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Federal Reserve Bank
OF DALLAS

Dallas, Texas, August 23, 1960

SELECTED OPERATING RATIOS OF MEMBER BANKS
ELEVENTH FEDERAL RESERVE DISTRICT

To the Member Banks in 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 1960, with comparative figures for the first half of
1959. The ratios for 1960 were computed from data taken from reports of
condition as of June 15, 1960, and from reports of earnings and expenses
for the 6 months ended June 30, 1960. 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.
Yours very truly,
Watrous H. Irons
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 FEDERAL RESERVE DISTRICT
JANUARY-JUNE, 1960 AND 1959
BANKS WITH JUNE 15 DEPOSITS (in thousands of dollars)

YOUR BANK

$500 and under

$500 - $1,000

$1,000 $2,000

$2,000- $5,000

1960

1960

1959

1960

1959

1960

1959

1960

1959

$5,000 - $10,000

$10,000 $25,000

1959

1960

1959

7

1960
Number of banks in group

8

38

35

101

102

212

208

138

145

70

66

20.3
.5
74.1
42.9

13.6
.9
81.3
41.5

20.2
6.6
65.4
33.6

17.7
3.3
70.5
35.7

24.8
7.7
58.4
32.6

20.7
6.9
63.3
33.5

25.7
9.4
55.3
29.5

22.3
9.0
59.1
30.8

24.8
8.8
54.5
28.0

21.5
8.2
58.0
29.8

18.5
7.7
59.0
28.7

5.6
3.5

5.8
4.7

7.3
4.8

6.3
3.9

7.9
5.5

7.6
5.3

9.5
5.5

8.6
5.9

10.6
5.9

9.7
5.4

32.2
20.2

39.3
17.0

31.2
15.5

32.2
15.4

28.7
13.5

28.9
12.1

25.8
11.1

26.2
10.2

24.4
9.4

28.2

27.7

31.6

34.4

34.5

35.0

34.9

36.9

34.2

1959

$25,000 $50,000

1960

$50,000 - $100,000

Over $100,000

1959

1960

1959

1960

1959

24

28

17

18

17

17

18.2
7.4
59.2
29.5

19.9
5.6
59.2
26.1

20.5
5.9
57.5
26.7

17.7
4.1
65.6
26.3

20.7
4.4
62.8
26.6

15.6
4.4
65.7
21.4

18.6
4.5
62.2
22.2

1.
a.
b.
2.
3.

10.3
5.4

9.8
4.3

9.8
5.5

9.8
5.2

10.1
5.7

8.9
2.6

9.3
4.8

8.4
4.0

4.
5.

25.0
8.7

24.1
8.8

25.5
7.8

23.9
9.1

24.3
8.5

26.0
8.1

25.1
7.7

27.5
9.6

25.9
9.1

6.
7.

37.1

31.2

34.9

33.8

36.6

28.6

32.5

28.8

32.1

8.

RATIOS TO TOTAL EARNINGS
1. Interest and dividends on:
a. Government securities..........................
b. Other securities....................................
2. Interest and discount on loans..................
3. Salaries and wages....................................

RATIOS TO TOTAL CAPITAL ACCOUNTS
4. Net current operating earnings
before income taxes..............................
5. Net profits after income taxes..................

RATIOS TO TOTAL DEPOSITS
6. Cash assets..................................................
7. Total capital accounts................................

RATIOS TO TOTAL EARNING ASSETS
8. U. S. Government securities...................... .

EXPLANATION
The basic data used in compilation of the ratios were taken from reports furnished
by member banks. The asset and liability items were taken from member bank condition
reports of June 15, 1960, and June 10, 1959. 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 as of the June
call date in each of the 2 years. Group ratios are expressed in percentages and are averages
of the ratios of the individual 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 that
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.

Ratio No. 3 — Salaries and wages to total earnings
The ratio 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 1960 compared with the first 6 months of 1959.
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 deposits held
in the form of cash assets.
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 types
of security holdings.