Berkshire Hathaway Letter 1969
1969 annual report on banking acquisition and textile exit
warren-buffettberkshire-hathawaybankingtextilesrestructuring
Berkshire Hathaway Letter 1969
Author: Kenneth V. Chace Date: April 3, 1970
Overview
The 1969 letter announces Berkshire's major acquisition of Illinois National Bank and Trust Co. (97.7% ownership) and continued textile restructuring. The company achieved over 10% return on average stockholders' equity despite less than 5% return from textiles.
Key Points
Major Acquisition: Illinois National Bank
| Metric | Value |
|---|---|
| Ownership | 97.7% |
| Founded by | Eugene Abegg |
| Net Worth (1931) | $250,000 |
| Net Worth (1969) | $17 million |
| Deposits (1969) | $100 million |
| 1969 Earnings | ~$2 million |
"Mr. Abegg has continued as Chairman and produced record operating earnings... Such earnings, as a percentage of either deposits or total assets, are close to the top among larger commercial banks."
Textile Operations
- 12% sales decline from 1968
- Box Loom Division termination completed
- Industry-wide recession more severe than normal cycles
Transformation Summary
| Segment | Return on Capital |
|---|---|
| Overall Average | >10% |
| Textile Portion | <5% |
- Marketable securities liquidated at $5 million profit after taxes
- Funds facilitated 1969 acquisition
Source
Kenneth V. Chace, April 3, 1970.