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Federal Reserve Bank of Philadelphia
Contents
President's Letter...page 4
First Vice President's Letter...page 6
The Third District Economy Builds Momentum in 1996...page 8
Directors...page 18
Officers...page 20
Advisory Councils...page 22
Statement of Condition...page 24
Statement of Income...page 25
Statement of Changes in Capital...page 26
Operating Statistics...page 26
A Letter from the President
'T'he nation s economy turned in a remarkable performance in 1996.
The expansion
-L entered its sixth year.
Output of goods and services grew at a robust pace. Nearly three million
jobs were added to the nation’s payrolls. And the underlying rate of inflation was the lowest in over
30 years. Thus far the expansion of the 1990s has shown the kind of measured pace and balance that
should sustain it for the foreseeable future.
Here in the Third District, the economy turned in a surprisingly strong performance in 1996. The
pace of job growth in the tri-state area came closer to matching the nation's than at any time in this
expansion. And the momentum the local economy built up seems to be carrying into the new year.
Because the District's economy has been slower to recover than the nation's, it is particularly
important for us that the national expansion continue for as long as possible. The pace of the national
economy has always put bounds on how fast the region grows. For the local momentum to be
realized, the national expansion must be sustained. Keeping inflation low is a key contribution the
Fed can make toward sustainable growth and job creation.
Sustamed expansion will bring steady improvements to all communities in the Third District. But
the biggest benefits will come to those areas that are just beginning to turn around, including the city
of Philadelphia, which in 1996 recorded its first job growth in five years.
As I write this, signs are positive that both the national and regional economies will continue to
expand in 1997 in an environment of low inflation.
4
I
A Letter from the First Vice President
’he year 1996 was one of solid accomplishment for the Federal Reserve Bank of Phila
T
delphia. Recognizing that profound changes to the nation's payments system were under way,
we have been investing in new equipment, new technologies, and better ways of doing business.
Those efforts brought significant rewards this past year. And we expect them to yield still greater
rewards in years to come.
In keeping with its role as an industry leader in check collection, the Bank introduced in August a
new "check imaging" service for depository institutions. By capturing the digital image of a paper
check, the Bank can make processing, storage, and retrieval faster, easier, and cheaper. We will ex
pand our imaging capability in 1997, and we will be among the first Reserve Banks to image U.S.
Treasury checks.
The new computer system that supports check imaging will serve as the springboard for other
innovations as well. In fact, the Bank introduced two new electronic check deposit products in 1996.
The Bank also spearheaded the Federal Reserve's participation in the rollout of the new $100 bill.
The "new look" currency, which includes a variety of innovative anti-counterfeiting features, will be
introduced for smaller denomination bills over the next several years.
Meanwhile, as part of the Federal Reserve's efforts to streamline electronic payments, the Bank
reorganized its Automated Clearing House operation and successfully integrated its electronic funds
and securities transactions into a new consolidated computer system.
Much has been accomplished, but maintaining a leadership role in the fast-changing payments
business requires an ongoing effort. Thus the Bank has embarked on an aggressive campaign to
continuously improve performance by achieving high standards of product quality and customer
service and by encouraging greater creativity and innovation.
As the nation's central bank, the Federal Reserve System is charged with fostering the kind of
reliable, accessible, and efficient payments system the economy needs in order to grow. Here at the
Federal Reserve Bank of Philadelphia, we are committed to serving the System and the nation as an
innovative leader in the provision of high-quality payments services.
6
The Third District Economy Builds Momentum in 1996
or the economy of the Third Federal Re-
national level. Keeping inflation low helps pro
serve District, 1996 was a year of significant
long economic expansions and job creation,
F
improvement.
The momentum the District
Even though jobs continued to grow at a
economy built up during
Payroll Job Growth
the year puts us in position
(Percent)
slower pace in the tri-state
region than in the nation in
to make further gains in
1996, we came closer to the
US
I Three States
1997 as the national expan
national average than at
sion continues to unfold.
any other time in the expan
Indeed, early indications
sion. Moreover, total jobs in
from local labor and hous
the three states grew faster
ing markets and from our
in 1996 than we had antici
own Business Outlook Sur
pated earlier in the year.
vey suggest that 1997 will
Our projections were for job
bring another year of solid
growth.
And so we can
look back on 1996 as a year
92
93
94
95
96
Source: Bureau of Labor Statistics. Data are
seasonally adjusted by FRB Philadelphia and
changes are fourth quarter to fourth quarter.
