Evening star., 1940-03-20
Fifth District Bank
Ratios for Year
Are Revealed
Reserve Bank Bases
Report on Earnings
And 1889 Dividends
BY EDWARD C. STONE.

Operating ratios of 4O3 member
banks of the Fifth Federal Reserve
district, compiled from the two semi
annual reports of earnings and divi-
dends and from the four call re-
ports Of condition for the year 1889,
have just been reported by Hugh
Leach, president of the Richmond
Reserve Bank. The ratios are given
in percentages and the report is
by far the most complete ever
put out.
Interest and discount on loans
furnished 61.9 per cent of total cur
rent earnings during 1899, interest
and dividends on securities 25.4 per
cent service charges Al per cent
and all other current earnings 8.6
per cent.
Figures on the disposition of earn
1ngs during the year are equally en-
Tightening. Of the years total
earnings, salaries and wages re-
quired 261 per cent, interest on time
deposits 22.4 per cent, all other ex-
penses 22.7 per cent, making total
current expenses 7l.2 per cent.
Net current earnings were % per
cant of total current earnings. from
Which 2 per cent was deducted for
charge-offs, leaving net profits of
S6.8 per cent of current earnings.
Time deposits formed 48.5 per cent
OF total deposits, the analysis saws.
while interest paid on time deposits
was l.9 per cent on these deposits.
Net return on loans was 5.6 per
cent and net return on securities 80
per cent.
Counter Securities Active.
Securities sold over the counter in
Washington have displayed a good
deal OF activity recently. Interest
has been confined largely to four
chief issues.
Washington Properties, Inc, Is,
1852, have been the most active bonds
on the whole list. They have recent
ly f1uctuated over a range of more
than 10 points which is very un-
usual for any local bond The pres
ent bid is Sc, offered at 81.
The demand for Mayflower Hotel
bonds, with the stock attracted ac-
cording to the recently announced
plan, has picked up notably in the
financial district, reports state. These
first SIS, 1850. with stock, are now
being quoted at 92l2 bid and 97ls
asked.
There has also been a lot of ac-
tivity noted in Washington Railway
& Electric participating certificates.
The units are now being quoted at
19s4 bid, offered at 2l34.
Julius Garfinckel Co. common
stock has been in the limelight since
the favorable earnings report pre-
sented at the annual meeting. The
current bid for the stock is ga with
10a. asked.
Consolidated Title IS, with a bid
of 100, are the highest priced bonds |
on the list at present, while the
highest priced stock is Columbia Ma
tional for which 200 is bid and 220
asked.
New Investment View Needed.
The high price of high-grade in
vestments held by banks. says the
current Federal Reserve Bulletin,
presents another aspect of low inter
est rates that needs special con-
sideration Although banks are
worried about low interest rates |
from the standpoint of earnings, |
many banks also fear the effect of a |
possible rise in interest rates in |
lowering the current market values |
of investments held in their port
folios.
The handling of this problem is
IN part a responsibility Of the pub
lie authorities, but it will also re-
quire some change in attitude of |
bankers themselves as to invest
ments. Banks will need to realize !
that they are to an increasing eX-
tent institutions for the investment |
of savings as we'll as holders OF de- |
mand deposits and suppliers CT |
short-term credits.
Banks should not, of course,
place too large a portion of their |
resources in long-term bonds; but |
should maintain proper spacing of |
maturities and hold sufficient Sec
ondary reserves in readily market |
able assets to provide such liquidity |
as they may need, and these needs |
will vary from bank to bank.
d. c. Bankers at Richmond.
Among the large number of
Washington bankers at the Rich
mond Bond Conference which
opened tWo-day session this morn
ing, were A. M. McLachlen. first
vice president, District Bankers AS
sociation; Nelson B. ONeal, Edwin
B. Shaw, John Saul, F. P. H. Sid
dons, Joshua Evans, jr.; Warren R.
Forster, Aubrey o. Dooley, M. F.
Calnan, P. j. Mcmahon, A. j. Byrne,
William B. Willard, Nelson J. Fos-
ter, julius E. Lob, w. F. D. Heron,
j. William Miller, Wilbur c. Dieter,
Bernard L. Amiss and Remick Fer
guson.
Two of the most important speak
ess at the opening session we're
Hugh Leach, president of the Fed
eral Reserve Bank of Richmond
and A. E. Kincaid, consulting econ
omist of the same bank. Hjalmar
j. Procope, Minister of Finland to
the United States. will be the ban
quet speaker this evening. Mr..
Siddons will preside at tomorrow
afternoons session.
Loan Officers Arrange Trip.
William NJ Payne, jr., president
of the District Building and Loan
League, reports that many loan Off
cialS from Washington will attend
the annual meeting of the stock
holders of the Federal Home Loan
Bank of Winston-Salem on March
27 and %.
F. Wilson Camp, secretary of the
District League, will speak on
League Activities" He is ex-
pected to refer to the success of the
cooperative advertising campaign
now appearing in Washington news
papers in which "a associations are
taking part.