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Federal
Reserve Bank of
Philadelphia
Annual Report
1985

1985 ANNUAL REPORT
President's Letter

the Bank's partnership with the Third District
economy and its banking system.

Indeed, the three are interrelated and inter­
active. The condition of the banking system
depends to an important extent on the
strength of the District economy, and vice
versa. Both, in turn, have an impact on the
Bank, and I like to think that what we do can
affect favorably both banking and economic
activity in the region.
I’m pleased to report that the members of
this partnership all enjoyed a strong year in
1985. The performance of the District
economy compared favorably to both the
national experience and to its own past.
Third District banks in general have avoided
the crises and dislocations that beset the
industry in other parts of the country. And
the Bank itself ended the year with both its
priced services and traditional central bank
activities at or above targeted performance
levels.

In recent years, this Bank’s annual reports
featured our own people and operations. We
showed photographs taken within our
building and told of our accomplishments,
department by department, throughout the
year.
This report for 1985 steps outward to include
the Third District economy and banking
structure as well as the Bank's performance.
You will see pictures representing area main­
stays such as health care, insurance, and legal
services. Information on the condition of
District banks is included along with tradi­
tional material on the Bank itself.

This emphasis on the District is appropriate
because the Bank's mission has a stronger
regional focus than ever. Without diminishing
our national role, I believe the Bank can make
vital contributions in the District as a provider
of quality banking services, as an alert bank
supervisor, as an analyst, convener, catalyst,
and supporter of local communities.
I would like the Bank to have an image as a
partner seeking joint solutions to local and
regional problems. This report will highlight

A key element in the Bank's good showing
was our expanded quality assurance program.
We surveyed our customers and found that
quality, more so than price, is becoming the
critical element in the choice of a supplier of
electronic services, and this program was an
effective part of our response.

With eyes on the District, this Bank’s
Research Department played a major role in
developing new techniques of regional
economic research and analysis during 1985.
In addition, our departments dedicated to
community affairs, public information, and
consumer education, enjoyed particularly
productive years.
A major challenge this Bank faces is keeping its
services attuned to the needs of a District
banking system, which, like the nation, is
moving inevitably toward interstate banking.
Both our customers and competitors will be
deeply affected, and in 1985 our operating
people spent a lot of time planning to meet
changing problems and opportunities.

Important as the Third District may be to us,
this Bank’s partnerships extend outward to

embrace the Federal Reserve System, other
financial regulators, and the U.S. Treasury.

rising stock prices, and a significant drop in
the value of the dollar.

We in this Bank have a tradition of leadership
within the Federal Reserve, but 1985 has to
be a high watermark. The number of System
conferences, committees, and task forces
that our officers chaired and/or served on is
large by any relative measure. The Bank also
was a key participant in a variety of leadingedge projects, such as the System’s check
truncation project.

As 1 have indicated, 1985 was a good year for
the Bank and all its partnership involvements,
ranging from a civic organization in the Point
Breeze section of Philadelphia through the
Third District economy and its banking
system, through various System and Treasury
involvements to monetary policy and the
U.S. economy.

Cooperation with other bank regulators on
both state and national levels is a wellestablished objective, and never was it
achieved so fully as in 1985. In March, and
again in May, this Bank lent examiners to
other agencies to assist with savings and loan
crises in Ohio and Maryland. In addition, we
conducted a number ofjoint training sessions
with state examiners from our District.

And a very nice thing about a solid year is
that it can make a good foundation for the
years that follow.

Edward G. Boehne
President

The Federal Reserve Bank of Philadelphia is
pleased to have been the one selected to
work in partnership with the U.S. Treasury to
develop and operate a new computerized
book-entry system for its securities. Although
the hardware for "Treasury Direct” will be
located here, the service will operate through
all Federal Reserve offices for investors across
the nation. Nineteen eighty-five was a time
of intense preparation to get this system
ready for use in mid-1986.
Although the number of this Bank’s people
who are directly involved in monetary policy
is small, their impact is significant. Our Board
of Directors must set the discount rate every
14 days. As president, 1 attend meetings of
the Federal Open Market Committee and 1
receive input, not only from our staff of
economists, but from people involved in
business and community work all over the
District.
In many ways 1985 was a positive year for
the U.S. economy, and an appropriate
monetary policy had an important role in the
achievements. It was a year characterized by
slow, sustainable growth, continued modera­
tion in inflation, gradual improvement in
unemployment, declining interest rates,

1

Contents
Annual Report
Executive Changes
Directors
Officers
Advisory Councils
Statement of Condition
Earnings and Expenses
Operating Statistics

1985 Annual Report
2
13
14
15
16
20
21
22

Diversity and balance are good words to
describe the Third District economy.
From poultry farms in the southeast to oil
rigs in the northwest, from coal and casinos
to cement and computers, we are known for
diversity. The rise of the service sector relative
to manufacturing provides a better overall
balance, and within these two major sectors
one also finds diversity and balance.

