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FE D E R A L R E S E R V E BANK
O F NEW YORK
r Circular No. 3 9 5 2*1
L February 27, 1953 J

Operating Ratios of Member Banks in the Second Federal
Reserve District for the Year 1952
To all Member Banks in the
Second Federal Reserve District :

Net profits after all charges, but before dividends,
for member banks in the Second Federal Reserve
District averaged 7.3 per cent o f capital funds in
1952, compared with 6.9 per cent in 1951 and 7.7 per
cent in 1950. The greatest increase in the rate of
return on capital (item 3) occurred in the two largestsized groups of New York City banks. For these banks
an increase in the rate o f return on loans (item 26)
was the principal influence in raising average returns
on capital to the highest levels since 1946, namely, to
6 .6 per cent for Group V I and 7.3 per cent for
Group V II banks. The return on capital funds for the
four groups o f banks located outside New York City
showed smaller increases over 1951; profit rates for the
different size-groups, however, ranged from an average
o f 6.9 per cent to 7.5 per cent. The average return for
the smallest-sized New York City banks (Group V )
ran counter to the generally higher profit trend in the
District and declined sharply, owing to an increase in
operating expenses and in net charge-offs without any
compensating growth in operating income.
In most banks o f the District, total current earnings
reached a record level in 1952 in absolute dollar
amounts. Relative to total assets (item 5) they aver­
aged 3.08 per cent, the highest since 1941 when
3.30 per cent was realized on a much smaller volume
o f assets. Except for banks in Group V , operating
expenses (item 18) as a percentage o f total earn­
ings were generally unchanged or lower in 1952.
Consequently, net current operating earnings before
income taxes either remained unchanged or improved
slightly as a percentage o f total earnings (item 19) in
most groups o f banks; in actual dollar volume net
current operating earnings also attained peak levels.
Deductions from net current operating earnings as a
result o f total net losses and charge-offs accounted
for about the same proportion of total earnings as in
1951, but income taxes continued to increase and net
profits (item 2 2 ) as a fraction o f total earnings were
generally little changed except for a rise in the largest
New York City banks.
As shown in the accompanying chart, loans con­
tinued to move upward in 1952 and attained all-time
high levels. The effective rate o f return on loans
(item 26) also increased slightly in most groups of
banks but the rise was somewhat greater in the two
largest-sized New York City groups, in which higher
rates on business and security loans brought average
loan earnings to 3.4 per cent (compared with 5.4
per cent for all banks in the D istrict). This combina­




tion increased actual loan income in this District to a
peak level. As a proportion o f total earnings, loan
income averaged 55.0 per cent, the highest ratio since
1929. The growth in loans and other “ risk assets” also
was reflected in a further reduction in the ratio of
capital accounts to total assets, less U. S. Government
securities and cash (item 34). The rate o f decline in
this ratio, however, was the smallest for any year since
the end o f "World W ar II.
The dollar amount o f interest received on U. S.
Government securities also was larger in 1952 despite
a falling-off in average holdings. The rise in income,
which arose from the higher yields received on re­
placements o f maturing obligations, generally did not
keep pace with the growth in total earnings and
the proportion of earnings attributable to interest
on Government securities (item 8 ) receded slightly in
most groups o f banks. Income received on other
securities, largely tax-exempt municipal obligations,
accounted for a slightly larger proportion o f total earn­
ings because of continued net acquisitions carrying
considerably larger yields. Although Government
securities continued, for the second successive year,
to sell in a free market at unsupported prices, net
losses and charge-offs on securities (item 25) were
confined in almost all groups o f banks to a maximum
of Yio o f 1 per cent o f holdings (about the same as
in 1951).
Salary and wage payments continued to increase
because o f higher wage rates and larger staffs,
although relative to total earnings (item 15) they de­
clined moderately. Interest payments on time and
savings deposits increased sharply both in absolute
and relative terms as the commercial banks began to
pay higher rates to their depositors. These rate in­
creases have apparently had some effect in discouraging
withdrawals from commercial banks in this area, and
time deposits continued to rise moderately in 1952.
Relative to total deposits (item 36), however, they have
generally declined. Income taxes also consumed a
larger part o f total earnings because o f the larger
payments required by the increased amounts of
taxable income.
Dividend payments rose in a large number of banks
but relative to capital funds the average fo r the
District remained unchanged at 2.5 per cent. A sizable
part o f the year’s net profits, about two thirds on
average, was again added to capital funds.
A l l a n Sproul,

President.

