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i ■U - March 31, 1964 To All Member Banks of the Second Federal Reserve District: We are pleased to send you this report on the income and dividends and the operating ratios of our member banks for the year 1963, prepared by our Bank Examinations Department. The report is intended for use by your management in analyzing and making comparisons of your operations with those of banks in the same deposit grouping. Should any questions arise, you may direct your inquiries to the Bank Examinations Department. 19 Additional copies of this report are available upon request. A lfred H ayes, President. Federal Reserve Bank of New York 14 FIFTIETH ANNIVERSARY 1 9 6 4 CONTENTS Page PART I, Income and Dividends of Second District Member Banks in 1963 ................................ 1 Table: Income, Expenses, and Dividends of Second District Member Banks, 1961-63.................. 3 PART II, Operating Ratios of Second District Member Banks for the Year 1963 ...................... 3 Tables 1963 Average Operating Ratios of All Member Banks in the Second District.................................. 6 1963 Average Operating Ratios of Second District Member Banks: In New York C it y ....................................................................................................................... 6 In Group I — Deposits under $2 Million ............................................................................. 7 In Group II — Deposits of $2 Million to $5 M illion ............................................................. 8 In Group III— Deposits of $5 Million to $20 M illion .............. ............................................. 9 In Group IV— Deposits of $20 Million to $50 M illion .......................................................... 10 In Group V— Deposits of $50 Million or o v e r ..................................................................... 11 Notes to Pages 6-11 ............................................................................................................................. 12 PART I Income and Dividends of Second District Member Banks in 1963 Summary M A JO R OPERATING REVENUES AND EXPENSES SECOND DISTRICT MEMBER BANKS 1954-1963 Net current operating earnings of $841.8 million for Second District member banks in 1963 were $5.5 million over the previous year. This increase was in contrast with the more than $26 million decline registered in 1962, and a reversal of the downward trend from the record level of $916.5 million set in 1960. Despite this overall increase, net operating earnings of the large New York City banks* con tinued to decline, but in an amount substantially less than that of the previous year. Outside New York City, net earn ings rose by $17.5 million. Millions of dollars 1800 -Ratio scale 1400 1000 1000 Including service charges and fees 600 600 400 400 U5. Govt, and others 200 *200 Trust department —• --------• " --------* ______ _ . Other revenues 100( Total operating revenues continued to rise over preceding years and the $2.7 billion for 1963 represents an increase of 18.9 per cent in two years. However, total operating expenses rose to $1.9 billion, an increase of 31.8 per cent in the same period. Interest paid on time and savings deposits totaled $673.5 million, up $138.3 million from the previous year. Lower net deductions in nonoperating items allowed net income before related taxes to gain by $38.1 million from the 1962 level. This gain, aided by lower tax payments, caused largely by a shift to tax-exempt investment obligations, especially by banks within New York City, accounted for a rise in net income after taxes. The rise, offset by only a conservative increase in dividend payments, produced nearly a 30 per cent gain in net income after divi dends over 1962 results. The 1963 increase in retained income is in sharp contrast with the declines of the two prior years. 100 50 ----- »«Js— - 1 1 1 800 l i i i 50 800 EXPENSES _ Salaries and w aaes ■ 400 400 ^ expenses 200 — 200 100 ~ 100 Interest on time deposits 60 - 60 40 — J ’40 20 20 / 10 — 4 < 1954 In spite of rising costs, banks this year have been able to level off some major expense items sufficiently to produce a small rise in net earnings— the first since 1960. The major reason for higher net earnings appears to be the continued increase in loans, particularly mortgage financing and con sumer credit, in a volume sufficient to offset the continually increasing costs of operation. / N. / \ 7 Interest and discount on borrowed money _ 10 4 1 1 1 1 1 1 1 1955 1956 1957 1958 1959 1960 1961 1 1962 ” 1963 Operating Revenue Preliminary figures for 1963 are tabulated on page 3, and trends throughout the past decade are shown on the accompanying chart. * This and all other references to New York City member banks are to those that were central reserve city member banks prior to July 28, 1962, when the central reserve city classification was abolished. The category is retained for yearly comparisons. Millions of dollars 1800 1400 REVENUES I The $216 million rise in total current operating revenue for 1963 over 1962, an 8.6 per cent increase, was slightly less than the gain recorded in 1962. The $1.7 billion earn ings from