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1987AnnualReport TheFederalReserve Bank of Philadelphia ABOUTTHECOVER: Someof theBank's1,200plus employees are arriving at work. Thisreportdescribes whatsomeof thosepeopledo. CONTENTS: YearofAchievement President's Letter All in a Day's Work Directors 1 2 4 Officers 18 19 AdvisoryCouncils Statementof Condition 21 22 Earningsand Expenses OperatingStatistics 23 2-Y YEAROfACHIEVEMENT TheBank had manysatisfyingaccomplishments in 1987: ®e replacedor modifiedvirtually everymajor automatedsystem,eitherto improve in shared Banks.Forexample, the projects efficiency or toparticipate withotherReserve Departmentimplementeda newBook-EntrySecuritySystem,Cashput in a new Pascal Information/Control System, whilebothAccountingand ComputerServices completed several ®e state-ofthe-artinstallations. tookon the testingof a newcommunications network, FedlineII, and becamethefirst Bank to install it. All but thelargestusersof Fedservices 0 7)easurybills and interest nowhaveone`gateway"toall our on-lineservices. rocessing Directsystemthat wedesigned statements wereaddedto the Theasury and installedin ©t for U.S Theasury book-entry 1986asa nationwide securities. system therequest of the Departmentof Housingand UrbanDevelopment, weprepareda basicdesignfor a definitive ©he book-entry for that agencys debentures. Bank succeeded beyondour expectations system with theProductivityImprovementProgramin 1987.Our operatingexpenses werebelow ®e 1986,whileour output volumeswereup substantially. tightenedour qualitystandards with improvingresultsat year's end, thuspositioningourselves wellfor 1988. ® upervision to reduceexaminationtimeconsiderably. and Regulationintroducedmorepersonalcomputers 0 detailedstudiesof tax reform,federal deficitreduction,newfinancial esearch completed IommunityAffairs instruments,and theundergroundeconomy,among othertopics. itsprogramwith a comprehensive enhanced reporton Camden,NewJersey,and strengthened ® ith interstatebankinga reality in the tieswith both communitygroupsand lenders. ThirdDistrict,theBank continuedto encourage itspeopleto search for waysto increase productivityand improvequality. 0 PRESIDENT'S LETTER hebodyof thisreportdescribes a typicalday at theFederalReserve Bank of Philadelphia. Theintent is to giveyou an ideaof whatour 1,200employees do around theclock.Somemakespeeches, serveon like Theasury Direct. outsidecommittees, visit banks,and designnewsystems Mostof our workforce,however,havejobs with lowerprofilesbut no less importance.Theyget thework of theBankdonewith quietdedication,day in and day out. Thisis theirannual reportasmuchasanyone's. improved theBank's In 1987ourpeople, workingtogether, in termsof bothcosts performance and quality.In addition,they communityand System renewedemphasis on customer, These accomplishments shouldimproveour ability relationships. to serveboththenewinterstatebankingindustryand a growingeconomy. Aftera longperiodin relativedarkness,theThirdDistrict hasdonevery well in recentyears.AsI perceiveit, this economy newera ofprosperitydawnedearly in the1980s,and it moved acrosstheDistrict,from eastto westlike thesun. Thenewera beganin NewJerseyand Delaware.Whilethe decadestill wasyoung, newjobs wereradiating outfrom AtlanticCity,and officeexpansion wasignitingaroundPrinceton. Delawarepassedlegislationthat sofar hasattracted 24 bankswith an estimated7,300newjobs. out-of-state Bothstatesremainedin thesunshinethrough1987.Southern NewJersey nowzcgrowingfasterthan thenorthernpart, and eventhepersistent unemployfinancial mentproblemsin the Vineland-Millville areahaveeased.Delaware's jobs