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F ederal Reserve Ban k of Dallas
DALLAS, TEXAS

75222

Circular No. 78-107
August 17, 1978

CONDITION AND INCOME OF MEMBER BANKS
ELEVENTH FEDERAL RESERVE DISTRICT
TO ALL MEMBER BANKS
IN THE ELEVENTH FEDERAL RESERVE DISTRICT:
Member banks in the Eleventh District experienced sharp growth in both loans and
deposits in 1977— especially in the last half of the year—as economic activity continued to
strengthen. As loan demand picked up, banks shifted a considerable portion of their portfolios
away from generally lower-yielding securities— mainly short-term issues of the U.S. Govern­
ment— into loans. On balance, the rate of increase in total investments was only about half
as large as the gain a year earlier. Total deposits increased at the fastest rate since 1972. But
the growth in deposits trailed the sharp rise in total loans, and member banks increased their
borrowings somewhat.
Total loans at member banks rose 14.2 percent last year. Loans to commercial and
industrial firms increased $1.5 billion— 16 percent—despite a weak first quarter. Slower
growth in profits and moderate growth in inventories and plant and equipment expenditures
increased considerably business needs for external financing.
Real estate loans at member banks increased nearly $1.3 billion, or 33 percent, last year
as District construction activity remained strong. Loans to finance construction and land devel­
opment projects rose 54 percent and accounted for about half the total increase in real estate
lending. But residential mortgages— especially those secured by one-to four-family properties
—also rose appreciably.
Consumers continued to borrow heavily last year, and their outstanding debt to member
banks in the District rose $1.0 billion. About half of the increase reflected the financing of
private passenger cars, but the largest percentage growth resulted from expanded use of
retail credit cards.
District member banks continued to increase their holdings of both U.S. Government
securities and municipal obligations in the first half of 1977. Some investment portfolio adjust­
ments were evident in the second half, however, as business loan demand strengthened con­
siderably and the outlook for bank profits improved. In the last six months of 1977, member
banks liquidated a small volume of U.S. Government securities and acquired a modest amount
of municipal issues.
Total deposits at member banks in the District expanded 12.1 percent last year, despite a
small decline in the first half. The sharpest gain occurred in time deposits—mainly because of
a large increase in the volume of large negotiable certificates of deposit outstanding late last
year. By that time, market interest had risen to the point that bank rates on most other time
and savings deposits were noncompetitive. As loan demand was expanded rapidly, banks found
it necessary to bid more aggresively for large CD funds.
N et income of member banks in the District rose $79 million to reach $499 million in 1977.
That 18.9-percent increase exceeded the 14.2-percent gain in 1976 and was well above the 1.6percent rise in 1975. The sharper growth in income before taxes caused income tax liabilities
to increase 39.8 percent last year, in contrast to the 29.3-percent rise a year earlier.
Total operating income was up 15.2 percent in 1977— somewhat less than the 17.7-percent
growth of the previous year. The lower rate of increase last year mainly reflected a slightly
slower growth in loans and a slightly lower average level of business loan rates. Although
bank lending rates at the end of 1977 were higher than at any time in the previous year, those
rates generally remained lower than the comparable year-earlier level until September. Inter­
est and dividends on securities rose 10.2 percent last year— or about half as much as in the
previous year. The lower growth rate in 1977 reflected both the slowdown in security acqui­
sitions and the greater reliance on municipal obligations with generally lower pretax yields.
Total operating expenses rose 13.7 percent in 1977. That was well below the 18.1-percent
increase a year earlier and mainly resulted from slower growth in interest paid on time and
savings deposits.
With total loans increasing more rapidly than deposits last year, the loan-deposit ratio
at member banks in the District rose from 68.2 percent in 1976 to 69.4 percent at the end of
1977. And the ratio of total capital accounts to risk assets declined slightly to 9.0 percent.
The number of member banks continued to increase slightly in 1977.
Sincerely yours,
Ernest T. Baughman
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)
Dec. 31,
1977p

Item

June 30,
1977

Dec. 31,
1976

Loans (gross), including overdrafts1 ___________________ 31,050,466
27,758,936
27,186,126
U. S. Treasury se cu ritie s___________________ ____ ______ 4,848,520
4,909,159
4,507,564
Obligations of States and political subdivisions................ - 6,681,543
6,333,905
5,990,192
Other securities (including trading account securities) .... 1,760,799
1,719,784
1,965,486
TOTAL LOANS (GROSS) AND INV EST M E N T S_______44,341,328
40,721,784
39,649,368
Cash and balances due from b a n k s________________ ____ _ 8,445,861
6,666,638
7,862,482
TOTAL ASSETS ________ _____________________ _________________ ______ 54,682,286 49,021,040 48,935,880
Individual — Demand deposits _________________________ 16,033,029
13,504,274
14,475,810
Individual — Time and savings d e p o sits______ __________ 18,465,685
17,017,424
16,333,535
Deposits of U.S. Government __________________ __ ____
400,795
233,413
244,041
Deposits of States and political subdivisions________ ___ 5,996,531
5,810,811
5,100,247
Deposits of b a n k s __________________________ ___ _______ 3,309,891
2,727,349
3,268,927
Certified and officers’ checks, e t c ............. ...... ................. ........
511,917
404,443
454,614
39,697,714
39,877,174
TOTAL D E PO SITS________________________ __ ________ 44,717,848
TOTAL CAPITAL ACCOUNTS.............. ............................... 3,717,640
3,561,804
3,357,151
Borrowings from Federal Reserve B a n k __________________________ 23,900 30,300
1,937
4,519,306
4,576,062
All other borrowings _________ ___ _____________________ 4,773,179
Ratio of loans to total d ep osits___________________________________ 69.4% 69.9%
68.2%
Ratio of cash and balances due from banks
to total d ep osits_____________________ ____ _____________________ 18.9% 16.8%
19.7%
Ratio of total capital accounts to risk assets (total assets
less Government securities and cash assets) ___________________ 9.0%
9.5%
9.2%
Number of member b a n k s__ _____________________________________695
692
688
1 Includes Federal funds sold,
p—Preliminary.

