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A M Iu Review Recession in Bank Earnings Atlanta, Georgia April • 1962 Also in this issue: DIVERSE TRENDS M ARK G EO R G IA 'S EC O N O M Y DIRECTORS OF FEDERAL RESERVE BANK OF ATLAN TA AND BRANCHES DISTRICT BUSINESS CO N D ITIO N S SIXTH DISTRICT STATISTICS SIXTH DISTRICT INDEXES LIBRARY APR 1 9 1 9 6 2 FEDERAL RESERVE BANK OF PHItAD Net income of member banks in the Sixth Federal Reserve District suf fered a setback in 1961. The total declined from $92,623,000 in 1960 to $88,082,000 in 1961. The District’s 418 reporting member banks had net income of .70 percent of total assets, compared with .86 percent in 1960. The ratio of net income to capital accounts also fell— from 10.6 percent in 1960 to 8.2 percent in 1961. Many stockholders felt the impact of lower profits as banks declared lower cash dividends than in 1960. Income and expenses of District member banks for 1961 are based on a preliminary tabulation of annual Income and Dividend Statements. Detailed operating ratios have been computed by using these statements and the quarterly Reports of Condition for December 31, 1960, June 30, 1961, and September 27, 1961. The data for groups of banks are derived from averages of individual bank ratios rather than from aggre gate dollar figures. Revenue from all major sources registered increases between 1960 and 1961, but rises in expenses eroded these gains and more. Net cur rent operating earnings, therefore, declined from $169 million to $161 million, the first annual decrease in the postwar period. Net current earnings amounted to 14.3 percent of capital accounts and to 1.21 percent of total assets. Both ratios were appreciably lower than in the preceding year. Revenue from Most Sources Climbs To a large extent, banks’ operating revenue reflects the amount and the distribution of their earning assets. Total earning assets of District member banks rose about 7 percent between the fall of 1960 and the fall of 1961. Although the nation felt the effect of recessionary forces during most of 1961, bank loans were somewhat higher, on the average, than during 1960. U.S. Government security holdings and other securities also rose appreciably as bankers sought to put funds to work. Interest discount on bank loans, including service charges and fees, rose erately, amounting to 60.5 percent of total revenue, compared with 59.2 percent in the previous year. Interest on U.S. Government securities also rose in dollar terms, although it fell from 21.7 percent to 20.5 percent of total revenue. Interest on other securities rose both in dollars and as a proportion of total revenue. The rate of return on both types of securities and on loans was slightly lower in 1961 than in 1960. The ease-off in the rate of return reflected the greater supply of loanable funds of all types, together with a slackening in the demand for some types of credit. District bankers earned an average of 3.22 percent on U.S. Government securities dur ing 1961, 3.03 percent on other securities, and 6.83 percent on loans. Other types of operating revenue also improved in 1961. Service charges on deposit accounts, amounting to 7.3 percent of total revenue in 1960, rose to 8.0 percent. Commercial banks with trust departments enjoyed an average rise in trust earnings from 2.6 percent to 2.9 per- Income and Expenses, Sixth District Member Banks A verage Operating Ratios of All Member Banks in the Sixth Federal Reserve District (In Thousands of Dollars) 1960 O p e r a t in g r e v e n u e : I n t e r e s t a n d d iv id e n d s o n s e c u r it ie s . In te re s t a n d o t h e r c h a r g e s o n lo a n s . S e r v ic e c h a rg e s o n d e p o s it a c c o u n t s . T ru s t d e p a rtm e n t re v e n u e . . . . A l l o t h e r o p e r a t in g r e v e n u e . . . T o t a l ................................................. Dollar Change 1961 1 1 3 ,0 2 7 3 1 6 ,9 4 3 3 3 ,2 2 3 1 4 ,1 2 3 2 7 ,5 9 6 5 0 4 ,9 1 2 1 2 0 ,4 2 2 3 2 1 ,1 1 8 3 6 ,0 5 6 1 6 ,1 0 5 1 5 ,8 1 2 5 0 9 ,5 1 3 + 7 ,3 9 5 + 4 ,1 7 5 + 2 ,8 3 3 + 1 ,9 8 2 — 1 1 ,7 8 4 + 4 ,6 0 1 1 3 6 ,8 6 1 * 1 4 0 ,8 4 8 1 6 ,9 0 3 + 3 ,9 8 7 + 1 6 ,9 0 3 7 1 ,4 9 8 8 2 ,6 3 5 + 1 1 ,1 3 7 O p e r a t in g e x p e n s e s : S a l a r i e s ................................................ O f f ic e r a n d e m p lo y e e b e n e f it s . . . I n t e r e s t o n t im e a n d s a v in g s d e p o s i t s ................................................ N e t o ccu p a n cy expense o f b a n k p r e m i s e s ................................ A l l o t h e r o p e r a t in g e x p e n s e s . . . T o t a l ................................................. 1 2 7 ,6 5 6 3 3 6 ,0 1 5 2 4 ,0 1 8 8 4 ,4 3 9 3 4 8 ,8 4 3 ■— 4 3 , 2 1 7 + 1 2 ,8 2 8 N e t c u r r e n t o p e r a t in g e a r n in g s 1 6 8 ,8 9 7 1 6 0 ,6 7 0 — 8 ,2 2 7 R e c o v e r ie s , tra n s fe rs f r o m re s e rv e s a n d p r o f i t s ........................................... 3 0 ,2 6 6 2 2 ,8 5 9 — 7 ,4 0 7 L o s s e s , c h a rg e -o ffs , a n d tra n s fe rs f r o m r e s e r v e s ...................................... 4 5 ,5 7 7 3 3 ,9 3 3 — 1 1 ,6 4 4 N e t in c o m e b e f o r e r e la t e d ta x e s . . . . . . ** 1 5 3 ,5 8 6 1 4 9 ,5 9 6 — 6 0 ,9 6 3 6 1 ,5 1 4 + 551 N e t i n c o m e ................................................. 9 2 ,6 2 3 8 8 ,0 8 2 — 4 ,5 4 1 C a s h d i v id e n d s d e c l a r e d ........................... 