Philadelphia law firms have a prominent posi­
tion in the profession, but legal services share
the spotlight with many other service indus­
tries in the District. One is health care, which
includes our many hospitals and pharmaceutical
firms. Another is education with a concentra­
tion of colleges and universities seldom equaled
in quantity or quality.

We also are a major insurance center, and
banking and finance are vital elements in the
area economy. The department store was
"invented” in Philadelphia, and the largest
shopping mall complex in the nation now can
be found near that city.
W.C. Fields used to say that Philadelphia was
deficient in places to eat and drink after dark,
but the restaurant renaissance of the past
decade has put us in the same league with
New Orleans and San Francisco.

Third District manufacturing used to be on the
heavy side, but lately we’ve lightened up with
high tech firms that produce everything from
lasers to robots. Although many of our manu­
facturers have closed or moved away in recent
decades, we now have a more dynamic indus­
trial base.

Pennsylvania boasts a fast growing economic
corridor along Route 202 from north of King
of Prussia to south of West Chester. It features
high tech companies, many with a medical
orientation, as well as office space, and retail­
ing. Follow Route 202 north, and when you
get near Princeton, New Jersey, you will find
another area bursting with growth along
Route 1. This corridor also supports a diversity
of activity but with perhaps less emphasis on

2

An aerial view ofthe Great Valley Corporate
Center in Malvern, Pennsylvania. Part ofthe
Route 202 boom, the Center now has about
200firms with more than 4,500 employees.

Loan Growth
at Large Commercial Banks, 4th
Quarter 1985 vs 4th Quarter 1984

Annual Average
Unemployment Rates

■h 3rd District
mU.S.

15
14
13

12

Percentage Change Over Las t Year

11

10
9
8
7
6

5

4
3

2
1

0
3rd
District

U S.

75 76 77 78 79 80 81
Year

Source: Bureau of Labor Statistics

82 83 84 85

retailing and more on financial institutions than
the one along Route 202. In central Pennsyl­
vania, another high tech cluster has sprung up
around the Penn State University, making itself
the District's newest metropolitan area.
Agriculture has experienced well-advertised
problems in other parts of the nation, but
the picture is much brighter here in the Third
District. From milk to mushrooms, from small
truck farms to large cattle spreads, we have
a lot more than eggs in our agricultural basket.
If one crop runs into trouble, there usually are
many others to offset it.

How Our Economy Performed
Continuing trends begun early in the decade,
the Third District economy accelerated in
absolute terms and also strengthened relative
to the nation during 1985.
Unemployment is a good indicator of regional
economic health. Some areas of the District
still show a bleak picture. For example, parts
of western Pennsylvania, southern New Jersey,
and the cores of large cities still carry heavy
jobless burdens. But in the Third District states
of Delaware, New Jersey, and Pennsylvania,
the unemployment rate averaged 7.0 in 1985,
compared to 7.2 for the U.S. as a whole. This
was the first year in over a decade that our
rate was below the nation's.

Some of the good news in lower unemployment
was due to the shift from goods-producing
industries to service-producing industries, which
has been more pronounced here than in the
nation. But more of the improvement resulted
from our relatively faster employment growth
across the board. In the Philadelphia metro­
politan area, as an illustration, employment
in manufacturing, transportation, communi­
cations and public utilities, trade, finance,
insurance, real estate, and general services all
showed improvement relative to the nation in
the 1980s.

Manufacturing activity in the Third District
ended 1985 on an upbeat note, and retailers
also enjoyed a solid year with Christmas sales
three to seven percent above 1984. Inflation

remained under control here as it did through­
out the nation. Housing sales were strong
with help from declining mortgage rates and
the fact that our housing stock traditionally
has been well-built and bargain-priced. The
value of construction contracts was up com­
pared to most other parts of the country,
and although much new office space has been
built in downtown Philadelphia, the vacancy
rate is relatively low.
Throughout the year, economists in our
Research Department have tracked the upward
movement of the District economy, analyzed
the underlying causes, and played a role in its
future. In fact, our staff economists have con­
tinued to make important contributions to
regional economics with studies of population
and employment growth and the factors
affecting housing. One of the Bank's top
economists now chairs the Federal Reserve
System’s Committee on Regional Analysis, and
members of our staff are involved in efforts
to advise and assist local policymakers in
promoting regional growth.

