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RESEARCH LIBRARY

Federal f-^eserve Bank
of St. Louis

JUL 0 7 1988




S U M M A R Y
R E P

O R T

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^ RESERVE
RVNKof
ST. I / R T 8




President's Message

I

.n 1987, the Federal Reserve
Bank of St. Louis continued to emphasize
many of the themes that have served
us so w^ell in recent years. Important
among these is our desire to provide
leadership in the rapidly changing times
facing the financial services industry.
In economic research, our focus
remains on money and its relationship
to economic activity in a policy context.
We think our work is particularly important now w^hen there are questions
about the relevance of monetary growth
in formulating policy
Our supervision and regulation
activities continue to be characterized
by timely examinations and inspections,
w^ith active follo^v-up on any problem
situations. In 1987, the n u m b e r of
bank failures in the Eighth District
w^as among the lov^est in the country,
totaling only two.
Finally, in providing services to
financial institutions, w^e further emphasized electronic payment systems,
particularly the automated clearinghouse
(ACH) function. Our FEDNET connections \vere expanded by 50, bringing
to almost 300 the number of institutions on this dial-up PC network. Of
these, more than 150 became ACH users
in 1987.
All of our activities continue to
be characterized by high quality and a
concern for controlling costs, two hallmarks of the Bank's operations. We are

among the top two or three banks in
the Federal Reserve System based on a
set of internal quality measures, and
our check services were perceived as
having the best quality in the System
according to a national survey of correspondent banks. In 1987, v^^e again
had only a modest increase in total
expenses over the prior year—2.6 percent — reflecting our ongoing attention
to costs.
The year 1987 also marked the
departure of our active and able chairman of the board for the past five years,
W. L. Hadley Griffin, w^ho retired on
December 31 We regard him highly for
his efforts here and ^vish him well in
the future. We also wish to express our
gratitude to other retiring directors for
their contributions to our organization:
Paul K. Reynolds and Jesse M. Shaver,
St. Louis; Wilbur P GuUey, Jr., Douglas
W. Jackson, and Sheffield Nelson, Little
Rock; John E. Darnell, Jr., and R. I. Kerr,
Jr., Louisville; and Edgar H. Bailey, John
P Dulin, and G. Rives Neblett, Memphis.
A final w^ord of gratitude is due
Joseph P Garbarini, w^ho served for 27
years at the Federal Reserve Bank of
St. Louis before retiring last November
as first vice president and chief operating
officer. Joe's leadership at the St. Louis
and Memphis offices, as well as his tireless work on Federal Reserve System
projects, will be remembered for years
to come.

<^A.^
Thomas C. Melzer
President and Chief Executive Officer




T

.he r e m a i n d e r of this r e p o r t
JLh
summarizes the financial status and
certain operating statistics of the Federal
Reserve Bank of St. Louis and its three
b r a n c h e s in Little Rock, Louisville
and Memphis. In addition, it highlights
the Bank's boards of directors and
officers who will guide us through the
coming year.

!
The

Statement of Condition

Federal
Reserve
Bank
of
St. Louis

(thousands

of

dollars)

D e c e m b e r 31

Assets

1986

1987
G o l d certificate a c c o u n t
Special D r a w i n g Rights certificate a c c o u n t
Coin

$

351,000
160,000

1

$

366,000
160,000

27,845
38,147

25,977

218,128

230,428

6,321,843

5,816,381

$6,539,971

$6,046,809

501,849
19,971
371,092
723,405

568,629
19,599
387,299
0

$8,733,280

$7,611,388

$6,941,914

$5,889,469

1,165,633
4,650
20,460

1,020,808

$1,190,743

$1,037,426

07,472
77,111
0

504,569
63,510
864

$8,617,240

$7,495,838

$

58,020
58,020

$

57,775
57,775

116,040

$

115,550

Loans t o d e p o s i t o r y institutions

37,075

Securities:
Federal a g e n c y obligations
U.S. G o v e r n m e n t s e c u r i t i e s
Total s e c u r i t i e s

