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F ederal R eserve Bank of Dallas DALLAS, TEXAS 75222 Circular No. 69-57 March 21, 1969 C O N D IT IO N A N D INCO M E OF MEMBER BANKS ELEVENTH FEDERAL RESERVE DISTRICT To All Member Banks in the Eleventh Federal Reserve District: Most of the major balance sheet and income and expense items increased markedly during 1968 at member banks in the Eleventh Federal Reserve District. Rapid expansion in the economy and record interest rates contributed to this development. Inflows of both demand deposits and, particularly, of time deposits were quite large. With heavy deposit inflows, the District’s member banks expanded their loans more rapidly than in any previous year of this decade and also added to their investment portfolios. Total assets of the District’s member banks were $22.3 billion as of December 31, 1968, up 12.1 percent from December 30, 1967. Net current operating earnings of District member banks rose $38.1 million, or 16.5 percent, in 1968, almost double the gain in the previous year. Total current operating revenue advanced $152.1 million, or 17.2 percent, as both interest and dividends on securities and interest and discount on loans rose about 17 percent. Current operating expenses also increased rapidly, advancing $114.0 million, or 17.5 percent. Interest payments on time and savings deposits, by far the largest single expense item, rose 20.4 percent, reflecting both larger amounts of these deposits and higher effective rates. Total credit extended by the District’s member banks last year advanced $1.9 billion, or 12.4 percent, somewhat above the gain in 1967. Loan demand was quite strong, with total loans rising more than 14 percent. The increase in loans was fairly general throughout the major loan categories. However, gains in real estate loans, commercial and industrial loans, and loans for purchasing or carrying securities were particularly noticeable and accounted for 60 percent of the loan advance over the year-earlier total. Credit extended under credit card arrangements and related plans almost doubled last year. Investments in obligations of state and local governments surged, increasing 18.7 percent, but holdings of U.S. Government obligations showed little change. Total deposits at the District’s member banks increased about $1.9 billion, or 10.7 percent, during 1968. Demand deposits of individuals, partnerships, and corporations expanded 8.5 percent, slightly below the 1967 gain. IPC time deposits, however, rose 13.6 percent, as large certificates of deposit increased sharply. In addition, borrowings by the District’s member banks also rose, principally reflecting increased purchases of Federal funds. Borrowings totaled $742 million on December 31, 1968, which was almost double the amount on December 30, 1967. These borrowings equaled 46 percent of capital accounts at the end of 1968, compared with only 25 percent a year earlier. Reflecting the rapid increase in loans, the ratio of total loans to total deposits advanced to a level of 57.0 percent on December 31, 1968. Moreover, the ratio of total capital accounts to risk assets fell almost one full percentage point and was 11.0 percent on December 31, 1968. 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) COM PARATIVE STA TEM EN T OF CONDITION OF M EM BER BANKS E L E V E N T H F E D E R A L R E S E R V E DISTRICT (Amounts in thousands of dollars) Dec. 31, 1968p Item June 29, 1968 Loans (net), including overdrafts1__________________ 11,169,525 10,063,136 U.S. Government obligations ______________________ 2,649,463 2,393,234 Obligations of states and political subdivisions_________ 2,534,216 2,256,767 Other securities ________________________________________ 561,199522,915 15,236,052 T O T A L L O A N S (NET) A N D I N V E S T M E N T S _______ 16,914,403 Cash and balances due from banks_________________ 4,781,424 3,713,945 T O T A L ASSETS _______________________________ 22,311,166 19,548,958 Individual — Demand deposits _____________________ 8,627,401 7,413,775 Individual — Time deposits ______________________ 6,533,560 6,070,450 Deposits of U.S. Government, including postal savings__ 187,520 205,908 Deposits of states and political subdivisions__________ 2,012,226 1,771,434 Deposits of banks_______________________________ 1,993,962 1,510,681 Certified and officers’ checks, etc___________________________248,701176,696 T O T A L DEPOSITS ______ . __________________ 19,603,370 17,148,944 T O T A L CAPITAL A C C O U N T S ____________________ 1,630,085 1,601,550 Borrowings from Federal Reserve Bank______________________ 5,300 16,233 All other borrowings_____________________________________ 736,509475,637 Ratio of