________________
in which the District reaped
growth in the region to be
slightly less than 1 percent.
It turned out to be 1.7 per
cent. The national economy
some of the benefits of sustained economic
also grew faster than most forecasters had pre
growth and job creation.
dicted.
Through most of this expansion we have said
When we look at the data for the individual
the three-state region has been lagging the nation.
states, we see a familiar pattern (see Payroll Job
And that is well illustrated by a comparison of
Growth for Pennsylvania, New Jersey, and Dela
national and regional job growth over the past
ware on the next page). Job growth was signifi
five years (see Payroll Job Growth for the U.S. and
cantly higher in Delaware than in the other two
the three-state region on this page). With slower-
states. For the second consecutive year payrolls
than-average growth, the region did not regain
in Delaware increased faster than the national av
all the jobs lost in the recession until the end of
erage. Jobs grew at an almost identical rate in
1995. Since our economy generally recovers more
Pennsylvania and New Jersey last year—1.6 per
slowly than the nation's, it is particularly impor
cent. And total job growth over the past five years
tant for us that expansions continue as long as
for these two states has differed by less than 0.1
possible by maintaining sustainable growth at the
percent. Pennsylvania recovered all the jobs lost
8
in the recession by mid-1994. But during the re-
in our District were in central and south central
cession, job losses in New Jersey were much
Pennsylvania and along the New Jersey shore,
deeper than in Pennsylvania, so New Jersey has
State College had the fastest growth in Pennsyl-
not yet recovered all the
jobs lost between 1989 and
vania, with a job gain of 4
Payroll Job Growth
percent, and Atlantic City
(Percent)
1992. If recent growth rates
had the fastest growth in
continue, New Jersey's job
New Jersey, with an increase
levels should reach a new
of 3 percent. But Atlantic
high sometime in 1997.
City still has the second
In the local labor mar
highest unemployment rate
kets across the District, job
in the state. At the other end
growth varied consider
of the scale, those areas
ably last year. All the met
shown in orange on the map
ropolitan areas shown in
white on the map below
had job growth of 2 percent
92
93
94
95
96
Source: Bureau of Labor Statistics. Data are
seasonally adjusted by FRB Philadelphia and
changes are fourth quarter to fourth quarter.
or more. Besides the two
metro areas in Delaware, the high growth areas
had growth of less than 0.5
percent in 1996. And Johns
town and Vineland actually
experienced some job losses
on a fourth-quarter-over-fourth-quarter basis.
Job Growth 1995:IV to 1996:IV
| 2.0% or more
less than 2.0% and
greater than 0.5%
0.5% or less
Source: Bureau of Labor Statistics.
Data are seasonally adjusted by
FRB Philadelphia.'
9
For the Philadelphia metro area as a whole,
One factor in the improvement in the city's
jobs increased about 11/4 percent in 1996; that
economy was its continuing success in attracting
was up from less than 0.5 percent in the previous
tourists and conventioneers. This success is re
year. The suburbs grew at
about the same pace in 1996
as they did in 1995 (see
Philadelphia City & Suburban
flected in the hotel occu
Philadelphia City &
Suburban Job Growth
pancy rate for Center City;
(Percent)
it increased from 60 percent
4th Quarter to 4tlh Quarter
in 1991 to 75 percent in 1996
I SuburbsL
Job Growth). The big differ
(see Hotel Occupancy Rates).
ence was the increase in jobs
And this upward trend is
in the city. The data in the
even more impressive than
figure are fourth-quarter-
it appears at first glance.
over-fourth-quarter num
During this period the
bers, and the annual aver
number of hotel rooms in
ages show a less dramatic
Center City increased sig
improvement. But even if
Source: Bureau of Labor Statistics. Data are
seasonally adjusted by FRB Philadelphia.
we use annual averages, job
nificantly with the opening
of the Marriott. The in
levels stabilized in the city
Hotel Occupancy Rates
Center City Philadelphia
crease in visitors in 1996
last year.