Cash i t e m s in p r o c e s s of c o l l e c t i o n
Bank p r e m i s e s ( n e t )
O t h e r assets
Interdistrict settlement account
TOTAL ASSETS

Liabilities
Federal R e s e r v e n o t e s
Deposits:
Depository institutions
Foreign
Other
Total d e p o s i t s

D e f e r r e d availability cash i t e m s
O t h e r liabilities
Interdistrict settlement account
TOTAL LIABILITIES

4,500
12,118

Capital Accounts
Capital paid in
Surplus
TOTAL CAPITAL ACCOUNTS

$

TOTAL LL\BILITIES AND
CAPITAL ACCOUNTS
1




$8,733,280

$7,611,388

Income and Expenses
(thousands

Current

of dollars)

Income

1986

1987
Interest on loans to depository institutions
Interest on government securities
Earnings on foreign currency
Revenue from priced services
All other income

$

3,663

469,887
10,668
29,119

1,553
470,078
11,817
28,079

445

371

$513,782

5511,898

Current operating expenses
Less expenses reimbursed

$ 60,229
(8,008)

$ 58,724
(7,294)

Current net operating expenses
Cost of earnings credits

$ 52,221
4,347

$ 51,430
4,423

Current net expenses

$ 56,568

$ 55,853

$457,214

$456,045

Total current income

Current

$

Expenses

CURRENT NET INCOME
Profit and Loss
Additions to current net income:
Profit on sales of government securities (net)
Profit on foreign exchange transactions (net)
All other additions
Total additions

$

1,210
55,933
32

1,958
59,119
3

$ 57,175

$ 61,080

0
175

0
3,700

Deductions from current net income:
Loss on foreign exchange transactions (net)
All other deductions
Total deductions

$

175

$

3,700

Net additions or deductions
Cost of unreimbursed Treasury service
Assessment by Board of Governors:
Expenditures
Federal Reserve currency costs

$ 57,000
(3,396)

$ 57,380
O

$ (2,503)
(5,146)

$ (2,959)
(5,775)

Total assessment

$ (7,649)

$ (8,734)

NET INCOME AVAILABLE FOR DISTRIBUTION

$503,169

$504,691

Dividends paid
Payments to the U.S. Treasury
(interest on Federal Reserve notes)

$ (3,462)

$ (3,374)

(499,441)

(497,265)

Distribution of
Net Income




Transferred to surplus
Surplus, January 1

266
57,754

4,052
53,723

Surplus, December 31

$ 58,020

57,775

The
Federal
Reserve
Bank
of
St. Louis

Operating Statistics

Operations

Senfices
Cash

Number of Pieces Handled
1987
1986

to Depository

Dollar Amount (thousands)
1987
1986

Institutions

Services:
Currency Received
and Counted
Coin Received
and Counted

545,628,000

915,443,000

827,987,000

104,500

94,400

U.S. Government
Checks
Postal Money Orders
Another

33,608,000
146,436,000
543,247,000

34,208,000
140,341,000
525,418,000

29,552,500
12,551,200
311,506,500

29,328,200
11,103,200
313,303,200

Commercial
U.S. Government

32,306,000
17,848,000

25,724,000
16,063,000

199,553,400
10,249,900

158,420,100
8,594,500

U.S. Government
Coupons Paid
All Other

Ciieclc

580,283,000

91,000
267,449

117,000
327,894

43,000
476,300

64,800
543,200

2,709,600

2,663,500

3,552,198,000

3,670,276,000

2,169

1,028

4,963,100

2,179,300

$

6,731,900

$

5,951,200

Senfices:

Automated
Clearingtiouse
(ACH)
Senfices:

Collection

Services:

Wire Transfer of Funds:
Loans to Depository
Institutions:

Services

to U.S. Treasury

Issues,
Redemptions,
8k Exchanges of U.S.
Government
Securities:
Definitive
Book-Entry

Food Stamps
Redeemed:




7,003,241
276,477
163,759,000

7,658,790 $
3,138,400
2,229,517 $
179,039,000
208,798,000
256,487
164,550,000

728,300

776,700

DIRECTORS

St. Louis Board of Directors
Chairman
Robert L. Virgil, Jr.
Dean
John M. Olin School of
Business
Washington University
St. Louis, Missouri

Frank M. Mitchener, Jr.
President
Mitchener Farms, Inc.
Sumner, Mississippi

Executive Committee

Deputy
Chairman
H. Ed^vin Trusheim
Chairman and
Chief Executive Officer
General American Life
Insurance Company
St. Louis, Missouri

Roger W Schipke
Senior Vice President
General Electric Company
Louisville, Kentucky

Audit Committee

H. L. Hembree, III
Chairman of the Board and
Chief Executive Officer
Arkansas Best Corporation
Fort Smith, Arkansas

Robert J. Sw^eeney
Consultant
Murphy Oil Corporation
El Dorado, Arkansas

H u m a n Resources
Committee

David W Kemper
Chairman and Chief
Executive Officer
Commerce Bank of St. Louis,
N.A.
Clayton, Missouri

Janet M. Weakley
President
Janet McAfee Inc.
Clayton, Missouri

Robert L.Virgil, Jr.,
Chairman
David W. Kemper
Robert J. Sweeney
H. Edwin Trusheim

H. Edwin Trusheim,
Chairman
David W. Kemper
Roger W. Schipke
Robert J. Sweeney

H. L. Hembree, III,
Chairman
Robert E. Menz
Frank M. Mitchener, Jr.
Janet M. Weakley

Federal Advisory
Council Member
Donald N. Brandin
Chairman of the Board
Boatmen's Bancshares,
Inc.
St. Louis, Missouri

Robert E. Menz
Chairman of the Board
and President
First National Bank of
Highland
Highland, Illinois

E c o n o m i c Advisory Council
Small B u s i n e s s

Lynn Broeder, Executive Director, Ecumenical Housing Production Corporation, St. Louis, Missouri
Susan A. Cejka, President, Cejka & Company, St. Louis, Missouri
Samuel B. HoUis, President, Federal Compress & Warehouse Co., Inc., Memphis, Tennessee
Carl S. Rosenbaum, President, Arkansas Glass Container Corporation, Little Rock, Arkansas
William A. Stone, President, Louisville Plate Glass Company, Louisville, Kentucky

Agriculttire

Lary C. Eckert, President, Eckert's, Inc., Belleville, Illinois
JeflErey W Gain, Chief Executive Officer, National Corn Grov^ers Association, St. Louis, Missouri
Curtis R. Hancock, Jr., Fulton, Kentucky
F. H. Lyons, Jr., England, Arkansas
M. Carter Stovall, General Manager, Stovall Farms, Stovall, Mississippi




1
The
Federal
Reserve
Bank
of
St. Louis
Little Rock Board of Directors

Louisville Board of Directors

Mempliis Board of Directors

Chairman
James R. Rodgers
Airport Manager
Little Rock Regional Airport
Little Rock, Arkansas

Chairman
Sandra B. Sanderson
President and Chief
Executive Officer
Sanderson Plumbing
Products, Inc.
Columbus, Mississippi

David Armbruster
President
First America Federal
Savings Bank
Fort Smith, Arkansas

Thomas A. Alvey
Delegate
Owensboro Council of
Labor
Owensboro, Kentucky

William H. Brandon, Jr
President
First National Bank of
Phillips County
Helena, Arkansas

Robert C. Connor
President
Union National Bank of
Little Rock
Little Rock, Arkansas

Irving W. Bailey, II
President and Chief
Executive Officer
Capital Holding Corporation
Louisville, Kentucky

Thomas M. Garrott
President and Chief
Operating Officer
National Bank of Commerce
Memphis, Tennessee

L. Dickson Flake
President
Barnes, Quinn, Flake &
Anderson, Inc.
Little Rock, Arkansas

^gflttji^
M^^^^^y
Jf
\
JB
_
1
^
~^P^^^' ^ ^

Chairman
Lois H. Gray
Chairman of the Board
James N. Gray Construction
Company, Inc.
Glasgow^, Kentucky

lorton Boyd
. resident
First Kentucky National
Corporation
Louisville, Kentucky

Michael J. Hennessey
President
Munro and Company, Inc.
Addison Shoe Company
Wynne, Arkansas