The District Banks
The performance of the District economy is
reflected in the expansion of bank loans. In the
fourth quarter of 1985, loans at large area
banks were up 14.1 percent compared with
the fourth quarter of 1984; during the same
period, banks nationwide saw loan volume
increase only 4.2 percent. Indeed, the entire
District banking system shows up well relative
to the country as a whole.
A study in this Bank’s September/October
1985 Business Review showed that banks
in the Third Federal Reserve District have been
in good condition for a number of years, and
their performance statistics have compared
favorably with national averages. The health
of our banks is reflected in measures such as
loan quality, earnings, capital ratios, and
liquidity positions. In each category, our banks
have performed steadily through the 1980s
and have been well above national norms.
Across the nation, 120 banks failed in 1985,
and 180 others already had closed their doors

5

in the earlier years of the decade. In contrast,
only one bank failed in the Third District over
the past six years. Furthermore, the proportion
of problem banks to the total banks here is
lower than the national figure.
Many of the nation's recent bank failures
occurred in areas that were heavily dependent
on energy or agriculture. In contrast, the
character of economic activity we enjoy here
has given strength of diversity and balance to
area lenders. Add in the prudent management
that our banks long have been noted for,
supplement it with effective supervision and
one can see why District banks have done
so well in the 1980s.

Supervising for Soundness
Our Supervision and Regulation Department
had one of its most productive years ever
in 1985. Facing issues related generally to
deregulation and specifically to repurchase
agreements, large-dollar transfers, leveraged
buyouts, capital adequacy, and off-balancesheet risks, the department devoted special
attention to adequate staffing levels and
improved training. As another step, automa­
tion was used to improve the efficiency of
field examinations.

System undertook a nationwide program to
provide information on minimizing risks when
investing in repurchase agreements based on
government securities. Senior officers from
several departments in the Bank cooperated
on the program, and two seminars were held
in the District in conjunction with state
treasurers' offices. Decisionmakers from over
7,000 governmental units and depository
institutions were invited, and all received
informational pamphlets on REPOS.
The Risk Reduction Program is another System
effort that we highlighted in 1985. Its purpose
is to reduce the risks associated with bank
overdrafts made and settled within the same
business day. We explained the program, which
takes effect in March 1986, at a series of six
seminars with a total attendance of about 300
executives from 175 depository institutions.

Across State Lines
As 1985 unfolded, most Third District banks
awaited the next chapter in interstate banking.
It first came to Delaware in 1981, and about 16
large de novo banks have been established in
the state since then. Typically, they are subsid­
iaries of out-of-state companies, and they must
meet certain capital and employment condi­
tions, while not competing for local deposits.

One weekend in March 1985, the Department
received a call saying that state-insured savings
and loan associations in Ohio were in trouble,
and many were being closed temporarily. We
had a cadre of examiners on the plane within
hours to help the associations reopen as fast
as possible. In May, a similar call came from
Maryland, and our examiners hit the road again.
At the peak of these crises, we had as many
as 15 examiners working outside the District
in cooperation with other agencies.

Out-of-state banks and others also have tried
to enter the Third District by setting up
“nonbank” or limited service banks. As 1985
ended, however the most viable route to
interstate expansion seemed to be through
reciprocal compacts. Although no legislation
was passed in the District during the year.
New Jersey and Pennsylvania were showing
particular interest. Delaware, as we said,
already has gone down another road.

Within the District, we have ongoing partner­
ships with the state banking authorities, which
involve seminars to improve specialized skills,
sharing surveillance information and the joint
training of examiners and interns.

No matter how it comes, interstate banking
will bring a new spectrum of competition for
Third District institutions, and many have begun
to strengthen their position through mergers,
cost control, new services, and automation.

In the spring of 1985, several U.S. government
securities dealers failed, causing widespread
losses to investors. The Federal Reserve

This Bank also will face new competition and
with it new opportunities in an interstate
banking environment, so in 1985 we intensi-

6

■■

■I

—

-1.M

'SSa
-1

Since colonial times Philadelphia has been a
center ofA merican medicine. A bo re is a
restoration ofthe nation’s first operating
room at Pennsylvania Hospital.

The District specializes in medical care,
education and technology. Here a nurse at
Pennsylvania Hospital caresfor an
incubator baby.

A leader ofthe restaurant renaissance in
Philadelphia, owner Steve Poses (standing)
and his executive chiefin the FROG
restaurant.

This computer helps maintain the area’s
position as a major insurance center. It is
located at the Penn Mutual Life Insurance
Co., one ofthe leaders.

fied efforts to develop appropriate plans
and strategies.
It is likely that Federal Reserve electronic
services increasingly will be separated into their
component parts: processing, delivery, and
settlement While this unbundling should pro­
vide benefits for our customers, it also opens
the door to competition, and much of it may
come from nonbank institutions.

