STATE BANKING DEPARTMENT. REPORT OF THE COMMISSIONER. STATE OF MICHIGAN, Banking Department, Lansing, December 31, 1917. To the Honorable Albert E. Sleeper, Governor of Michigan: Agreeable to the provisions of Section 43 of the General Banking Laws of Michigan, I have the honor to submit for your consideration the twenty-ninth annual report of this Department for the year ending December 31, 1917. NUMBER OF STATE BANKS AND TRUST COMPANIES. There are at the date of this report, under the supervision of this Department, 501 state banks, one industrial bank and ten trust companies transacting business in Michigan. FINANCIAL CONDITION. Reports showing the condition of all state banks and trust companies will be found on pages 3 to 516 inclusive. Reports of condition were called for by the Department and made by the banks at the close of business, December 27, 1916, March 5, May 5, June 20, September 11, November 20 and December 31, 1917. The last named report as to each state and national bank will appear in the Department's annual report for the year 1918. In order that the annual report may be in the hands of the public in time to be of use as a book of reference, this plan of publishing reports has been adopted. Statements of condition of each national bank in Michigan will be found on pages 519 to 626 inclusive. Special attention is called to the tables in the text of this report, as evidencing the increasing wealth and prosperity of the people of Michigan since the organization of the Department in 1889. These tables contain abstracts of the annual reports of state and national banks for the past twenty-nine years. Again included are the statistics of the state and national banks located in reserve cities, and statistics of state and national banks by counties. NUMBER OF EXAMINATIONS. The examining staff of the Department, during the year 1917, made 1,017 examinations, as follows: The above table will show that all of the banks have been examined twice during the year with the exception of 10 of the new banks. Preliminary examinations consist of examinations of new banks under Section 7 of the Banking Law, which is incumbent upon the Department to make precedent to the issuance of certificate of authority to commence business. Each of the ten trust companies has been examined once during the year, in accordance with the provisions of the trust, deposit and security law. Reports of examiners as to condition of the several state banks have been carefully scrutinized and letters of criticism written the banks. Such letters, as well as replies thereto, are made a part of the directors' records in each bank. All state banks, with the exception of those organized during the year, have made six reports of condition, two reports of earnings and dividends, two reports showing result of directors' examinations, and also special reports whenever the Department has deemed it necessary to require the same. Oaths of directors, signatures of officers, and list of stockholders, together with a report as to the number of depositors are furnished the Department each year by each state bank. RESERVES. The requirements of Sections 24 and 27 of the Banking Law as to cash and legal reserves, have been fully met, as is evidenced by the following table: Where reports of condition have shown low reserves, or other conditions not in harmony with the law, banks have been instructed to place themselves within the law's provisions. NEW BANKS. During the year 1917 the following Michigan state banks have been authorized to commence business. For the purpose of increasing their capital stock the following banks have amended their original articles of incorporation, in accordance with sections 10 and 10-a of the General Banking Law. The above table shows an increase in capital stock of $1,835,000.00; adding to this amount $695,000.00 capital stock of new banks makes a total increase for the year of $2,530,000.00. There has been a decrease in capital stock of $170,000.00, caused by the liquida-. tion and consolidation of certain banks, leaving a net increase in capital stock for the year of $2,360,000.00. CHANGE OF NAME. The following banks have amended their original articles of incorporation for the purpose of changing their corporate name: "Michigan State Bank," Hamtramck to "First State Bank of Hamtramck." "German-American Bank," Detroit to "First State Bank of Detroit." "The Farmington Exchange Bank," Farmington to "The Farmington State "The Capac Savings Bank," Capac to "Capac State Savings Bank." "German-American Savings Bank," Port Huron to "United States Savings Bank of Port Huron." CONSOLIDATIONS. On February 9, 1917 and March 3, 1917, respectively, the stockholders of the Springwells State Bank, Springwells, and the Peoples State Bank, Detroit voted to consolidate the affairs of the two institutions, the Springwells State Bank to be absorbed by the Peoples State Bank. In view of the consolidation examinations were made of the two institutions and being satisfied that the depositors and creditors were not defrauded, nor