3 0 ,8 5 0 3 4 ,0 2 1 + 3 ,1 7 1 3 2 ,0 9 3 3 1 ,5 9 6 — 497 . . *Included in “All other operating expenses.” ♦♦Included in “All other operating expenses” and partly in “All other operating revenue.” cent of total revenue. A change in the composition of the remaining revenue category, shown in the table above as all other operating revenue, during 1961 makes comparison with previous years impossible. Prior to 1961, this category included rental income on bank premises. In this year’s report, such revenue was reported as an offset to building occupancy costs in all other operating expenses. The net effect, there fore, was to reduce both the miscellaneous revenue and expense accounts. It is interesting to note that three Dis trict member banks reported that their building occupancy cost was a credit figure in 1961, i.e., a source of revenue. Expenses Outpace Revenue Rise Interest on savings accounts and other time deposits led the assault of bank expenses on earnings. District bankers paid $83 million to holders of time deposit accounts of all types during 1961. This was 16 percent more than they paid in 1960 and 27 percent more than in 1959. Interest on time deposits consumed 19.2 percent of total revenue during 1961, up from 18.0 percent in 1960. Most of the rise in interest costs between 1960 and 1961 reflects the sharp gain in total time deposits at member banks. The total rose $364 million between the end of 1960 and the end of 1961. Total demand deposits, on the other hand, increased only 3.2 percent during this period. Time deposits averaged 35.0 percent of total deposits, therefore, compared with 33.0 percent in 1960. The exact source of the sharp gain in time deposits dur ing the year is, of course, not known. A part of the gain may have come at the expense of other types of savings institutions. In addition, some persons may have shifted demand deposits to the time category in order to reap the benefit of higher rates. Although the maximum permissible rate on time de posits remained at 3 percent throughout 1961, many 1958 1959 J 960 1961 P e r c e n t o f to t a l c a p it a l a c c o u n t s : N e t c u r r e n t e a r n in g s . . N e t in c o m e b e fo r e ta x e s . N e t i n c o m e ...................... C a s h d iv id e n d s d e c la r e d . . . . . 1 5 .7 1 2 .6 . . 3 .0 . . . . 3 .8 8 1 .1 6 * 14.2 14.1 9.6 2.9 16.5 11.9 1 6 .9 1 4 .8 1 0 .6 3 .1 8 .2 3 .0 1 4 .3 1 2 .6 8 .2 2 .9 P e r c e n t o f to ta l a sse ts: T o t a l o p e r a t in g r e v e n u e . N e t c u r r e n t e a r n in g s . . N e t iJ nl ivc -oUml l let . . . . . . . S O U R C E A N D O F 4 .0 1 1 .0 9 . 74 4 .2 4 1 .2 5 . O6 2Z 4 .5 5 1 .3 6 . 88 06 4 .5 2 1 .2 1 . /7 u0 D IS P O S IT IO N IN C O M E : 1 ~ 1 P e r c e n t o f t o t a l o p e r a t in g r e v e n u e I n t e r e s t o n U . S . G o v ’t, s e c u r it ie s I n te r e s t a n d d iv id e n d s o n o t h e r s e c u r i t i e s ................................ I n te re s t a n d d is c o u n t o n lo a n s . S e r v ic e c h a r g e s o n d e p o s it a cco u n ts . . . . 3 ,9 9 0 T a x e s o n n e t i n c o m e ................................ N u m b e r o f o f fic e r s a n d e m p lo y e e s 1957 U M M A R Y R A T IO S : Trust department revenue1 . 2 2 .5 2 0 .9 2 1 .5 2 1 .7 2 0 .5 6 .2 5 9 .4 7 .2 5 9 .4 6 .9 5 9 .5 6 .9 5 9 .2 7 .0 6 0 .5 7.3 2.6 5 .2 1 0 0 .0 3 0 .3 7.1 2.5 5 .0 1 0 0 .0 2 8 .7 7.3 2.6 4 .9 1 0 0 .0 2 8 .3 8.0 2.9 4 .0 1 0 0 .0 2 9 .2 n .a . n .a . n .a . 2 .6 1 6 .4 1 8 .5 1 8 .2 1 8 .0 1 9 .2 n .a . 3 9 .7 6 9 .9 3 0 .1 n .a . 4 2 .5 7 2 .8 2 7 .2 n .a . 4 1 .7 7 0 .4 2 9 .6 n .a . 4 1 .6 6 9 .9 3 0 .1 5 .1 3 6 .2 7 3 .1 2 6 .9 3 .2 + 2 .5 6 .5 .9 1 .0 2 .4 7. 9 2 .6 8. 6 1 8 .5 1 .5 6. 7 1 4 .9 2 .5 7. 5 1 9 .2 1 .8 8. 5 1 5 .6 . 2.6 A l l o t h e r o p e r a t in g r e v e n u e . . 5 .3 T o t a l o p e r a t in g r e v e n u e . 1 0 0 .0 S a la r ie s a n d w a g e s ...................... 3 0 .2 P e n s io n , h o s p it a liz a t io n , a n d o t h e r b e n e f it s . . . . Interest on time and savings deposits2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N e t o ccu p a n cy expense o f b a n k p r e m i s e s ...................... A l l o t h e r o p e r a t in g e x p e n s e s . T o t a l o p e r a t in g e x p e n s e s . N e t c u r r e n t e a r n in g s . . . . N e t lo s s e s ( o r r e c o v e r ie s a n d p r o f it s + ) 3 ........................... N e t in c r e a s e in v a lu a t io Taxes on net N e t in c o m e R A T E S (o r d e cre a se + ) n re se rv e s . . in c o m e . . . . . . O F R E T U R N S E C U R IT IE S A N D O N L O A N S . R e t u r n o n s e c u r it ie s : I n t e r e s t o n U . S . G o v ’t, s e c u r it ie s I n te re s t a n d d iv id e n d s o n o t h e r s e c u r i t i e s ...................... N e t lo s s e s ( o r r e c o v e r ie s a n d p r o f it s + ) o n t o t a l s e c u r it ie s 3 R e tu r n o n lo a n s : R e v e n u e f r o m lo a n s . . . . N e t lo s s e s ( o r r e c o v e r ie s + ) 3 . 2 .6 4 2 .6 5 2 .9 5 3 .3 9 3 .2 2 2 .6 6 2 .8 2 2 .8 7 3 .0 9 3 .0 3 .1 1 + .4 4 .5 0 + .2 1 + .2 1 6 .6 7 .1 5 6 .7 1 .1 3 6 .9 0 .1 8 6 .9 1 .2 2 6 .8 3 .2 7 D IS T R IB U T IO N O F A S S E T S : P e rc e n t o f to ta l a sse ts: U O L C R A . S . G o v ’t, s e c u r i t ie s . . . . 3 1 .4 t h e r s e c u r it ie s . . . . 9. 4 o a n s ................................. a s h a s s e t s ...................... e a l e s t a t e a s s e t s ...................... l l o t h e r a s s e t s ........................... T o t a l a s s e t s ...................... 1 0 0 .0 O T H E R 3 0 .3 1 0 .4 3 5 .7 2 1 .9 1 .5 .2 1 0 0 .0 2 9 .8 1 0 .4 3 6 .9 2 1 .1 1 .6 .2 1 0 0 .0 2 8 .0 1 0 .3 3 9 .2 2 0 .5 1 .7 .3 1 0 0 .0 2 7 .9 1 0 .6 4 0 .3 1 9 .0 1 .9 .3 1 0 0 .0 7 .9 8 .2 8 .0 8 .4 9 .0 1 8 .1 8 .8 2 8 .2 1 7 .7 9 .1 3 1 .7 1 7 .0 8 .9 3 2 .1 1 6 .8 9 .3 3 3 .0 1 7 .5 1 0 .1 3 5 .0 R A T IO S : T o t a l c a p it a l a c c o u n t s to : T o t a l a s s e t s ................................. T o t a l a s s e t s l e s s U . S . G o v ’ t, s e c u r it ie s a n d c a s h a s s e ts . . T o t a l d e p o s i t s ........................... T im e d e p o s it s 4 t o t o t a l d e p o s it s . I n te re s t o n t im e d e p o s it s 4 t o t im e d e p o s i t s ........................... N u m b e r o f b a n k s .................................3 8 7 ? 