loans to total deposits_____________________________ 57.0% 58.7% Ratio of cash and balances due from banks to total deposits_______________________________________ 24.4% 21.7% Ratio of total capital accounts to risk assets (total assets less Government securities and cash assets)________________ 1.0% 11.9% Number of member banks________________________________ 651 663 Dec. 30, 1967 9,775,383 2,610,139 2,135,273 529,792 15,050,587 4,279,773 19,906,830 7,954,181 5,749,849 199,880 1,735,222 1,845,026 224,574 17,708,732 1,539,474 5,800 375,201 55.2% 24.2% 11.8% 667 1Includes Federal funds sold, p—Preliminary. PRINCIPAL ASSET A N D LIABILITY ITEMS O F M E M B E R B A N K S 1959-68 E L E V E N T H F E D E R A L R E S E R V E DISTRICT (In thousands of dollars) Date Dec. 31, 1959 1960 1961 Dec. 28, 1962 Dec. 20, 1963 Dec. 31, 1964 1965 1966 Dec. 30, 1967 Dec. 31, 1968p Total Deposits Total Loans (N et)1 Total Investments Total Loans (Net) and Investments Total U.S. Gov. Secs. Total Capital Accounts 10,669,985 11,215,770 12,167,914 4,857,870 5,154,181 5,645,684 3,469,554 3,501,845 3,893,949 8,327,424 8,656,026 9,539,633 2,594,655 2,620,601 2,904,526 909,042 973,089 1,034,789 12,456,678 6,167,837 4,099,016 10,266,853 2,910,190 1,132,235 12,968,887 6,854,157 4,200,729 11,054,886 2,767,547 1,202,411 14,489,488 15,366,002 16,073,230 7,740,423 8,509,564 29,008,633 4,268,358 4,481,641 24,618,385 12,008,781 12,991,205 13,627,018 2,669,966 2,498,091 2,355,472 1,298,084 1,378,642 1,454,963 17,708,732 9,775,383 5,275,204 15,050,587 2,610,139 1,539,474 19,603,370 11,169,525 5,744,878 16,914,403 2,649,463 1,630,085 1 Includes Federal funds sold. 2Commodity Credit Corporation certificates of interest and Export-Import Bank participations are henceforth included in “Total Investments,” rather than “Total Loans (N et).” p—Preliminary. COM PARATIVE STA TEM EN T OF INCOME AND DIVIDENDS OF M EM BER BANKS E L E V E N T H F E D E R A L R E S E R V E DISTRICT (Amounts in thousands of dollars) Net Change, Item Interest and dividends on securities______________ ___ 222,256 Interest and discount on loans__________________ ....... 697,902 41,455 Service charges on deposit accounts______________ __ All other revenue ___________________________ ___ 73,603 T O T A L C U R R E N T O P E R A T I N G R E V E N U E ______ __1,035,216 Salaries and wages________________ __ ________ ...... 192,644 Interest on time and savings deposits___ ________ ___ 328,942 All other expenses ___ 243,990 T O T A L C U R R E N T O P E R A T I N G E X P E N S E S _____ ___ 765,576 N E T C U R R E N T O P E R A T I N G E A R N I N G S ______ ...... 269,640 Total recoveries, transfers from valuation reserves, and profits _______________________________ ...... 13,346 from 1967 1968 1967 1968p 189,708 596,916 37,121 59,348 883,093 173,486 273,100 204,980 651,566 231,527 32,548 100,986 4,334 14,255 152,123 19,158 55,842 39,010 114,010 38,113 12,136 1,210 60,989 182,674 52,663 130,011 64,604 667 3,437 35,886 12,946 22,940 13,462 — 16 Total losses, charge-offs, and transfers to valuation reserves _____________ _____________ ___ 64,426 Net income before related taxes__________________ ....... 218,560 Taxes on net income_____________________________ 65,609 N E T INCOME __ 152,951 78,066 Cash dividends declared1________________________ ___ 651 Number of member banks___________ ___ _________ 1 Includes interest on capital notes and debentures, p—Preliminary. PRINCIPAL ITEMS O F I N C O M E A N D DIVIDENDS O F M E M B E R B A N K S 1959-68 E L E V E N T H F E D E R A L R E S E R V E DISTRICT (Amounts in thousands of dollars) Year Total Current Operating Revenue1 424,727 1959 458,798 1960 459,019 1961 1962 516,727 573,061 1963 637,030 1964 701,424 1965 797,834 1966 883,093 1967 1968p 1,035,216 Total Current Operating Expenses1 Net Current Operating Earnings Total Recoveries, Transfers, and Profits Total Losses, Charge-offs, and Transfers 269,118 289,110 295,129 344,023 396,221 452,370 509,130 586,397 651,566 765,576 155,609 169,688 163,890 172,704 176,840 184,660 192,294 211,437 231,527 269,640 9,638 10,665 19,768 13,765 15,714 14,330 9,569 8,880 12,136 13,346 43,381 32,038 35,737 38,872 39,873 51,096 50,802 56,076 60,989 64,426 Net Income Cash Dividends Declared2 Number of Member Banks 70,630 88,765 88,748 89,803 90,545 95,942 105,100 116,744 130,011 152,951 37,623 40,702 42,164 44,167 46,668 50,956 56,080 59,816 64,604 78,066 633 632 630 632 656 672 675 673 667 651 1 Beginning in 1961, income and expenses related to bank premises are reported net (plus or minus) under current operating expenses. 2 Includes interest on capital notes and debentures, p—Preliminary.
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