increased service at almostthreetimesthenational averageduring the year, and its unemployment rate now ranksamongthelowestin thenation. By mid decade,thePhiladelphia areacameinto thesunlightasservice industriesmadeupfor long-lostmanufacturingjobs. In 1987, thedeclineof thedollar sparkeda turnaroundin localmanufacturing,and thestockmarket crashdid not bring thefinancial layoffsthat it did in NewYork,in part because our officesconcentrate on generalinvestorserviceratherthan specialtiessuchasinvestmentbankingand arbitrage. brightestspotbyfar in 1987,with an 88 Construction wasPhiladelphia's from theprevious percentincreasein thevalueof non-residential contracts year.Muchof that wasnewofficespace,and beforelong, therewill befive m buildingsrisingaboveBilly Penn'shat on thetopof CityHall. Residential constructionmadea particularlystrongshowingin thesuburbs,ashousing to otherparts of theNortheast. remaineda bargainherecompared Theglow ofprosperityalsomovedthroughtheLehighValley,whichis usingits strategiclocationto makeupfor declinesin manufacturing.A havelocatedthereand in otherpartsof the operations numberof back-office in non-manufacturing Districtfrom NewYork.Lancastersawimprovement whilemanufacturingheldsteadylastyear. Harrisburgsawbothimprove, whichdemonstratedthat it hasa lot moreto its economythan thestate government. Pavelingnorthto Williamsport, a numberof companies enjoyed good for the increase result wasan overall of about years variousreasons,and jobs StateCollege is Pennsylvania's tenpercentin manufacturing newestmetroin 1987. politan area,and it hadanotherexceptionally strongyear in services butfull Johnstownand Altoonahaveseensomeeconomicimprovement, Unemployment prosperityhasyet to reachthatpart of Pennsylvania. ratesare down there,but in Johnstownthat'sdueas muchto a declinein thelabor forceas to increases in employment. Ofcourse,I'm pleasedwith the ThirdDistricteconomyin 1987.We from unemployment continuedto outperformthenation in manymeasures, to thedemandfor bank loans.In agriculture,diversityand know-howhelped overcome an assortmentofproblems. WhenI readreportsfrom otherparts of thenation,I am gratifiedthat wehavenot had evenonebankfailure in theDistrictsince1981.Our institutionsareprogressive and well managedtoday,astheyhavebeenfor years. Whether you lookat capitalratios,loan losses, or any numberof otherindicators,bankshereratehighmarksfor safety,soundness andprofitability. Theinterstatemergermovementalreadywasin full swingas 1987 Reserve cameto an end,and Districtinstitutions,aswell as thePhiladelphia Bank,seemed wellpositionedtoparticipatein it. Rwh4-jý A4.7. EdwardG.Boehne m ALL -., -, - -- A DAY'S WORK is midnightand checks are on the move.HelenEng is full boxes of of checkstowardanother wheelinga cart begins loading them into a high-speed who worker, sortingmachine.Beforethisnight is over,about3.8 million by thePhiladelphia Fed. checks will beprocessed Wereceivechecksby thebagand bundle,and wesort them so theycan be deliveredto thefinancial institution on which theyare drawn. Onour bookswecreditthesendinginstitutions and debit thepaying institutions.They,in turn, creditand debit their customers'accounts,and checkshavedonetheir workpayingfor thethingsyou and I buy or sell. Howit addsup! In 1987,our Checks Departmentprocessed morethan 948 million checks, worthmorethan $852 billion. Tapedend to end, theywouldencircletheworld almostfour times! In addition, wehandlemanypaymentsthat are madeelectronically,includingthedirectdepositofpayrolls,SocialSecurity, intereston U.S. Theasury securities, and wire transfersoffunds. (ACH) Our automatedclearinghouse