Wayne Hartsfield
President and Chief
Executive Officer
First National Bank
Searcy, Arkansas

Raymond M. Burse
President
Kentucky State University
Frankfort, Kentucky

Seymour B. Johnson
Kay Planting Company
Indianola, Mississippi

Wm. Earle Love
President
Sound-Craft Systems, Inc.
Morrilton, Arkansas

Allan S. Hanks
The Anderson National Bank
of Lawrenceburg
Lawrenceburg, Kentucky

Katherine Hinds Smythe
President
Memorial Park, Inc.
Memphis, Tennessee

Patricia M. Tow^nsend
President
Townsend Company
Stuttgart, Arkansas

Wayne G. Overall, Jr
President
First Federal Savings Bank
Elizabethtow^n, Kentucky

Larry A. Watson
( hairman of the Board and
President
iberty Federal Savings Bank
? 'aris, Tennessee







Senior Management

Other Officers

Thomas C. Melzer
President and Chief Executive Officer
James R. Bowen
First Vice President and Chief Operating
Anatol B. Balbach
Senior Vice President
Research and Public
Information
Henry H. Bourgaux
Senior Vice President
Operations
Harold E. Uthoff
Senior Vice President
Banking Supervision and Regulation
Ben C. Wade
Senior Vice President
Adni in istration

John P Baumgartner
Michael T Belongia
Bernard E. Berns
John W Block, Jr
Timothy A. Bosch
Jerry J. Calton
Martin J. Coleman
Rik W. Hafer
Gregory S. Pusczek
Harold H. Rieker
Harold E. Slingerland
Roger D. Smith
Courtenay C. Stone
Daniel L. Thornton

Vice Presidents
Ruth A. Bryant
Public
Information
Albert E. Burger
Economic
Analysis
Joan P Cronin
Legal
Charles R. Halbrook
Member Banks
James R. Kennedy
Information
Systems
Jean M. Lovati
Marketing
Michael T. Moriarty
Valuables Processing
Martha L. Ferine
Financial Services
William J. Sneed
Support Services
Randall C. Sumner
Credit and Community
Affairs
Patricia A. Tarbutton
Human Resources
Robert W Thomas
Payments
Delmer D. Weisz
Bank Holding
Companies

Assistant Vice Presidents
Dennis W Blase
Keith M. Carlson
Judie A. Courtney
Hillary B. Debenport
John W. Druelinger
R. Alton Gilbert
Walter W.Jacobs
Jerome J. McGunnigle
John P Merker
Jerome R. Rodgers
Les F. Schmeding
Kristi D. Short
Frances E. Sibley
Darwin W Stephens
John A. Tatom
Robert J. Taylor

Officer

Audit
Richard E. Kay
General Auditor
Jeffrey M. Dale
Assistant General
Robert R. Long
Audit Officer

Auditor

Litde Rock Branch
John F. Breen
Vice President and Manager
Thomas R. Callaway
Assistant Vice President
David T Rennie
Assistant Vice President

Louisville Branch
W Howard Wells
Vice President and Manager
George E. Reiter, Jr
Assistant Vice President
Raymond F. Seefeldt
Assistant Vice President

Memphis Branch
Paull. Black, Jr
Vice President and Manager
Anthony C. Cremerius, Jr
Assistant Vice President
Michael E. Trebing
Assistant Vice President

Federal Reserve Bank of St. Louis
Post Office Box 442
St. LouiS^ Missouri 63166
(314) 444-8444
Little Rock Branch
Post Office Box 1261
Little Rock, Arkansas 72203
(501)372-5451
Louisville Branch
Post Office Box 32710
Louisville, Kentucky 40232
(502) 568-9200
Memphis Branch
Post Office Box 407
Memphis, Tennessee 38101
(901) 523-7171





Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102