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FEDERAL RESERVE BANK
OF NEW YORK
'Circular No. 1 7 4 1 1
. March 10, 1937. J

Operating Ratios of Member Banks in the Second Federal
Reserve District For the Year 1936 Compared With 1935
Average operating ratios in 1936 of various groups of member banks in the Second
Federal Reserve District, are presented on the following pages. The banks have been
grouped, as in previous years, according to size of deposits and each group of banks
outside New York City has been further subdivided according to the ratio of time deposits
to gross deposits. Owing to the expansion of demand deposits, the number of banks in
the groups having high percentages of time deposits diminished further during the past
year.
All groups of banks showed net profits in 1936 for the first year since 1929. For several
years most groups had been showing net losses, due to heavy charge-offs on loans and
investments, although in 1935 charge-offs on securities were greatly reduced and a few
groups of banks showed some net profits. In 1936, charge-offs on loans continued, although
in considerably reduced amount, but there were substantial recoveries on securities
previously written down and other profits on securities sold. The average net profit,
after charge-offs and recoveries, for the 742 banks included in the compilation was 8.9
per cent of capital funds.
Net earnings from current operations increased slightly to 7.1 per cent of total capital
funds, as compared with 6.7 per cent in 1935. The improvement in operating income was
occasioned by the smaller portion of earnings used for the payment of interest on deposits.
This saving in interest payments was offset in part by an increase in "all other expenses"
which included the assessment for deposit insurance, formerly reported in "all other"
charge-offs by most banks. Service charges on deposit accounts formerly included in
"all other earnings" are shown as a separate item of income for the first time.
The average rate of income on loans was unchanged from 1935 at 5.5 per cent for all
banks, while the rate on investments was reduced 0.2 per cent to 3.7 per cent. The rates
of income for the smaller banks were slightly above the average for all banks in the
district and for the large New York City banks were much below the average.
As usual space has been provided for the insertion of the figures of any bank which
may wish to compare its operations with those of other banks of similar size and character
of deposits.



193 6

Average Operating Ratios of Member Banks in the Second Federal Reserve District
GROUPED ACCORDING TO SIZE AJVD CHARACTER OF DEPOSITS
All ratios are expressed in percentages and are arithmetical averages of the ratios of individual banks, rather than ratios based on aggregate figures
GROUP IV
GREATER NEW YORK
CITY BANKS

GROUP III
BANKS WITH TOTAL DEPOSITS
$5,000,000 and Up

GROUP II
BANKS WITH TOTAL DEPOSITS
$1,000,000 to $4,999,999

GROUP I
BANKS WITH TOTAL DEPOSITS
UNDER $1,000,000

YOUR
FIGURES

ALL BANKS

Under 50%
Number of Banks.
Year

ITEMS OF INCOME, EXPENSE, AND NET PROFIT IN
PERCENTAGES OF TOTAL EARNINGS FROM CURRENT
OPERATIONS
Source! of Earnings from Current Operation*
1. Interest and discount on loans
2. Interest and dividends on bonds and stocks.
3. Income from Trust Department