receives computertapes instructions the and wire messages with on amountsto be creditedto or chargedagainstindividual accountsat different financial institutions. TheACHresembles our checkoperation,but it receives, sorts delivers and electronicimpulsesratherthanpaper. Through ACHand FedWire,anothersystem for electronicallymoving $6.9 trillion in 1987. money,wetransferredabout Nora Burns labels computer tapes ... -- IN -, loading dock. .o [ne GlendaBlakesortscheckson a low-speedmachine. m II in ire :, acing area, Greg Aikins tosses a bundle into a bank's bin. bout 3 a.in., mostof thenight'sACHprocessing has beendone.Muchof theinformationis senttofinancial lines,with computerstalking institutionsovertelephone to computers, so to speak.Our new,personalcomputer-based for even network,FedlineII, makesit easier communications have "on-line" link institutions to to small an us, and the numberof institutionsreceivingtheirACHinformationthat way is growing. Still, courierspick up as manyas 225 magnetictapesfrom thisBank eachmorning.JoyceBellingerand NoraBurns in ACHracetheclockto label tapesand get themto theloading dockin time. At 5 a.m., theloadingdock'sin highgear.Boxesofprocessed checks and packages of computertapesare rolledin, and Bob Brown and theloading dockcreware quicklyputting together for eachfinancial institution. Couriersbegintheir packages pick-upsabout 6 a.m. Theloading dockisn't the only busyplaceat that time. Thingsare cooking- literally - in thekitchen.ChefFelipe Riveraand therestof thestaffarepreparingfor the 1,700 customers who will cometo oneor moreof thefive meals servedin the next24 hours.Mary Monzopreparesthefirst of thegallonsof coffeethat will beserved.In addition to breakfast and lunch,the cafeteriaservesdinner at threedifferenttimes - 8."30p.m., midnightand 3 a.m. Whenthefirst breakfastcustomers arrive at 7 a.m., the kitchenstaff hasalready cooked five poundsof bacon(30 poundsif BLTsare on thelunch menu),preparedsoupin 20and 40gallon caldrons,turned20 headsof lettuceinto salad, and begunbakingcakesand pies. F. 1 Dave Riverscooks bacon, B s night workersin Checks makewayfor theday shy 8. Wanda Williamsand MaureenHahn in at "30a.m., the CashDepartmentgreetthefirst of thearmored trucksthat cometo theBank to depositorpick up currency and coins. Whenweshipor receivecoin and currency,the armored truckactuallydrivesinto theBank, onto an elevatorthat takes thetruck down35feet belowtheground, wherethevaultsare. ThisBank is responsible for meetingthecashneedsoffinaninstitutions in the Third District, whichconsistsof the cial easterntwo-thirdsof Pennsylvania,thesouthernhalf of New Jerseyand all of Delaware. A lot of moneypasses throughthisBank - so muchthat we countcoinsby weighingbagsand verifypaper moneywith high-speed machinesthat countthe bills at therate of 20 notes per second,automaticallyshreddingthosetoo worn to put back into circulation. In 1987, wereceived and countedmorethan $13 billion in currency- that'smorethan 1 billion piecesofpaper! Wealso received about 1 billion coins,worthabout $169million. Those coinsweighedmorethan 5,000 tons! TheProtectionDepartment,whichis on duty 24 hoursa day, watches overthewholecashoperationcarefully.Theguards politely,yet alsomonitor theBank'sentrances,greetingguests have business here. they Through their presence makingsure by and watchingon scoresof surveillancecameras,theguards ensurethesecurityof everycornerof the building. By 9 a.m., mostof the1,000plus employees on theday the job, desks, drafting tables,printing workforceare on at presses, computerterminalsand sortingmachines,or in currencycounting areasand