1 9 5 2 Average Operating Ratios o f Member Banks in the Second District, Grouped A ccordin g to Size o f Deposits and P roportion o f Loans to Total Assets
All ratios are expressed in percentages and are arithmetical averages of the ratios of individual banks in each group, rather than ratios based on aggregate dollar figures

Balance sheet figures used as a basis for the 1952
ratios are averages of amounts reported for Decem­
ber 30, 1951. June 30, 1952, and September 5, 1952.

1951
SUMMARY RATIOS

1951

715

1952

131

1952

732

Number of B a n k s..

Group average

Group average

Loans to total assets, per cent— 19.‘>2
Under 20 20-29.9 30-39.9
A
B
C

118

19

28

MANHATTAN,

40 and up
D

YO U ll
BANK

1951

1952

32

39

224

Loans to total assets, per cent— 1952
30-39.9 40 and up
C
D

Under 20 20- 29.9
B
A

216

63

32

73

NEW

YORK

48

YOUR
BANK

Group average

Y O U R N OTES

BANKS IN M AN H ATTAN , N EW Y O R K C IT Y

CITY

GROU P III— Deposits of $5,000,000 to 820,000.000
Line Number

N ote:

OUTSIDE

GROUP II— Deposits of 82,000,000 to 85,000,000

GROUP I— Deposits under 82,000,000

Group average

Loans to total assets, per cent— 1952
Under 20 20-29.9 30-39.9
B
A
C

1951

1952

262

260

36

80

40and up
D

YOUR
BAN K

87

Loans to total assets, per cent— 1952
Under 20 20-29.9 30-39.9 40 and up
B
A
C
D

1952

52

92

1951

93

6

30

26

GROUP VI
Deposits $100 million
to $1 billion

GROU P V
Deposits
under 8100 million

GROU P IV— Deposits over S20,000,000

YOUR
BANK

GROU P VII
Deposits
over $1 billion

1951

1952

1951

1952

1951

9

9

10

10

9

YOUR
BANK

1952

Line Number

BANKS
ALL BANKS
Second District

9

31

P e r c e n t a g e o f Total C apital A ccou n ts

1. Net current earnings before income taxes...........

11.6

12.4

9.4

10.0

7.1

8.8

10.5

11.8

10.8

11.7

9.7

11.4

12.3

12.4

1

12.7

13.4

10.8

12.5

13.3

16.8

14.0

14.6

11.8

13.4

13.7

17.1

10.6

8.6

12.0

12.8

12.1

13.9

1

2. Profits before income taxes....................................

9.9

10.6

8.6

9.1

6.9

8.4

8.9

10.9

9.5

10.3

8.9

10.2

10.7

10.8

2

10.5

11.1

9.3

10.5

11.3

13.1

11.1

11.4

11.0

10.3

10.7

13.2

8.6

6.0

9.9

12.1

11.4

13.5

2

7 .3

6.6

6.9

5.6

6 .5

6.6

8 .0

7.0

7 .5

7.1

7.6

7.6

7 .5

3

7 .0

7 .5

6.9

7 .3

7 .6

7.8

7 .0

7.2

7.7

6 .7

6.9

7.7

5 .2

3.1

5 .8

6.6

6 .2

7 .3

3

2 .5

2 .5

2.1

2.0

2.0

1.8

2.1

2.1

2.3

2.3

1.9

2.3

2.4

2 .5

4

2.6

2 .5

2.2

2.5

2 .5

2.7

3.1

3.2

2.6

3 .3

3.3

3.3

2.1

2.1

3.6

3.6

3.9

3 .9

4

4. Cash dividends declared .........................................
P e r c e n t a g e o f T otal A sse ts1

2.95

3.08

3.07

3.18

2.49

2.80

3.22

3.77

2.94

3.07

2.41

2.83

3.19

3.62

5

2.94

3.05

2.41

2.77

3.14

3.73

2.98

3.11

2.48

2.75

3.04

3.63

3.12

3.11

2.41

2.54

2.12

2.31

5

6. Net current earnings before income taxes...........

0.93

0.98

0.96

1.02

0.74

0.90

1.02

1.24

0.93

1.00

0.75

0.96

1.05

1.13

6

0.91

0.96

0.76

0.88

0.95

1.22

0.93

0.96

0.82

0.83

0.92

1.14

0.78

0.62

1.08

1.16

0.95

1.08

6

7. Net profits ................................................................

0.56

0.59

0.69

0.71

0.58

0.66

0.66

0.85

0.60