(Percent)
was due not only to the
By either measure, last
new Convention Center
year's experience provides
but also to some special
hope that Philadelphia can
events like the baseball All-
stem the tide of job losses
Star game and the well-pro
that has plagued the city
moted Cezanne exhibit at
since 1988. If sustained ex
the Art Museum. The good
pansions are important for
news is that the city was
the tri-state region, they are
able to capitalize on these
even more important for the
opportunities. The chal
city. It has taken the city
lenge is that these are not
more than five years since
recurring events, so efforts
the end of the national recession to record any
to attract and promote similar events will have to
year-over-year job growth.
be launched every year just to stay even.
io
The city's improvement, of course, was not
at current levels. New casino development is m
just the result of special events; it was also part of
the works for Atlantic City. Several Philadelphia
a general rebound in the tri-state economy. As
suburbs have office occupancy rates in excess of
90 percent, which makes
usual, the service-producing
Nonresidential Buildings
industries provided the bulk
of the new jobs in the three
Value of Contracts
("Index)
tion. And the high hotel oc
cupancy rate for Center
states. But the area's re
City is an incentive to add
bound is best seen in some
more rooms.
statistics from the construc
convert the PSFS Building
dustries.
at 12th and Market streets
Construction jobs in
into a 600-room hotel.
creased more than 4 percent
Residential construc
on a fourth-quarter-over-
tion in the region also
fourth-quarter basis, revers
bounced back last year
ing the decline in the previ
Housing Permits
from a slide that started in
(Index)
mid-1994. The slide began
residential buildings fell
with a rise in mortgage
sharply in the last quarter of
rates. Rates rose in 1994 for
1995 and the first quarter of
the first time following the
1996. But they rebounded
1991-92 recession. Rates
by mid-year (see Nonresiden
declined again in 1995, but
tial Buildings'). Shaded areas
Three States
on the graphs represent the
by that time, job growth
had slowed significantly in
national recession. The fluc
the tri-state area.
tuations in contracts we see
As mortgage rates rose
at the end of 1996 in this
graph are not unusual for
Recently,
plans were announced to
tion and manufacturing in
ous year. Contracts for non
them ripe for new construc
Source: Bureau of Labor Statistics. Data are
seasonally adjusted by FRB Philadelphia.
nonresidential construction.
in 1994, housing permits in
this region declined, and
And there are indications that nonresidential con-
they fell even further in 1995 as job growth slowed
tracts will increase in 1997 or at least be sustained
(see Housing Permits). A significant gap opened
li
up between housing growth in the region and the
index on this graph is a measure of manufactur-
nation. But with the pickup in overall job growth
ing output. Since the recession, output has in-
in the three states last year, permits increased al-
creased in every year except 1995. And the de-
most 20 percent. Our 1997
forecast of housing permits
Mid-Atlantic
Manufacturing Index
is shown by the dotted line
(Index)
cline in 1995 was more than
reversed last year. The re
sponses to our monthly sur
on the Housing Permits
vey of manufacturers in the
graph. After a rise in the first
District also reflected this
quarter, we are looking for
decline in 1995 and pickup
a gradual decline in permits
in 1996.
through the rest of the year.
In our Business Out
In the region's manufac
look Survey we ask the re
turing sector, the 1996 re
spondents not only about
bound is best seen in our
the current month's activity
90 91
Mid-Atlantic Manufactur
92 93
94 95
96
97
but also about what they
Data are three-month moving averages.
ing Index, which covers our
expect over the next six
three states plus New York
Business Outlook Survey
Expectations
(see Mid-Atlantic Manufac
(Index)
months (see Business Out
look Survey Expectations). We
turing Index). Employment
form an index for each mea
data do not always give us
sure, such as overall activ
an accurate picture of how
ity or employment, by sub
well manufacturing is do
tracting the percentage of
ing. With the rapid produc
respondents who expect a
tivity increases this country
decrease from the percent
has experienced in manu
age who expect an increase.
facturing, the tri-state re
So far this year the index of
gion has been losing indus
future activity has been
trial jobs even in years when
near its highs for the past
output has gone up. Indeed,
three years, and the index
last year was the ninth consecutive year of job
of future employment has recently had some of
losses in the region's manufacturing sector. The
its highest readings in the last 10 years. These
12
indexes suggest that over the near term, we
view discusses some of the factors that have made
should see continued growth in the manufactur
our region less competitive for manufacturing.
ing sector and even some pickup in employment.
Here are a few of the major ones. First, manufac
turers tend to locate new
According to the early pay
roll data for 1997, we may al
Manufacturing Employment
As Percent of Total Employment
facilities in rapidly ex
ready be seeing some in
(Percent)
panding markets, and the
mid-Atlantic region has
crease in factory jobs.