In this increasingly competitive market for
electronic services, a transaction’s price is
being replaced by service quality as the most
important element in the choice of a supplier.
Thus accuracy, timeliness, and reliability are
becoming critical concerns. That’s a major
reason why this Bank expanded its Quality
Assurance Program into eight new areas in
1985. As a result, the dependability of our
automated systems was and will continue to
be enhanced.
The Monetary Control Act of 1980 required
this Bank, as well as the System, to price
a variety of services and to earn enough from
them to cover their cost of production, plus
a margin to compensate for private sector
profits and other costs. Strong revenue growth
combined with effective cost control enabled
us to exceed our total revenue goals by a
comfortable margin in 1985, with all categories
of priced services but one meeting their targets.
For the Bank as a whole, net revenue was up
11 percent in 1985 from the previous year.
This performance minimized pressures for ser­
vice price increases so check prices, which
account for almost three-quarters of the Bank’s
revenues, were reduced for 1986.

Operating Features
During 1985, the Bank’s operating departments
refined existing services, introduced new ones,
and planned intensively for 1986 milestones.
In the first category, Payor Bank services were
upgraded, and Automated Clearing House and
Noncash Services were enhanced with new fea­
tures. We focused on smaller banks with the
creation of product advisory groups who told
us of their specific needs. Interdistrict

business and services for thrifts are important
and productive areas that received special
attention during the year.
Fedline was one of our most significant new
services of 1985. A network based on personal
computers, it gives smaller depository institu­
tions convenient, cost-effective access to this
Bank’s electronic services. About 80 customers
were on line by year’s end, and the number
on-line is expected to grow rapidly as new
phases become available.

The excitement about Treasury Direct con­
tinued to build throughout 1985. Begun in
1983 (nee T-DAB), it is a joint undertaking
with this Bank, the Board of Governors, and
the U.S. Treasury. When operational in mid1986, it will provide full book-entry for U.S.
Treasury securities for an estimated 2,000,000
investors across the nation.

Design of the electronic systems for Treasury
Direct, which are located in this Bank, began
in 1983. In the summer of 1985, the program
was expanded to include investor information
and education. This Bank again was selected
as the central site and led the planning for a
national information campaign. In addition to
the Board and the Treasury, public information
officers of the 12 Reserve Banks will play a
major role in the introduction of Treasury Direct

System Leadership
The Third District is relatively small when
measured by area or economic activity, but
this Bank has much larger involvement and
influence in the Federal Reserve System than
its size would indicate.
In 1985, we increased our already high-level
of leadership on committees and other System
organizations. President Ed Boehne and First
Vice President Dick Smoot became vice chair­
men of their respective conferences, a step
towards taking over the chairs in early 1986.
President Boehne also continued as chairman
of the System’s influential Pricing and Policy
Committee. Officers from the Bank chair five
other System committees and subcommittees,
and are members of a variety of committees,
conferences, task forces, and advisory groups.

9

Over the years, our Public Information function
has developed special expertise in film making,
and has produced three System movies on
Federal Reserve credit regulations and allied
topics. In 1985, we completed another System
film, this one about consumer Ioans and
deposits, and put it in national distribution.

The Bank also had a starring role in the
System’s check truncation project during the
year and was featured in the Federal Reserve
long-range automation program.

Community and In-Bank
Responsibilities
At home in the District, we find the Bank
placing new emphasis on developing better
relations with its various communities. To this
end, the Community Affairs function was set
up as a special department with augmented
powers and visibility in January 1985. In a
landmark effort, this department published a
directory of community revitalization pro­
grams. Titled “Options for Investing in Our
Communities," it was used and emulated far
beyond the District boundaries. Our third
annual conference brought together repre­
sentatives from 130 different financial institu­
tions and community groups. A new tour
program, using retirees as guides, was an
unqualified success and more than doubled
the number of people who come to visit
our building.
With all their involvements and activities on
national, System, District, and community
levels, the Bank’s officers and employees remain
aware of the phrase, “You are This Bank,"
which is the slogan for a continuing effort
to stress excellence in performance.
The 1985 phase stressed the Bank’s corporate
values such as integrity, respect for the indi­
vidual, and quality service, which were com­
municated and reinforced throughout the year
in a series of publications and posters. In a
"Gold Standard Contest,” employees who best
displayed the corporate values in their job per­
formance were singled out for commendation.
In such ways the Bank strives to maintain

10

standards of dependability and quality among
its staff.
The body of this annual report started by
saying that diversity and balance characterize
the Third District economy. What better way
to conclude than to say that dependability
and quality characterize our own work force.