0.64

0.55

0.65

0.65

0.68

7

0.51

0.54

0.47

0.52

0.54

0.59

0.48

0.48

0.56

0.42

0.47

0.53

0.37

0.22

0.55

0.61

0.48

0.57

7

26.5

26.0

25.6

25.8

39.9

33.6

22.8

15.6

27.4

27.3

46.1

31.1

23.1

16.0

8

28.1

27.2

44.1

31.3

23.3

15.8

23.2

22.3

37.1

27.8

21.4

14.8

15.4

18.6

24.1

23.6

19.6

18.9

8

7 .2

11.2

8.6

6.1

4.3

9

6.6

6.7

11.9

8.4

5.4

3.1

6.2

6 .7

14.6

7.9

6.6

4.0

4.6

5.5

6.1

6.4

4.9

4 .8

9

57.1

SOURCES A N D DISPOSITION OF EARNINGS
P e r c e n t a g e o f T otal Earnings

8. Interest on U. S. Government securities...............
9. Interest and dividends on other securities.............

6 .8

6 .7

7.2

6.9

15.9

7.4

5.3

3.5

6.9

58.9

35.7

49.5

63.3

73.4

54.4

10. Earnings on loans2 .................................................

53.8

55.0

58.1

55.0

30.3

49.3

60.9

70.0

10

51.1

52.8

30.1

46.2

58.2

69.1

54.4

55.8

33.3

46.7

57.0

67.9

55.5

44.7

46.9

54.8

57.9

10

11. Service charges on deposit accounts.......................

7.2

6 .9

5.9

5.4

5.1

6.3

5.3

5.0

6.9

6.6

7.7

6.8

6 .2

6.4

11

8.3

8 .0

8.2

8.4

8.2

6.7

7.2

7.1

6.9

8.3

6.9

6.4

10.2

9.4

3.8

3.8

2.6

2.4

11

12. Other current earnings...........................................

5.8

5.3

3.2

3.0

3.4

3.2

3.3

2.5

4.4

3.9

4.7

4.2

3.7

3.3

12

5.9

5.3

5.7

5.7

4.9

5.3

9 .0

8.1

8.1

9 .3

8.1

6.9

12.7

11.0

21.3

19.3

18.1

16.0

12

13.
Total earnings ......................................................
14. Trust department earnings3 (part of item 12)-----

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

13

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

13

3.1

2.9

—

0 .9

-

-

1.1

-

1.4

1.1

0.9

1.0

1 .3

1.0

14

2 .2

2.1

2.6

2.3

1.9

1.6

4 .0

3.6

3.8

4.1

3.6

3.0

6.9

7 .0

14.3

13.4

9.2

8 .5

14

IS. Salaries and wages...................................................

31.5

31.0

32.2

31.8

35.0

33.5

32.1

28.8

31.2

30.3

32.1

30.6

29.3

30.2

15

30.8

30.2

29.0

30.4

31.5

28.6

32.6

32.7

30.8

34.1

33.1

31.2

40.1

40.7

33.2

32.9

32.4

30.9

15

16. Interest on time deposits.........................................
17. Other current expenses...........................................

13.1

14.1

13.1

14.2

14.3

13.9

12.2

16.1

14.3

15.1

15.2

14.0

16.1

14.9

16

13.9

15.4

17.5

15.6

14.4

15.4

11.2

11.9

13.6

10.4

12.1

12.9

3.2

5.8

1.0

1.2

1.9

2.4

16

23.8

22.9

23.5

22.1

21.1

21.0

23.8

22.0

23.1

22.1

21.6

21.5

21.9

23.6

17

24.0

23.1

21.9

22.2

24.1

23.1

25.2

24.6

22.2

25.2

24.6

24.5

31.1

32.6

20.5

19.9

20.5

19.8

17

68.4

68.0

68.8

68.1

70.4

68.4

68.1

66.9

68.6

6 7.5

68.9

66.1

67.3

68.7

18

68.7

68.7

68.4

68.2

70.0

67.1

69.0

69.2

66.6

69.7

69.8

68.6

74.4

79.1

54.7

54.0

54.8

53.1

18

31.6

32.0

31.2

31.9

29.6

31.6

31.9

33.1

31.4

32.5

31.1

33.9

31.3

19

30.8

33.4

30.3

30.2

31.4

25.6

20.9

45.3

46.0

45.2

46.9

19

4 .1

20

1.6

20

18.
Total expenses .....................................................
19. Net current earnings before income taxes.............
20. Net recoveries and profits4 (or losses - ) .............

