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FEDERAL RESERVE BANK
OF NEW YORK
Circular No. 1921
March 4, 1939
Operating Ratios of Member Banks in the Second Federal
Reserve District for the Year 1938 Compared with 1937
To all Member Banks in the
Second Federal Reserve District:
The annual compilation of operating ratios of member banks in the Second
Federal Eeserve District for the year 1938 is presented herein, with comparative
ratios for 1937. Practically all member banks in the District are included and are
grouped according to the amount of their deposits. Banks in New York City are
segregated from those located outside New York City, and those located outside
New York City are further subdivided according to the ratio of time deposits to
total deposits.
Two additional ratios have been added to the compilation this year. Real estate
taxes and other taxes paid, which formerly were included in "All other expenses,"
are now shown separately as percentages of total earnings from current operations. Another change in the ratios this year concerns "Income from Trust department." Such income is now shown separately as a percentage of total current
earnings for only those banks in each group which had income from trust departments, and is also included in "All other earnings."
All groups of banks showed net profits in 1938, but the average percentage of
profits to total earnings from current operations (Item 13) declined to 9.9 per cent
in 1938 from 16.2 per cent in 1937 and 31.9 per cent in 1936. This decline may be
attributed almost entirely to larger charge-offs for losses and depreciation on investments, caused by the depressed prices for medium and lower grade bonds that
accompanied the recession in business in the early part of the year. In 1936 there
were substantial profits and recoveries on investments which added considerably
to net profits. The average net profit, after charge-offs and recoveries, for the 757
banks included in the compilation (Item 17) was equal to 2.2 per cent of capital
funds in 1938, as compared with 4.3 per cent in 1937 and 8.9 per cent in 1936. From
1923 to 1929 net profits averaged about 10 per cent of total capital funds.
Although gross income of banks in this District was rather generally reduced
in 1938 because of a somewhat smaller volume of loans and investments and a
slightly lower rate of return on those assets, most banks managed to curtail expenses
accordingly, so that the average ratio of total expenses to total earnings (Item 10)
was 74.9 per cent in 1938, as compared with 75.8 per cent in 1937.
The proportion of investments to total loans and investments (Item 28) again
decreased slightly in 1938 in the smaller banks of the District, but increased in most
of the larger banks; the large banks in New York City showed a sizable increase
from 50 per cent in 1937 to 56 per cent in 1938, caused by the reduced demand for
loans. The average percentage of capital funds to deposits for all banks (Item 26)
continued the slight downward trend of previous years.
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.
GEOEGE L. HAEBISOIST,
President.
Average Operating Ratios of Member Banks in the Second Federal Reserve District, 1938 Compared with 1937
GROUPED ACCORDING TO SIZE AND CHARACTER OF DEPOSITS
All ratios are expressed in percentages and are arithmetical averages of the ratios of individual hanks, rather than ratios hased on aggregate figures
MEMBER BANKS LOCATED OUTSIDE GREATER NEW YORK
ALL I
Group
Average
Number of Banks. .