electricalshops.Thephonesare ringing, and meetingshavebegun. At 9:15 a.m., theBank's boardof directorsmeetsvia telephoneconference call. Thedirectorsare in theirown offices around theDistrictand ourpresidentand severalotherofficers k1 ýare pazragedano snipped[o rinanclalinstitu[ions. Fe] [II Usingmusclesanda forklift,two workersmovebags of coins. participatefrom theBank'sboard room.Theprimary purpose of this meetingis to setthediscountrate, whichis theinterest rate at whichthisBank makesshort-termloanstofinancial institutions.It is oneof severaltoolstheFederalReserve usesto influencethe nation'smoneysupplyand thelevelof market interestrates,and every1 daysthedirectorsmustconsider whetherthe rateshouldbechanged. I boo burns ioaas a press wlin Ink. IiJ oday,thedirectorsrote to changetheehcouni rat, and a message - in code- is on its way to the Board of Governors, whichmustapprovea newdisbefore it into countrate goes effect.In thiscase,' weget the 4.30 P.m. approvalabout Assoonas BernieBeckin theCreditDepartmentlearnsof theapproval,hepreparesa noticeto sendto banksand other institutions.Otherpeopleget busytoo.AliceParkeraddresses Bill Darrell in and as soonas thenoticeis typeset, envelopes, Printingputs it on thepress.Themail roomis alertedthat a circular is goingout that night. Whilethepresses are running thediscountrate notice,Anne Griith-McNallyof theHumanResources Departmentbringsin for 3-C,the monthlymagazinefor employees. thepaste-ups PatrickStonein thedarkroomaddsthemagazineto hisstack to maketoday. of negatives Asthedirectorsare votingon thediscountrate,Ann Dwyer from theBusiness and TonyWhite,two accountrepresentatives Planningand Development Department,are leavingtheBank financial institutionsaround theDistrict. to visittop officersat Theyarepart of ourforce offield representatives that talk with bankersabout their needsand helpsolveproblemswhenthey II PhyllisGrecochecksfiles in theRecordsDepartment. arise. Withtheir checksto clear,funds to wire, and currencyand coin needsto meet,financial institutionsare thisBank'sbigbutfar from our only ones.Wealsosell U.S. gestcustomers, bonds and 7heasury securitiesto thepublic. Manyof savings do businesswith us by mail, but somecome thosecustomers right to our teller windowsin theEastburnCourt. By 12.30p. m., thelinesat theteller windowsaregetting fill in topurchase shorter.Sincetenders- theforms customers due 1 T°easury securities- are at p.m. on theday of the at thetellerwindows auction,Joan Vicariand herco-workers lot buyers. havealreadyseena of ý"ý-Marian Dunn and Berme 6e-, a bank's discount request. m LibrarianCarolAldridgeanswersan inquiry. fier lunch, theResearch iieparwient s economists who specialize in monetarypolicygatherto go overthelast detailsof thereportthey'reabout to maketo Bank PresidentEd Boehne,who'sheadingto Washington, D.C.,for a TheMMC, as meetingof theFederalOpenMarketCommittee. it zr called,is themonetarypolicyarm of theFederalReserve System.Thecommittee's decisions will affecttheinterestrates pay whentheyborrow. consumers and businesses In theAccountingDepartment, LauraElling and Iola Stroud are readyingtheBank'spayroll Oncethey'vetransferredinformationfrom timecardsinto a computer,the ComputerServices Departmentprints out theheededchecksand directdeposit stubsfor everyone,showingearningsand deductions. k1 m 4 its AlthoughtheFederalReserve wascreatedby Congress, are notpart of theUS government'scivil service employees Banks'pay scalesare relatedto marketwage system.Reserve ratesin their communities. TheBank offersmany benefitsto its employees, including Today, dental, plans. Linda Dompert and retirement