36 2 .4 6 397 2 .5 1 399 2 .6 3 402 2 .6 8 418 1 Banks with none were excluded in computing this average. Ratio included in “All other operating revenue.” - Banks with none were excluded in computing this average. Ratio included in “All other operating expenses.” 3 Includes recoveries or losses applied to either earnings or valuation reserves. 1 Banks with none were excluded in computing this average, n.a. Not available. . 2 • District bankers who were paying less raised their interest rates toward that ceiling. The ratio of interest paid to average time deposits was higher than in 1960 at 235 banks. The average of all member banks was 2.68 per cent in 1961, compared with 2.63 percent in 1960. Salary costs at member banks have shown a strong upward trend for several years. Although salaries of officers and employees rose during 1961, the gain in both dollar and percentage terms was less than it had been in any other year since 1950. Considering that total revenue rose only slightly, however, salaries and wages still ac counted for a higher proportion of total revenue than in 1960— 29.2 percent, compared with 28.3 percent. As previously mentioned, all other operating expenses for 1961 are not comparable with previous years’ figures because of the different treatment of net occupancy ex pense of bank premises. In addition, pensions, hospitali zation, and other fringe benefits, formerly included in all other operating expenses, were reported separately in 1961. This cost amounted to 2.6 percent of total revenue. Altogether, expenses amounted to 73.1 percent of total revenue during the year, up from 69.9 percent in 1960. The resulting drop in net current earnings from 30.1 to 26.9 percent of total revenue was the largest since 1957. Net losses on securities and loans of 1.0 percent of reve nue, a further increase in valuation reserves for securities and loans, and a small rise in taxes on net income trans formed the net current earnings figure into net income of 15.6 percent of revenue. Prospects for I 962 Bank loans expanded more than seasonally in the last quarter of 1961, after having been somewhat weak earlier in the economic recovery. So far this year, loans have changed little, although partial data for March indicate some advance. If the upward trend in bank loans continues, it will be favorable to bank earnings during 1962. This is because the rate of return on bank loans is higher than on other types of bank earning assets. How strong the demand for bank loans will be during 1962 depends in large part on the vigor of economic expansion in the months ahead. As 1962 began, District bankers were experiencing continued competition for time and savings deposits with other types of savings institutions. The Board of Gover nors authorized a higher maximum rate on time and savings deposits, effective January 1, 1962. Many banks acted promptly to raise the rates paid on some types of accounts. A special survey made by this Bank covering 82 banks indicated that almost two-thirds of them had raised rates on some types of time deposits by the middle of January 1962. The higher rates have apparently been effective, since time deposits are still rising sharply. The total at District member banks rose $203 million, or 6 percent, between the end of December and the end of February. Additions to time deposits, unless they are conversions of demand deposits, represent funds that can be placed in earning assets. District bankers are thus in a position to provide a further expansion in bank credit, either in the form of loans or the purchase of investments of bankable quality. The holding of time deposits is expensive, however, and the recent increase in rates means higher costs. District bankers may have to wage an even stiffer fight against costs in 1962 than they did in 1961. W. M. D a v is Diverse Trends Mark Georgia’s Economy A year ago we noted that Georgia had suffered greater declines in employment and income during the 1960-61 recession than at any other time in the postwar period. The pattern of recovery, which had been rapid and sub stantial following previous recessions, therefore showed signs of being different. It was hoped, however, that the coming of spring might be accompanied by a warming trend in Georgia’s economic climate. The evidence indicates that so far as the economy is concerned, spring arrived very late in Georgia in 1961, but that once it did arrive, it warmed things up rapidly. Total nonfarm employment remained at or below the January level until August. A slow but persistent rising trend since then brought it to a new record by February of this year. Personal incomes remained virtually un changed through July, but they increased rapidly toward the end of the year and in December were almost 7 percent higher than those a year earlier. Bank debits, a measure of overall spending by businesses and consumers, followed a similar trend. As recently as September, the seasonally adjusted index stood where it was at the be ginning of 1961. A sharp upturn since then has pushed it to a level well above that of a year ago. Just as the pattern of recovery from the recent recession has differed from past patterns, so have the trends of economic activity in the various parts of Georgia differed from one another. A review of activity in the several trade and banking areas— those groups of counties having similar economic characteristics—will better illustrate the changes in the total economy. Although there are no overall measures available for comparing relative economic strength in the various parts of Georgia, indirect evidence of differing trends may be obtained from looking at a number of recent develop