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F e d e r a l r e s e r v e Ba n k OF DALLAS D allas, T ex a s, F e b ru a ry 16, 1951 THE CONDITION AND EARNINGS OF MEMBER BANKS ELEVENTH FEDERAL RESERVE DISTRICT To Member Banks o f the Eleventh Federal Reserve District: T h e g ro w th d u rin g 1950 in all m a jo r a sset and lia b ility accou n ts and in n e t p rofits o f th e m em b er banks in th e E lev en th F ederal R eserve D istrict is reflected in th e com p a ra tiv e sta tem en t o f con d ition and th e com p a ra tiv e statem en t o f ea rn in g s and exp en ses p resen ted on th e in side p ages o f th is letter. D u rin g th e y e a r tota l resou rces rose $817,885,000, refle ctin g a gen eral exp an sion in all m a jo r a sset item s. T h e m o st n ota ble g r o w th a m on g th e v a riou s a sset a ccou n ts w a s th e $375,802,000 in crea se in loans, th e la rg e st ga in o f record in a n y com p a ra ble 12 m on th s. M em ber ban k h old in g s o f ob liga tion s o f states and p olitical su bd ivision s and o f o th e r secu rities ro se $53,294,000, w hile in v est m en ts in G ov ern m en t ob liga tion s ro s e $41,983,000. M em b er banks also added su bstan tially t o th eir reserves, cash, and balan ces due fr o m o th er banks. T h e trend o f loans du rin g 1950 d id n ot co n fo rm to th e seasonal p attern n oticea ble in m o st o th e r re cen t yea rs. D u rin g th e sp rin g m on th s b oth th e am ou n t and the d u ration o f th e seasonal decline in loan s w ere less th a n usual. M oreover, in th e second h a lf o f th e y ea r loans ro se m u ch m ore sh arply th an is n orm a l f o r th a t period. T h e loan exp an sion d u rin g th e y e a r w as n o t confined to a n y p articu la r ca te g o r y o f loans o r to any one g rou p o f banks, b u t w as gen eral o v e r th e D istrict. In con tra st, h old in gs o f G overn m en t secu rities rose b y less th an h a lf th e am ou n t rep orted in 1949, as m em b er banks d ev oted g r e a te r p rop ortion s o f available fu n d s to in crea sin g loans and add in g to h old in g s o f m u n ici pal and o th er n on -G overn m en t investm en ts. D u rin g 1950, deposits o f th e m em ber banks rose $760,022,000, as com pared w ith $299,855,000 in 1949. A lth o u g h deposits declin ed slig h tly in th e first h a lf o f th e year, rapid and su stain ed expan sion o ccu rred in th e final 6 m on th s. A ft e r June, dem and d eposits o f individuals and businesses rose sh arply and, f o r th e yea r, a ccou n ted f o r a p p rox im a te ly 74 p e rce n t o f the increase in tota l d eposits. T h e in crease in in terban k deposits, a m ou n tin g to $128,204,000, w as som ew h at less th a n th e n et expan sion re p orted in 1949. On D ecem ber 31, tota l deposits w ere a re co rd $7,198,697,000. A s a resu lt o f fa v o ra b le earn in gs, sale o f n ew sto ck , g en era lly con serv ative dividend p olicies, and th e a dd ition o f seven banks to m em b ersh ip in th e F ed eral R eserve S ystem , th e tota l o f capital accou n ts o f th e D istrict’ s m em b er banks rose $46,987,000. T h is increase, w h ich w as a b o u t 62 p ercen t la rger than th e g r o w th rep orted in 1949, raised total capital accou n ts to $418,466,000 at th e end o f 1950. M em ber banks rep orted n et profits a fte r ta xes o f $41,923,000 d u rin g 1950, reflectin g an increase o f 24 p ercen t over n et p rofits o f th e p reced in g year. N et p rofits d urin g the y ea r w ere 10.0 p ercen t o f total capital accou n ts, as com pa red w ith 9.1 p ercen t in 1949. A lth o u g h total cu rre n t op e ra tin g exp en ses rose $10,278,000, o r 11.2 p ercen t, th e im p rovem en t in tota l earn in gs fr o m cu rre n t op era tion s— reflectin g p