medical, has Resources Department the Human appointments schedin to the to uledthroughtheafternoon explain savingsplan new employees. m At the tellerwindow,JoanGarrisontakesa tenderfrom a Treasurysecuritiesbuyer. Im in the t x:30 p.m.. InezRidgeuay and herco-workers FiscalDepartmentare busyprocessingthe 7heasury securitiestendersthat arrived in today'smail or were brought to theBank's teller windows.Othersare settling Direct,thebook-entrysystemthat the accountswith Theasury FederalReserve usesto sell U.S. Nasury bills,bondsand notes by thisBank, and Treasury Directwasdesigned to thepublic. System. wenow operateit for theentireFederalReserve TreasuryDirectisjust oneexampleof theimportanceof Departcomputers as toolsin thisBank.Our ComputerServices "nerve center"of theBank ment couldbe thoughtof as the is important information processed there.That sinceso much department playsa major rolein all theservicesweperform for financial institutions,includingcheckclearings,cashshipments,electronictransfersof moneythroughACH,and mai 'i, nanceoffinancial institutions' reserveaccounts.CSDalso handlescritical inter and benefitdeductions Aboutthetime the f days paperwork., Jim Cuivanaof theSupeivision and Regulation Bank. He Departmentis returning to the and a teamof examinershavejust completed their mostrecentassignment- an examinationof a commercialbankin centralPennsylvania. Fedexaminesstatememberbanksand SincethePhiladelphia bank holdingcompaniesthroughoutour three-state District, fair time traveling and living in examinersspenda amountof hotels. m JO,:ý,nasr :, < ýý.: rs over figures in in m CleoColesin the ChecksDepartment ... upervisionand Regulationis thedepartmentthat makessurethat banksand holdingcompaniesare operatingsoundlyand safely,and are well managed. S&Ralsohelpsenforcebanking lawsand regulations. helpsenforceis theCommuA specificlaw theFederalReserve banks Act, whichsays mustplay their role in nity Reinvestment legitimate the their meeting creditneedsof communities.The CRAgivescommunitygroupsand otherorganizationsan opportunity toprotestmergersand acquisitionswhentheybelievethe institutionsinvolvedaren't satisfyingthelaw's requirements. KeithRollandin our CommunityAffairsDepartmentis oneof thepeoplewho worksto bring banksand communitygroups together. At 6p. m., studentstaking an AmericanInstituteof Banking coursearrive at theBank.AIBis an educationalarm of the banking industry,and wemakespaceavailablefree of charge for theseclasses. Tonight,TedAlberfrom theFiscalDepartment is teachinga basicaccountingcourse. By 8 p. m., muchof theBank is quiet.Day workershave gonehome.But a shiftis beginningin Checks. About10p. m., there'saction on theloadingdockagain. Thucksand vansare deliveringchecksthat we will process throughoutthe night. And, by midnight,yet anothershiftof Checks workersarrive, and checks are on the move- again. ThePhiladelphiaFed beginsanotherday. handles o %Drk. ý BarryCutler(left)and Phil Farleyfind answersto a bank'sregulatoryquestions. m BOARDOFDIRECTORS eviusM. Curtis, chairman and chiefexecutiveofficer of DelmarvaPower& Light Co., beganbisfirst term as chairmanof theboard in 1987.He replacedRobertM. Landis,who E. Bartol, III, chairmanof Hunt Manufacturing servedas chairmanfor four years.George Co.of Pbiladelphia,wasdeputychairmanin 1987. Twonewdirectorsjoined theboard in 1987. George A Butler,chairmanand chiefexecutive officerof FirstPennsylvaniaBank and FirstPennsylvaniaCorp.of Philadelphia, tookofficeas a ClassA director electedby large memberbanks.He succeeded John H. Walther,chairman and chiefexecutiveofficerof NewJerseyNational Bank. PeterA Benoliel,chairmanof