ments. Trends in member bank loans, which reflect in part the results of these developments, may be used as a guide for assessing the relative vigor of economic expan sion in these areas. The Augusta region has probably enjoyed the most substantial expansion in recent months. The metropolitan area has been highly successful in attracting new indus tries lately. Increased activities at Fort Gordon and the Savannah River Plant of the Atomic Energy Commission have also contributed to Augusta’s current prosperity. February nonfarm wage and salary employment in the metropolitan area was 3 percent above that of a year ago • 3 • Member bank loans reflect different economic trends among Georgia trade and banking are as. ECONOMIC INDICATORS Georgia 1111111111111111111ii1111111111111111111ii| nii11111 n11n h j 1947- 4 9 * 100 _ Seasonally Adjusted _ •138“ Nonfarm Employment 226 197 Mfg. Payrolls 164 157 186 Member Bank Deposits 111111111111111111111111111111111111111 ii 11111111111111111111 1957 1958 1959 I960 1961 1962 — almost twice the rate of increase reported by any other Georgia city. Reflecting these gains in the Augusta trade and banking area, seasonally adjusted member bank loans rose 11 percent during the year and were 40 percent above the 1957-59 average— the largest increases in the state during both periods. The Atlanta trade and banking area, which contains most of North Georgia, has experienced mixed trends in recent months. A persistent decline in employment at a major aircraft factory and erratic production schedules at local automobile assembly plants tended to depress employment in the early months of the year, while re versals of those trends have added impetus to the upturn since mid-year. Low prices paid for poultry, a major source of income in the counties north of Atlanta, put a damper on the rapid growth that has characterized this industry in recent years. Balanced against these factors was a continued increase in government, wholesale trade, and financial employment. Bank loans remained virtually unchanged in the early months of the year. Since then, however, they have moved up rapidly, topping the yearago figure by 5 percent in January. Employment in textiles, the Columbus area’s major in dustry, has failed to show a significant recovery from re cession lows. Construction activity in metropolitan Colum bus has slackened in recent months, and available indica tors of consumer spending are at or below year-ago levels. An expansion at Fort Benning benefited the area, however, particularly in the early months of 1961. Bank lending, mirroring these developments, has remained almost un changed, after having risen moderately through mid-1961. At Warner Robins Air Force Base, civilian employ ment, which accounts for about one-fourth of total em ployment in metropolitan Macon, was below year-ago levels through the early months of 1961. Excessive rains in the spring and a long dry spell in the summer hampered farmers in the important cotton- and peanut-producing areas in the Macon region. These factors, combined with the failure of some local industries to increase employ ment to pre-recession levels, were reflected in a declining trend in bank lending activities. Successful farm market ings and increased nonfarm employment, however, were (Continued on Page 6) . 4 . Directors of Federal Reserve Bank ofAtlanta and Branches Each Federal Reserve Bank has nine directors: three Class A and three Class B, who are elected by the member banks, and three Class C, who are appointed by the Board of Governors of the Federal Reserve System. Class A directors are representative of the member banks. Class B directors may not be officers, directors, or employees of any bank and must be actively engaged in their District in commerce, agriculture, or some industrial pursuit. Class C directors may not be officers, directors, employees, or stock holders of a bank. One Class C director is designated by the Board of Governors as Chairman of the Board of Directors and Federal Reserve Agent and one as Deputy Chairman. Federal Reserve Bank branches have either five or seven directors; a majority are appointed by the board of directors of the parent Federal Reserve Bank and the others by the Board of Governors. One of the di rectors appointed by the Board at each branch is designated an nually as Chairman of the Board. Following is a current list of the directors of the Federal Re serve Bank of Atlanta and its branches. The list shows the name of each director, his principal business affiliation, the class of directorship, and the date when his term expires. Term Expires December 31 FEDERAL RESERVE BANK OF ATLANTA Class C: Class B: J. M . C C J ack T arver1 M c G Jam G H. C es K S. C. W it h , Jr. row im b r e l eorge D. Sm J arm an ax ey Class A: M. M. , J r .2 halkley regor W. M President, Dundee Mills, Griffin, Ga. President, Sweet Lake Land & Oil Company, Lake Charles, La. President, Atlanta Newspapers, Inc., Atlanta, Ga. Chairman, Florida Power & Light Company, Miami, Fla. Chairman, Genesco, Inc., Nashville, Tenn. Vice President, The Chemstrand Corporation, Decatur, Ala. Chairman, The First National Bank of Thomson, Thomson, Ga. President, Trust Company of Georgia, Atlanta, Ga. President, The American National Bank of Gadsden, Gadsden, Ala. heatham H. G. C raft Sr. ad sw o rth , BIRMINGHAM BRANCH Appointed by Board of Governors: J ack W . W arner 1 S e l d e n S h e f f ie l d H K enry Stanford in g 1962 1963 1964 1962 1963 1964 1962 1963 1964 Chairman and President, Gulf States Paper Corporation, Tuscaloosa, Ala. Cattleman, Farview Farm, Greensboro, Ala. President, Birmingham Southern College, Birmingham, Ala. 1962 1963 1964 Executive Vice President, Citizens-Farmers & Merchants Bank, Brewton, Ala. Chairman and President, Birmingham Trust National Bank, Birmingham, Ala. President, Union