 10,744 7,123 6,905 5,533 7,728 7,734 11,299 10,261 7,006 6,781 5,717 10,591 7,649 8,273 5,673 5,940 6,540 8,515 8,708 10,000 21,934 18,653 Cash Dividends Declared1 Number of Member Banks 15,170 14,150 14,981 12,048 17,607 21,334 24,078 32,635 30,995 28,556 33,657 6,821 7,381 7,606 7,196 7,635 8,298 9,715 11,078 11,939 13,051 13,757 547 568 573 570 575 580 585 595 613 618 623 *Taxes paid on net income were included in expenses prior to 1942 but for 1942 and subsequent years were treated as a deduction from total profits; hence, the data on current operating expenses and net earnings from current operations after 1941 are not strictly comparable with those for prior years. 1 Includes interest on capital notes and debentures. 2 Beginning with 1948 includes transfers from and to reserves. r— Revised, p— Preliminary.
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