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F ederal r eser ve Bank of Dallas DALLAS, TEXAS 75222 Circular No. 73-77 Dallas, Texas, April 13, 1973 CONDITION AND INCOME OF MEMBER BANKS ELEVENTH FEDERAL RESERVE DISTRICT To All Member Banks in the Eleventh Federal Reserve District The comparative statements of condition and income for member banks in the Eleventh District reflect the general expansion of economic activity that characterized 1972. Total assets of member banks, for example, increased more than 15 percent to $33 billion, surpassing the previous record increase set in 1971. Net income, after taxes, grew at a slightly slower pace but still provided a return to total capital of more than 12 percent, a slight increase from the previous year. Accompanying this expansion in assets and income was a significant change in the composition of the total loan and investment portfolios of member banks. While banks increased both loans and holdings of state, municipal, and other securities about 19 percent, they added only 1 percent to their holdings of U.S. Treasury securities. This realignment of assets resulted in a decrease in the ratio of capital accounts to risk assets from 9.5 percent to 8.8 percent and was partially responsible for an increase in the ratio of loans to deposits from 63.2 percent to 65.5 percent. There was also a significant change in the composition of total bank loans as some types of loans deviated widely from the average growth rate. Led by a very rapid increase in loans to finance residential construction, real-estate loans increased 31.7 percent, and by the end of 1972 constituted 13.3 percent of total bank loans. For similar reasons, loans to individuals for mobile home purchases and repairs and modernization of houses also rose very sharply. Special strength was noted in loans extended under credit cards, check credit, and revolving credit plans. Commercial and industrial loans, accounting for more than one third of all bank loans, increased only 12 percent in 1972. The very large increase of nearly 40 percent in loans to financial institutions reflected mainly sales of Federal funds rather than any fundamental credit demand. The two largest components of bank liabilities — demand deposits and time deposits of individuals — almost kept pace with the increase in bank assets, increasing 14.5 percent and 14.8 percent, respectively. U.S. Government deposits actually decreased from their 1971 level. Revenue sharing payments added significantly to deposit balances of state and local govern ments in December, however, contributing to a 29.1-percent annual increase in this category. Despite the growth in total deposits and in bank capital accounts, expanding loan demand outstripped available funds in 1972, resulting in substantial increases in bank borrowings from the Federal Reserve Bank and other sources. Net income of the District’s member banks increased $29 million in 1972, or 12.3 percent. This increase primarily reflected a larger volume of bank business, as both operating income and operating expenses gained about 12 percent over 1971 levels. As would be expected from the redistribution of assets, interest and dividends on securities grew a little more slowly than interest and fees on the more rapidly expanding holdings of loans. And the trend of rising interest rates throughout 1972 resulted in falling prices of securities so that income from security transactions contributed much less to bank income in 1972 than in 1971. 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) Dec. 31, 1972p Item m Loans (gross), including overdrafts1____________ _____ .18,041,392 U.S. Treasury securities ______________________________. 2,389,357 Obligations of states and political subdivisions_________ . 4,423,724 Other securities (including trading account securities)_ 1,406,807 TOTAL LOANS (GROSS) AND INVESTMENTS ___ 26,261,280 Cash and balances due from banks____________________ . 5,921,719 TOTAL ASSETS ____________________________________ .33,278,941 Individual — Demand deposits _______________________ .11,031,515 Individual — Time deposits __________________________ . 9,642,200 Deposits of U.S. Governm ent_________________________ . 420,352 Deposits of states and political subdivisions____________ . 3,642,002 Deposits of banks ___________________________________ . 