PRINCIPAL ASSET AND LIABILITY ITEMS OF MEMBER BANKS
ELEVENTH FEDERAL RESERVE DISTRICT
(In thousands of dollars)

Year-end

1968
1969
1970
1971
1972
1973
1974
1975
1976
1977p

Total
Deposits

Total
Loans
(Gross)1

Total
Investments

Total Loans
(Gross) and
Investments

Total U.S.
Treasury
Securities

Total
Capital
Accounts

19,603,344
19,403,693
21,310,875
24,105,203
27,533,316
30,125,994
32,782,571
35,846,988
39,877,174
44,717,848

11,370,944
12,138,578
13,496,198
15,223,814
18,043,657
20,861,033
21,897,329
23,553,994
27,186,126
31,050,466

5,744,992
5,322,856
6,196,825
7,244,416
8,223,521
8,619,969
9,237,983
11,055,096
12,463,242
13,290,862

17,115,936
17,461,434
19,693,023
22,468,230
26,267,178
29,481,002
31,135,312
34,609,090
39,649,368
44,341,328

2,649,477
2,148,747
2,194,238
2,365,542
2,389,335
2,121,498
2,026,000
3,357,495
4,507,564
4,848,520

1,630,114
1,730,892
1,872,565
2,002,638
2,222,533
2,484,022
2,765,183
3,030,562
3,357,151
3,717,640

1 Includes Federal funds sold,
p—Preliminary.

COMPARATIVE STATEMENT OF INCOME, EXPENSES, AND DIVIDENDS
OF MEMBER BANKS
ELEVENTH FEDERAL RESERVE DISTRICT
(Amounts in thousands of dollars)
Item

1976

Net Change

686,598
2,340,938
73,923
192,439
3,293,898
517,698
1,405,644
859,960
2,783,302

69,772
389,927
11,581
29,121
500,401
69,505
174,012
136,636
380,153

510,596
99,793
6,340
2,019
419,162
151,802
687

120,248
39,671
-1,877
646
79,346
19,340
8

1977p

Interest and dividends on securities
___ 756,370
Interest and fees on loans
2,730,865
Service charges on deposit accounts
___
85,504
All other operating income
... . 221,560
TOTAL OPERATING INCOME
___ 3,794,299
Salaries and employee benefits
_
_ 587,203
Interest on time and savings d ep o sits_______________ _ 1,579,656
_
All other operating expenses
_
.___ 996,596
___3,163,455
TOTAL OPERATING EXPENSES
_
INCOME BEFORE INCOME TAXES AND
630,844
SECURITIES GAINS OR LOSSES __ ____________....
_
Applicable income taxes . ...
. __ 139,464
_
4,463
_ __
Net securities gains or lo ss e s _______ ________
2,665
Extraordinary items and other charges or credits __
NET INCOM E____________
..
___ 498,508
Cash dividends declared___________________ ______ _
_ 171,142
Number of member b a n k s ______________
......
695
p—Preliminary.

PRINCIPAL ITEMS OF INCOME, EXPENSES, AND DIVIDENDS
OF MEMBER BANKS
ELEVENTH FEDERAL RESERVE DISTRICT
(Amounts in thousands of dollars)

Year

Total
Operating
Income

Total
Operating
Expenses

Income before
Income Taxes
and Securities
Gains or Losses

Net
Income

Cash
Dividends
Declared

1968
1969
1970
1971
1972
1973
1974
1975
1976
1977p

1,035,225
1,250,222
1,408,333
1,508,729
1,687,789
2,246,807
2,859,153
2,798,455
3,293,898
3,794,299

765,580
960,470
1,093,905
1,205,908
1,350,622
1,855,069
2,398,445
2,356,933
2,783,302
3,163,455

269,645
289,752
314,428
302,821
337,167
391,738
460,708
441,522
510,596
630,844

152,949
189,681
219,794
236,796
263,860
302,415
361,217
367,057
419,162
498,508

78,065
72,812
82,034
94,471
95,537
93,171
96,422
139,279
151,802
171,142

p—Preliminary.

Number
of
Member
Banks

651
640
634
633
633
642
658
673
687
695

CHANGES IN LOANS AND DEPOSITS AT MEMBER BANKS
ELEVENTH FEDERAL RESERVE DISTRICT
20 --------------------------------------------------------------------------------------------

1967

1969

1971

1973

1975

1977

CHANGES IN OPERATING EXPENSES AND INCOME OF MEMBER BANKS
ELEVENTH FEDERAL RESERVE DISTRICT
4 0 --------------------------------------PERCENT CHANG E (Y e a r to Y e a r)

1967

1969

1971

1973

1975

1977


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102