loans, however, reflected an 11.0 per cent gain. This was higher than the gain recorded in 1962 and was once again due to growth in loan volume. A $1.5 billion increase in two important loan categories— consumer instal ment and real estate loans— more than doubled the rise of 1962, carrying total outstanding loans to a record $35.3 billion for the entire District. Commercial and business Salaries and wages rose by 4.9 per cent to a record $623.5 million. The percentage rise for these outlays was greater for banks outside New York City (10.7 per cent) than for banks in the City (1.6 per cent). Interest and discount on borrowed money continued on an upward trend and totaled $11.5 million over 1962. Again, virtually all the increase stemmed from New York City banks’ borrowings to replen ish temporary shortages of reserves. Other items of expense either held steady or showed minor increases over com parable items in 1962. loans increased by nearly $1 billion over 1962, but accounted for a smaller portion of total loans than in the previous year. The decline in income from U. S. Governments and the higher earnings derived from “ other securities” holdings reflect the shift by banks into tax-exempt State and munici pal securities. A liquidation by the City banks of more than $900 million of U. S. Government obligations, and the purchase of nearly $1 billion of other types of securities (mostly tax-exempt State and municipal obligations) pro duced a drop in the earnings from U. S. Governments of 5.5 per cent and an increase in earnings from other securities of 30.6 per cent over 1962. Banks outside New York City showed a rise of 5.1 per cent from U. S. Governments and 25.4 per cent from other securities. Nonoperafing Items, Taxes, Dividends/ and Retained Earnings Although charge-offs on loans were higher, and profits and recoveries on securities lower than in the previous year, any adverse effect that this would have produced on “ net current operating earnings” was offset by the drop of some $63 million in “ additions to valuation reserve for loan losses” from the past year. A substantial reduction of $56.5 million for the same item permitted the New York City banks to show a rise in net income before taxes of $30.2 million. Banks outside New York City showed an increase in this “ net” of only $7.9 million. Operating Expenses On the cost side of the picture, total expenses of member banks in the District rose to $1.9 billion, a substantial dollar rise over 1962, but at a lower rate than the rise between 1961 and 1962. Since the rate of increase in gross earnings remained practically unchanged, net operating earnings rose slightly in contrast with a decline experienced in 1962. The largest dollar increase in expense was the $138.3 million rise in interest payments on time and savings accounts. Although substantial, this increase was nearly $20 million less than the increase incurred in 1962. For the first time in recent years, interest constituted the largest single expense item, supplanting salaries and wages. Interest outlays accounted for nearly 36 per cent of total expenses, in contrast with about 32 per cent in 1962 and 26 per cent in 1961. The rise resulted mainly from the more than $3 bil lion increase in total time and savings deposits; 1963 was the first full year that many banks felt the effect of the higher interest rates permitted in 1962. The heavy investment in tax-exempt securities enabled Second District banks to show a rise in net income after taxes of some $74 million, or 16 per cent, over 1962 results. By comparison, the rise in 1962 over 1961 was less than $2 million. Dividends to shareholders continued to increase, with payments of 4.7 per cent more than in 1962. The total net income retained after the payment of dividends for all banks was nearly 30 per cent greater than the corresponding amount in 1962. 2 In c o m e , E x p e n s e s , a n d D iv id e n d s o f S e c o n d D is tr ic t M e m b e r B a n k s 1961-1963 (In millions of dollars) All Second District member banks Item New York City member banks* All other Second District member banks 1963 1962 1961 1963 1962 1961 426 451 475 12 13 13 Current Operating Revenue: On United States Government securities......................... On other securities............................................................. On loans (including service charges and fees on loans).. Service charges on deposit accounts................................. Trust department earnings............................................... Other current operating revenue..................................... 362.0 222.8 1,740.9 97.1 194.0 109.5 367.1 173.3 1,568.7 91.8 190.1 119.0 338.3 139.4 1,432.3 86.9 177.1 118.8 213.0 137.5 1,078.5 33.8 166.7 87.6 225.3 105.3 1,000.1 35.0 156.2 98.5 Number of banks................................................................ 1963 1962 1961 414 438 462 215.4 81.4 917.9 33.2 143.0 100.8 149.0 85.3 662.4 63.3 27.3 21.9 141.8 68.0 568.6 56.8 33.9 20.5 122.9 58.0 514.4 53.7 34.1 18.0 Total current operating revenue.................. 