QuakerChemical Corp.of Conshohocken, wasappointedto a term as a ClassC director,filling theseatformerly held by Mr. Landis. In addition, CarlE. Singley,a partner in thePhiladelphialawfirm of White,McClellan& Singley, wasreelected a ClassB directorby medium-sized memberbanksin 1987. Chairman NeviusM. Curtis Chairmanand ChiefExecutive Officer DelmarvaPower& Light Co. Wilmington,DE DeputyChairman George E. Bartol, III Chairman Hunt ManufacturingCo. Philadelphia,PA PeterA Benoliel Chairman QuakerChemicalCorp. Conshohocken, PA CharlesF. Seymour Chairmanand ChiefExecutive Officer Jackson-Crass Co. Philadelphia, PA Carl E. Singley,Esq. Partner white,McClellan& Singley Phlladelphaia, PA Ronald H. Smith Presidentand ChiefExecutive Officer CCNBBank,NA NewCumberland,PA George A Butler Chairmanand ChiefExecutive Officer FirstPennsylvaniaBank,NA Philadelphia,PA ClarenceD. McCormick President Farmers National and Merchants Bank Bridgeton,AJ NicholasRiso Presidentand ChiefExecutive Officer Giant FoodStores,Inc. Carlisle,PA Im OFFICERS 1987,WilliamH. Stone,Jr., whofirst joined theBank in 1971,waspromotedto First VicePresident.HereplacedRichardL. Smoot,whoresignedto accepta positionat a commercialbank. for PaymentOperations; DonaldF. DorosbecameSeniorVicePresident In otherofficial changes, in Supervision RobertA. Dobieand LouisN. Sanfelice werenamedVicePresidents and Regulation; MalcolmT. HumphreywasappointedVicePresidentand Directorof ComputerServices, and Stephen Directorof Research. A Meyerwaspromotedto VicePresidentand Associate Also,RobertJ Buccowaspromotedto AssistantVicePresidentof ElectronicFunds73ansfer; James E. Burns became AssistantVicePresidentof CheckOperations;WilliamJ Evans,Jr., waspromotedto AssistantVicePresidentof Technical Services and Administration;JoannaH. Frodin wasnamed Planning Officer; Stephen M. Hoffman Business waspromotedto Examining Officer;Edward became Associate General Counsel; M. Mahon and Patrick M. Reganwaspromotedto Data Communications Officer. Steven P. Cohen joined theBankas VicePresident of AccountingHehasmanyyearsof experience infinancial management. An Eduard G.Boebne President WilliamH. Stone,Jr. First VicePresident KonutantyG.Adack ExecutiveVicePresident ThomasK. Desch SeniorVicePresidentand LendingOfficer RichardW.Lang SeniorVicePresidentand Directorof Research RonaldD. Watson SeniorVicePresident J Warren Bowman, Jr. Vice President StevenP. Cohen VicePresident DonaldF. Doros SeniorVicePresrülenrt JamesF. Gaylord SeniorVicePrecrcle nl Hiliary H. Holloway SeniorVicePresidentand GeneralCounsel First Vice President William H. Stone, Jr., (left) ,:na i'raýw m ýýrrýiý ý. cuonue ýun)ý). EdwardJ Coia VicePresident PeterM. DiPlacido VicePresident RobertA. Dobie VicePresident JamesB. Duffy VicePresident RonaldG. Foley VicePresident Malcolm T. Humphrey VicePresident Stephen A Meyer VicePresidentand Associate Directorof Research Donaldj McAneny VicePresidentand General Auditor LawrenceC.Murdoch,Jr. VicePresidentand Secretary Terence B. O'Brien VicePresident LouisN. Sanfelice VicePresidentand Assistant Secretary LawrenceC.Santana,Jr. vicePresident VrshP. Vrswanathan VicePresident Robertj Bucco AssistantVicePresident JamesE Burns AssistantVicePresidentand AssistantSecretary Theodore M. Crone Research Officerand Economist Thomas P. Lambinus FinancialAccountingOfficer EdwardM. Mahon GeneralCounsel Associate RobertH. DeFina Research Officerand Economrst FrederickM. Manning AssistantVicePresidentand CommunityAffairsOfficer PatrickL. Donahue FinancialServices Officer JaniceM. Moulton Research Officerand Economist RobertN. Downes,Jr. ApplicationsOfficer