their interests defeated, the preliminary proceedings being regular in every particular, consent to consolidation was given by this Department, the consolidation becoming effective March 24, 1917. On September 18, 1917, the stockholders of The Citizens State Savings Bank, Pinconning, and the Pinconning State Bank voted to consolidate the affairs of the two institutions, the continuing bank to be known as the Pinconning State Bank. In view of the consolidation examinations were made of the two institutions and being satisfied that the depositors and creditors were not defrauded, nor their interests defeated, the preliminary proceedings being regular in every particular, consent to the consolidation was given by this Department, the consolidation becoming effective October 15, 1917. EXTENSION OF CORPORATE EXISTENCE. In accordance with the provisions of Act 143 of the Public Acts of 1899 the stockholders voted to extend the corporate existence of the following banks, for the period specified: The State Bank of Carson City, thirty years from and after March 15, 1917. Ypsilanti Savings Bank, Ypsilanti, thirty years from and after May 1, 1917. Peoples Commercial and Savings Bank, Bay City, thirty years from and after August 15, 1917. Peninsular State Bank, Detroit, thirty years from and after August 26, 1917. Peninsula Bank, Ishpeming, thirty years from and after October 27, 1917. REORGANIZATION. On December 14th, 1917, The Muskegon Savings Bank was reorganized as The Muskegon Savings Bank of Muskegon, Michigan, for the purpose of continuing the business of the former institution for a period of thirty years. TRUST COMPANIES. During the year two trust companies have been organized: "The Bankers Trust Company of Detroit" and "The American Loan and Trust Company," Detroit with capitals of $300,000.00 each. The Bankers Trust Company of Detroit was authorized to commence business May 11, 1917, and The American Loan and Trust Company was authorized to commence business July 2, 1917. INDUSTRIAL BANKS. Under the provisions of Act No. 296 of the Public Acts of 1917, an act concerning industrial banks, defining the same and providing for their incorporation, powers, supervision and control. The Industrial Morris Plan Bank of Detroit was organized with a capital of $500,000.00 and was authorized to commence business August 16, 1917. RESERVE CITIES. As required by Sections 24 and 27 of the General Banking Law, I hereby designate for the year 1918 the following cities as reserve cities for Michigan state banks and trust companies: Adrian, Alpena, Ann Arbor, Battle Creek, Bay City, Benton Harbor, Cadillac, Detroit, Grand Rapids, Jackson, Kalamazoo, Lansing, Marquette, Muskegon, Port Huron, Saginaw, Sault Ste. Marie, Traverse City, Baltimore, Boston, Buffalo, Chicago, Cincinnati, Cleveland, Milwaukee, Minneapolis, GROWTH OF STATE BANKS. December 31, 1917, marks the twenty-ninth anniversary of the founding of the present system of state bank supervision in Michigan. The following table shows the enormous increase in the aggregate footings of the state banks from the close of the first year's existence of this Department to the present time: In the period 1889-1917, the following approximate increases are shown: deposits, $545,000,000.00; loans, $524,000,000.00; capital, $36,000,000.00; surplus and undivided profits, $36,000,000.00. The loans have increased, between November 17, 1916, and November 20, 1917, $58,481,388.23, the deposits $43,189,235.95. The increase in deposits is divided as follows: Commercial deposits $29,494,035 30 EARNINGS AND DIVIDENDS OF STATE BANKS. The General Banking Law of the State of Michigan does not fix a uniform dividend period for state banks. It provides, however, that each bank shall report to the Commissioner of the Banking Department within ten days after declaring any dividend, such reports showing amount of dividend, amount carried to surplus and any earnings in excess thereof. The custom of the Department in this regard is to call for a report of earnings and dividends as of June 30 and December 31 of each year. For the year ending June 30, 1917 the gross earnings of state banks amounted to $29,201,177.09. From this sum was charged off on account of losses. bad debts, premiums, etc., $1,731,484.91 while expenses, interest and taxes paid aggregate $20,184,614.75. Net profits for the period amount to $7,285,077.43 out of which total dividends of $44,353,992.16 were declared. For the twelve months ending June 30, 1917, the total average capital of state banks was $38,695,880.83, total average surplus, $23,069,276.62; total average undivided profits, $10,668,140.57; average total deposits, $551,764,680.86, and total average investable funds, $493,085,605.71. On average capital and surplus the net profits were equivalent to 11.79 per cent, on average total deposits 1.32 per cent, on average capital, surplus, undivided profits and deposits 1.17 per cent,and on average total investable funds 1.48 per cent. On average capital and surplus dividends paid were equivalent to 7.21 per |