2,726.3 2,510.0 2,292.8 1,717.1 1,620.4 1,491.7 1,009.2 889.6 801.1 Current Operating Expenses: Salaries and wages—officers and employees.................... Pension, hospitalization, social security taxes, etc............. Interest on time and savings deposits.............................. Interest and discount on borrowed money...................... Net occupancy expense of bank premises....................... Furniture and equipment—depreciation, rents, etc........ Other ourrent operating expenses..................................... 623.5 117.5 673.5 42.0 143.1 49.9 235.0 594.5 111.5 535.2 30.5 131.6 41.8 228.6 564.4 101.6 377.8 17.5 121.2 36.3 211.5 385.2 82.1 354.6 38.7 92.4 26.0 124.5 379.3 80.1 273.5 28.6 88.7 21.5 123.1 360.3 73.1 187.7 16.1 81.2 18.7 111.2 238.3 35.4 318.9 3.3 50.7 23.9 110.5 215.2 31.4 261.7 1.9 42.9 20.3 105.5 204.1 28.5 190.1 1.4 40.0 17.6 100.3 Total current operating expenses.................. Net current operating earnings............................................. 1,884.5 841.8 1,673.7 836.3 1,430.3 862.5 1,103.5 613.6 994.8 625.6 848.3 643.4 781.0 228.2 678.9 210.7 582.0 219.1 Net recoveries ( + ) or charge-offs ( —) on loans................. Securities profits and recoveries ( + ) or charge-offs ( —) .. All other recoveries ( + ) or charge-offs ( —) ....................... Net additions to ( —) or deductions from ( + ) valuation reserves for: Loan losses...................................................................... Securities losses............................................................... - 63.7 + 22.4 + 11.6 - 26.0 + 33.4 + 5.4 - 40.1 + 77.6 9.6 - 36.8 + 16.2 + 0.4 - 14.5 + 24.9 5.6 - 25.6 + 65.2 7.7 - 26.9 + 6.2 + 11.2 - 11.5 + 8.5 + 11.0 - 14.6 + 12.4 1.9 - 29.5 + 9.9 - - 92.3 13.9 6.4 + 11.9 - 62.9 + 1.2 - - - - Net income before related taxes........................................... Taxes on net income.............................................................. 792.5 257.5 754.4 293.4 784.2 324.7 598.9 203.9 568.7 239.3 593.4 257.0 193.6 53.6 185.7 54.1 190.8 67.7 Net income....................................................... 535.0 461.0 459.5 395.0 329.4 336.4 140.0 131.6 123.1 Cash dividends declared........................................................ Net income after dividends.................................................. 260.7 274.3 249.1 211.9 242.8 216.7 193.2 201.8 189.2 140.2 182.5 153.9 67.5 72.5 59.9 71.7 60.3 62.8 92.5 2.2 74.4 7.5 23.1 2.0 29.6 3.4 17.9 6.4 * Includes only those member banks that were “ central reserve city member banks” prior to July 28, 1962, when the central reserve city classification was abolished. P A R T SI Operating Ratios of Second District Member Banks for the Year 1963 Summary Ratios but the percentage of retained earnings equal to 1962. The operating ratios of all member banks on a Districtwide basis as tabulated on page 6 show no significant changes since 1962. Net current operating earnings, both as a percentage of total capital accounts (# 1 ) and of total assets (# 7 ), declined only slightly from the previous year. This decline was, however, not nearly as large as that which occurred between 1961 and 1962. Total operating revenue to assets (#5) reached a postwar high in 1963, but was not large enough to offset the increase in total current operating expenses (# 6), thus producing the aforementioned decline in net operating earnings. Net income before taxes as a per centage of total capital accounts (# 2 ) also dropped slightly, (#3 minus # 4 ) was Sources and Disposition of Earnings Sources of operating revenues as percentages of total earnings changed only slightly as reported in ratios #9 through #13. The aforementioned increase in total operating revenue to assets (#5) reflected the higher income on loans (# 11 ) that arose largely from a continued buildup of loan volume. Over the last decade, as Chart 1 shows, the portion of revenue derived from loans rose from 57.4 per cent in 1954 to 63.2 per cent in 1963. By contrast, the chart indi cates the decline in the portion of income derived from U. S. 3 decreased less than in 1962. Net income as a percentage of total operating revenue (#26) continued to decrease, but the drop was less than half that sustained in 1962. The lower 1963 net income ratio resulted mainly from higher operating expenses, as the total of nonoperating accounts (#23) and transfers to valuation reserves (#24) showed little change. The reduced tax burden (#25), resulting from lower taxable income, partially offset the higher expenses. Chart 1 CURRENT O PERA TIN G REVENUES AS A PERCEN TA GE OF TOTAL ALL SECO N D DISTRICT BANKS 1954-1963 100 Rates of Return on Securities and Loans 1954 55 56 57 58 59 60 61 62 Most of the ratios showing rates of return on securities and loans give the details accounting for the higher total current operating revenue. With the exception of New York City banks in Group VI, the average rate of return on 1963 Government securities holdings (#27) rose over that of 1962. Yields on other securities (#28) increased for five of the eight bank groups, with Groups II, VII, and VIII recording declines. The higher interest returns reflect shifts toward longer maturities as well as the average higher rates on short-term instruments that prevailed in the 1963 money markets. 