Year
GROUP II
BANKS WITH TOTAL DEPOSITS 81,000,000 to $4,999,999
GROUP I
BANKS WITH TOTAL DEPOSITS UNDER $1,000,000
Ratio of Time Deposits to Total Deposits
Under 50%
50% to 69.9%
70% and Up
Ratio of Time Deposits to Total Deposits
Group
Average
Under 50%
50% to 69.9%
70% and Up
GROUP III
BANKS WITH TOTAL DEPOSITS 85,000,000 and UP
Ratio of Time Deposits to Total Deposits
Group
Average
Under 50%
50% to 69.9%
70% and Up
MEMBER BANKS
IN
GREATER NEW YORK
GROUP IV
GROUP V
Total Deposits Total Deposits
Under
$20 000 000
820,000,000
and Up
YOUR
FIGURES
Total Deposit*
Group
1
Ratio of Time Deposits
to Total Deposits
754
757
266
261
62
51
156
159
48
51
329
337
43
44
172
170
114
123
108
109
30
27
61
64
17
18
28
27
23
23
1937
1938
1937
1938
1937
1938
1937
1938
1937
1938
1937
1938
1937
1938
1937
1938
1937
1938
1937
1938
1937
1938
1937
1938
1937
1938
1937
1938
1937
1938
43.1
44.8
46.7
49.8
44.5
47.2
47.3
50.4
47.6
50.4
41.2
42.9
41.5
44.7
43.7
44.5
37.4
40.0
41.3
41.0
40.9
39.8
42.0
41 3
39.8
41.5
43.6
44.9
36.2
35.1
42.5
39.5
42.1
38.4
43.4
38.9
41.1
37.4
43.6
40.9
45.2
42.3
41.0
35.6
41.8
40.0
51.7
48.0
40.4
38.4
37.6
35.2
39.6
38.2
48.4
43.7
30.2
26.9
32.9
32.8
5.0
5.8
4.9
5.4
5.6
7.1
4.9
5.5
3.9
3.6
4.7
5.4
7.6
8.2
5.0
5.9
3.3
3.8
4.1
4.9
4.6
5.1
4.1
5.1
3.3
3.8
15.9
19.3
2.4
3.1
9.4
9.9
6.3
6.4
6.5
6.8
6.7
6.7
4.9
5.1
8.9
9.4
9.9
11.5
9.5
9.6
7.6
8.2
14.2
15.7
16.9
19.9
14.3
15.4
8.5
11.0
10.3
8.9
28.5
29.0
3.8
4.3
1.8
2.3
2.2
1.4
1.7
2.2
1.2
3.0
2.0
2.3
2.6
3.2
1.9
2.4
1.7
1.7
4.4
5.1
5.7
7.0
4.4
4.8
1.9
3.1
5.1
7.6
17t7
18.1
1937
1938
ITEMS OF INCOME, EXPENSE, AND NET PROFIT
IN PERCENTAGES OF TOTAL EARNINGS FROM
CURRENT OPERATIONS
Sources of Earnings from Current Operations
4. All other earnings
Income from Trust department (included in item 4)t
Total earnings from current operations
100.0
100.0
100.0
100.0
100.0
100.0
100.0
34.1
34.7
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
27.3
27.7
23.9
24.1
24.9
26.1
30.0
32.2
25.4
26.2
22.2
23.6
25.4
27.3
28.6
29.8
24.6
27.2
22.2
23.8
32.7
34.1
36.6
38.7
16.1
15.3
25.2
23.1
32.3
31.6
24.4
22.7
16.3
14.3
25.5
24.0
34.6
30.8
11.4
10.9
2.1
1.8
4.7
Disposition of Earnings
8
Other taxes
.
...
9. All other expenses
10. Total current expenses
11 Net earnings from current operations
12. Recoveries or charge-offs (—), net*
13 Net proSt
(after charge-offs, recoveries, etc.)
