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federal reserve Bank of D allas DALLAS, TEXAS 75222 Circular No. 71-170 July 29, 1971 CONDITION AND INCOME OF MEMBER BANKS ELEVENTH FEDERAL RESERVE DISTRICT To All Member Banks in the Eleventh Federal Reserve District Total credit and net income increased substantially during 1970 at member banks in the Eleventh Federal Reserve District. These increases reflected mainly sizeable deposit inflows and the relatively high interest rates prevailing over much of the year. But loan demand at banks was rather modest, as was the pace of economic activity generally, and banks employed a large portion of the deposit inflows to increase their holdings of securities — both to rebuild depleted liquidity positions and to take advantage of attractively priced long-term securities. Total credit outstanding advanced $2.2 billion during 1970, or an increase of 12.8 percent. This was the largest increase in credit for any year in the postwar period. And while total loans outstanding rose by $1.4 billion, or 11.2 percent, nearly two-thirds of this increase represented loans to financial institutions, largely in the form of Federal funds sales to other commercial banks. Loan demands from other sectors of the economy were quite modest. Commercial and industrial loans rose by 4.5 percent, real estate loans by 2.6 percent, and agricultural loans by .3 percent. Outstanding loans associated with credit card plans doubled, but declines in other consumer loans more than offset this increase. In view of the lackluster loan demand and the sizable inflow of deposits, District member banks increased their holdings of securities by 16.4 percent, again the largest annual increase in the postwar period. About half of this advance represented net acquisitions of obligations of states and political subdivisions. With the large volume of such securities coming to market, the yields of these securities were quite attractive. Banks also added substantially to their holdings of other securities, with the exception of U.S. Government obligations which rose only nominally. Total deposits at District member banks rose by $1.9 billion during 1970, for nearly a 10percent increase. N et inflows of time and savings deposits accounted for almost two-thirds of this advance. Depostis of the U.S. Government and of state and political subdivisions also rose fairly rapidly. Demand deposits of individuals, however, increased only by a relatively small amount. Net income of District member banks was $30.1 million greater in 1970 than in 1969, an increase of about 16 percent. This rise reflected in part the $158.1 million, or 12.6 percent, increase in total operating income. Interest and fees on loans continued to make up the bulk of the rise in operating income. However, in percentage terms, the category “all other operating income”— which includes income from Federal funds sales — showed the largest increase, rising by 37.5 percent. Total operating expenses advanced by $133.4 million, or 13.9 percent. Interest on time and savings deposits remained the largest single item in both dollar and per centage terms in the increase in total operating expenses. Yours very truly, P. E. Coldwell 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) June 30, 1970 Dec. 31, 1969 11,848,383 1,949,988 2,915,439 487,595 17,201,405 4,179,507 22,240,020 7,874,158 6,249,486 349,647 2,032,264 1,745,080 195,562 18,446,197 1,809,987 5,625 1,086,668 64.2% 12,138,578 2,148,747 2,686,685 487,424 17,461,434 4,797,346 23,059,976 8,645,418 6,183,496 263,460 1,944,647 2,078,504 288,168 19,403,693 1,730,892 17,350 1,060,548 62.6% 22.7% 24.7% 11.2% 634 10.7% 640 Dec. 31, 1970 Item Loans (gross), including overdrafts1____________ _____ 13,496,198 U.S. Treasury securities ___________________________ 2,194,238 Obligations of states and political subdivisions___ ____ 3,115,573 887,014 Other securities ______________________________ _____ TOTAL LOANS (GROSS) AND INVESTMENTS _____ 19,693,023 Cash and balances due from banks . ____ 4,877,358 TOTAL ASSETS _____________________________ _____ 25,424,845 Individual — Demand d ep osits_________________ _____ 8,852,029 Individual — Time deposits ___________________ _____ 7,350,691 339,469 Deposits of U.S. Government_______________________ Deposits of states and political subdivisions______ _____ 2,246,860 Deposits of b an k s_____________________________ _____ 2,241,465 280,361 Certified and officers’ checks, etc________________ _____ TOTAL DEPOSITS ________________________________ 21,310,875 TOTAL CAPITAL ACCOUNTS________________ _____ 1,872,565 Borrowings from Federal Reserve Bank_________ ______ 0 All other borrowings __________________________ _____ 1,401,813 Ratio of loans to total deposits_______________ _____ 63.3% Ratio of cash and balances due from banks to total deposits ________________________ . ____ 22.9% Ratio of total capital accounts to risk assets (total assets less Government securities and cash assets)________ 10.2% Number of member banks _ ....... .. ._____ 634 1 Includes Federal funds sold. PRINCIPAL ASSET AND LIABILITY ITEMS OF MEMBER BANKS 1961-70 ELEVENTH FEDERAL RESERVE DISTRICT (In thousands of dollars) Date Dec. 30, 1961 Dec. 28, 1962 Dec. 20, 1963 Dec. 31, 1964 1965 1966 Dec. 30, 1967 Dec. 31, 1968 1969 1970 Total Deposits Total Loans (Gross)1 Total Investments Total Loans (Gross) and Investments Total U.S. Treasury Securities Total Capital Accounts 12,167,914 5,750,851 3,893,949 9,644,800 2,904,526 1,034,789 12,456,678 6,272,027 4,099,016 10,371,043 2,910,190 1,132,235 12,968,887 6,973,324 4,200,729 11,174,053 2,767,547 1,202,411 14,489,488 15,366,002 16,073,230 7,887,222 8,669,530 29,176,977 4,268,358 4,481,641 24,618,385 12,155,580 13,151,171 13,795,362 2,669,966 2,498,091 2,355,472 1,298,084 1,378,642 1,454,963 17,708,732 9,957,491 5,275,204 15,232,695 2,610,139 1,539,474 19,603,344 19,403,693 21,310,875 11,370,944 12,138,578 13,496,198 5,744,992 5,322,856 6,196,825 17,115,936 17,461,434 19,693,023 2,649,477 2,148,747 2,194,238 1,630,114 1,730,892 1,872,565 1 Includes Federal funds sold. 2 Commodity Credit Corporation certificates of interest and Export-Im port Bank participations are henceforth included in “Total Investments,” rath er than “Total Loans (Gross).” COMPARATIVE STATEMENT OF INCOME, EXPENSES AND DIVIDENDS OF MEMBER BANKS ELEVENTH FEDERAL RESERVE DISTRICT (Amounts in thousands of dollars) Item 1969 Net Change, 1970 from 1969 238,545 851,747 45,122 114,808 1,250,222 219,266 361,020 380,184 960,470 26,655 84,825 3,557 43,074 158,111 25,220 55,753 52,462 133,435 289,752 91,817 -10,439 2,185 189,681 72,812 640 24,676 2,309 10,519 -2,773 30,113 9,222 -6 1970 Interest and dividends on securities . 265,200 Interest and fees on loans__ . 936,572 Service charges on deposit accounts. . 48,679 All other operating income1. ___ . 157,882 TOTAL OPERATING INCOME___ 1,408,333 Salaries and wages . 244,486 Interest on time and savings deposits. 416,773 All other operating expenses. 432,646 TOTAL OPERATING E X P E N S E S ________ ____ _ 1,093,905 INCOME BEFORE INCOME TAXES AND SECURITIESl 314,428 94,126 Net securities gains or losses__________________ . 80 Extraordinary items and other charges or credits . -588 NET INCOME ____________ 219,794 82,034 Number of member banks 634 1Includes income from Federal funds sold and securities purchased under agreements to resell. 2Includes interest on capital notes and debentures. 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 Taxes and Securities Gains or Losses 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 459,019 516,727 573,061 637,030 701,424 797,834 883,093 1,035,225 1,250,222 1,408,333 295,129 344,023 396,221 452,370 509,130 586,397 651,566 765,580 960,470 1,093,905 163,890 172,704 176,840 184,660 192,294 211,437 231,527 269,645 289,752 314,428 1Includes interest on capital notes and debentures. Net Income Cash Dividends Declared1 Number of Member Banks 88,748 89,803 90,545 95,942 105,100 116,744 130,011 152,949 189,681 219,794 42,164 44,167 46,668 50,956 56,080 59,816 64,604 78,065 72,812 82,034 630 632 656 672 675 673 667 651 640 634
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