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F ederal r e se r v e Bank O F DALLAS Dallas, Texas, March 1,1954 THE C O N D IT IO N AND EARNINGS OF MEMBER BANKS ELEVENTH FEDERAL RESERVE DISTRICT To the Member Banks in the Eleventh Federal Reserve District: Total resources, loans, investments, deposits, and capital accounts of member banks in the Eleventh Federal Reserve District rose to record end-of-year levels in 1953. Increases in most of these major categories of assets and liabilities were substantial but somewhat less than in 1952. Net profits of member banks rose during the year to a near-record level. 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. Banking trends in 1953 developed within an atmosphere of marked strength in business activity during the first 4 or 5 months of the year and a moderate easing among many important economic indicators during the last 6 months. Consequently, credit demands at the District’s member banks were rather strong through June, with loans resisting seasonal downward pressures early in the year. Later in the year, however, when financing requirements of a seasonal nature usually tend to accentuate other credit demands, loan expansion was moderate as compared with other recent years. Loans o f member banks in the District rose $241,317,000, or 8.4 percent, during 1953 to a total o f $3,098,248,000 on December 31, with reserve city member banks accounting for about 60 percent o f the growth. This expansion, which compares with an increase in 1952 of $286,502,000, or 11.1 percent, was weighted heavily by a sharp October-December rise in loans directly guaranteed by the Commodity Credit Corporation. Consumer-type loans increased substantially but somewhat less than in 1952; the gain in commercial and industrial loans was markedly smaller than a year earlier. Investments of member banks rose $14,498,000, or somewhat less than 1 percent, during 1953. Although holdings o f Government securities expanded in the last 6 months, there was a relatively small net reduction in these portfolios during the year. Investments in obligations o f states and political subdivisions increased 10.8 percent. On December 31, total investments amounted to $2,887,374,000, or 48 percent of total loans and investments. Deposit trends during the year included a gradual decline from January to August, followed by a sharp rise at reserve city member banks and a more modest gain at country member banks. Reflecting these changes, total deposits increased $364,875,000, or 4.5 percent, to a total o f $8,556,406,000 on December 31. This increase compares with the expansion of $448,733,000, or 5.8 percent, in 1952. Time deposits of individuals and businesses rose 18.1 percent in 1953 and accounted for one-third o f total deposit growth. Other notable gains included $112,096,000, or 17.8 percent, in deposits o f states and political subdivisions and $56,979,000, or 1.1 percent, in demand accounts of individuals, partnerships, and corporations. Member banks added $41,899,000, or 8.1 percent, to their total capital accounts in 1953, reflecting favorable earnings, the sale of new capital stock, and conservative dividend policies. On December 31, total capital accounts amounted to $558,175,000, or 15 percent of risk assets. Net profits o f the District’s member banks in 1953 totaled $41,789,000, or 1.8 percent above 1952. Total earnings from current operations rose $19,218,000, or 8.7 percent, virtually all o f which was absorbed by higher operating expenses and a rise in taxes on net income. Yours very truly, WATROUS H. IRONS 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 (Amounts in thousands of dollars) December 31, September 30, December 31, 1953r 1952r 1953 p Item Loans, including overdrafts........................... ................. U. S. Government obligations, direct and guaranteed.. Obligations o f states and political subdivisions............ Other securities ....... ...................................................... . TOTAL LOANS AND INVESTMENTS................... Cash and balances due from banks...... ........................ TOTAL ASSETS .............................................................. Individual — Demand deposits....................................... Individual — Time deposits ........................................... Deposits o f U. S. Government, including postal sa v in gs............................. .............................................. Deposits of states and political subdivisions................ Deposits o f banks....................... .................................... Other deposits........................ .................................... ...... TOTAL D E P O SIT S ......................................................... TOTAL CAPITAL ACCOUNTS ...................... Borrowings from Federal Reserve Bank.....___ ______ All other borrow ings..................... .................................. Ratio of loans to total deposits............................... ....... Ratio of cash and balances due from banks to total deposits.......................................................... . Ratio o f total capital accounts to risk assets (total assets less Government securities and cash assets) Number o f banks................................................................ 3,098,248 2,427,524 381,337 78,513 5,985,622 3,040,349 9,184,766 5,345,162 797,558 2,891,624 2,337,526 372,467 70,091 5,671,708 2,408,486 8,216,939 5,022,024 768,533 2,856,931 2,446,220 344,150 82,506 5,729,807 2,901,275 8,777,554 5,288,183 675,240 172,491 743,225 1,341,480 156,490 8,556,406 558,175 — 0— — 0— 36.2% 185,129 593,907 940,930 73,016 7,583,539 564,783 13,740 1,064 38.1% 177,215 631,129 1,275,768 143,996 8,191,531 516,276 30 477 34.9% 35.5% 31.8% 35.4% 15.0% 635 16.3% 635 15.1% 634 p— Preliminary, r— Revised. PRINCIPAL ASSET AND LIABILITY ITEMS OF MEMBER BANKS 1945, 1950-53 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 1945 1950 1951 1952r 1953p 5,738,464 7,198,467 7,742,798 8,191,531 8,556,406 1,138,936 2,406,188 2,570,429 2,856,931 3,098,248 2,863,853 2,643,066 2,768,680 2,872,876 2,887,374 4,002,789 5,049,254 5,339,109 5,729,807 5,985,622 2,702,604 2,274,935 2,362,881 2,446,220 2,427,524 253,741 418,483 464,027 516,276 558,175 r— Revised, p— Preliminary. COMPARATIVE STATEMENT OF EARNINGS AND EXPENSES OF MEMBER BANKS ELEVENTH FEDERAL RESERVE DISTRICT (Amounts in thousands of dollars) 1952r Net Change 1953 over 1952 51,798 136,064 9,264 22,685 219,811 65,206 12,174 53,266 130,646 89,165 5,309 11,606 995 1,308 19,218 7,344 522 7,536 15,402 3,816 5,955 2,565 20,882 74,238 33,180 41,058 20,006 634 1,869 4,512 3,781 731 968 1 1953 p Item Interest and dividends on securities____________________ 57,107 Interest and discount on loans— ______________________ 147,670 Service charges on deposit accounts___________________ 10,259 All other earn in gs------------------------------------------------------- 23,993 TOTAL EARNINGS FROM CURRENT OPERATIONS 239,029 Salaries and wages ----------------------------------------------------- 72,550 Taxes other than net income----------------------------------------- 12,696 All other expenses------------------------------------------------------- 60,802 TOTAL CURRENT OPERATING EXPENSES_______ 146,048 NET EARNINGS FROM CURRENT OPERATIONS— 92,981 Total recoveries, transfers from valuation reserves, and profits ---------------------------------------------------------8,520 Total losses and charge-offs, and transfers to valuation reserves ------------------------------------------------ 22,751 Profits before income ta x e s----------------------------------------- 78,750 Taxes on net income..--------------------------------------------------- 36,961 41,789 NET P R O F IT S _______________________________________ Cash dividends declared1 -------------------------------------- ----20,974 685 Number of b a n k s -------------------------------------------------------i Includes interest on capital notes and debentures, p— Preliminary, r— Revised. PRINCIPAL ITEMS OF EARNINGS AND EXPENSES OF MEMBER BANKS 1945, 1950-53 ELEVENTH FEDERAL RESERVE DISTRICT (Amounts in thousands o f dollars) Year 1945 1950 1951 1952r 1953p Total Earnings from Current Operations Total Current Operating Expenses Net Earnings from Current Operations 84,576 173,424 193,010 219,811 239,029 53,860 101,975 112,833 130,646 146,048 30,716 71,449 80,177 89,165 92,981 Total Total Losses Recoveries and and Profits1 C harge-Offs1 11,299 7,399 6,172 5,955 8,520 1 Beginning with 1948 includes transfers from and to reserves. 2 Includes interest on capital notes and debentures, r— Revised. p— Preliminary. 8,515 16,932 20,191 20,882 22,751 Net Profits Cash Dividends Declared2 Number of Member Banks 24,078 41,995 39,393 41,058 41,789 9,715 15,081 17,531 20,006 20,974 585 630 633 634 635
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