Bank & Trust Co., Montgomery, Ala. President, The First National Bank of Florence, Florence, Ala. 1962 1963 1964 1964 Appointed by Federal Reserve Bank: R. F J. M urphy A. P rank John H . N W. H. M lum m er , Jr. e il l it c h e l l JACKSONVILLE BRANCH A ppointed by Board of Governors: C J. H J. laude O l l ie E T. arry Y a tes1 dmunds V aughn Vice President and General Manager Southern Bell Telephone and Telegraph Company, Jacksonville, Fla. President, Stetson University, DeLand, Fla. President, United States Sugar Corporation Clewiston, Fla. 1962 1963 1964 Chairman, Peoples National Bank of Miami Shores, Miami Shores, Fla. President, Capital City National Bank of Tallahassee, Tallahassee, Fla. Chairman, The Atlantic National Bank, Jacksonville, Fla. President, The First National Bank in Fort Myers, Fort Myers, Fla. 1962 1963 1964 1964 A ppointed by Federal Reserve Bank: L eonard A. U G o d frey Sm J. T. H L s in a it h ane F arry agan NASHVILLE BRANCH A ppointed by Board of Governors: A D. ndrew W. N. K H olt rauth V . S. J o h n s o n , J r .1 President, University of Tennessee, Knoxville, Tenn. President and General Manager, Colonial Baking Company, Nashville, Tenn. Chairman and President, Aladdin Industries, Inc., Nashville, Tenn. 1962 1963 1964 President, Executive President, President, 1962 1963 1964 1964 Appointed by Federal Reserve Bank: D. L . E a r n e s t D. W. J o h n s t o n T r a v is H H arry M . N it t acey, Jr. NEW ORLEANS BRANCH Appointed by Board of Governors: J. O . E m m e r ic h F rank A. K enneth G odchaux, R. G id d e n s The Blount National Bank of Maryville, Maryville, Tenn. Vice President, Third National Bank in Nashville, Nashville, Tenn. The Farmers National Bank of Winchester, Winchester, Tenn. The Hamilton National Bank of Knoxville, Knoxville, Tenn. 1962 1963 1964 Editor, Enterprise-]ournal, McComb, Miss. III1 Vice President, Louisiana State Rice Milling Co., Inc., Abbeville, La. President, WKRG-TV, Inc., Mobile, Ala. A ppointed by Federal Reserve Bank: F rank G il e s Lew A. is John O 1 Chairman G W . P G allaug hfr atty o t t l ie b u l l ib e r President, Jeff Davis Bank & Trust Company, Jennings, La. President, First National Bank in Meridian, Meridian, Miss. Chairman, City National Bank of Baton Rouge, Baton Rouge, La. President, The National Bank of Commerce in New Orleans, New Orleans, La. - D e p u ty C h a irm a n • 5 • 1962 1963 1964 1964 Personal Income in Sixth District States G EO R G IA (Continued from Page 4) (Seasonally Adjusted Annual Rates, in Millions of Dollars) accompanied by a vigorous upturn in bank loans toward the end of 1961. Savannah’s economy was jolted in late 1960 and early 1961 by a double dose of troubles. The national recession resulted in reduced employment in the city’s important pulp and paper industry and a decline in ocean shipping. In addition, military and civilian employment at Hunter Air Force Base were cut back substantially. Building activity fell to the lowest level in several years, putting Savannah at the bottom of the list of major Southern cities in the value of construction contracts in 1961. On the positive side, major expansion has taken place at a pulp and paper mill in Brunswick, and activity has in creased at Glynco Naval Air Station. Nevertheless, bank loans in the Savannah region declined throughout the first half of 1961, and there has been little change since. Many of the depressing factors noted elsewhere have prevailed in the South Georgia trade and banking area. Air Force training bases were abandoned in Moultrie and Bainbridge, and a substantial cutback in personnel took place at Moody Air Force Base in Valdosta, creating some unemployment in those cities. Rapid mechanization of cotton production in South Georgia just in the past year has aggravated an already serious decline in farm popula tion. Reflecting both short- and long-run trends, bank loans in January were fractionally below those of a year ago and only 10 percent above the 1957-59 average. Thus, the economic data for Georgia as a whole con cealed important differences in conditions in the different parts of the state. Generalizations about the future are subject to the same limitations. Up to the present, all the important indicators for the state have pointed upward. The overwhelming impact of Atlanta in the statistics, how ever, may obscure developments in other parts of the state. In many communities, future textile employment may shape the business outlook. In some areas, the future depends upon the extent to which military cutbacks have been completed. In still others, the outlook will be in fluenced by planned new industrial plants or expansions. R obert M. Y oung This is one of a series in which economic developments in each of the Sixth District states are discussed. Develop ments in Florida’s economy were analyzed in the March R eview , and a discussion of Alabama's economy is sched uled for a forthcoming issue. Bank Announcement The Metropolitan Bank of Jefferson, Metairie, Louisi ana, a newly organized nonmember bank, opened for business on March 1 and began to remit at par for checks drawn on it when received from the Federal Reserve Bank. Officers include Charles J. Derbes, Jr., President; A. J. Hynes, Executive Vice President; L. V. Busenlener, Vice President; and E. S. Perret, Cashier. Capital totals $300,000, and surplus and undivided profits, $150,000. Alabama Florida Georgia . Louisiana Mississippi Tennessee Total . iPreliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . Jan.1 1962 D ec.2 1961 4,915 . 10,612 . 6,714 . 5,555 . 2,848 . 5,935 . 