rin cip a lly th e in crease in earn in gs on loan s— w as m ore th a n tw ice as large. M ore over, n et losses and ch a rg e-offs and tra n sfers to valuation reserves w ere a p p recia b ly sm aller in 1950 th an in 1949. T a x es on n et incom e in creased $5,651,000, o r 39.6 p ercen t, o v e r th ose in 1949. Cash dividends declared b y m em b er banks in 1950 am ounted to $15,012,000, an increase o f $1,287,000 ov er 1949. Cash dividends declared am ounted to 3.6 p ercen t o f tota l ca p ital accou n ts and 35.8 p ercen t o f n et profits. C om parable figu res f o r 1949 are 3.7 p ercen t and 40.7 p ercen t, resp ectively. Y o u rs v e ry tru ly, R. R . G IL B E R T P residen t This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) C O M P A R A T IV E S T A T E M E N T O F C O N D IT IO N O F M E M B E R B A N K S E L E V E N T H F E D E R A L R E S E R V E D IS T R IC T Decem ber 30, 1950 p Item M em ber b an k s in E lev en th D istrict....... L oa n s, in clu d in g o v e r d r a f t s ..______ ___ U. S. G overn m en t ob liga tion s d ire ct and g u a ra n teed ......... ...... ......................... ......... O b ligation s o f states and p olitical sub d iv is io n s ......- ....... ........................................ O th er s e c u r itie s ............................................. T O T A L L O A N S A N D IN V E S T M E N T S T O T A L A S S E T S ............................................. Individual— D em and d e p o s it s .................... Individual— T im e d e p o sits................... . D ep osits o f U . S. G overn m en t, in clu d in g p ostal s a v in g s ............................................... D ep osits o f states and p olitical su b d iv isio n s....................................... .............. D ep osits o f b a n k s.......................... ......... O th er d ep osits.................... ...... ...... T O T A L D E P O S IT S ...... ................. T O T A L C A P IT A L A C C O U N T S ............ C ash and balances due fr o m b a n k s........ B orrow in g s fr o m F ed era l R eserv e B ank A ll o th e r b o r r o w in g s ................................... R a tio o f loan s to tota l loans and in v e st m e n ts................................................................ R a tio o f cash and exch a n ge to total d ep osits........................................................ O ctober 4, 1950 r D ecem ber 31, 1949 r 630 2,406,140,000 630 2,219,433,000 623 2,030,838,000 2,275,309,000 2,200,162,000 2,233,326,000 293,189,000 74,562,000 5,049,200,000 7,657,094,000 4,703,372,000 548,508,000 285,673,000 73,779,000 4,779,047,000 6,847,250,000 4,386,439,000 538,469,000 261,667,000 52,790,000 4,578,621,000 6,839,209,000 4,141,288,000 530,289,000 99,996,000 82,688,000 79,357,000 616,967,000 1,075,852,000 154,002,000 7,198,697,000 418,466,000 2,507,178,000 — o— --- 0---- 546,280,000 768,014,000 65,630,000 6,387,520,000 422,273,000 1,968,835,000 515,000 — o— 614,445,000 947,648,000 125,648,000 6,438,675,000 371,479,000 2,172,460,000 — o— - — 0— 4 7 .7 % 4 6 .4 % 4 4 .4 % 3 4 .8 % 3 0 .8 % 33.7 % p— Prelim inary, r— Revised. P R IN C IP A L A S S E T A N D L I A B IL IT Y IT E M S O F M E M B E R B A N K S , 1939-50 E L E V E N T H F E D E R A L R E S E R V E D IS T R IC T (I n th ou san d s o f d olla rs) Decem ber 31 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949r 1950p p— Prelim inary, r— Revised. Total D eposits 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 6,438,675 7,198,697 Total Loans 496,359 579,639 663,215 599,354 666,375 815,977 1,138,936 1,319,153 1,579,758 1,835,718 2,030,838 2,406,140 T otal Investm ents Total Loans and Investm ents Total U. S. Gov. Secs. Total Capital Accounts 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 2,547,783 2,643,060 921,689 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 4,578,621 5,049,200 279,450 294,480 369,689 939,929 1,588,403 2,149,906 2,702,604 2,246,267 2*280,836 2,122,615 2,233,326 2,275,309 167,220 175,880 183,916 188,169 200,785 222,182 253,741 292,167 318,953 342,390 371,479 418,466 C O M PAR AT IVE ST A T E M E N T OF EA R N IN G S A N D E X P E N S E S OF M E M BE R B A N K S E L E V E N T H F E D E R A L R E SE R V E DISTRICT (Am ounts in thousands of dollars) Item 1950 p In terest and dividends on secu rities........ ............. .................. ........................................... In terest and d iscou n t on loan s S ervice ch a rg es on d eposit a ccou n ts................................ A ll o th e r ea rn in g s.................................... T O T A L E A R N IN G S F R O M C U R R E N T O P E R A T IO N S Salaries and w a g e s ........................ T a xes o th e r th an n et in com e.............. ................ .................. A ll o th er exp en ses......................................................... T O T A L C U R R E N T O P E R A T IN G E X P E N S E S ....... N E T E A R N IN G S F R O M C U R R E N T O P E R A T IO N S T ota l recov eries, tra n sfe rs fr o m valu ation reserves, and p ro fits.............................................................................................. T ota l losses and ch a rg e-offs, and tr a n s fe rs to valu ation reserv es......... .................. P rofits b e fo r e in com e ta x e s ................... T axes on n et in com e ........................... N E T P R O F IT S ........................................ C ash dividends d eclared 1.............................................................. N u m b er o f b an k s............................................................. 1949 r Net Change 1950 over 194! 42,948 103,354 8,168 18,787 173,257 51,391 9,681 41,109 102,181 71,076 41,164 87,267 7,537 16,592 152,560 46,066 8,796 37,041 91,903 60,657 1,784 16,087 631 2,195 20,697 5,325 885 4,068 10,278 10,419 7,351 5,832 1,519 16,587 61,840 19,917 41,923 15,012 630 18,542 47,947 14,266 33,681 13,725 623 — 1,955 13,893 5,651 8,242 1,287 7 1—Includes interest on capital notes and debentures, p—Preliminary, r—Revised. PR IN CIPAL ITEM S OF E A R N IN G S A N D E X P E N S E S OF M E M BE R B A N K S , 1939-50 E L E V E N T H F E D E R A L R E SE R V E DISTRICT (Am ounts in thousands o f dollars) Y ear 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949r 1950» Total Earnings from Current O perations 46,535 48,376 53,716 53,973 60,829 72,343 84,576 105,947 119,929 139,551 152,560 173,257 T otal Current O perating Expenses* 31,518 33,700 37,367 38,598 40,839 46,000 53,860 62,574 73,015 83,412 91,903 102,181 Total Net T otal Losses Earnings from Current Recoveries and Operations* and P rofits2 C h arge-O ffs2 15,017 14,676 16,349 15,375 19,990 26,343 30,716 43,373 46,914 56,139 60,657 71,076 10,744 7,123 6,905 5,533 7,728 7,734 11,299 10,261 7,006 6,781 5,832 7,351 10,591 7,649 8,273 5,673 5,940 6,540 8,515 8,708 10,000 21,934 18,542 16,587 Net Profits 15,170 14,150 14,981 12,048 17,607 21,334 24,078 32,635 30,995 28,556 33,681 41,923 Cash Dividends D eclared1 6,821 7,381 7,606 7,196 7,635 8,298 9,715 11,078 11,939 13,051 13,725 15,012 Number of Member Banks 547 568 573 570 575 580 585 595 613 618 623 630 ’"Taxes paid on net incom e w ere included in expenses p rior to 1942 but fo r 1942 and subsequent years w ere 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 com parable w ith those fo r p rior years. 1 Includes interest on capital notes and debentures. 2 B eginning w ith 1948 includes tran sfers from and to reserves, r— Revised. p— Prelim inary.
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