63 Chart 2 2 Government securities from 23.4 per cent to 18.9 per cent over the same period. ----------------------- The proportion of total current operating expenses to total earnings (#21) continued to increase, but the rate of increase declined sharply compared with 1962. The major factor in the rise continued to be the interest cost on time and savings deposits (#18), which absorbed a higher per centage of total operating revenues in 1963 than in any previous year. Underlying the increase was the continuing rise in interest rates (#41), as shown on Chart 2, and the growth in time and savings deposits relative to total deposits (#40). The increase in interest expense was particularly apparent in the larger New York City banks (Group VII and Group V III), reflecting the rapid movement of these banks to the maximum interest rate ceilings, particularly on time certificates of deposit. There was no significant change in the other operating expense ratios. As we have noted in previous years, the relatively low salary and wage ratios (#16) of certain groups of banks— such as the largest New York City banks — are attributable to the high total operating revenues upon which the ratios are computed, rather than low average salary levels. Largely as a result of the less pronounced rate of increase in total current operating expenses, the ratio of net current operating earnings to total current operating revenue (# 22) — RATE OF RETURN ON SECURITIES AND LOANS COM PARED WITH INTEREST PAiD ON TIME AND SA V IN G S DEPOSITS TIME AND SA V IN G S DEPOSITS 1954-1963 4 The moderately lower rate of returns on loans (#30) reversed the previous year’s increase. Chart 2 shows a com parison between the rate of return on loans and securities and the rate of interest paid on time and savings deposits. spread generally throughout the District. All New York City banks now have more than 25 per cent of their total deposits in time and savings money. The movement of banks in Groups VII and VIII above this percentage is due primarily to the continuing interest of customers in the negotiable interest-bearing time certificates of deposit. Distribution of Assets As shown on Chart 3, the unbroken postwar downward trend in Second District member banks’ holdings of U. S. Governments as a proportion of total assets (#32) continued in 1963, the decline in the past decade approximating 30 per cent. Holdings of other securities (#33), largely the tax-exempt State, county, and municipal issues, are approxi mately 26 per cent higher, while the loan sector (#34) increased approximately 35 per cent during the same period. The nonearning cash holdings continued their uninterrupted descent. C h a rt 3 DISTRIBUTION OF M A JO R ASSETS AS A PERCENTAGE OF TOTAL ASSETS ALL SECOND DISTRICT BANKS Capital and Deposit Ratios For the District as a whole, no change occurred in the ratios of capital accounts to total assets (#37) and total deposits (#39). Banks in Groups IV, VII, and VIII recorded moderate declines, while banks in the other groups maintained or increased their capital strength. The ratio of capital to so-called “ risk assets” (#38) continued to decline in correlation with the sustained downward trend in Gov ernment securities and cash holdings as percentages of total assets. 1954 The increases in the ratio of time deposits to total deposits (#40) and in the average rate of interest paid (#41) were 5 1955 1956 1957 1958 1959 1960 1961 1962 1963 1 9 6 3 Average Operadng Ratios of All Member Banks in the Second District (All ratios in this table and in the tables on the following pages 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.) Note: Balance-sheet figures used as a basis for the 1963 ratios are averages of amounts reported for December 28, 1962; June 29, 1963; and December 20, 1963. All Second District Banks BANK 3 IN NEW YOIIK CITY* GROUP VII GROUP VIII GROUP VI Deposits Deposits $100 Deposits million to under $100 over $1 million $1 billion billion 1963 SUMMARY RATIOS Number of banks......... 1962 1963 1962 1963 1962 1963 1962 425 446 4 5 8 7 7 YOUR BANK 7 Percentage of Total Capita! Accounts 12.0 12.1 15.3 15.6 18.6 20.3 15.8 16.7 10.3 10.5 9.5 10.3 14.2 18.1 15.0 15.2 7.4 7.4 6.0 6.5 7.7 9.2 9.7 8.9 3.1 3.1 2.5 2.6 4.3 4.6 5.1 6.1 Percentage of Total Assets 4.75 4.61 4.73 4.58 4.76 4.80 3.78 3.78 3.77 3.61 3.58 3.40 3.11 2.96 2.43 2.31 0.98 1.00 1.15 1.18 1.65 1.84 1.35 1.47 0.60 0.61 0.46 0.49 0.72 0.85 0.83 0.78 SOURCES AND DISPOSITION OF EARNINGS Percentage of Total Current Operating Revenue 14.1 18.9 18.9 12.2 16.4 13.9 12.9 12.3 7.8 7.8 1.7 4.2 4.7 3.8 8.2 6.5 63.2 9. Interest on U. S. Government obligations........................ 62.8 73.0 66.5 59.4 57.7 63.0 62.0 6.6 4.3 5.2 3.1 2.9 1.9 2.0 3.7 8.8 7.7 18.9 22.7 14.6 15.4 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 3.4 3.2 b b 16.7 20.2 9.5 9.7 24.3 24.7 24.9 25.6 27.6 28.3 22.9 23.7 3.0 2.9 4.3 3.9 4.7 4.9 4.4 4.6 33.5 16. Salaries and wages (officers and employees) .................. 6.8 3.5 32.6 29.6 28.4 16.0 10.6 20.3 16.5 4.5 4.5 4.4 4.4 5.3 5.5 5.3 5.2 14.2 13.7 12.0 11.9 12.1 12.4 11.3 11.0 79.5 78.4 75.2 74.2 65.7 61.7 64.2 61.0 20.5 21.6 24.8 25.8 34.3 38.3 35.8 39.0 23. Net recoveries and profits ( + ) or losses ( —) * ................ - 1.2 - 0.6 - 5.6 - 2.2 - 1.2 + 0.3 24. Net increase ( - ) or decrease ( + ) in valuation reserves4. - 1.6 - 2.0 - 3.1 - 6.2 - 1.6 - 3.7 - 0.5 - 3.8 5.0 5.6 6.0 6.5 12.4 17.1 12.3 14.8 12.7 13.4 10.1 10.9 14.4 17.5 21.8 20.7 a 5.9 - SATES OF RETURN ON SECURITIES AND LOANS Return on Securities 3.49 3.25 3.23 3.29 3.35 3.34 3.27 2.98 2.96 4.14 3.69 3.03 3.09 2.90 3.01 29. Netrecoveries&profits(+)orlosses(-)ontotalsecurities5 + 0.05 + 0.09 - 0.42 - 0.38 + 0.07 + 0.23 + 0.09 + 0.23 28. Interest and dividends on other securities........................ 3.06 Return on Loans 6.19 6.22 5.49 5.56 5.35 5.16 31. Net losses ( - ) or recoveries ( + ) on loans9 .................... - 0.16 - 0.15 - 0.25 - 0.08 - 0.54 - 0.07 4.94 - 5.07 0.15 - 0.06 DISTRIBUTION OF ASSETS Percentage of Total Assets 32. U. S. Government obligations ............................................. 25.1 26.0 18.5 23.1 19.1 17.9 14.1 33. Other securities ......................................................................... 12.5 12.1 2.0 4.7 8.2 6.6 10.5 8.1 34. Loans ............................................................................................. 48.8 46.9 63.8 55.7 •49.5 49.7 48.3 46.1 35. Cash assets ............................................................................... 11.9 13.4 14.2 15.0 20.4 23.0 22.1 23.6 36. Real estate assets ................................................................... 1.4 1.4 0.8 0.9 0.8 0.7 1.1 1.0 8.5 8.5 7.6 7.6 9.0 9.3 8.6 8.9 14.2 14.7 11.7 12.8 14.7 15.6 13.5 15.2 9.6 9.6 8.5 8.4 10.3 10.7 10.5 10.6 54.1 52.3 44.1 41.4 29.0 23.3 26.9 22.1 17.4 CAPITAL AND DEPOSIT RATIOS 38. Capital accounts to total assets, less U. S. Government 40. Time and savings to total deposits.................................... 41. Interest on time and savings deposits................................ 3.21 3.14 3.48 3.39 2.91 2.67 3.43 3.35 AVE3ASE BANK IN GROUP—In thousands of dollars 131,159 116,238 66,857 53,825 313,775 314.010 5,006,748 4,688,437 Capital accounts .................................................................... 12,591 11,159 5,683 4,521 32,319 33,599 * See page 12 for the note to “ Banks in N ew Y ork City” and other notes referred to in this table. 525,709 496,974 100.0 1 9 6 3 Average Operating Ratios of Second District Member Banks in Group I — Deposits under $ 2 Million Note: Balance-sheet figures used as a basis for the 1963 ratios are averages of amounts reported for December 28, 1962; June 29, 1963; and December 20, 1963. 1963 19 0-34.9 A 1962 23 Number of banks......... SUMMARY RATIOS Loans to total assets, per cent--1963 Group average 35-44.9 B 7 1 45-54.9 C 55 and up D YOUR BANK 2 9 Percentage of Tote! Capital Accounts 7.8 9.8 8.6 10.4 7.0 8.1 8.1 8.4 5.6 5.6 6.4 6.5 1.5 1.6 1.9 1.5 4.77 4.61 4.76 4.85 3.92 3.55 3.73 3.82 0.85 1.06 1.03 1.03 0.60 0.58 0.78 0.69 Percentage of Total Assets SOURCES AND DISPOSITION OF EARNINGS Percentage of Total Current O perating Revenue 27.3 18.3 6.0 6.8 fi. “ HI 25.7 — 0.5 g 5.7 m W 14.6 H w 22.9 - 2.9 27.6 G O Total current operating expenses.................................... 0.1 15.8 77.7 21.6 22.3 0.2 - 0.2 - 3.5 5.8 4 2 4.2 12.6 16.2 13.8 3.37 29. Net recoveries&profits(-}-)orlosses(-)on total securities3 3.30 3.51 3.33 3.65 3.47 3.21 4.19 + 0.12 + 0.08 + 0.16 + 0.01 36.2 26.2 Return on Loans 30. Earnings on loans1 .............................................. ................... 31. Net losses ( —) or recoveries ( - } - ) on loans8 .................. DISTRIBUTION OF ASSETS Percentage of Total Assets 32. U . S. Government obligations.............................................. 30.8 31.1 ...................................................................... 8.4 9.3 34. Loans ......................................................... ............... ................. 45.8 43.3 39.0 51.3 35. Cash assets •................................................................................ 13.9 15.5 14.8 13.0 36. Real estate assets .................................................. ................. 1.0 0.8 0.6 1.0 12.3 10.8 33. Other securities 8.4 CAPITAL AND DEPOSIT RATIOS 37. Capital accounts to total assets............................................ 12.0 38. Capital accounts to total assets, less U. S. Government securities aind cash assets .................................................. 22.5 21.8 25.1 17.7 39. Capital accounts to total deposits........................................ 14.0 12.8 14.4 12.3 40. Time and savings to total deposits .................................... 48.6 50.7 47.6 48.4 41. Interest on time and savings deposits................................ 3.01 2.90 2.82 3.07 AVERAGE BANK IN GROUP—In thousands of dollars Total deposits .......................................................................... 1,425 1,450 1,509 1,396 Capital accounts ...................................................................... 168 186 217 172 1 See page 12 for the note to “ Earnings on loans” and other notes referred to in this table. w H £ < 1 Pi W £ H ---- W ss H Return on Securities 28. Interest and dividends on other securities........................ M W — p H £ 12.3 RATES OF RETURN ON SECURITIES AND LOANS K m 2.4 w - O 29.4 £ 3.8 24. Net increase ( - ) or decrease ( + ) in valuation reserves*. P h r> « « !3 2.2 30.2 21. . 100.0 O « D m 22. Net current operating earnings.............. ' ............................ 