Any pickup in manufac
had the slowest popula
turing jobs in 1997 is not
tion growth of any region
likely to signal the beginning
in the nation in recent de
of a new trend in the region's
cades. Also, many private
manufacturing sector. The
costs for manufacturers
Manufacturing Employment
tend to be higher in our
graph on this page shows
region than elsewhere.
the
the
These include labor costs,
region's nonfarm jobs that
such as wages and ben
are in manufacturing and
efits, and energy costs. For
percentage
of
the percentage of the nation's jobs in manufac
example, electricity prices in Pennsylvania and
turing. Since 1980 the percentages have declined
New Jersey are typically 20 to 50 percent higher
as manufacturing workers have become more
than the national average. This is not true in Dela
productive. Today, both the nation and the region
ware. Finally, the business tax burden can tip the
have fewer manufacturing workers and more out
balance in the decision about where to locate a
put than in 1980. The region's much greater con
new plant. The business-related taxes in our re
centration in manufacturing in 1980 can be seen
gion that tend to be much higher than the national
in the gap between the two lines. If we extended
averages are the corporate income tax in Penn
these lines further back in time, the gap would be
sylvania and the property tax in New Jersey.
even wider. Today, the region's economy is still
With the loss of manufacturing jobs in 1996,
slightly more manufacturing-oriented than the
the private service-producing industries and gov
nation's, but not nearly as much as it was 15 or 16
ernment essentially provided all the new jobs in
years ago.
the region. They also account for most of the ex
An article in a recent issue of our Business Re
isting jobs. The five categories shown in the graph
13
(Service-Producing Sector) account for 80 percent
in other service industries as well. While there
of the jobs in the tri-state area, and two catego-
has been a lot of job creation in some parts of the
ries—trade and business and personal services—
communications industry, such as cellular
account for more than half.
The biggest generator of
phones, paging, and fax ser
Service-Producing Sector
Tri-State Job Growth
1995:IV to 1996:IV (Percent)
vices, there have been job
new jobs was the broad cat
cuts in some more tradi
egory of business and per
tional areas, especially at
sonal services. Within this
some large firms. Legal ser
group, business support
vices continue to be under
services, such as computer
cost-cutting pressures, and
programming and mainte
the industry had very mea
nance, advertising, and di
ger job growth in the three
rect mail, grew more than 7
percent.
The first bar in the
states last year, following a
Trans
Trade
,
Utilities
Finan Business
Per^nal
Govt
Serv
Source: Bureau of Labor Statistics. Data are seasonally
adjusted by FRB Philadelphia.
graph, however, shows a
slight decline in jobs in the
transportation and utilities
decline in the previous year.
In the region as a
whole, job growth at banks
Depository Institutions
Job Growth 1995:1V to 1996:1V
(Percent)
and other depository insti
tutions was greater than 1
industries. This is a sober
percent last year, but banks
reminder that service-pro
continued to have different
ducing industries are not
growth profiles across the
immune to the kinds of cut
three states (Depository In
backs that we have often
stitutions'). Led by the credit
seen in manufacturing.
card banks, banking jobs in
Cost-cutting reduced jobs at
Delaware increased 8 per
gas and electric utility com
panies in the region more
than 4 percent last year. This
US
Three
States
PA
NJ
DE
Source: Bureau of Labor Statistics. Data are
seasonally adjusted by FRB Philadelphia.
was the second year in a
cent. In New Jersey, on the
other hand, jobs declined 3
percent in 1996 after a 5 per
cent loss in the preceding
row for major job reductions in the industry. Cost-
year. And we shouldn't read too much into the
cutting and consolidation helped limit job growth
better-than-average job growth in Pennsylvania's
banking industry last year. This increase repre-
overall pace of growth in the region in 1997. First,
sents the return of only about half the jobs lost in
the momentum from 1996 has already carried
the previous year.
over into 1997. It has shown up in the early employment and housing
The growth in total gov
ernment employment in 1996
also hides some differences
Government Sector Job Growth
Three States 1995:IV to 1996:IV
(Percent)
statistics.
Last year's
growth, however, was
among the three levels of gov
helped by the fact that the
ernment (Government Sector
region was rebounding
Job Growth). All the net job
from a weak year in 1995.
growth in the tri-state region
That will not be true this
was at the local level. And
year; there is less slack in
this growth is basically being
the region's economy
driven by increased enroll
than there was a year ago.
ments in the public schools.
Finally,
Federal jobs in the three states
economy is expected to
declined only slightly last
grow more slowly in 1997
year, but 1996 was the eighth
Payroll Jobs
(Index)
the
national
than it did in 1996. And
consecutive year of decline.
the pace of the national
Nationwide, federal jobs are
economy has always put
now at their lowest level since
bounds on how fast the
1982.
region grows.
