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FED ERA L RESERVE BAN K OF DALLAS DALLAS, TEXAS 75222 Circular No. 76-151 November 17, 1976 CONDITION AND INCOME OF MEMBER BANKS, JUNE 30, 1976 ELEVENTH FEDERAL RESERVE DISTRICT To All Member Banks in the Eleventh Federal Reserve District: Member banks in the Eleventh District experienced moderate growth in the first half of 1976 as the economy moved into its second year of recovery. Loans increased less than usual for this stage of an economic recovery and also less than a year ago. Banks increased their holdings of U.S. Government securities nearly as much as in the same period in 1975 but made smaller additions to their holdings of municipal securities. There was little change in member bank borrowings from the Federal Reserve Bank or the Federal funds market since total deposits increased about as fast as total loans and investments. Total loans at member banks rose 0.9 percent during the first six months of 1976, even less than the modest 1.9-percent gain in the comparable 1975 period. Business loans increased 4.3 percent during the first half, as business customers continued conservative postures on inventories and capital outlays. Moreover, businesses obtained a large portion of needed funds internally and shifted a sizable amount of bank borrowing into long-term debt. Consumer loans at member banks in the District increased 5.1 percent during the first half of 1976. Automobile loans continued to rise sharply, as did instalment loans for the repair and modernization of homes. Outstanding loans under credit-card plans declined less than seasonally. Residential construction activity in the District improved during the first six months of 1976. This was reflected in an increase of 10.1 percent in real estate loans, with most of the rise taking place in construction loans on one to four-family residential properties. Sales of Federal funds and loans to other commercial banks dropped 21.5 percent, reflecting the ability of most banks to serve customers’ credit needs from deposit funds. Thrift institu tions also borrowed less heavily from member banks, reflecting the continuation of sizable deposit inflows. Member banks in the District acquired substantial amounts of U.S. Government securities, primarily in the intermediate maturity range, but increased their holdings of municipal secu rities less than in previous periods of relatively weak demand. Activities — such as leasing operations — that generate sizeable tax credits, plus increases in loan loss reserves, tended to reduce tax liabilities of the banks, lessening the attractiveness of tax-exempt municipal securities. Total deposits rose only slightly during the first six months of 1976, mainly because of a seasonal decline in interbank deposits. Demand deposits of individuals and businesses declined 5.6 percent, but this was more than offset by a 7.4-percent increase in time and savings deposits. A significant portion of the expansion in time and savings deposits was in response to the regu latory change in 1975 that permitted businesses to hold savings accounts at banks for the first time. N et income of member banks totaled approximately $217 million during the first half of 1976, after taxes and securities adjustments. Interest and fees on loans accounted for roughly 60 percent of the $1.6 billion in total operating income, while interest and dividends on securities made up a fifth. Total operating expenses came to $1.3 billion, with more than half this amount attributable to interest paid on time and savings deposits. 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 BANES ELEVENTH FEDERAL RESERVE DISTRICT (Amounts in thousands of dollars) June 30, Item 1976p ______________ .23,760,740 Loans (gross), including overdrafts1 ________________3,941,313 U.S. Treasury secu rities__________ Obligations of states and political subdivisions_________ 6,204,968 Other securities (including trading account securities)__ 1,672,379 TOTAL LOANS (GROSS) AND INVESTMENTS______ 35,579,400 6,817,596 Cash and balances due from banks________________ .43,772,458 TOTAL A SSE T S________________________________ .12,713,156 Individual — Demand deposits 14,961,352 Individual — Time deposits _ _ 293,469 Deposits of U.S. Government _ 4,979,876 Deposits of states and political subdivisions _ 2,769,450 Deposits of b a n k s_______________________ Certified and officers’ checks, e t c .__________ . 334,843 TOTAL D EPO SITS_____________________ .36,052,146 TOTAL CAPITAL ACCOUNTS _ 3,198,152 Borrowings from Federal Reserve Bank _ 15,185 .. 3,584,215 All other borrow ings________________ Ratio of loans to total deposits ... _ 65.9% Ratio of cash and balances due from banks to total deposits 18.9% Ratio of total capital accounts to risk assets (total assets 9.7% less government securities and cash assets) _________ Number of member b anks___________________________ 681 Dec. 31, 1975 June 30, 1975 23,553,994 3,357,495 6,059,437 1,638,164 34,609,090 7,423,929 44,024,780 13,472,668 13,931,303 199,673 4,641,347 3,217,557 384,440 35,846,988 3,030,562 200 3,640,071 65.7% 22,308,585 2,522,597 5,963,645 1,455,450 32,250,277 6,029,087 40,072,897 12,202,157 12,957,845 207,328 4,645,548 2,434,954 286,037 32,733,869 2,918,196 489 3,046,354 68.2 % 20.7% 18.4% 9.1% 673 9*3% 663 1 Includes F ed eral funds sold, p — P relim inary. INCOME, EXPENSES, AND DIVIDENDS OF MEMBER BANES ELEVENTH FEDERAL RESERVE DISTRICT (Amounts in thousands of dollars) Item Interest and dividends on securities Interest and fees on lo a n s________ Service charges on deposit accounts All other operating income1 ____ TOTAL OPERATING INCOME___ Salaries and employee benefits Interest on time and savings deposits All other operating expenses TOTAL OPERATING E X PE N SE S________________________________________ INCOME BEFORE INCOME TAXES AND SECURITIES GAINS OR LOSSESApplicable income taxes Net securities gains or lo s s e s ___________________ Extraordinary items and other charges or credits NET INCOME______________________________ Cash dividends declared2 ______________________ Number of member b an k s_____________________ 1 Includes income from F ederal funds sold and securities purchased un der agreem ents to resell. 2 Includes in te re st on capital notes and debentures, p — Prelim inary. January 1Jnne 30, 1976p 334,757 . 955,918 35,221 264,838 1,590,734 . 247,411 682,802 . 398,831 1,328,544 269,190 . 50,177 . 3,619 . 1,122 216,754 . 58,403 . 681
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