5.6 1.9 100.0 1 9 6 3 Average Operating Ratios of Second District Member Banks in Group II — Deposits of $ 2 Million to «$ 5 Million > Note: Balance-sheet figures used a3 a basis for the 1963 ratios are averages of amounts reported for December 28, 1962; June 29, 1963; and December 20, 1963. 1963 Number of banks......... SUMMARY RATIOS Loans to total assets, per cent—1963 Group average 81 1962 0-34.9 A 35-44.9 B 45-54.9 C 55 and up D 26 25 22 11.1 8 94 YOUR BANK Percentage of Total Capital Accounts 9.8 9.6 8.0 8.2 10.9 8.8 8.4 7.4 7.4 10.0 9.7 6.4 5.9 5.7 5.6 7.5 6.4 2.3 2.4 2.6 2.3 2.4 2.2 Percentage of Total Assets Total current operating revenue........................................ 7. Net current operating earnings............................................ 4.75 4.55 4.21 4.42 4.83 5.24 3.82 3.61 3.42 3.67 3.72 4.26 0.93 0.94 0.79 0.75 1.11 0.98 0.B9 5 6. Total current operating expenses.............................. .. 0.58 .0.57 0.49 0.75 0.54 SOURCES AND DISPOSITION OF EARNINGS Percentage of Total Current Operating Revenue 15.2 20.9 20.4 32.5 23.4 19.4 10. Interest and dividends on other securities........................ 7.2 7.4 12.7 9.1 6.9 3.3 11. Earnings on loans1 .................................................................. 63.9 63 9 45.5 58.7 66.2 74.1 5.7 6.3 6.4 7.5 6.8 5.8 1.7 1.9 1.8 2.0 1.7 1.7 100.0 100.0 100.0 100.0 100.0 100.0 15. Trust department earnings2 (part of item 1 3 ) .................. 0.8 1.4 b 0.8 b b 16. Salaries and wages (officers and employees) .................. 25.6 25.4 24.5 27.8 25.0 23.9 2.0 3.2 2.7 2.9 38.2 30.9 33.3 34.8 12. Service charges on deposit accounts .................................. 2.8 2.7 33.4 33.6 4 2 4.2 3.0 5.7 3.1 4.1 20. All other current operating expenses ........................ 14.9 13.6 13.6 16.0 13.1 16.0 21. 80.9 79.5 81.3 83.6 77.2 81.7 19.1 20.5 18.7 16.4 22.8 18.3 23. Net recoveries and profits ( + ) or losses ( - ) 3 ................ - 1.6 - 1.3 - 0.5 - 1.3 - 2.0 - 1.9 24. Net increase ( - ) or decrease ( + ) in valuation reserves4. - 0.4 - 1.4 - 0.6 - 0.4 - 0.2 - 0.6 5.2 4.1 4.1 5.0 5.8 12.6 13.5 10.6 15.6 100.0 10.0 Total current operating expenses .................................... 25. Taxes on net income.............................................................. 26. Net income............................................................................ 4.8 12.3 RATES OF RETURN ON SECURITIES AND LOANS Return on Securities 3.62 3.55 3.25 3.59 3.40 3.63 28. Interest and dividends on other securities........................ 3.02 3.10 3.21 3.06 2.89 29. Net recoveries & profits ( + ) or losses ( - ) on total securities’ + 0.01 + 0.02 + 0.05 0.05 a 6.38 6.13 6.29 6.44 6.48 0.19 - 0.07 - 0.15 - 0.22 30.4 26.0 21.8 17.4 13.5 11.2 • 49.8 60.0 - 3.05 + 0.07 Return on Loans 30. Earnings on loans1 .................................................................. 31. Net losses ( - ) or recoveries ( + ) on loans0 .................... - 0.15 - 0.12 27.5 27.7 - DISTRIBUTION OF ASSETS 32. U. S. Government obligations.............................................. 33. Other securities ...................................................................... 11.1 10.9 38.4 6.8 47.9 46.5 31.4 41.1 11.9 13.4 11.8 13.3 11.7 10.5 1.4 1.4 0.9 1.5 1.2 1.7 10.4 10.1 10.0 10.5 10.5 10.3 15.3 CAPITAL AND DEPOSIT RATIOS 38. Capital accounts to total assets, less U. S. Government 17.5 17.6 20.9 18.8 17.0 11.8 11.4 11.2 11.9 11.9 11.7 55.5 54.1 57.2 49.1 56.4 61.4 3.13 3.08 3.09 2.93 3.19 AVERAGE BANK IN GROUP— In thousands of dollars 3.31 3,405 3,482 3,235 3,511 3,103 3,686 402 397 362 418 369 431 1 See page 12 fo r the note to "E arnings on loans” and other notes referred to in this table. 8 1 9 6 3 Average Operating Ratios of Second District Member Banks in Group III — Deposits of $ 5 Million to $ 2 0 Million Note: Balance-sheet figures used as a basis for the 1963 ratios are averages of amounts reported for December 28, 1962; June 29, 1963; and December 20, 1963. Group average Loans to total assets, per cent--1963 1962 0-34.9 A 35-44.9 B 45-54.9 C 55 and up D 161 183 18 44 58 41 11.3 11.3 9.9 10.8 11.2 12.7 9.7 SUMMARY RATIOS 1963 10.2 9.9 9.4 9.4 10,2 Number of banks......... YOUR BANK Percentage of Total Capital Accounts 7.0 7.3 8.1 7.0 7.0 6.7 2.7 2.9 2.8 2.9 2.6 2.8 4.68 4.58 4.02 4.45 4.79 5.19 3.75 3.66 3.22 3.59 ' 3.89 4.08 0.93 0.92 0.80 0.86 0.90 1.11 0.58 0.60 0.64 0.57 0.56 0.59 Percentage of Total Assets SOURCES AND DISPOSITION OF EARNINGS Percentage of Total Current O perating Revenue 20.6 20.0 38.5 25.2 17.8 7.7 8.3 11.0 9.0 7.6 5.1 62.4 61.6 39.0 55.7 65.0 76.0 6.9 7.3 8.3 7.2 7.2 5.8 2.4 2.8 3.2 2.9 2.4 1.5 100.0 100.0 100.0 100.0 100.0 100.0 1.7 1.7 2.0 2.0 1.6 0.8 23.2 23.9 23.3 23.4 23.2 22,9 2.7 2.7 2.7 2.5 2.9 2.6 36.1 35.1 36.3 37.3 36.5 34.2 11.6 4.5 4.0 4.1 4.3 4.5 14.0 13.9 13.7 13.5 14.3 14.4 80.3 80.1 80.0 • 80.8 81.2 78.6 19.7 19.9 20.0 19.2 18.8 100.0 21.4 4.3 ' 23. Net recoveries and profits ( + ) or losses ( - ) 3 ................ - 1.0 - 0.3 + 1.1 - 0.8 - 1.5 - 1.3 24. Net increase ( - ) or decrease ( + ) in valuation reserves4. - 1.7 - 1.4 - - 1.5 - 1.3 - 2.7 1.1 4.6 5.0 3.9 4.3 4.2 5.9 12.4 13.2 16.1 12.6 11.8 11.5 RATES OF RETURN ON SECURITIES AND LOANS Return on Securities 3.44 29. Netrecoveries&proiits(+)orlosses(-)ontotalsecurities0 3.24 3.38 3.52 3.46 3.38 2.91 2.87 3.17 2.77 2.79 3.12 •f 0.05 + 0.13 + 0.12 + 0.03 + 0.07 + 0.01 Return on Loans 6.25 6.28 6.03 - 0.13 - 0.16 - 0.06 27.3 27.4 45.5 32.0 24.6 12.5 13.0 14.9 14.4 12.9 8.8 47.4 45.3 .26.2 40.7 49.6 60.9 11.2 12.7 12.2 11.5 11.2 10.5 1.4 1.4 1.1 1.3 1.5 1.7 8.3 8.2 8.4 8.0 8.1 8.8 14.4 14.4 25.6 14.3 12.7 12.3 9.2 9.1 9.4 8.9 9.0 9.8 58.0- 56.4 51.4 58.5 58.5 59.6 6.09 - 6.26 0.08 - 0.17 6.51 - 0.13 DISTRIBUTION OF ASSETS Percentage of Total Asset* 18.0 CAPITAL AND DEPOSIT RATIOS 38. Capital accounts to total assets, less U. S. Government 8.20 3.15 2.98 3.11 3.27 3.31 AVERAGE BANK IN GROUP— In thousands of dollars 10,741 11,056 10,228 11,550 10,794 10,022 988 1,006 961 1,028 971 982 1 See page 12 fo r the note to “ Earnings on loans” and other notes referred to in this table. 9 1 9 6 3 Average Operating Ratios of Second District Member Banks in Group IV —- Deposits of $ 2 0 Million to $ 5 0 Million ... Note: Balance-sheet figures used a3 a basis for the 1963 ratios are averages of amounts reported for December 28, 1962; June 29, 1983; and December 20, 1963. Group average Leans to total assets, per cent -1963 1963 1962 0-34.9 A 35-44.9 B 45-54.9 C 55 and up D 76 63 4 18 31 23 12.5 13.0 8.7 11.5 12.8 13.5 10.4 11.2 8.6 10.5 10.6 10.3 3. Net income................................................................................ 7.7 7.9 8.3 8.1 7.7 7.2 4. Dividends declared .......................................... ....................... 3.4 3.5 3.3 3.3 3.5 3.4 SUMMARY RATIOS Number of banka......... YOUR BANK P ercen tage e f 7o?a! Capital Accounts P ercen tage Tote! Assets 5. Total current operating revenue.......................................... 4.76 4.65 4.13 4.45 4.73 5.14 6. Total current operating expenses...................... .................. 3.82 3.64 3.51 3.60 3.75 4.11 7. Net current operating earnings............................................ 0.94 1.01 .0.62 0.85 0 98 1.03 8. Net income (after taxes) .................................................... 0.57 0.62 0.54 0.61 0.58 0.55 SOURCES AND DISPOSITION OF EARNINGS P ersentegs o f Total Current O perating Revenue 10.9 16.4 28.7 21.6 16.6 10. Interest and dividends on other securities........................ 9.4 8.7 14.1 12.6 9.1 6.4 11. Earnings on loans1 .................................................................. 63.1 64.1 43.8 54.3 63.8 72.3 12. Service charges on deposit accounts .................................. 7.1 7.1 9.2 7.7 7,1 6.2 13. All other current operating revenue.................................. 3.5 3.7 4.2 3.8 3.4 8.4 9. Interest on U. S. Government obligations.............. .. 14. Total current operating revenue.................................. 11.7 100.0 100.0 100.0 100.0 100.0 100.0 IS. Trust department earnings2 (part of item 1 3 ) .................. 2.4 2 2 1.7 3.3 2.1 2.4 16. Salaries and wages (officers and employees) .................. 23.8 24 3 25.4 24.2 22.8 24.6 17.- Pension, hospitalization, and other benefits...................... 3.1 3.0 2.9 3.0 3 2 3.1 18. Interest on time and savings deposits................................ 35.0 33.3 33.1 35.7 35.6 ' 33.6 19. Net occupancy expense of bank premises.......................... 4.7 4.4 5.3 4.8 4.7 4.4 20. All other current operating expenses ................................ 13.7 13.2 14.9 13.5 13.0 100.0 14.5 80.2 21. Total current operating expenses.................................... 78.2 84.6 81.2 79.3 22. Net current operating earnings............................................ 19.7 21.8 15.4 18.8 20.7 19.8 23. Net recoveries and profits ( + ) or losses ( - ) 3 ................ - 1.3 - 0.2 + 0.6 - 0.3 - 1.4 - 2.4 24. Net increase ( - ) or decrease ( + ) in valuation reserves4. - 1.9 - 2.1 - 2.7 - 2.2 - 1.2 - 2.1 '25. Taxes on net income.............................................................. 5.5 0 6 3.5 4.9 4.7 Net income ............................................................ • .............. 13.4 13.2 13.8 12.3 10.6 26. RATeS OF RETURN ON SECURITIES AND LOANS Return on Securities 27. Interest on U. S. Government obligations................ .-... 3.56 3.23 3.41 3.45 3.69 28. Interest and dividends on other securities........................ 2.96 2.91 2.73 3.10 2.78 + 0.02 + 0.04 + 0.17 + 0.14 + 0.07 29. Net recoveries & profits ( + ) or losses( - ) on total securities5 3.50 3.11 - 0.15 Return on Loans 30.- Earnings on loans1 .............................................................. 6.06 6.28 0.18 - 0.15 5.79 6.11 - 0.23 - 0.17 34.9 27.8 21.7 39.4 50.0 59.2 10.9 12.7 10.9 10.7 1.5 1 5 1.3 1.6 1.6 7.8 6.7 7.4 ' 7.7 7.7 11.5 12.3 12.2 12.6 11.5 10.7 8.4 8.7 7.4 8.2 8.5 8.6 53.0 49.5 52.7 55.3 56.9 31. Net losses ( - ) or recoveries (-f-) on loans6 .................... - DISTRIBUTION OF ASSsTS Percentage o? Total Assets 32. U. S. Government obligations.............................................. 33. Other securities ...................................................................... 17.3 10.8 • 34. L o a n s......................................................................................... 35. Cash assets ................................................................................ 