This look at some indi
So while we expect
vidual sectors shows that
solid growth in 1997, job
even in a year of good job
growth in each of the
growth there can be a great
three states is forecast to
deal of shuffling among the
be somewhat slower than
various industries and within
in 1996 (Payroll Jobs). Jobs
industries. We are likely to
in Delaware are expected
see more of the same in 1997,
to grow a little more than
but what will overall growth look like?
Three important factors will determine the
2 percent, which is faster growth than we have
projected for the nation as a whole. Jobs in New
15
Jersey are expected to grow a little less than 1.5
able amount. With electricity deregulation on the
percent, and that is the same as we are projecting
horizon in Pennsylvania and New Jersey, utili
for the nation. Pennsylvania's labor market has
ties will remain under severe cost-cutting pres
less slack than New Jersey's.
And jobs in Pennsylvania
Unemployment Rate
(Percent)
sures.
Furthermore, the
breakup of Conrail will un
are expected to grow only
doubtedly lead to a loss of
about 1 percent in 1997.
jobs in the area; we just
We have been predicting
don't know how many.
a decline in the first-quarter
And the merger of Bell At
unemployment rates for all
lantic and Nynex will result
three states this year (Unem
in job cuts and a shift of
ployment Rate). The prelimi
some jobs out of our region.
nary numbers for the first
Second, the effect of
two months do show a de
welfare reform on labor
cline in New Jersey and
markets is not yet clear, but
Delaware. And we expect
it could be substantial in
the rates in these two states
large urban areas. For ex
to stay at these levels for the rest of the year or
ample, more than 40 percent of Pennsylvania's
drift a little lower. The preliminary numbers show
welfare cases are in the city of Philadelphia, and
little change in Pennsylvania's unemployment
about 50 percent are in the five southeastern coun
rate in the first quarter of 1997. The final num
ties. If the five-county area were to meet its share
bers may show a slight dip in the rate, but our
of the state's quota under the new federal law,
forecast calls for Pennsylvania's unemployment
13,000 adults would either have to find work or
rate to tick up again before the end of the year.
in some way be removed from the roles. That is
In conclusion, there are two issues that should
about half the number of jobs that were added in
not alter the overall outlook for the region but
the metropolitan area last year. Depending on
could have a significant impact on certain indus
how well welfare reform works, it could increase
tries or local labor markets. First, how much cost
job growth in large urban areas like Philadelphia,
cutting and consolidation will take place in 1997?
or it could push up the unemployment rate. We
Recent legislation and pending mergers and ac
will probably have to wait until the end of the
quisitions indicate that there will be a consider
year to see which scenario plays out.
16
Directors
Chairman
Donald J. Kennedy
Business Manager
International
Brotherhood of
Electrical Workers
Local Union #269
Trenton, NJ
Terry K. Dunkle
Chairman
United States
National Bank
Johnstown, PA
Albert B. Murry
President and
Chief Executive Officer
Lebanon Valley
National Bank
Lebanon, PA
Charisse R. Lillie
Partner
Ballard Spahr Andrews
& Ingersoll
Philadelphia, PA
Dennis W. DiLazzero
President and
Chief Executive Officer
Minotola National Bank
Vineland, NJ
Deputy Chairperson
Joan Carter
President and
Chief Operating Officer
UM Holdings Ltd.
Haddonfield, NJ
Robert D. Burris
President and
Chief Executive Officer
Burris Foods, Inc.
Milford, DE
J. Richard Jones
President and
Chief Executive Officer
Jackson-Cross
Company
Philadelphia, PA
Howard E. Cosgrove
Chairman, President &
Chief Executive Officer
Delmarva Power and
Light Company
Wilmington, DE
cers
In 1996, numerous promotions and administrative
changes took place among the official staff:
Milissa M. Tadeo was named Senior Vice President
responsible for the Fiscal and Treasury Direct
departments.
Henry T. Kern was named Vice President, General
Administrative Services.
Arun K. Jain was named Vice President, Retail
Payments Processing, including both the Automated
Clearing House and Check Processing.
Edward G. Boehne
Robert J. Bucco
President
Vice President
William H. Stone, Jr.
Theodore M. Crone
First Vice President
Vice President and
Economist
Donald F. Doros
Executive
Patrick L. Donahue
Vice President
Vice President
Edward J. Coia
William Evans, Jr.
Theodore M. Crone was named Vice President and
Economist.