26.8
27.7
28.3
28.4
23.2
22.1
21.7
20.9
13.3
11.8
22.8
21.6
28.9
28.0
26.4
25.2
2.9
3.2
2.3
2.4
2.0
2.4
2.5
2.5
2.0
2.0
3.3
3.4
3.6
3.7
3.4
3.5
3.1
3.2
4.0
4.2
5.0
4.0
4.6
3.7
4.8
1.6
2.7
2.1
2.4
3.0
2.3
3.4
2.5
3.7
2.7
3.5
2.5
2.9
2.6
2.9
2.2
3.2
2.4
2.6
2.1
3.0
2.2
2.1
1.7
1.9
15
2.0
1.8
2.6
1.8
2.9
2.2
3.3
3.4
19.9
19.6
20.5
19.8
21.7
21.9
21.0
19.8
17.2
17.7
18.3
18.2
23.6
21.6
18.7
18.7
15.8
16.4
19.5
20.1
22.4
23.4
19.5
19.5
14.9
16.7
29.3
27.4
25.7
26.4
75.8
74.9
76.2
74.0
74.8
73.5
77.1
74.1
74.9
74.4
75.8
75.1
76.5
75.2
75.3
73.6
76.4
77.0
75.4
76.5
73.4
74.0
75.6
77.1
78.0
77.9
77.9
77.3
69.S
72.7
24.2
25.1
23.8
26.0
25.2
26.5
22.9
25.9
25.1
25.6
24.2
24.9
23.5
24.8
24.7
26.4
23.6
23.0
24.6
23.5
26.6
26.0
24.4
22.9
22.0
22.1
22.1
22.7
30.2
27.3
— 8.0 —15.2
16.2
9.9
3.8
— 6.1 —15.1 — 5.8 —15.0 — 5.3 —16.8 — 9.1 — 9.6
17.7
10.9
19.4
11.5
3.7
4.0
4.0
3.9
0.9
1.0
1.0
1.1
6.9
7.1
6.2
4.3
2.2
0.6
— 8.7 —17.2 — 8.7 —15.4 —10.8 —17.8 — 5.3 —17.1
—13.6 —12.9 —16.3 —12.9 —15.9 —14.3 — 1.0 — 7.6
— 0.7 — 8.4 — 4.3 — 6.3
17.6
9.1
16.0
16.0
15.5
7.7
14.8
9.4
13.9
8.6
18.3
5.9
11.0
10.6
10.3
13.1
8.5
8.6
21.0
14.5
21.4
14.3
25.9
21.0
3.8
4.1
4.1
4.1
4.1
3.8
3.7
3.6
3.6
3.8
3.7
3.8
3.6
3.5
3.4
3.3
3.2
3.7
3.5
3.5
3.5
4.3
4.1
2.3
2.2
1.0
1.1
1.0
1.1
1.1
1.1
0.9
0.9
0.9
0.9
1.0
1.0
0.9
0.9
0.9
0.8
0.9
0.8
0.9
0.8
0.8
0.8
1.0
0.9
0.7
0.6
6.8
5.7
6.0
6.2
7.0
6.8
7.1
7.2
7.4
6.8
6.9
7.6
8.1
6.9
6.7
7.7
7.2
7.6
7.3
8.0
i .
7.0
6.7
7.1
7.1
5.7
4.8
4.3
2.6
3.9
2.2
4.5
2.2
4.1
4.1
4.4
1.5
4.5
2.1
4.1
2.0
4.8
0.6
3.4
2.6
2.6
3.3
3.0
2.1
6.2
3.6
6.0
4.5
4.7
3.8
0.4
0.7
0.5
0.7
0.4
0.7
0.4
0.7
0.7
0.6
0.3
0.6
0.4
0.6
0.3
0.7
0.2
0.4
0.3
0.3
0.3
0.3
0.3
0.8
0.5
0.9
0.6
0.6
0.4
5.5
5.4
5.8
5.8
5.7
5.9
5.8
5.8
5.9
5.9
5.5
5.5
5.3
5.5
5.5
5.5
5.7
5.5
5.0
4.8
4.6
4.4
5.1
5.0
5.0
5.0
5.6
5.4
2.5
2.6
0.7
0.5
0.5
0.4
0.4
0.4
0.6
0.4
0.4
0.3
0.7
0.5
0.7
0.7
0.6
0.4
0.9
0.5
1.0
0.6
0.8
0.5
1.0
0.6
1.3
0.6
0.6
0.6
0.5
0.3
1.0
0.9
0.9
0.7
1.0
0.8
0.4
0.9
3.5
3.3
3.8
3.6
3.9
3.7
3.7
3.6
3.8
0.4
0.4
0.4
0.3
0.5
0.3
0.4
0.3
24. Per cent of profits on securities sold to investments
0.9
1.0
0.8
0.9
0.7
0.7
0.9
25. Per cent of losses on investments to investments
1.2
1.9
1.1
1.9
1.2
1.7
17.6
17.2
21.5
21.3
26.8
21.4
21.5
17.8
17.2
18.4
EARNINGS AND PROFITS RATIOS
15. Net earnings to total available funds
17 Net profitf to capital funds
.
