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Federal reserve bank OF DALLAS Dallas, Texas, February 8,1952 THE CONDITION AND EARNINGS OF MEMBER BANKS ELEVENTH FEDERAL RESERVE DISTRICT To the Member Banks of the Eleventh Federal Reserve District: The principal categories of assets and liabilities of all member banks in the Eleventh Federal Reserve District showed further increases during 1951, but net profits were somewhat less than in 1950. These changes are reflected in the comparative statement of condition and the comparative statement of earnings and expenses presented on the inside pages of this letter. Total resources of the 638 member banks in the District amounted to $8,267,661,000 on Decem ber 31,1951, which represents an increase of $610,805,000, or 8 percent, during the year. Loans and investments of these banks rose $289,762,000, while cash, reserves, and balances due from banks increased $292,390,000. The principal changes in liabilities include increases of $544,418,000 in deposits and $45,625,000 in capital accounts. These increases in 1951 in major asset and liability accounts are somewhat smaller than those reported in the preceding year. The sustained high level of economic activity, unusually large agricultural production, and a rising demand for products for defense combined to create a strong loan demand throughout the year. Despite these conditions, however, the increase in loans was held down to $163,108,000, as compared with $375,350,000 in 1950. Moreover, the country banks of the District, which hold some what less than one-half of member bank loans, accounted for more than nine-tenths of the total loan increase. Commercial, industrial, and agricultural loans rose approximately $124,000,000 during the year, while the category which includes consumer loans increased about $50,000,000. Most other types of loans showed minor declines. Member bank holdings of Government securities increased $90,741,000 during the year and on December 31 totaled $2,365,676,000, while holdings of municipals and other state and local govern ment issues increased $30,725,000 to a total of $324,387,000. The proportion of total earning assets represented by Government securities was approximately the same—44 percent— in 1951 as a year earlier. The expansion of $544,418,000 in deposits of the District’s member banks was distributed principally between demand deposits of individuals, which increased $356,835,000, and interbank deposits, which rose $143,591,000. The latter was largely a year-end development and probably represents a considerable amount of “ deposit inflation.” On the other hand, the growth in individual and business deposits reflects principally the expansion in loans and investments, the high levels of production and business activity that prevailed, and net Treasury expenditures in the District. The increase of $42,852,000 in time deposits of individuals, partnerships, and corporations is particularly notable, in that it compares with an increase of only $18,223,000 in 1950. Banks of the District continued to strengthen capital accounts through the sale of new stock, conservative dividend policies, and the transfer of a substantial part of earnings to surplus. On December 31, total capital accounts were $464,180,000, an increase of $45,625,000 or about the same as in 1950. Member banks reported net profits after taxes of $39,428,000 during 1951, which represents a decrease of about 6 percent from the net profits of 1950. Although net earnings from current operations showed an increase of more than 10 percent, larger net losses, charge-offs, and transfers to valuation reserves and a marked increase in income taxes were more than offsetting. Yours very truly, R. R. GILBERT 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 Item Member banks in Eleventh District____ Loans, including overdrafts___________ U. S. Government obligations, direct and guaranteed_________________________ Obligations of states and political subdivisions___________________________ Other securities______________________ TOTAL LOANS AND INVESTMENTS TOTAL ASSETS_____________________ Individual— Demand deposits__________ Individual— Time deposits_____________ Deposits of U. S. Government, including postal savings______________________ Deposits of states and political subdivisions__________________ ________ 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 investments______________________________ Ratio of cash and exchange to total deposits____________________________ December 31, 1951P December 30, 1950* 633 