Patrick M. Regan Officer Data Communications WilliamJ Evans,Jr. AssistantVicePresident Edward G. Rutizer AssistantVicePresident Edwardj Fox NationalAccountOfficer JohnB. Shaffer AssistantGeneralAuditor JoannaH. Frodin Business Planning Officer RichardA Sheaffer SecuritiesOperationsOfficer Secretary and Assistant Judith H. Helmuth Human Resources Officer EugeneE. Hendrzak AssistantVicePresident Stephen M. Hoffman ExaminingOfficer Ronald R. Sheldon Data Services Officer Charles J Sullivan,Jr. AssistantVicePresident JoAnneTarnoff AutomationPlanning Officer JerryKatz AssistantVicePresident Marie Tkaczyk Officer Systems Development Alan L. Kiel Staffing and Development Officer ElizabethS Webb AssistantCounsel RobertB. Klein AssistantVicePresident Bernard Wennemer ExaminationReviewOfficer Mary M. Labaree AssistantVicePresident ®i ÄDVIS0RYC0UNCILS facilitate our communication headi isoryy councilselectedb) this Bank'sboard of directors with majorsectorsof theregionaleconomy. Eachcouncilconsists of membersdrawnfrom throughouttheDistrict. Thecouncilsmeet from theBank to exchange President Boebne informationand regularlywith and otherexecutives discuss problemsand needs. Thereare nowfour advisorycouncils.The1987 membership is listedbelow. U SMALL BUSINESS/ NONMEMBER BANK CREDITUNION ADVISORYCOUNCIL AGRICULTURE COUNCIL THRIFTINSTITUTIONS ADVISORY COUNCIL Chairman Peggy j Bosnia Letterkenny FederalCreditUnion Chairman RichardM Linder TheDrovers& Mechanics Bank Chairman DonaldLynch Animal HealthSales,Inc. Chairman Stephen G. Hargis,Jr. Artisans'SavingsBank DeputyChairman JohnLadd 609AreaFederalCreditUnion DeputyChairman F. ParkerRenelt CitizensStateBank DeputyChairman Donald C.Hershey Hershey Farms BettyL. Baker DelawareStateEmployees FederalCreditUnion Theodore D. Bessler GardenStateBank RoyL. Bomberger Bomberger's Store,Inc. DeputyChairman David W.Lindstrom Franklin Savings& Loan Association WilliamK. Francis Citizens& NorthernBank NewJerseyFarmBureau EdwardJ Boyle NJDOTCreditUnion WalterEllis JosephDuffy PhiladelphiaInquirer and Daily NewsEmployees FederalCredit Union WayneH. Hainley SchuylkillHavenThistCo. WillieJoimson FidelitySystems JohnR. Howell First ValleyBank NoahKreider,Jr KreiderFarms GladysDuling LouviersFederalCreditUnion Jon C.Nichols FeltonBank LindaI McAleer MeliorGroup Harold A Queen MauchChunk7hustCo. HowardPapen PapenFarmas Inc. David L. 7fessler NortheasternBank of Pennsylvania Charles A Wiggs Town& CountrySheet Metal Corp. George R. Welch ContinentalBank of NewJersey RobertA. Winner PleasantAcresDairy Farm RobertG.Zullinger Farmersand Merchants7hist Co. JohnH. Wright,Jr. WrightMotorSalesCo. William Gilmore WestPhiladelphiaFederalCredit Union HelenHirsch Fischer& PorterEmployeeCredit Union MichaelR. Prettyman Defense ActivitiesFederalCredit Union RobertSmith 7h'-County AreaFederalCredit Union DonaldA Stites Deepwater IndustriesFederal CreditUnion Virginia Williams FAA TechnicalCenterFederal CreditUnion John Mahner Mahner BrothersFarms ADVISORYCOUNCIL WendellT.Breithaupt 7ienton SavingsFund Society Robertj Colaa'cco SouthjerseySavings& Loan Association RonaldP. Crouch Ninth WardSavings& Loan Association ArmondoFelicetti FidelityFederalSavings& Loan Association WilliamC. Gamble DimeSavingsBank of Chester County john M. 0 Brien CentralPennsylvaniaSavings Association RobertW Pullo YorkFederalSavings& Loan Association OliverH. Reed, Jr. Peoples-Thrift Building & Loan Association RobertH. Thewbella First FederalSavings& Loan Association m STATEMENTOFCONDITION ASSETS Goldcertificate account Specialdrawing rightscertificates Othercash Loansand securities: Discountsand