Professor Gary’ Gorton discusses a
problem with students Fred Siegel and
Valerie A. Mosley at the University of
Pennsylvania’s Wharton School.

Princeton, New Jersey is one ofthefastest
growing areas in the District. This modern
building is in the Forrestal Center on Route 1.

PRINCETON
BANK

A human hand helps to build a robot at the
ProgramMation Inc., one ofthe many high-tech firms
that add new diversity to our industrial mix.

■i

I

Executive Changes
Robert M. Landis, Partner in the Philadelphia
law firm of Dechert, Price & Rhoads, was
redesignated chairman of the board of the
Philadelphia Federal Reserve Bank for 1986.
Nevius M. Curtis, Chairman and Chief
Executive Officer of Delmarva Power and
Light Company, Wilmington, Delaware, was
renamed deputy chairman. Mr. Landis and
Mr. Curtis have held these posts since 1983.
Mr. Curtis was also reappointed to a threeyear term as a Class C director. The appoint­
ments were made by the Board of Governors
of the Federal Reserve System in
Washington, D.C.
Two new directors were voted to our board
in December. Clarence D. McCormick,
President of Farmers and Merchants National
Bank, Bridgeton, New Jersey, and Nicholas
Riso, President and Chief Executive Officer of
Giant Food Stores, Inc., Carlisle, Pennsylvania,
will serve three-year terms, beginning
January 1,1986. Mr. McCormick was elected
a Class A director representing small member
banks in the District. He replaced JoAnne
Brinzey, Chairman and Chief Executive Officer,
First National Bank at Gallitzin, Gallitzin,
Pennsylvania. Mr. Riso was elected to
represent the public as a Class B director by
large member banks. He filled the seat
formerly held by Eberhard Faber, IV, Chairman
and Chief Executive Officer, Eberhard Faber,
Inc., Wilkes-Barre, Pennsylvania.

Robert N. Downes, Jr., became Applications
Officer; and Bernard M. Wennemer became
Examination Review Officer.

Stanley J. Forst resigned as Vice President,
Computer Services, to take a position with a
private firm.

The Bank created a new department in 1985
to focus more directly on community affairs.
The Community Affairs and Regulations
Assistance outreach functions, formerly part
of Supervision and Regulation, became a
separate department, directed by Frederick
M. Manning, Assistant Vice President and
Community Affairs Officer, and reporting to
Lawrence C. Murdoch, Jr., Vice President and
Secretary.

This Bank's directors named George A. Butler,
Chairman and Chief Executive Officer of First
Pennsylvania Bank, N.A., in Philadelphia, to
his third one-year term as Third District
representative to the Federal Advisory Council
in 1986.
In an official promotion occurring in 1985,
Aris Protopapadakis was named Vice
President and Economist in the Research
Department.
In addition, the Board of Directors approved
four new promotions and appointments in
the examination, supervision, and regulation
area: Joseph J. Ponczka and Edward G.
Rutizer became Assistant Vice Presidents;

13

Board of Directors
December 31,1985
Chairman
Robert M. Landis, Partner
Dechert, Price & Rhoads
Philadelphia, Pennsylvania
Deputy Chairman
Nevius M. Curtis, Chairman
and Chief Executive Officer
Delmarva Power and Light Company
Wilmington, Delaware
George E. Bartol, 111, Chairman
Hunt Manufacturing Company
Philadelphia, Pennsylvania

JoAnne Brinzey, Chairman
and Chief Executive Officer
First National Bank at Gallitzin
Gallitzin, Pennsylvania

Eberhard Faber, IV, Chairman
and Chief Executive Officer
Eberhard Faber, Inc.
Wilkes-Barre, Pennsylvania
Charles F. Seymour, Chairman
and Chief Executive Officer
Jackson-Cross Company
Philadelphia, Pennsylvania

Robert M. Landis, chairman ofthis Bank’s
Board ofDirectors and a partner in the
Philadelphia lawfirm ofDechert, Price &
Rhoads, in his office.

Carl E. Singley, Dean
and Professor of Law
Temple University School of Law
Philadelphia, Pennsylvania

Ronald H. Smith, President
and Chief Executive Officer
CCNB Bank, N A
New Cumberland, Pennsylvania
John H. Walther, Chairman
and Chief Executive Officer
New Jersey National Bank
Pennington, New Jersey
Member of the Federal
Advisory Council
George A. Butler, Chairman
and Chief Executive Officer
First Pennsylvania Bank. NA
Philadelphia, Pennsylvania