-

21. Taxes on net income.................................................
22.

4.2

-

4.3

-

2.2

-

2.3

-

1.0

-

1.3

-

4.1

-

2.1

-

3.6

-

3.7

-

2.5

-

3.5

32.7

-

4.1

-

31.3

-

5.0

31.3

-

5 .0

31.6

-

4.8

31.8

-

5 .0

30.0

-

4.4

32.9

-

6.4

31.0

-

5 .9

-

6 .4

-

1.1

-

6.7

-

6.4

-

7.1

-

5.8

-

6 .3

-

5.8

-

2 .0

-

2 .8

-

8 .0

8.4

6.5

7.2

5.5

7.0

7.1

8.1

7.1

7 .6

5.6

7.5

8 .2

8 .2

21

8 .5

8 .5

7 .0

7.9

8.4

10.5

8 .8

8.9

9 .5

8 .4

8.4

9.7

8.0

7.1

15.7

19.9

19.6

20.7

21

19.4

Net profits ............................................................

19.3

22.5

22.4

23.1

23.3

20.7

22.9

20.7

21.2

23.0

22.9

20.4

19.0

22

17.8

17.8

19.8

18.9

17.2

16.0

16.3

15.5

22.8

15.2

15.4

14.6

11.8

7.5

23.8

24.1

2 2.8

24.6

22

RATES OF RETURN O N SECURITIES AND LOANS
R etu rn o n S e cu ritie s

23. Interest on U. S. Government securities...............
24. Interest and dividends on other securities.............
25. Net recoveries and profits (or losses-)
on total securities5 ...................................................

1.9

—

2.0

2.0

2.1

2.0

2.1

2.1

2.2

1.9

2 .0

2 .0

2.1

2 .0

2.1

23

1.8

2.0

2.0

2 .0

2.0

1.9

1.8

1.9

1.9

1.8

1.9

1.9

1.6

1.9

1.7

1.7

1.5

1.7

23

2.3

2 .4

2.6

2.6

2.9

2 .8

2.4

2.6

2.3

2.4

3.0

2.2

2 .2

2.4

24

2.2

2.2

2.3

2.2

2.2

2.3

2.2

2.2

2 .2

1.9

2.3

2.4

3.1

3.1

2.3

2 .3

2.2

2 .2

24

0.1

t

t

t

0.1

t

t

0.1

0.1

0.1

25

0 .2

t

0.1

t

25

0.1

-

-

-

0.1

-

-

0.1

-

0.1

-

-

0.1

-

0.1

-

0.1

-

0 .1

-

0.1

-

0 .2

-

0.1

-

0.1

-

0.1

-

0.1

-

0.1

-

0.2

-

0.1

-

0.1

-

FOOTNOTES

R etu rn o n L oans

26. Earnings on loans2 .................................................
27. Net recoveries (or losses-) on loans6 ...............

5.4

5.2
-

0.1

-

0.1

5.6

-

0.1

5.8

-

0.1

5.9

-

5.7

0.1

t

5.8
-

0 .2

5.9

-

0.1

5.4

-

0.1

5.5

-

0.1

5.5

-

0.1

5 .5

t -

5 .5

5.6

26

0.1

t

27

5.1
-

5.3

5.1

5.1

t

0.1

t

t

5.6

5.3

0.1

-

4 .9

5.1

5.1

4.9

t

t

0.1

t

t

5.4

5.0

0.1

-

0.1

4 .8
-

0 .2

4 .8

-

3.0

3.4

3.0

3.4

26

0.1

t

t

0.1

t

27

DISTRIBUTION OF ASSETS

2 Interest and discount on loans plus
service charges and other fees on loans.

P e r c e n t a g e o f T otal A ssets

28. U. S. Government securities....................................

39.8

38.1

37.8

36.8

48.6

44.9

34.5

27.1

40.4

38.9

55.2

42.7

35.9

28.0

28

42.1

39.8

52.8

44.0

37.0

29.7

37.7

35.5

48.0

41.6

34.4

28.1

28.7

29.6

32.8

32.7

27.8

26.0

28

29. Other securities .......................................................

9.1

9.4

8 .5

8.3

14.6

8.8

7 .5

5.3

9.4

9.9

11.1

12.0

9 .3

7 .2

29

9 .5

9 .8

13.7

11.8

8.7

5.9

9 .4

10.0

17.0

11.8

9.9

7.0

6 .5

7 .0

6.0

6 .2

5.3

5.7

29

........................................................................

31.7

32.3

33.0

33.2

15.4

24.5

35.0

46.7

31.0

31.4

13.6

25.3

35.2

45.3

30

30.4

31.3

14.5

25.1

34.7

46.4

33.4

34.5

16.2

26.3

35.0

45.6

37.4

36.1

34.6

34.0

38.6

39.3

30

31. Cash assets ..............................................................
32. Real estate assets.......................................................