36,579 5,128 10,749 6,825 5,558 2,760 5,835 36,855 . N o v .2 1961 Jan. 1961 5,200 10.770 6,879 5,555 2,813 5,907 37,124 4,742 10,062 6,353 5.325 2,566 5,623 34,671 -’Revised. Debits to Individual Demand Deposit Accounts _________________(In Thousands of Dollars)_________________________________ ALABAMA Anniston . . . . Birmingham . . . Dothan . . . . Gadsden . . . . Huntsville* . . . Mobile . . . . Montgomery . . . Selma* . . . . Tuscaloosa* . . . Total Reporting Cities Other Citiesf . . . FLORIDA Daytona Beach* Fort Lauderdale* . Gainesville* . . . Jacksonville . . . Key West* . . . Lakeland* . . . Greater Miami* Orlando . . . . Pensacola . . . St. Petersburg . . Tallahassee* . . Tampa . . . . W. Palm-Palm Bch.* Total Reporting Cities Other Citiesf . . . GEORGIA Albany . . . . Athens* . . . . Atlanta . . . . Augusta . . . . Brunswick . . . Columbus . . . . Elberton . . . . Gainesville* . . . Griffin* . . . . LaGrange* . . . Percent Change Year-to-date 2 months Feb. 1962 from 1952 from Jan. Feb. 1962 1961 1961 Feb. 1962 Jan. 1962 Feb. 1961 37,711 856,201 36,110 32,344 71,482 278,560 163,180 23,942 58,138 1,557,668 728,065 44,992 959,377 40,566 39,173 84,617 313,723 186,415 27,980 63,065 1,759,908 844,904 36,362 767,410 34,160 32,997 62,358 261,915 150,850 21,838 48,573 1,416,463 667,618r — 16 — 11 — 11 — 17 — 16 — 11 — 12 — 14 —8 — 11 — 14 53,171 218,644 45,528 836,031 17,488 79,826 935,801 1,375,612 253,144 82,722 221,803 69,567 428,256 168,621 3,850,413 1,732,251 71,411 268,738 52,156r 1,041,540 22.967 100,554 1,141,552 1,722,137 317,155 88,369 289,022 78,101 518,018 200,677 4,770,845r 2,143,754r 52,253 204,796 38,731 815,586 16,255 86,245 906,497 1,340,073 244,804 80,982 198,611 n.a. 409,405 141,075 3,628,816 l,619/977r — 26 — 19 — 13 — 20 — 24 — 21 — 18 — 20 — 20 —6 — 23 — 11 — 17 — 16 — 19 — 19 + 2 +7 + 18 +3 +8 —7 +3 +3 +3 +2 + 12 n.a. +5 + 20 +6 +7 54,991 41,681 2,151,667 109,377 26,606 109,832 8,406 46,554 19,655 16,456 118,600 31,497 20,997 46,352 161,242 31,230 2,995,143 943,360 64,027 50,117 2,510,286 131,110 32,140 132,176 8,424 50,035 21,850 19,135 145,329 36,839 24,198 51,794 189,626 39,877 3,506,963 1,092,436 49,740 35,995 1,882,511 99,821 22,282 99,376 7,564 41,306 17,530 17,770 112,454 28,104 22,046 51,390 144,799r 29,994 2,662,682r 900,540r — 14 — 17 — 14 — 17 — 17 — 17 —0 —7 — 10 — 14 — 18 — 15 — 13 — 11 — 15 — 22 — 15 — 14 + 11 + 16 + 14 Marietta* . . . Newnan . . . . Rome* . . . . Savannah . . . Valdosta . . . . Total Reporting Cities Other Citiesf . . . LOUISIANA Alexandria* . . . 75,006 84,700 62,958 306,481 234,442 Baton Rouge . . 294,903 63,211 75,962 58,294 Lafayette* . . . 80,204 99,984 71,152 Lake Charles . . 1,458,145 1,278,033 New Orleans . . 1,236,331 1,791,357 2,025,272 Total Rpporting Cities 1,663,177 753,527 Other Citiesf . . . 557,277r 679,069 MISSISSIPPI 54,002 Biloxi-Gulfport* 58,598 48,839 37,068 40,555 Hattiesburg . . . 34,203 Jackson . . . . 341,166 366,016 283,428 27,586 Laurel* . . . . 26,150 24,690 Meridian . . . . 43,667 41,163 49,720 23,714 24,192 Natchez* . . . . 22,437 24,281 Vicksburg . . . 21,290 18.706 547,057 Total Reporting Cities 590,948 473,466 Other Citiesf . . . 267,628 310,356 250,262r TENNESSEE 48,074 54,482 Bristol* . . . . 43,268 316,332 288,652 Chattanooga . . 430,255 40,398 46,312 Johnson City* . . 38,764 Kingsport* . . . 80,226 94,933 74,665 Knoxville . . . . 230,738 275,740 217,963 728,818 850,821 Nashville . . . . 686,152 Total Reporting Cities 1,444,586 1,752,543 1,349,464 Other Citiesf . . . 566,569 650,143 564,116r SIXTH DISTRICT . 17,103,166 20,201,599r 15,753,858r Reporting Cities 12.186,224 14,406,479r 11,194.068 4,916,942 Other Citiesf . . 5,795,120r 4,559,790r Total, 32 Cities . . 10,327,030 12,159,093 9,522,358 UNITED STATES 344 Cities . . . 239,500,000 294,700,000r 222,700,000 — 11 +4 + 12 +6 —2 + 15 +6 +8 + 20 +8 + 11 + 10 +4 + 17 +5 +8 +8 + 16 + 10 +10 +9 +9 + 10 +10 + 19 + 11 + 11 + 13 + 12 —7 +5 + 12 —5 — 10 + 11 +4 + 12 +5 +6 + 10 + 13 +9 + 14 —2 +5 +6 +7 +0 + 13 n.a. +6 + 24 + 10 + 10 + 14 + 17 + 15 + 11 + 21 + 14 + 1 +7 +8 —7 + 10 + 12 + 13 —7 + 11 + 8 +14 +6 + 19 + 26 +8 + 13 +3 +8 + 22 + 19 + 16 — 17 — 20 — 12 — 12 — 10 —8 —9 —7 —5 — 12 —2 — 12 —7 — 14 +11 +8 + 20 +6 +6 +6 +14 + 16 +7 + 11 +6 + 17 + 1 +8 +5 +14 + 13 +9 + 11 + 14 + 8 +7 — 12 — 26 — 13 — 15 — 16 — 14 — 18 — 13 — 15 — 15 — 15 — 15 — 19 +10 +4 +7 +6 +6 +7 +0 + 10 + 14 +4 +7 + 20 + 10 +4 +9 +8 + 2 +9 +9 +8 +8 + 10 + 10 +8 + 11 +9 +9 *Not included in total for 32 cities that are part of the national debit series maintained by the Board of Governors. fEstimated. r Revised. n.a. Not available. • 6 • Sixth District Indexes Seasonally Adjusted (1947-49 = 1961 SIXTH DISTRICT JAN. Nonfarm Employment.................................. 142 Manufacturing Employment . . . . 121 A p p a re l................................................... 187 C h e m icals..............................................134 Fabricated Metals .............................190 F o o d .........................................................118 Lbr., Wood Prod., Fur. & Fix. . . 73 Paper......................................................... 163 Primary M e t a l s .................................. 86 T e x tile s .................................................... 84 Transportation Equipment . . . . 191 Nonmanufacturing Employment . . . 150 Manufacturing Payrolls .............................213 Cotton Consumption**.................................. 78 Electric Power Production** . . . . 401 Petrol. Prod, in Coastal Louisiana & M ississippi**.........................239 Construction C o n tra c ts * ...............................309 Residential................................................... .. 291 All O t h e r ................................................... ...324 Farm Cash Receipts........................................134 Crops............................................................... 97 L iv e s to c k ................................................... 