14

Officers
December 31,1985
Edward G. Boehne
President

Vish P. Viswanathan
Vice President

Richard L. Smoot
First Vice President

Jack P. Besse
Assistant Vice President

Konstanty G. Adack
Executive Vice President

Robert J. Bucco
EFT Services Officer

Thomas K. Desch
Senior Vice President
and Lending Officer

James E. Bums
Planning Officer and
Assistant Secretary

Donald E Doras
Senior Vice President

Edward J. Coia
Assistant Vice President

James F. Gaylord
Senior Vice President

Robert A. Dobie
Assistant Vice President

Hiliary H. Holloway
Senior Vice President
and General Counsel

Patrick L. Donahue
Financial Services Officer

Richard W. Lang
Senior Vice President
and Director of Research

Robert N. Downes, Jr.
Applications Officer

William Evans, Jr.
Technical Services Officer

William H. Stone, Jr.
Senior Vice President

Edward J. Fox
National Accounts Officer

Ronald D. Watson
Senior Vice President

Judith H. Helmuth
Administrative Officer-DAS

Peter M. DiPlacido
Vice President

Eugene E. Hendrzak
Statistical Officer

James B. Duffy
Vice President

Jerry Katz
Assistant Vice President

Ronald G. Foley
Vice President

Alan L. Kiel
Staffing and Development
Officer

John M. L. Gruenstein
Vice President and Economist

Malcolm T Humphrey
Vice President

Donald J. McAneny
Vice President and
General Auditor

Edward G. Rutizer
Assistant Vice President

Louis N. Sanfelice
Assistant Vice President
and Assistant Secretary
John B. Shaffer
Assistant General Auditor
Ronald R. Sheldon
Data Services Officer

Charles J. Sullivan, Jr.
Assistant Vice President

JoAnne Tamoff
Automation Planning Officer
Elizabeth S. Webb
Assistant Counsel

Bernard M. Wennemer
Examination Review Officer

Mary M. Labaree
Operations Officer-DAS

Thomas P. Lambinus
Financial Accounting Officer

Edward M. Mahon
Assistant Counsel

Terence B. O'Brien
Vice President

Frederick M. Manning
Assistant Vice President
and Community Affairs
Officer

Lawrence C. Santana, Jr.
Vice President

Joseph J. Ponczka
Assistant Vice President

Robert H. Klein
Assistant Vice President

Lawrence C. Murdoch, Jr.
Vice President and
Secretary

Aris Protopapadakis
Vice President and Economist

Janice M. Moulton
Research Officer
and Economist

Stephen A. Meyer
Research Officer
and Economist

15

Advisory
Councils
Since 1981, the Board of Directors of
this Bank has created a variety of
Advisory Councils to promote the
exchange of information and the under­
standing of needs and problems.

Each Advisory Council consists of 12
members and meets at least twice each
year. In 1985, a new Council to repre­
sent small business and agriculture was
established to open two-way communi­
cation with these vital sections of the
regional economy.

Robert M. Hoyt
Chairman, President and C.E.O.
Sussex Trust
Laurel, Delaware

Milt Hershberger
President
Abco Federal Credit Union
Rancocas, New Jersey

Richard M. Linder
Chairman and President
The Drovers and Mechanics Bank
York, Pennsylvania

Carl W. Knowlden
Manager
WAT Federal Credit Union
Williamsport, Pennsylvania

RoyT Peraino
Chairman and C.E.O.
Continental Bank
Philadelphia, Pennsylvania

Lonny J. Maurer
Manager
Harrisburg Belco Federal Credit Union
Harrisburg, Pennsylvania

Bernard J. Taylor, II
Chairman and C.E.O.
Wilmington Trust Company
Wilmington, Delaware

Clement H. Schaller
Manager
New Castle County School Employees
Federal Credit Union
Wilmington, Delaware

Today there are four Advisory Councils:
(1) Nonmember Banks
(2) Credit Unions
(3) Thrift Institutions
(4) Small Business/Agriculture

William F. Sharp, Jr.
President and C.E.O.
Lenape State Bank
West Deptford, New Jersey

Nonmember Bank
Advisory Council

Credit Union
Advisory Council

Chairman
Philip J. DiBerardino
President and C.E.O.
Bay State Bank
Ship Bottom, New Jersey

Chairman
Carolyn O’Brien
Treasurer/Manager
Princeton University
Employees Federal Credit Union
Princeton, New Jersey

Deputy Chairman
John D. Wickert
Chairman of the Board
and C.E.O.
Dauphin Deposit Bank
and Trust Company
Harrisburg, Pennsylvania
Richard J. Abdill
President and C.E.O.
Fidelity Bank and
Trust Company of New Jersey
Pennsauken, New Jersey
Theodore D. Bessler
President and C.E.O.
Garden State Bank
Jackson, New Jersey