2,569,296,000 October 10, 1951p 632 2,447,940,000 630 2,406,188,000 2,365,676,000 2,184,181,000 2,274,935,000 324,387,000 79,657,000 5,339,016,000 8,267,661,000 5,060,204,000 591,364,000 317,674,000 82,002,000 5,031,797,000 7,503,043,000 4,764,123,000 573,680,000 293,662,000 74,469,000 5,049,254,000 7,656,856,000 4,703,369,000 548,512,000 128,939,000 148,108,000 100,122,000 588,728,000 1,219,326,000 154,324,000 7,742,885,000 464,108,000 2,799,452,000 — o— 14,000 510,707,000 934,762,000 64,275,000 6,995,655,000 467,158,000 2,363,864,000 — o— 1,372,000 616,963,000 1,075,735,000 153,766,000 7,198,467,000 418,483,000 2,507,062,000 — o— 21,000 48.1% 48.6% 47.7% 36.2% 33.8% 34.8% p— Preliminary, r— Revised. PRINCIPAL ASSET AND LIABILITY ITEMS OF MEMBER BANKS, 1939-51 ELEVENTH FEDERAL RESERVE DISTRICT (In thousands of dollars) December 31 Total Deposits Total Loans Total Investments Total Loans and Investments Total U. S. Gov. Secs. Total Capital Accounts 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950r 1951p 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 7,198,467 7,742,885 496,359 579,639 663,215 599,354 666,375 815,977 1,138,936 1,319,153 1,579,758 1,835,718 2,030,838 2,406,188 2,569,296 425,330 445,887 532,411 1,092,898 1,726,506 2,272,535 2,863,853 2,472,547 2,562,907 2,433,464 2,547,783 2,643,066 2,769,720 921,689 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 5,049,254 5,339,016 279,450 294,480 369,689 939,929 1,588,403 2,149,906 2,702,604 2,246,267 2,280,836 2,122,615 2,233,326 2,274,935 2,365,676 167,220 175,880 183,916 188,169 200,785 222,182 253,741 292,167 318,953 342,390 371,479 418,483 464,108 r— Revised, p— Preliminary. COMPARATIVE STATEMENT OF EARNINGS AND EXPENSES OF MEMBER BANKS ELEVENTH FEDERAL RESERVE DISTRICT (Amounts in thousands of dollars) 1950r Net Change 1951 over 1950 43,327 103,012 8,171 18,914 173,424 51,417 9,763 40,795 101,975 71,449 1,807 15,917 572 1,136 19,432 6,558 672 4,552 11,782 7,650 7,399 — 442 16,932 61,916 19,921 41,995 15,081 630 3,669 3,539 6,106 — 2,567 2,223 3 1951p Item Interest and dividends on securities__________________ 45,134 Interest and discount on loans_______________________ 118,929 8,743 Service charges on deposit accounts__________________ 20,050 All other earnings___________________________________ TOTAL EARNINGS FROM CURRENT OPERATIONS 192,856 Salaries and wages__________________________________ 57,975 Taxes other than net income_________________________ 10,435 All other expenses__________________________________ 45,347 TOTAL CURRENT OPERATING EXPENSES_______ 113,757 NET EARNINGS FROM CURRENT OPERATIONS__ 79,099 Total recoveries, transfers from valuation reserves, and 6,957 profits___________________________________________ Total losses and charge-offs, and transfers to valuation reserves _________________________________________ 20,601 Profits before income taxes___________________________ 65,455 Taxes on net income_________________________________ 26,027 39,428 NET PROFITS_____________________________________ Cash dividends declared1 _____________________________ 17,304 633 Number of banks___________________________________ 1—Includes interest on capital notes and debentures. p— Preliminary, r— Revised. PRINCIPAL ITEMS OF EARNINGS AND EXPENSES OF MEMBER BANKS, 1939-51 ELEVENTH FEDERAL RESERVE DISTRICT (Amounts in thousands of dollars) Year 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950r 1951p Total Earnings from Current Operations 46,535 48,376 53,716 53,973 60,829 72,343 84,576 105,947 119,929 139,551 152,560 173,424 192,856 Net Total Current Earnings Operating from Current Expenses1 Operations1 31,518 33,700 37,367 38,598 40,839 46,000 53,860 62,574 73,015 83,412 91,903 101,975 113,757 15,017 14,676 16,349 15,375 19,990 26,343 30,716 43,373 46,914 56,139 60,657 71,449 79,099 Total Total Losses and Recoveries and Profits2 Charge-Offs2 10,744 7,123 6,905 5,533 7,728 7,734 11,299 10,261 7,006 6,781 5,832 7,399 6,957 10,591 7,649 8,273 5,673 5,940 6,540 8,515 8,708 10,000 21,934 18,542 16,932 20,601 Net Profits Cash Dividends Declared3 15,170 14,150 14,981 12,048 17,607 21,334 24,078 32,635 30,995 28,556 33,681 41,995 39,428 6,821 7,381 7,606 7,196 7,635 8,298 9,715 11,078 11,939 13,051 13,725 15,081 17,304 Number of Member Banks 547 568 573 570 575 580 585 595 613 618 623 630 633 1 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. 2 Beginning with 1948 includes transfers from and to reserves. 3 Includes interest on capital notes and debentures, r— Revised. p— Preliminary.
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