191 Department Store S a le s */ **..........................178 Department Store Stocks*................................229 Furniture Store S a l e s * / * * .......................127 Member Bank D e p o sits *.............................189 Member Bank L o a n s * .................................. ...351 Bank D e b its*................................................... ...288 Turnover of Demand Deposits* . . . . 162 In Leading C itie s ........................................176 Outside Leading C i t i e s ............................ 125 ALABAMA Nonfarm Em ploym ent.............................125 Manufacturing Employment . . . . 101 Manufacturing Payrolls.............................175 Department Store S a le s**..........................158 Furniture Store S a l e s .............................103 Member Bank Deposits............................ 169 Member Bank Lo a n s.................................. ...300 Farm Cash Receipts.................................. 115 Bank D e b i t s .................................................247 FLORIDA Nonfarm Em ploym ent................................200 Manufacturing Employment . . . . 206 Manufacturing Payrolls............................ ...368 Department Store S a le s **..........................265 Furniture Store S a l e s .............................154 Member Bank Deposits................................247 Member Bank Lo a n s.................................. ...550 Farm Cash R eceipts.................................. ...266 Bank D e b i t s .................................................416 GEORGIA Nonfarm Em ploym ent............................ 134 Manufacturing Employment . . . . 117 Manufacturing Payrolls................................ 199 Department Store S a le s**.......................157 Furniture Store S a l e s .............................124 Member Bank Deposits............................ 169 Member Bank Lo a n s.................................. ...285 Farm Cash Receipts.................................. 144 Bank D e b i t s ................................................. 263 LOUISIANA Nonfarm Em ploym ent.............................129 Manufacturing Employment . . . . 92 Manufacturing Payrolls............................ 177 Department Store Sales*/** . . . . 151 Furniture Store S a le s * ............................ 163 Member Bank D e p o s its * .......................165 Member Bank L o a n s * ............................ ...319 Farm Cash Receipts.................................. 93 Bank D e b its * .................................................210 MISSISSIPPI Nonfarm Em ploym ent.............................137 Manufacturing Employment . . . . 130 Manufacturing Payrolls................................244 Department Store Sales*/** . . . . 155 Furniture Store S a le s * ............................ 95 Member Bank D e p o s its * ..........................204 Member Bank L o a n s * ............................ ...442 Farm Cash Receipts.................................. 86 Bank D e b its * .................................................238 TENNESSEE Nonfarm Em ploym ent.............................124 Manufacturing Employment . . . . 123 Manufacturing Payrolls............................ 215 Department Store Sales*/** . . . . 147 Furniture Store S a le s * ............................. 85 Member Bank D e p o s its * .......................170 Member Bank L o a n s * .............................315 Farm Cash Receipts.................................. 96 Bank D e b its * ............................................. ... 249 *For Sixth District area only. 1962 FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. NOV. DEC. || JAN. FEB. 141 121 187 134 189 118 73 164 87 84 190 150 212 78r 383 141 121 186 134 186 118 73 165 86 83 183 149 214 79 368 141 121 190 133 186 118 74 166 87 84 187 149 220 82 376 142 122 191 133 185 117 74 167 91 84 188 150 225 85 379 142 123 193 133 184 118 74 167 92 85 191 150 232 88 391 142 124 198 133 181 117 74 168 93 85 193 150 236 89 391 142 124 196 133 184 117 74 168 94 85 184 150 232 89 3% 143 123 194 133 183 116 74 165 92 85 190 151 232 88 398 143 124 193 132 187 117 75 164 94 85 204 151 235 92 377 143 124 195 133 190 117 75 165 92 85 202 151 239 91 386 143 124 197 133 190 119 75 164 93 85 202 150 239 95 393 143 124 197r 132 190r 119 73 163 89 84 211r 151 222 88 n.a. 144 125 198 133 192 119 75 163 92 85 218 152 239 91 n.a. 237 315 330 303 145 123 191 180r 225r 130 192 355 280 156 168 116 241 324 343 309 136 104 205 178 221 134 189 353 295 155 167 122 244 345 362 330 126 99 189 183 229 135 191 354 271 146 164 111 253 360 388 337 136 113 192 175 225 129 191 357 292 165 183 127 252 372 412 340 141 117 191 185 227 130 189 355 291 154 175 119 243 384 393 377 125 97 175 194 227 135 193 353 279 162 179 129 243 394 402 387 150 139 187 179 239 132 190 359 288 166 189 122 239 402 406 400 131 104 197 192 239 143 194 361 284 152 164 126 251 375 431 329 173 162 194 188 242 139 199 363 291 161 170 119 250 351 374 333 169 147 202 189 244 138 197 365 307 161 170 117 267 322 368 285 136 98 203 1% 244 143 200 372 296 162 172 123 268 349 360 340 146 114 186 185 242r 133r 200 371 320r 159 168 124 273 n.a. n.a. n.a. n.a. n.a. n.a. 194 234p 144p 204 372 304 161 170 124 123 101 175 157r 106 170 299 126 238 123 101 177 166 112 167 303 133 249 123 102 183 173 124 169 298 115 232 124 102 185 163 101 163 304 126 266 125 103 191 168 112 162 301 118 254 125 104 196 177 111 163 295 117 241 125 105 195 171 117 163 302 113 256 125 104 197 175 114 167 303 118 254 125 104 204 166 108 170 304 163 264 126 104 209 163 120 168 309 155 273 125 104 197 172 111 172 314 131 254 124r 103 181r 157 99r 171 314 133 270 124 105 203 168 116 174 307 n.a. 261 200 207 374 262r 155 252 556 264 400 200 209 373 287 161 247 556 197 419 200 209 392 269 156 248 550 227 385 202 211 406 263 151 250 559 244 431 203 213 414 277 155 247 555 257 441 203 215 443 290 162 253 