Group
Average

Group
Average
Under 50%

70% and Up

50% to 69.9%

Under 50%

70% and Up

50% to 69.9%

70% and Up

Total
Deposits
Under
$10,000,000

Total
Deposits
$10,000,000
and Up

634

713

731

742

283

278

65

77

148

160

70

41

303

313

37

47

135

157

131

109

94

100

27

30

51

53

16

17

'.N

28

23

23

1933

1934

1935

1936

1935

1936

1935

1936

1935

1936

1935

1936

1935

1936

1935

1936

1935

1936

1935

1936

1935

1936

1935

1936

1935

1936

1935

1936

1935

1936

1935

1936

50.0

46.6

43.5

42.7

45.5

45.6

44.9

44.2

45.0

45.8

45.0

47.5

42.2

40.8

42.8

40.2

43.2

43.2

41.0

37.5

45.9

43.2

44.5

42.2

46.7

43.5

46.0

43.9

38.2

41.4

32.2

32.9

40.3

43.0

44.3

43.9

44.4

43.3

43.1

43.6

43.8

42.8

46.6

44.8

46.9

47.1

42.5

44.6

45.0

43.9

50.1

52.9

38.8

40.0

38.4

37.9

37.9

40.4

41.9

42.8

37.3

33.1

41.1

37.9

1.2

1.2

l.S

1.5

0.1

0.1

0.2

0.2

0.1

0.1

0.1

0.1

1.1

1.0

1.8

1.6

1.2

1.0

0.8

0.8

3.6

3.6

3.9

5.0

3.9

3.5

1.9

1.9

0.5

0.7

15.2

16.4

4.6

4.5

4.7

5.4

5.4

4.6

4.7

3.4

3.4

3.8

4.0

6.4

6.2

4.1

4.3

2.7

2.6

3.8

3.9

4.4

4.4

3.7

2.9

3.0

13.7

15.2

2.1

2.1

9.2

4.4

3.8

7.9

6.3

7.3

5.5

6.3

6.4

5.6

6.6

4.9

4.2

6.0

7.1

6.5

7.4

6.5

7.6

5.4

6.2

7.0

9.3

8.8

10.5

7.8

8.8

7.3

S.4

10.3

9.6

9.4

10.7

4. Service charges on deposit accounts
5. All other earnings
Total earnings from current operations

50% to 69.9%

Ratio of Time Deposits to Total Deposits

Ratio of Time Deposits to Total Deposits

Ratio of Time Deposits to Total Deposits

Group
Average

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Disposition of Earnings
6. Salaries and wages

24.2

25.2

26.4

26.7

27.7

28.2

33.1

33.4

27.5

27.0

23.1

23.6

24.1

24.7

29.6

30.3

25.2

25.3

21.4

21.3

24.5

24.8

27.2

27.7

24.0

24.3

21.8

21.5

33.0

32.9

37.5

35.7

7. Interest on deposits

33.6

31.7

27.7

23.2

26.2

22.0

16.3

15.2

27.1

23.3

33.3

29.5

31.7

26.2

21.0

16.2

29.6

25.0

37.1

32.4

29.5

25.2

22.3

18.4

30.8

26.9

37.2

32.2

14.1

11.5

3.0

2.4

2.0

0.8

0.2

0.2

0.2

0.2

0.3

0.1

0.3

0.2

0.2

0.3

0.3

0.2

1.2

0.5

0.2

0.2

0.1

0

0.1

0

0

0

0.1

0

0

0.1

0.2

0.2

0

0

25.2

23.6

25.6

26.5

28.4

23.7

25.5

20.7

20.9

21.0

23.5

29.0

28.7

21.9

23.9

17.8

20.7

22.3

25.4

26.3

29.2

20.9

23.8

20.2

23.1

32.5

34.2

28.4

32.0

77.7

76.0

76.2

77.1

78.6

76.0

77.3

74.3

77.1

74.6

80.8

75.7

76.9

74.4

76.4

74.4

76.4

75.4

75.8

75.3

75.8

75.0

79.2

76.9

79.8

78.8

68.9

70.1

23.1

20.2

21.2

31.1

29.9

—33.9 — 6.6 —36.9 — 7.8 —26.3 — 6.5 —53.4 — 4.9

- 7.8

- 2.3 —12.6 — 1.2

17.5

- 0.3

23.5

— 6.9 — 6.1 — 6.4 — 6.0 — 6.3 — 7.0 — 9.5 — 3.7

-10.8

- 5.8 — 5.9 — 6.7

8. Interest and discount on borrowings
9. All other expenses

18.1

21.0

22 8

10. Total current expenses

78.5

78.7

77.1

75.3

11. Net earnings from current operations

21.fi

21.3

22 9

24.7

Net Recoveries or Net Lostet (—)
12. On loans*

-16.8 —24.8

-20.9

- 5.6

13. On bonds and stocks**.

-23.9 —21.7

- 2.4

10.6

14. All other*

- 2.2 — 8.6

- 6.8

- 6.8

—21.4 —30.7 — 7.2

31.0

16. Net profit or n e t loss (—)
(after charge-offs, recoveries, etc.)
ASSET AND LIABILITY RATIOS
16. Capital funds to total deposits. •.

22.3

24.0

23.8

21.4

24.0

22.7

25.7

22.9

-14.5 — 4.5 - 8.9 — 4.0 -16.2

- 4.2

-15.9

- 7.0

-24.6

1.0

10.3

- 4.4

13.2

- 6.9

- 5.2 — 6.4 - 5.6 — 4.9 - 5.8

- 6.7

- 3.7

- 5.0

-7.9

33.4 — 1.3

26.9

—16.5

19.8

10.4

0.6

18.7

5.0

22.9

20.6

3.2

32.8

14.3

34.6

0.4

28.6

25.6

21.6

25.4

19.2 — 6.2
-8.3

15.9

16.1

15.0

25.7

25.0

22.6

39.8

37.7

42.0

38.2

38.9

21.4

20.5

20.1

20.6

18. Loans to loans and investments

60.2

45.9

42.1

40.7

43.1

42.7

42.5

41.7

43.8

43.0

42.2

61.4

60.9

59.2

56.7

58.9

56.5

36.6

37.3

61.2

61.1

75.0

74.5

65.8

62.8

fl.5

5.5

5.5

6.5

5.8

5.8

5.9

5.8

5.8

5.9

5.8

5.9

5.5

5.6

21. Income from investments to investments

— 9.3 — 7.0 — 7.3

0

19.0

22.8

RATES OF EARNINGS
20. Income from loans to loans.