John R. Beyer
President and C.E.O.
Mid-State Bank
and Trust Company
Altoona, Pennsylvania

Glenn Y Forney
President and C.E.O.
United Penn Bank
Wilkes-Barre, Pennsylvania

16

Deputy Chairman
Richard M. Stoops
Manager
Nylon Capital Federal Credit Union
Seaford, Delaware

Peggy J. Bosma
Manager
Letterkenny Federal Credit Union
Chambersburg, Pennsylvania
Joseph Duffy
Manager
Philadelphia Inquirer and
Daily News
Employees Federal Credit Union
Philadelphia, Pennsylvania

Benjamin T Griffith
Manager
South Jersey Federal Credit Union
Camden, New Jersey
Milton E. Grosmick
President
Kimble Federal Credit Union
Vineland, New Jersey

Glenn Stuart, Jr.
President/General Manager
Vfybro Federal Credit Union
Paoli, Pennsylvania

Charles T Williams
President
Lukens Community Federal Credit Union
Thorndale, Pennsylvania

Part ofthe dairy herd belonging to Robert
Winner, a New Jerseyfarmer and member of
this Bank’s Small Business/Agricultural
Advisory Council.

Banking’s recent growth in Delaware has
been more dramatic than in any other state.
Pictured here is downtown Wilmington.

Thrift Institutions
Advisory Council
Chairman
Ronald A. Seagraves
President and C.E.O.
Security Savings and Loan Assn.
Vineland. New Jersey
Deputy Chairman
Ralph 0. Williams
Chairman, President and C.E.O.
First Federal Savings and Loan
Assn, of Delaware
Wilmington, Delaware

Lynn S. Baker
President
First Federal Savings Bank
of Hanover
Hanover, Pennsylvania
Thomas H. Hamilton
President
Collective Federal Savings and
Loan Assn.
Egg Harbor City New Jersey
Stephen G. Harris, Jr.
President and C.E.O.
Artisans' Savings Bank
Wilmington, Delaware

Martin I. Kleppe
President and C.E.O.
Germantown Savings Bank
Philadelphia, Pennsylvania
John S. Madore
Chairman of the Board
United Federal Savings Bank
State College, Pennsylvania
Joseph J. McLaughlin
President and C.E.O.
Beneficial Mutual Savings Bank
Philadelphia, Pennsylvania

Oliver H. Reed, Jr.
Secretary-Treasurer
Peoples-Thrift Building and
Loan Assn.
Norristown, Pennsylvania

Barry E. Rohrbach
President
Penn Savings Bank, F.S.B.
Wyomissing, Pennsylvania

Small Business/
Agriculture Advisory
Council
Chairman
John H. Wright, Jr.
Wright's Motor Sales Company
of Hazleton
Hazleton, Pennsylvania
Deputy Chairman
Donald Lynch
Animal Health Sales
Selbyville, Delaware
Roy L. Bomberger
Bomberger's Store, Inc.
Elm, Pennsylvania
Sandra Graffius
Milroy Enterprises, Inc.
Sinking Springs, Pennsylvania

Joseph R. Hartle, Jr.
Lonely Spot Farm
Bellefonte, Pennsylvania
Donald C. Hershey
Hershey Farms
Lancaster, Pennsylvania

Willie Johnson
Fidelity Systems
Philadelphia, Pennsylvania

Dean Pappas
Clement Pappas & Company, Inc.
Seabrook, New Jersey

Ian Sydel
Sydel's Egg Farm
Hartley, Delaware
Charles A. Wiggs
Town and Country Sheet Metal Corp.
Hightstown, New Jersey
Robert A. Winner
Pleasant Acres Dairy Farm
Moorestown, New Jersey

John Yahner
Yahner Brothers Farm
Loretto, Pennsylvania

Paul W. Williams
President and C.E.O.
First Federal Savings and Loan Assn.
Hazleton, Pennsylvania

19

Statement of Condition
DECEMBER 31, 1985

DECEMBER 31, 1984

Gold certificate account.........................................
Special drawing rights certificates........................
Other cash..............................................................
Loans and securities:
Discounts and advances....................................
Federal Agency obligations...............................
United States Government securities............

$ 483,000,000
195,000,000
22,854,965

$ 515,000,000
225,000,000
12,420,569

154,362,000
288,124,345
6,226,478,136

90,789,000
281,834,390
5,349,007,109

Total loans and securities........................

$6,668,964,481

$5,721,630,499

ASSETS

Other assets:
Cash items in process of collection.................
Bank premises—net.... -.................................
Operating equipment—net...............................
Allother...............................................................
Interdistrict settlement account..........................

532,997,108
48,284,412
14,136,161
458,415,701
(651,023,785)

Total assets................................................