18.3

19.0

19.8

20.8

20.7

21.0

21.8

20.0

18.1

18.7

19.2

19.0

18.6

18.1

31

16.8

17.8

18.1

18.0

18.2

16.8

18.0

18.4

17.7

18.6

19.1

17.7

26.0

25.7

25.3

25.7

26.7

27.2

31

1.0

1.0

0 .8

0 .8

0 .6

0 .7

1.0

0 .8

1.0

1.0

0 .8

0 .9

0 .9

1.3

32

1.0

1.0

0.7

0 .9

1.1

1.1

1.2

1.2

0.9

1.3

1.1

1.2

0 .8

1.0

0 .5

0 .5

0.6

0 .5

32

30. Loans

CAPITAL AND DEPOSIT RATIOS — in p e r c e n ta g e

33. Capital accounts to total assets..............................
34. Capital accounts to total assets, less United States
Government securities and cash assets...................

8 .5

8.3

10.8

10.7

10.8

11.0

10.2

10.8

8.9

8 .8

8 .0

8 .8

8 .8

9 .3

33

7 .5

7 .5

7 .5

7 .4

7.4

7.6

6 .8

6 .7

7.1

6.3

6 .9

6 .9

7.7

7 .5

9.8

9 .6

8.1

8 .0

33

34

21.9

20.9

27.4

27.0

37.9

32.8

23.3

20.5

23.6

22.5

35.1

23.4

19.6

17.4

34

19.7

18.9

28.6

20.0

16.7

14.4

16.0

15.1

21.7

16.2

14.9

12.8

19.5

19.5

24.0

23.2

17.9

17.0

35. Capital accounts to total deposits..........................

9.4

9 .3

12.3

12.2

12.3

12.7

11.5

12.2

9.9

9.7

8 .8

9.7

9 .8

10.4

35

8.2

S .2

8 .2

8.1

8.1

8.4

7 .4

7 .3

7.7

6.8

7.5

7 .6

8.6

8.3

11.4

11.3

9 .2

9 .0

35

36. Time to total deposits...............................................

44.6

43.8

44.4

43.7

42.2

41.4

40.1

49.0

48.0

46.6

44.1

47.1

46.5

48.0

36

47.8

47.3

49.4

46.2

44.9

51.7

38.0

37.2

42.6

32.4

35.9

41.9

11.6

13.5

10.6

10.1

7 .0

7.4

36

37. Interest on time deposits.........................................

0.9

1.1

1.0

1.1

0.9

1.1

1.0

1.3

0 .9

1.1

0 .9

0 .9

1.2

1.2

37

0 .9

1.1

0.9

1.0

l.l

1.2

0 .9

1.1

0 .9

1.0

1.1

1.3

1.0

1.4

0.4

0.6

0 .6

0 .8

37

38. Total deposits ...........................................................

1,337

1,341

1,240

1,390

1,339

1,350

3,316

3,319

3,301

3,419

3,284

3,251

38

9,755

9.695

9,721

9,805

9,699

9,501

65,603

67,052

51,133

64,859

80,247

61,190

35,240

37,577

423,074

440,534

39. Capital accounts .......................................................

161

161

150

176

155

161

324

317

282

325

316

334

39

788

778

764

784

772

791

4,709

4,806

3,694

4,380

5,660

4,717

2,916

3,041

47,580

49,096

AVERAGE BANK IN GROUP — in th o u s a n d s o f d o lla rs




1 Total expenses as a percentage of
total assets may be computed by sub­
tracting item 6 from item 5.

2,286,873 2,380,338

38

211,168

39

207,615

3 Banks not reporting this item or
reporting negligible amounts were ex­
cluded in computing this average, and
averages are not shown where there
were fewer than 3 banks in a group.
4 Transfers from and to valuation
reserves, recoveries and profits on
securities, loans, and all other items,
less all losses and charge-offs other
than recurring depreciation on banking
house and fixtures which is in item 17.
5 Transfers from and to valuation
reserves included.
6 Transfers from and to valuation
reserves excluded.
t Less than 0.05 per cent

R EC EN T BANKING TRENDS IN SECOND FEDERAL RESERVE DISTRICT
N E W YORK C I T Y M E M B E R B A N K S

Includes deposits of states and p o lit ic a l subdivisions.




A L L O T H E R M E M BER B A N K S

Source:"Call” reports.




Prepared by
F i n a n c i a l S t a t i s t i c s D iv is io n
R esea rch D ep a rtm en t


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102