18. Net profitf to total available funds
1J
RATE OF INCOME, LOSSES, RECOVERIES, ETC.,
ON LOANS AND ON INVESTMENTS
21.
Per cent of losses on loans to loans
ASSET AND LIABILITY RATIOS
26. Capital funds to total deposits
27. Banking house and equipment to capital funds
29. Time deposits to total deposits
58.8
57.9
57.4
58.4
55.7
54.1
56.7
57.9
{ Average covers only those banks having Trust departments.
* Recoveries on previous charge-offs plus profits on securities sold, less current charge-offs (charge-offs
on banking house, furniture and fixtures, etc., as well as on loans and on investments are included).
T After charge-offs, recoveries, etc.
58.3
35.0
1.0
1.1
0.9
1.1
1.0
1.0
1.0
1.1
1.3
1.1
1.1
1.0
3.7
3.5
3.2
3.4
3.0
3.5
3.2
3.6
3.4
3.1
2.8
2.9
2 6
3.2
0.4
0.4
0.4
0.4
0.3
0.2
0.5
0.5
0.5
0.3
0.4
0.4
0.4
0.3
0.9
0.8
1.0
0.9
1.1
0.9
1.2
1.0
1.1
0.8
1.1
0.7
1.3
0.7
1.1
2.1
1.0
1.6
1.2
2.0
1.1
1.6
1.4
2.1
1.1
2.1
1.3
1.8
27.2
20.3
20.0
18.7
19.2
15.8
15.4
16.8
16.8
15.5
15.1
15.8
15.3
13.6
18.5
18.5
17.9
14.7
14.1
24.0
24.5
26.8
30.6
25.5
24.9
20.6
21.8
62.3
61.0
59.2
57.5
59.4
58.9
67.8
63.7
64.4
38.5
40.0
61.9
62.5
75.8
55.7
33.4
0.8
54.1
60.2
0.8
53.2
60.6
1.3
0.6
57.6
55.1
73.3
74.0
1.1
1.0
0.6
0.9
2.8
3.3
3.1
3.1
2.9
2.3
1.9
0.5
0 5
0.2
0.3
0.3
0.4
0.5
0.5
1.1
0.7
1.4
0.6
1.2
0.9
0.9
0.8
1.0
1.1
1 7
1.6
1.9
0.7
1.4
1.0
1.4
1.4
1.2
13.4
15.0
14.4
13.2
13.1
12.7
13.4
18.8
17.7
14.6
14.7
25.8
25.6
25.9
25. i
26.9
26.8
21.8
21.9
13.9
15.6
14.5
14.2
65.0
59.5
60.3
58.5
59.1
58.6
60.5
64.7
61.8
52.4
49.5
50.0
56.0
75.6
55.9
56.5
37.1
37.0
59.7
59.4
75.2
75.5
38.2
39.3
7.5
7.9
Capital funds include capital stock, capital notes and debentures, surplus, undivided profits, reserves for contingencies.
retirement fund for preferred stock or capital notes and debentures, and reserve for dividend payable in common stock; available funds include capital funds, total deposits, and borrowed money; demand deposits include deposits of other banks, certitied and officers' checks outstanding, etc., and Government deposits as well as individual deposits payable on demand.
1.5
1.2
Ratios 1-13 are computed from the figures of section 1 of the semi-annual earnings and dividends reports;
ratios 14-25 are based on figures from earnings and dividends and "call" condition reports; ratios 26-29 are
computed from averages of figures from the "call" condition reports,
@FedFRASER