$7,772,629,043

$6,795,241,440

Note liabilities:
Federal Reserve notes.......................................

$5,869,593,020

$5,686,485,962

Deposits:
Reserve accounts of depository
institutions.....................................................
U.S. Treasury—general account........................
Foreign...............................................................
All other...............................................................

$1,136,476,114
0
7,350,000
28,147,423

$ 726,625,104
0
7,350,000
14,732,561

Total deposits...........................................

$1,171,973,537

$ 748,707,665

Other liabilities:
Deferred availability cash items........................
All other...............................................................

485,284,275
80,686,411

110,997,930
89,165,883

Total liabilities...........................................

$7,607,537,243

$6,635,357,440

Capital accounts:
Capital paid in.....................................................
Surplus...............................................................

82,545,900
82,545,900

79,942,000
79,942,000

Total liabilities and
capital accounts....................................

$7,772,629,043

$6,795,241,440

202,669,258
49,135,072
10,217,701
276,875,453
(217,707,112)

LIABILITIES AND CAPITAL ACCOUNTS

20

Earnings and Expenses
Current earnings:
From U.S. Government securities...........................................
From discounts, advances and
miscellaneous sources.........................................................
From services to depository institutions ............................. ’
Total current earnings.......................................................
Net expenses:
Operating expenses (after deducting
reimbursable or recoverable expenses)...............................
Cost of earnings credits............................................................

1985

1984

$580,130,971

$556,858,451

13,582,924
25,021.004
$6^8734899

14,939,513
22,250,414

$594,048,378

Total net expenses............................................................

$ 50,756,030
8,966,615
$ 59,722,645

$ 48,721,105
7,570,566
$ 56,291,671

Current net earnings.....................................................................

$559,012,254

$537,756,707

Additions to current net earnings:
Gain on sales of Government securities..................................
Gain on foreign currency transactions....................................
Miscellaneous nonoperating income ......................................

$

$

Total additions...................................................................

3,391,633
59,292,121
4,868
$ 62,688,622

Deductions from current net earnings:
Assessment by the Board of Governors:
Board expenditures..............................................................
Federal Reserve currency......................................................
Loss on foreign currency transactions....................................
Miscellaneous nonoperating expenses....................................

$

Total deductions..............................................................

$

3,747,700
5,869,244
0
297,516
9,914,460

$

$

1,629.400
0
3,021
1,632,421

4,027,500
6,055,911
22,285,956
359,990

$ 32,729,357

Net additions or deductions.........................................................

$ 52,774,162

$(31,096,936)

Net earnings before payment to U.S. Treasury..........................

$611,786,416

$506,659,771

Dividends paid...............................................................................
Paid to U.S. Treasury (interest on Federal
Reserve notes)..........................................................................
Transferred to Surplus, additions........................................... ’"

$

4,852,310

604,330,206
2,603,900
$611,786,416

$

4,661,077

493,029.544
8,969,150
$506,659,771

21

Operating Statistics
1984

1985

Millions of Dollars
Loans to depository institutions............................................................
Currency received and counted...............................................................
Coin received and counted......................................................................
Checks handled:
U.S. Government checks......................................................................
All other................................................................................................
Issues, redemptions and exchanges of
U.S. Government securities.................................................................
Transfers of funds....................................................................................
Food stamps redeemed...........................................................................

$

5.003
12,290
162

$

8,347
10,793
151

25,413
579,663

25,226
488,403

2,457,929
4,753,287
434

2,143,790
3,889,303
433

Thousands of Items Processed
Loans to depository institutions............................................................
Currency received and counted...............................................................
Coin received and counted......................................................................
Checks handled:
U.S. Government..................................................................................
All other................................................................................................
Issues, redemptions and exchanges of
U.S. Government securities.................................................................
Transfers of funds....................................................................................
Food Stamps redeemed...........................................................................

*Unrounded data

22

1,222*
988,400
944,300

2,156*
912,000
855,000

29,100
720,000

30,300
662,300

13,800
2,600
99,300

13,500
2,400
113,700

Modern retailingfacilities are a mainstay of
the District’s fast-growing service sector.
This is Galter)’ I in Philadelphia’s Market
East section.

Tom Desch (left) and Rick Lang, both senior
vice presidents ofthis Bank, are cooperating
in the supervision and analysis ofthe District
banking system.

New office space is rising in various parts of
the District. Here is the new IBM building at
1700 Market Street in Philadelphia.

■■■

Thefacade ofthe Lit Brothers’ building, an
architectural treasure that’s being restored.

1

FEDERAL
RESERVE BANKOF
PHILADELPHIA
Ten Independence Mall, Philadelphia, PA 19106
Design and Photography: Al FSul

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