36. Real estate assets .................................. ................................. CAPITAL AND DEPOSIT RATIOS 37 Capital accounts to total assets............................................ 38. Capital accounts to total assets, less U. S. Government securities and cash assets .................................................. 39 Capital accounts to total deposits........................................ 54.8 41. Interest on time and savings deposits ................................ 3.32 • 3.21 3.02 3.31 3.33 3.37 AVERAGE BANK IN GROUP — in thousands of dollars 29,794 31,315 26,212 27.478 30,237 31,633 2,503 2,721 1,940 2,253 2,570 2,720 1 See page 12 fo r the note to “ Earnings on loans” and other notes referred to in this table. 10 1 9 6 3 Average Operating Ratios of Second District Member Banks in Group V — Deposits of $ 5 0 Million or over Note: Balance-sheet figures used as a basis for the 1963 ratios are averages of amounta reported for December 28, 1962; June 29, 1963; and December 20, 1963. SUMMARY RATIOS Number of banka......... Group average 1963 69 1962 64 Loans to total assets, per cent -1963 0-34.9 A 35-44.9 B 55 and up D 14 0 45-54.9 C 29 26 YOUR BANK Percentage c f TTotel Capita! Accounts 15.6 15.9 14.4 15.1 16.8 13.4 13.6 13.4 12.7 14.3 9.6 9 .7 9.7 9.5 9.6 4.6 4.5 4.7 4.4 4.8 4.89 4.80 4.50 4.78 5.24 3.81 3.79 3.50 3.77 4.05 Pereantese «S Total Assets 1.08 1.01 1.00 1.01 1.19 0.66 0.68 0.68 0.64 0.68 SOURCES AND DISPOSITION OF EARNINGS Percantegfe of Tota! Current Operating Revenue 9. Interest on U. S. Government obligations........................ 15.1 15.8 20.8 15.3 8.2 7.4 10.7 9.7 5.1 64.8 64.5 56.1 63.2 71.4 6.6 6.9 6.9 6.7 6.4 5.3 5.4 O i 5.5 5.1 5.3 100.0 100.0 100.0 100.0 100.0 IS. Trust department earningsa (part o f item 1 3 ) .................. 3.5 3.7 3.9 3.2 3.7 16. Salaries and wages (officers and employees) .................. o PS o a 24.5 25.3 23.6 24.7 24.9 17. Pension, hospitalization, and other benefits...................... 3.7 3.7 3.7 3.6 3.7 30.7 29.1 32.6 31.2 29.0 5.1 20. All other current operating expenses ................................ 5.1 14.0 13.7 p 03 C O W E h g 11.8 4.6 5.1 5.4 13.2 14.1 14.3 77.7 78.7 77.3 22.3 03 21.3 100.0 22.7 78.0 76.9 M < 22.0 23.1 o 23. Net recoveries and profits ( + ) or losses ( - ) 3 ................ - 0.3 + 0.8 + 1.2 - 24. Net increase ( - ) or decrease ( + ) in valuation reserves4. - 2.6 - 3.9 - 2.9 - 2.9 0.4 - 1.0 - 2.2 5.5 5.7 5.7 4.5 6.5 13.6 14.3 14.9 13.5 13.0 RATES OF RETURN ON SECURITIES AND LOANS Return on Securities 27.. Interest on U. S. Government obligations........................ 3.52 3.31 3.48 3.56 28. Interest and dividends on other securities........................ 2.85 2.79 2.76 2.99 2.74 + 0.11 + 0.14 + 0.15 + 0.10 + 0.08 29. Net recoveries & profits ( + ) or losses( - ) on total securities5 3.49 Return on Loens 30. Earnings on loans1 ................................................................. 6.08 6.16 5.95 5.96 6.29 31. Net losses ( - ) or recoveries ( + ) on loans'.................... - 0.18 - 0.14 - 0.07 - 0.16 - 0.27 32. U. S. Government obligations.............................................. 20.5 22.4 26.8 20.4 17.3 33. Other securities ..................................................................... 13.6 12.2 17.5 15.3 9.7 52.3 50.4 42.3 50.6 59.6 11.6 13.1 11.6 11.9 11.3 1.8 1.3 1.2 1.2 1.4 7.0 7.0 6.9 6.8 7.2 10.1 DISTRIBUTION OF ASSETS Percentage of Total Assets CAPITAL AND DEPOSIT RATIOS 38. Capital accounts to total assets, less U. S. Government 10.3 10.9 11.2 10.1 39. Capital accounts to total deposits........................................ 7.7 7.7 7.7 7.6 8.0 40. Time and savings to total deposits.................................... 50.1 47.8 48.1 50.3 51.0 41. Interest on time and savings deposits................................ 3.28 3.20 3.38 3.25 3.27 AVERAGE BANK IN GROUP—In thousands of dollars Total deposits ......................................................................... 197,407 190,609 174,635 230,772 172,455 Capital accounts ..................................................................... 15,200 14,677 13,447 17,539 13,796 1 See page 12 for the note to “ Earnings on loans” and other notes referred to in this table. 11 N O T E S T O PA G E S 6-11 New York City banks include only those banks that have their main office located in Manhattan. 1 Includes service charges and other fees on loans. 2 Excludes banks not reporting this item or reporting negligible amounts. 3 Includes recoveries, charge-offs, profits, or losses charged or credited to either undivided profits or valuation reserves. 4 Represents the net increase or decrease for the year in valuation reserves against loans and investments; calculated by deducting the balances in Schedule D of the income and dividends report at the end of the preceding year from the balance on hand at the end of the current year. 5 Excludes transfers to and from valuation reserves for losses on securities. 6 Excludes transfers to and from valuation reserves for losses on loans. a Less than 0.01 per cent. b Averages are not shown when fewer than three banks are in a group. Note : Year-to-year comparisons by size groups may be affected by mergers and shifts of banks from one size group to another. 12