2,409,859 Certified and officers’ checks, etc_______________________. 387,383 TOTAL DEPOSITS __________________ _____________ 27,533,311 TOTAL CAPITAL ACCOUNTS ______________________ 2,199,748 Borrowings from Federal Reserve Bank ______________ 41,335 All other borrowings _________________________________ . 2,531,297 Ratio of loans to total deposits . 65.5% Ratio of cash and balances due from banks to total deposits . 21.5% Ratio of total capital accounts to risk assets (total assets less Government securities and cash a ssets)_________ . 8.8% Number of member banks ____________________________ . 633 June 30, 1972 D ec. 31, 1971 15,637,590 2,165,661 4,103,945 1,192,251 23,099,447 5,085,837 29,195,635 9,333,672 8,808,190 379,904 3,347,020 1,938,730 230,347 24,037,863 2,127,374 200 2,039,377 65.1% 15,223,814 2,365,542 3,696,171 1,182,703 22,468,230 5,460,387 28,884,891 9,637,036 8,402,382 568,944 2,821,285 2,363,241 312,315 24,105,203 2,002,638 575 1,851,518 63.2% 21.2% 22.7% 9.7% 632 9.5% 633 1 Includes F ederal funds sold. p—Preliminary PRINCIPAL ASSET AND LIABILITY ITEMS OF MEMBER BANKS 1963-1972 ELEVENTH FEDERAL RESERVE DISTRICT (In thousands of dollars) D ate Dec. 20, 1963 Dec. 31, 1964 1965 1966 Dec. 30, 1967 Dec. 31, 1968 1969 1970 1971 1972p T otal D ep osits Total Loans (G ro ss)1 Total Investm ents Total Loans (G ross) and Investm ents Total U .S. Treasury Securities T otal Capital A ccounts 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 24,105,203 27,533,311 11,370,944 12,138,578 13,496,198 15,223,814 18,041,392 5,744,992 5,322,856 6,196,825 7,244,416 8,219,888 17,115,936 17,461,434 19,693,023 22,468,230 26,261,280 2,649,477 2,148,747 2,194,238 2,365,542 2,389,357 1,630,114 1,730,892 1,872,565 2,002,638 2,199,748 1 Includes Federal funds sold. 2 Commodity Credit Corporation certificates of interest and Export-Import Bank participations are henceforth included in “Total Investments,” rather than “Total Loans (Gross).” p— Preliminary. COMPARATIVE STATEMENT OF INCOME, EXPENSES AND DIVIDENDS OF MEMBER BANKS ELEVENTH FEDERAL RESERVE DISTRICT (Amounts in thousands of dollars) Item 1972p 1971 N et Change, 1972 from 1971 Interest and dividends on securities___________________ 343,642 309,108 Interest and fees on loans_____________________________ 1,079,563 963,241 Service charges on deposit accounts____________________________ 52,595 50,768 All other operating income1 ______ 211,989 185,612 TOTAL OPERATING INCOME ______________________ 1,687,789 1,508,729 Salaries and wages ___________________________________ 283,088 262,210 Interest on time and savings deposits_________________ 560,933 494,133 All other operating expenses _____ „ _ 506,536 449,565 TOTAL OPERATING EXPENSES _______________ .1,350,557 1,205,908 INCOME BEFORE INCOME TAXES AND SECURITIES GAINS OR L O S S E S ________________________________ 337,232 302,821 Applicable income taxes_______________________________________ 80,349 78,783 Net securities gains or losses _________________________________ 7,671 12,500 Extraordinary items and other charges or credits 1,373 258 NET INCOME ______ ________________________________ 265,927 236,796 Cash dividends declared2 ______________________________________ 95,031 94,471 Number of member b a n k s _____________________________________ ’633 633 34,534 116,322 1,827 26,377 179,060 20,878 66,800 56,971 144,649 34,411 1,566 -4,829 1,115 29,131 560 1 Includes income from Federal funds sold and securities purchased under agreements to resell. 2 Includes interest on capital notes and debentures, 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 T axes and Securities Gains or Losses 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972p 573,061 637,030 701,424 797,834 883,093 1,035,225 1,250,222 1,408,333 1,508,729 1,687,789 396,221 452,370 509,130 586,397 651,566 765,580 960,470 1,093,905 1,205,908 1,350,557 176,840 184,660 192,294 211,437 231,527 269,645 289,752 314,428 302,821 337,232 1 Includes interest on capital notes and debentures, p— Preliminay. N et Income Cash Dividends Declared1 Num ber of Member Banks 90,545 95,942 105,100 116,744 130,011 152,949 189,681 219,794 236,796 265,927 46,668 50,956 56,080 59,816 64,604 78,065 72,812 82,034 94,471 95,031 656 672 675 673 667 651 640 634 633 633
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