advances FederalAgencyobligations UnitedStatesGovernment securities Totalloansand securities DECEMBER31,1987 $ 385,000,000 31,1986 DECEMBER $ 431,000,000 162,000,000 23,639,616 162,000,000 20,397,852 131,525,000 228,558,271 178,250,000 250,690,569 6,624,142,252 $6,984,225,523 6,327,830,175 $6,756,770,744 Otherassets: Cashitemsin processof collection Bank premises-net Operatingequipment-net All other lnterdistrict settlement account Totalassets 542,821,293 (598,874,816) 596,827,502 46,842,992 14,978,258 535,849,077 (466,304,297) $8,035,168.786 $8,098,362,128 LIABILITIES AND CAPITALACCOUNTS Noteliabilities FederalReserve notes $5,705,826,311 $5,513,225,564 1,647,973,725 0 7,050,000 28,217,510 1,944,852,395 0 Deposits: Reserve accountsof depository institutions U.S. Treasury-general account Foreign All other Totaldeposits Otherliabilities: Deferredavailability cashitems All other Totalliabilities Capitalaccounts: Capitalpaid in Surplus Totalliabilitiesand capital accounts 477,347,586 46,222,477 12,787,107 $1,683,241,235 368,685,906 82,923,734 $7,840,677,186 97,245,800 97,245,800 $8,035,168,786 6,900,000 8,334,284 $1,960,086,679 381,505,200 70,613,685 $7,925,431,128 86,465,500 86,465,500 $8,098,362,128 m EARNINGS AND EXPENSES 1987 Currentearnings: FromU.S.Government securities Fromdiscounts, and advances miscellaneous sources Fromservicesto depository institutions 1986 $497,305,569 $532,214,470 19,546,033 20,900,972 30,841,255 27,488,236 $547,692,857 $580,603.678 $ 50,643,891 8,970,751 $ 59,614,642 $ 51,969.075 8,790.331 $ 60,759,406 $488,078,215 $519,844,272 $ 1,268,641 $ 2,210,987 84,801,017 4,393 90,648,998 3,225 $ 86,074,051 $ 92.863.210 from current net earnings: Deductions Assessment by theBoard of Governors. Boardexpenditures FederalReserve currency Lossonforeign currencytransactions Miscellaneous nonoperatingexpenses 7btal deductions $ 3,789,200 4,817,304 00 7,399,965` $ 16,006,469 $ 4,522,900 5,848,170 $ 16,284,812 Netadditions $ 70,067,582 $ 76,578,398 Netearningsbeforepaymentto U.S. 7ieasury $558,145,797 $596,422,670 $ 5,537,791 $ 4,964,654 541,827,706 10,780,300 $558,145,797 587,538,416 3,919,600 Totalcurrentearnings Netexpenses (after Operating expenses deductingreimbursableexpenses) Costof earningscredits Totalnet expenses Currentnetearnings Additionsto current net earnings: Gainon salesof Government securities Gainonforeign currency transactions Miscellaneous nonoperatingincome Totaladditions Dividendspaid Paidto U.S. Teasury (intereston FederalReserve notes) 7Yansferred to Surplus,additions 5,913,742* $596.422.670 %ndudesnonreimbursed7Wasurysen4ces m OPERATINGSTATISTICS 1987 1986 Millionsof Dollars Loansto depositoryinstitutions Currencyreceivedand counted Coin receivedand counted Checks handled. US Government checks All other Issues,redemptions and exchanges of U.S. Government securities 7hansfers offunds Foodstampsredeemed $ 8,276 13,755 169 $ 5,701 13,199 169 31,440 821,334 23,919 665,726 4,135,208 6,927,621 405 3,888,293 5,527,775 421 1,694 1,099,500 1,006,600 1,344` 1,015,700 1,010,300 31,700 916,400 29,500 803,500 14,000 3,600 87.100 14,500 3,200 86,300 Thousands of ItemsProcessed Loansto depositoryinstitutions Currencyreceivedand counted Coinreceivedand counted Checks handled. ' US Government All other Issues, redemptions and exchanges of U.S Governmentsecurities Transfersoffunds Foodstampsredeemed 7lnrounded data m Design by NGSAssociates Photography by JohnMcGrailPhotography Inc. Textand projectcoordinationbyJane Hinkle 7jpesettingby TerryRussell Printed by the FederalReserve Bank of Philadelphia
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