U4

BANKING STANDARDS

TABLE 83

COMPARATIVE PERCENTAGE AMOUNTS OF DEVIATION FROM DISTRICT
LEVELS AND NET YEAR-TO-YEAR CHANGE IN RATIOS OF
NET EARNINGS TO EARNING ASSETS

DIFFERENCES FROM DISTRICT AVERAGES, 1010-102

Sign

Number of
Cases

iy

Percentage | Average
Groups Percentage

Average

0.31

5.00 and over
".50 to 15.00
Under 7.<o

20.05
10.86
2.6¢

Under 7.50 4.69
7.50 to 15.00 9.79
‘5.00 and over 20.45

Average

8.072

NET PERCENTAGE
CHANGE FROM
YEAR TO YEAR

2.02

—II JI
- 4.13
—- 2.02

+ 5.17
+ 2.22
+ 5.28

4.

A

to type, the type being in each case the level common to the respective
 districts.
Earlier discussion showed that gross earnings and operating expenses
 also revert to type. In these cases, however, the reversion
is greater than that for net earnings. But this is to be expected
in view of the fact that net earnings, as residuals, are dependent
not only upon the amounts of gross earnings and of operating
expenses, but also upon the relations between them.
While inverse correlation obtains between the positions of net
earnings ratios in a given year and the directions of change from
year to year, direct correlation occurs between the net percentage
amounts of such change and the percentage amounts of the dispersion.
 That is, as shown in the detail in Table 85, the greater
the distance, measured on a percentage scale, which ratios of
net earnings are above or below the levels of the districts to which
they belong, the larger are the net percentage changes from year
to year. There is, as the table shows, but one exception to this
rule. Regression to type is indicated, accordingly, not only by
the direction but also by the amount of change.
The yearly net earnings ratios in the various districts may be
compared with their own district levels, and these levels may be
compared with one another and with the levels for all districts