19.3

16.4

21.4

23.4

43.3

— 8.1 — 7.3

19.1 — 7.8

16.8

22.7

20.0

19. Time deposits to total deposits

19.4 — 6.1

23.6

—17.2

27.1

13.8

25.6

34.7

17. Banking house and equipment to capital funds.

16.3

23.6

27.5 —16.9

18.0

22.2

25.6

23.8 —13.3

19.2

24.3

23.1

29.4 —27.3

20.1

,

24.3

- 6.9 —32.2 —12.6 —21.5 — 7.9 —25.7 — 2.9

20.8

19.5

19.2

19.1

23.0

16.8
29.8

28.1

16.1
22.4

21.3

26.2

24.6

20.9

24.2

6.7

32.8 —12.4

14 0

17.0

24.7

24.2

22.1 — 1.8

25.0

20.8

21.4 — 5.8

6.4

32.9 —47.9

32.0

1.3

36.6

19.0

46.1

14.6

13.9

12.9

25.1

20.5

16.7

14.6
15.2

13.0

29.2

30.4

25.0

23.8

24.8

27.9

15.9

14.8

15.7

42.5

45.9

42.6

46.6

42.5

45.8

42.5

43.0

45.9

42.2

43.6

37.4

60.2

59.7

75.7

74.5

42.3

37.6

7.6

6.6

26.5

41.0

40.2

38.0

33.8

37.7

62.2

61.1

77.2

76.1

56.5

55.5

38.0

5.1

5.3

5.5

5.6

5.6

5.6

5.0

6.0

4.6

4.8

5.1

6.1

5.2

5.2

5.6

S.8

2.5

2.5

46.3

4.3

4.2

3.0

3.7

4.2

4.0

4.0

3.9

4.2

4.0

4.2

4.0

3.9

3.7

3.6

3.5

3.9

3.7

4.0

3.9

3.5

3.3

3.2

3.0

3.5

3.3

3.8

3.7

3.7

3.3

2.3

2.2

22. Total earnings to total available funds

4.5

4.3

4.1

3.9

4.3

4.1

4.1

3.9

4.3

4.2

4.4

4.2

4.1

3.9

3.9

3.7

4.1

3.9

4.1

4.0

3.8

3.6

3.5

3.3

3.9

3.7

4.0

3.9

4.7

4.4

2.4

2.3

23. Net earnings to total available funds

1.0

0.9

1.0

1.0

1.0

1.0

1.0

0.9

0.9

1.0

1.1

1.1

1.0

1.0

0.7

0.9

1.0

1.0

1.0

1.0

0.9

0.9

0.8

0.8

1.0

1.0

0.9

0.9

1.0

1.0

0.7

0.7

24. Net earnings to capital funds

7.1

6.7

6.7

7.1

6.1

6.3

5.4

5.3

5.9

6.6

6.9

7.1

7.1

7.6

5.2

6.4

7.3

8.0

5.3

5.7

26. Net profit or net lossf (—) to capital funds

7.1

0.9

2.5

8.0

0.5

8.3

2.6

7.8

0

8.8

0.2

7.2

5.4

8.8

6.4

6.8

5.7

26. Net profit or net lossf (—) to total available funds

1.0

1.3

0.3

1.3

0.1

1.4

0.5

1.4

0

1.4

0

1.1

0.6

1.2

0.8

0.9

0.5

* Losses and depreciation charged off less recoveries.
** Losses and depreciation charged off less recoveries and profits on securities sold,
t After charge-offs, recoveries, etc.

Note: Groups I, II, III do not include New York City banks.



Cp
and reti
deposits
uepusjiB, ana Dorrowea money; aemana deposits include deposits of other Daniis,
etc., and Government deposits as well as individual deposits payable on demand

7.6

7.7

7.9

6.8

7.3

8.2

8.2

7.6

8.0

5.5

6.5

8.6 — 4.7

10.0

4.5

10.3

2.6

9.9

1.8

10.4

-16.5

10.8

0.9

10.7

2.9

8.S

1.1 — 0.6

1.4

0.7

1.3

0.4

1.4

0.5

1.2

- 2.0

1.2

0.1

1.6

0.4

1.0

7.5

Group
Ratio of Time Deposits
to Total Deposits

1935

24.1

33.0 —10.2

14.5

Total
Deposits

Ratios 1-15 were computed from the figures of section 1 of the semi-annual earnings and dividends reports; ratios
16-19 were computed from averages of figures from the "call" condition reports (in computing yearly averages, the
December "call" figures of the previous year were included); ratios 20-26 were based on figures from earnings and
dividends and condition reports.