553 211 407 204 214 432 274 148 250 561 292 438 204 214 437 284 167 254 567 246 432 204 215 441 280 171 260 567 200 443 205 216 428 288 155 260 568 215 457 205 216 427 296 170 263 570 226 428 205 215 409r 283 174 262 571 218 469r 206 217 419 286 172 269 576 n.a. 425 134 116 200 155 131 173 292 152 253 133 116 203 166 138 172 292 171 265 134 117 205 155 132 172 290 149 243 134 118 215 166 133 175 292 144 265 134 118 217 166 133 173 291 147 268 134 119 223 175 136 176 289 127 265 134 119 218 159 136 171 292 193 267 135 119 215 167 139 175 289 151 266 136 120 223 165 133 183 296 184 278 136 120 227 168 128 180 300 156 280 136 119 223 175 140 183 300 158 277 137 120 210 164 132r 183 303 143 296 138 121 226 166 146p 186 302 n.a. 280 129 91 173 151 152 167 322 103 209 128 92 177 155 147 163 314 104 237 128 91 180 149 158 169 331 98 216 129 91 179 149 165 166 324 105 234 128 90 179 157 159 167 326 112 252 127 90 178 157 164 172 327 104 223 127 90 177 152 159 169 331 112 236 127 89 175 148 185 171 337 109 234 127 90 179 144 177 174 335 130 230 127 90 181 147 186 173 331 137 235 127 91 182 158 196 174 346 118 238 128 90 176r 150r 151 172 350 121 230 129 91 188 162 178 174 351 n.a. 232 136 129 237 146 100 205 446 99 233 137 130 241 154 108 207 442 116 255 136 132 244 157 95 208 449 90 234 137 134 243 153 85 210 455 99 240 136 135 256 165 91 208 451 99 253 137 136 259 169 112 207 446 100 243 137 136 260 156 116 205 458 102 255 138 136 263 160 119 208 460 92 253 138 137 265 155 105 213 464 174 256 138 138 264 165 110 215 477 181 279 137 139 268 171 103 221 502 121 262 139 137 237r 157 109 221 491 159 264 140 139 281 170 105 221 488 n.a. 263 124 123 216 154 95 176 319 99 245 124 123 216 151 98 176 310 99 257 124 123 222 147 100 175 311 101 236 125 124 224 141 91 174 315 96 261 126 125 230 152 84 175 312 101 260 126 125 227 157 90 179 313 100 260 126 124 234 146 89 176 320 109 258 126 125 231 157 102 179 323 93 253 126 125 228 150 97 181 325 127 251 126 125 235 154 101 180 326 132 268 125 126 239 158 96 183 337 107 253 125 126 223r 152 88 185 327 110 268 127 126 239 158 100 190 336 n.a. 257 Other totals for entire six states. n.a. Not Available. p Preliminary. OCT. r Revised. **D aily average basis. Sources: Nonfarm and mfg. emp. and payrolls, state depts. of labor; cotton consumption, U.S. Bureau of Census, construction contracts, F. W. Dodge Corp.; petrol, prod., U.S. Bureau of Mines; elec. power prod., Fed. Power Comm. Other indexes based on data collected by this Bank. All indexes calculated by this Bank. • 7 • D I S T R I C T B U S I N E S S C O N D I T I O N S inn ' 1 1 1 I 1 ' 11 1 I ............ I i ' ' • ! I ' i ' i I O is t r ic t business activity improved in February, after showing some softness in the previous month. Nonfarm employment increased as both manufacturing and nonmanufacturing types registered significant gains. These and other measures of business activity are seasonally adjusted. Retail spend ing rose in February but did not regain the levels of late 1961. Large market ings and stable prices contributed to farmers’ increased incomes. After changing little earlier this year, bank loans expanded in March, judging from partial data. Mfg Employment. 359 Electric Power Production The substantial February increase in nonfarm em ploym ent came after a sm aller gain in the previous month, indicating a som ewhat better em ploym ent situation than p revailed in late 1961. The February gains brought nonfarm employment to record highs in Florida, Georgia, and Mississippi. Improvement also occurred in Louisiana and Tennessee; but employment weakened further in Alabama. The manufacturing work week lengthened, reversing a two-month downward trend and contributing to an increase in manufacturing payrolls. Construction employment also picked up in February, and the latest three-month average of contracts for new construc tion, based partly on February data, increased for the first time since last September. Cotton consumption, a measure of textile activity, improved slightly but remained below year-end levels. Consumer spending ap p arently recovered some of the Jan uary losses, but it rem ained below e a rlie r records. Department store sales in February approached the December record, but preliminary figures for March showed some weakening again. Both furniture and household appliance store sales improved. In the face of only modest gains in retail spending, consumer liquid savings in the form of time deposits and savings and loan shares in creased more than they usually do in February. Activity in the farm economy quickened, signaling the approach of spring. Farm employment rose, as good weather in the southern portions of the District encouraged spring plowing and planting. Despite freezing tempera tures in early March that damaged some vegetables in Florida and the Gulf Coast tung nut crop, overall farm output was maintained by increased ship ments of beef, pork, broilers, and strawberries. Meanwhile, the index of prices received by farmers in District states remained unchanged. Member Bonk Deposits P E R C E N T OF R E Q U IR E D ^ ^^ ^^204 - District member bank loans changed little betw een December and the end of February, after seasonal adjustment. A substantial pickup in RESERVES Borrowings from / F. R. Bank _ A . ■* 3 .4 Excess Reserves js A. ^ 11111111111 1111 m rfTn-rrm*..14 r7i i i 1959 I960 ’ 1961 1962 lending activity at banks in leading cities during March, however, may reflect renewed vigor in loan demand. Total member bank deposits rose somewhat more than seasonally in February, reflecting a continued rapid growth of time deposits. Banks continued to add to their investment holdings in both January and February. Excess reserves, reduced from their January peak, re mained at about the same level observed during much of the past year.
@FedFRASER