58 percent, was recorded by the State of New York, while the highest rate of growth, 267 percent, was registered by North Dakota. In general, the percentage expansion of loans was lowest in the Eastern half of the United States and highest in the Western half. Chart D. PERCENTAGE INCREASE OF TOTAL LOANS IN ALL BANKS, Table 21. PRINCIPAL TYPES OF LOANS OF ALL BANKS IN THE UNITED STATES AND POSSESSIONS, DECEMBER, 1945-1950 1 Gross loans include valuation reserves, which are excluded from net loans in Table 19. Detailed data for 1950: See Table 105, p. 232. Marked changes in the composition of bank loans have occurred since 1945. Between 1945 and 1950 real estate loans advanced from 30 to 36 percent of all loans; other loans to individuals, which include personal instalment loans, increased from 8 to 17 percent; commercial and industrial loans rose from 32 to 36 percent of the total, while loans made for the purpose of purchasing or carrying securities declined from 22 percent to 5 percent of total loans. The distribution of loans of all banks by principal type of loan at the close of each year since 1945 is given in Table 21. A similar breakdown of the volume and distribution of loans made by insured commercial banks only is illustrated in Chart E. BILLIONS OF 50 Chart E. AMOUNT AND TYPE OF LOANS, INSURED COMMERCIAL BANKS, DECEMBER 31, 1945-1950 BILLIONS OF DOLLARS 40 30 20 1945 Examiners' appraisal of assets, insured commercial banks. Both the amount and proportion of assets classified as substandard by examiners of insured commercial banks were lower in 1950 than in any year since 1939, except for 1945 and 1946. For banks examined in 1950 the ratio of substandard assets to appraised value of total assets was 0.45 percent, compared with 0.51 percent in 1949, 0.36 percent in 1946, and 5.12 percent in 1939. Loans comprised about two-thirds and securiti other than United States Government obligations almost one-third all assets regarded as substandard. At the end of 1950, 0.99 percent the appraised value of loans was classified substandard, and substanda securities amounted to 1.90 percent of the appraised value of all securiti other than United States Government obligations. These proportion of substandard loans and securities were the lowest for which comparab data are available. Amounts and percentages of assets classified substandard from 1939 to 1950 are given in Table 22. Table 22. SUBSTANDARD ASSETS OF INSURED COMMERCIAL BANKS, 1 Amounts and percentages both refer to securities other than U. S. Government obligations. Prior to 1942 no segregation was made between U. S. Government obligations and other securities. Components do not necessarily add to the total because of rounding. Data not available separately. Detailed data for 1941-1950: see Table 108, p. 242. While the over-all proportion of loans classified as substandard is at a historically low level, the amount and percentage of such loans present potential problems in individual banks. There are wide geographical variations in the proportion of loans which are classified as substandard, ranging from a low of 0.36 percent in Rhode Island to 5.27 percent in Vermont. Banks in all the States have made provision in varying degree for possible losses on loans by setting up valuation reserves. The total amount of these reserves is greater than the total amount of substandard loans, but the valuation reserves are not held by the banks which appear to need them most. A comparison of the ratios of substandard loans and of valuation reserves to total loans, by State, is given in Chart F. Chart F. RATIOS OF SUBSTANDARD LOANS AND VALUATION RESERVES TO TOTAL LOANS, INSURED COMMERCIAL Banks, 1950 The low percentage of assets of substandard quality held by the insured commercial banks of our Nation is primarily a reflection of business prosperity. Many of those assets formerly classified as substandard have since worked out satisfactorily. At the same time it is likely that many of the bank assets which appear to be sound today may actually possess inherent weaknesses not easily recognizable in a boom period. LIABILITIES About 99 percent of all bank liabilities, exclusive of capital accounts, consists of deposits. Miscellaneous liabilities other than deposits amounted to only $2 billion on December 30, 1950, compared with total deposits for all banks of $176 billion. Deposits. Total deposits of all banks in the United States and possessions increased by nearly $11 billion, or 7 percent, during 1950. All of this increase occurred after the outbreak of the Korean fighting and the subsequent intensification of industrial and business activity. The most significant changes occurred in the demand and time deposit accounts of individuals and businesses. Demand deposits of businesses and individuals rose $8 billion during the year while time deposits increased by less than $1 billion. All of the increase in time deposits occurred during the first half of the year. The amount and type of deposits of all banks in the United States and possessions from 1945 to 1950 are given in Table 23. Table 23. DEPOSITS OF ALL BANKS IN THE UNITED STATES AND POSSESSIONS, Dec. 30, 1950. $176,120 $149,455 164,555 139,642 June 30, 1949. Dec. 31, 1948. June 30, 1948. Dec. 31, 1947. 1 Includes postal savings deposits; prior to Dec. 31, 1947, also includes a small amount of unclassified deposits. $91,314 $55,203 81,924 55,541 165,244 140,241 83,454 54,416 157,239 135,003 78,399 54,216 162,041 138,674 83,167 53,355 157,177 134,961 79,723 53,181 162,729 140,357 85,303 52,454 2,600 7,788 154,191 138,475 79,551 51,775 2,149 7,520 156,758 133,956 81,276 50,284 2,396 6,895 159,990 127,469 76,693 48,423 2,353 6,619 166,474 121,776 73,876 45,285 2,615 5,786 24,770 14,142 151,933 109,321 66,709 41,348 1,264 5,442 24,538 12,632 $2,938 $9,546 $3,059 $14,060 2,177 9,580 3,875 11,458 2,371 8,956 3,318 12,729 2,388 8,912 2,373 10,951 2,152 8,561 2,515 12,291 2,057 8,511 2,249 11,456 1,534 13,050 1,423 11,778 3,164 12,738 13,515 12,387 |