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F

ederal

R eserv e B ank
OF DALLAS

Dallas, Texas, August 20, 1953

SELECTED OPERATING RATIOS OF MEMBER BANKS
ELEVENTH FEDERAL RESERVE DISTRICT

To Member Banks of the
Eleventh Federal Reserve District:
There is presented on the inside pages of this letter the statement of
operating ratios of member banks in the Eleventh Federal Reserve District
for the first half of 1953, with comparative figures for the first half of 1952.
Each of the 1953 ratios was computed from data taken from reports of
condition as of June 30, 1953, and from reports of earnings and expenses
for the 6 months ended June 30, 1953. Ratios for your bank are included
for your convenience in making comparisons.
If you should like to have additional copies of this report, we will be
glad to send them to you.
Sincerely yours,
R. R. GILBERT
President

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

Selected Operating Ratios of Member Banks
ELEVENTH FEDERA RESERVE DISTRICT
JANUARY- NE, 19 AND 1952
^ BANKS WITH JUNE 30 DEPOSITS (in thousands of dollars)
$1,000 - $1,99° $2,000 - $4,999
$5,000 $9,999 $10,000 $24,999 $25,000 $49,999
1953
1952
19.
1953
1953
1952
1953
1952
1953
1952
213
218
119
122
117
109
57
59
30
25

Under $500
1952
1953

1953

17

20

55

1. Interest and dividends on:
a. Government securities..............................
b. Other securities............................. -...........
2 . Interest and discount on loans.....................
3. Salaries and wages..........................................

12.7
1.5
77.9
37.3

7.5
3.6
81.2
33.7

16.0
4.1
72.8
33.8

4.3
75.8
32.8

21.9
5.3
64.3
32.0

4. Net current operating earnings
before income taxes..................................
5. Net profits after income taxes ................

6.7
3.8

7.4
4.4

8.0

9.8

4.5

6.5
5.6

6. Cash assets.......................................................
7. Total capital accounts............................

44.0
16.6

41.0
16.3

36.5
12.9

37.5
12.5

33.7
10.1

8. U. S. Government securities..............

30.8

27.7

36.0

32.4

44.6

1953

1952

Number of banks in group

1952
52

$99,999 $100,000 and over
1952
1953
1952
12
13
13

o
o
o
o'
L
O

YOUR BANK

1953
11

RATIOS TO TOTAL EARNINGS

12.0

25.1
6.0
59.0
31.2

20.3
6.2
62.7
31.7

23.9
5.6
59.6
30.1

20.1
5.7
61.7
31.0

21.5
4.8
59.2
31.8

19.3
5.6
60.2
31.4

25.1
5.5
56.6
29.1

22.7
5.6
59.0
29.1

20.4
2.4
63.3
30.1

10.6
6.2

10.1
6.4

12.1
6.4

10.9
6.0

11.7
5.7

10.9
5.7

10.2
4.7

9.7
4.4

11.0
5.1

9.5

32.0
8*3

32.2
7.8

29.9
7.2

31.1
6.8

32.0
6.6

32.7
6.3

32.9
6.5

34.5
6.2

42.1

46.3

46.4

45.5

45.8

43.2

44.2

44.8

46.3

V/0 .
68

33.1.

22.0
2.5
58.7
29.9

20.6
4.3
58.8
24.3

21.0
4.5
58.1
24.6

1.
a.
b.
2
3.

RATIOS TO TOTAL CAPITAL ACCOUNTS

RATIOS TO TOTAL DEPOSITS

RATIOS TO TOTAL EARNING ASSETS

EXPLANATION
The basic data used in the compilation of the ratios were taken from reports fur­
nished by member banks. The asset and liability items were taken from member bank
condition reports of June 80, 1958, and June 30, 1952. Earnings and expense items are
the amounts reported by member banks for the first 6 months of each year.
Banks were grouped according to the amount of their total deposits at the end of
June of each of the 2 years. Group ratios are expressed in percentages and are averages
of the ratios of the individual banks. This procedure prevents the data for the larger
banks in a group from exercising an undue influence on the ratios of the group and on
the ratios for all banks. Inasmuch as there should be about as many banks above the
average as there are below it, the group averages should not be considered as “standards
of performance. It is not important that the ratios of your bank conform to the average,
but it is important to know the reasons for the differences.
Ratio No. la — Interest on Government securities to total earnings
The ratio is computed by dividing total earnings into earnings from interest on
Government securities and shows the percentage of total earnings derived from t at
source of income.
Ratio No. lb Interest and dividends on other securities to total earnings
The ratio is computed by dividing total earnings into earnings from interest and
dividends on other securities and shows the percentage of total earnings derived from
other security holdings.
Ratio No. 2 — Interest and discount on loans to total earnings
The ratio is computed by dividing total earnings into earnings from interest and
discount on loans and shows the percentage of total earnings derived from interest and
discount on loans.

6.2

3- < ^

33.8

11.0
5.1

9.1
4.4

8.7 4
4.3 5.

32.2
5.8

31.5
5.4

33.1
6.9

33.4 6.
6.7 7.

41.2

47.3

38.2

41.0 8.

Ratio No. 3 — Salaries and wages to total earnings
„ ,
ra^j.° is computed by dividing total earnings into the amount spent on salaries
and wages of officers and employees and shows the percentage of total earnings absorbed
by the payment of all salaries and wages. Ordinarily, this is the largest item of expense
at member banks. The ratio tends to decline as the size of the bank increases.
Ratio No. 4 — Net current operating earnings to total capital accounts
The ratio is computed by dividing total capital accounts (capital, surplus, undivided
profits and reserves, including retirement account for preferred capital) into net current
operating earnings and shows the rate of earnings on total capital accounts for the first
6 months of 1953 compared with the first 6 months of 1952.
Ratio No. 5 — Net profits after income taxes to total capital accounts
The ratio is computed by dividing total capital accounts into net profits after income
taxes. It is similar to ratio No. 4, except that adjustment has been made for losses and
recoveries and for the payment of income taxes.
Ratio No. 6 — Cash assets to total deposits
The ratio is computed by dividing total deposits into cash assets (item 1 in the call
report, which includes cash, balances with other banks including reserve balances and
cash items in process of collection). The ratio shows the percentage of total denosits’held
m the form of cash assets.
v
Ratio No.7 — Total capital accounts to total deposits
The ratio is computed by dividing total deposits into total capital accounts and shows
total capital accounts as a percentage of total deposits.
Ratio No. 8 — United States Government securities to total earning assets
The ratio is computed by dividing total earning assets into holdings of United States
Government securities. In this study, total earning assets include all loans and all tvnes
of security holdings.
* y