Senior Vice President
Vice President
Loretta J. Mester was named Vice President and
Economist.
Fiscal Product Office
and Manager, Cash/
Joanna H. Frodin
Vice President
Michael E. Collins
Beverly L. Evans was named Assistant Vice Presi
dent, Applications and Banking Structure, in the
Supervision, Regulation and Credit Department.
Senior Vice President
Arun K. Jain
and Lending Officer
Vice President
Donna L. Franco was appointed Budget Officer,
Business Planning and Budget Department.
Richard W. Lang
Jerry Katz
Senior Vice President
Vice President
Howard M. James, Jr. was appointed Support
Services Officer for the Supervision, Regulation and
Credit Department.
J. Warren Bowman, Jr., Vice President, became the
officer in charge of Wholesale Payment Services.
Robert J. Bucco, Vice President, became the officer in
charge of Cash Services.
and Director of
Research
Henry T. Kern
Vice President
Ronald B. Lankford
Senior Vice President
Edward M. Mahon
Vice President
D. Blake Prichard
and General Counsel
Senior Vice President
Marie Tkaczyk, Assistant Vice President, became
responsible for all Systems Development and
Support, Data Base Administration, and the Informa
tion Center.
Frederick M. Manning
Milissa M. Tadeo
Vice President and
Senior Vice President
Community Affairs
Officer
Patrick M. Regan, Assistant Vice President, in
addition to his responsibilities for Technical Support
and Data Processing Operations, became responsible
for Automation Planning and Data Security Admin
istration and became the Bank's Information Secu
rity Officer.
20
J. Warren Bowman, Jr.
Vice President
Loretta J. Mester
Shirley L. Coker
Alan L. Kiel
Patrick M. Regan
Vice President and
Assistant Vice President
Assistant Vice President
Assistant Vice President
Economist
and Counsel
and Information
Mary M. Labaree
Security Officer
Stephen A. Meyer
Dean Croushore
Assistant Vice President
Vice President and
Assistant Vice President
and Assistant General
Sherrill Shaffer
Associate Director of
and Economist
Auditor
Assistant Vice President
John J. Deibel
Thomas P. Lambinus
Richard A. Sheaffer
Assistant Vice President
Assistant Vice President
Assistant Vice President
Robert N. Downes, Jr.
Joseph L. McCann
Ronald R. Sheldon
Assistant Vice President
Administrative Services
Assistant Vice President
Research
Louis N. Sanfelice
Vice President
John B. Shaffer
Officer and Security
Vice President and
General Auditor
Beverly L. Evans
Officer
Marie Tkaczyk
Assistant Vice President
Assistant Vice President
Alice J. Menzano
Herbert E. Taylor
Vice President and
Donna L. Franco
Assistant Vice President,
Sharon N. Tomlinson
Secretary
Budget Officer
Cash/Fiscal Product
Assistant Vice President
Officer and Assistant
Vish P. Viswanathan
John V. Heelan
Vice President and
International Examina
Cash/Fiscal Product
tions Officer
Secretary
Audit Officer
Edward Morrison
Operations Officer
Officer
Assistant Vice President
Camille M. Ochman
Assistant Vice President
Assistant Vice President
Bernard M. Wennemer
Assistant Vice President
Mary Ann Hood
John G. Bell
Check Adjustments
Jeanette Paladino
Assistant Vice President
Officer
Assistant Counsel
Anthony J. White
Financial Services
& Assistant Secretary
Gerard A. Callanan
Annie R. Ward
Assistant Vice President
Eugene E. Hendrzak
Eileen P. Adezio
Richard A. Valente
Howard M. James, Jr.
A. Reed Raymond, III
Support Services Officer
Assistant Vice President
Officer
Assistant Vice President
and Examination
Michael P. Zamulinsky
and Planning Officer
Review Officer
Assistant Vice President
21
Advisory Councils
The Federal Reserve Bank's three advisory
Small Business &
Rodney L. Metzler
councils include representatives from many of
Agriculture Council
Owner
the Third District's leading industries.
The
regular meetings between members of the
councils and the Bank's senior officers provide a
venue for exchanging important information
about local business and the economy.
Pleasantview Farms
Chairman
Martinsburg, PA
Thomas J. McGinley
President and
David R. Rice
Chief Executive Officer
President
McGinley Mills
Rice Fruit Company
Easton, PA
Gardners, PA
Deputy Chairperson
G. Erwin Sheppard
Sharon Dauito-Baxter
Vice President
President
Sheppard Farms, Inc.
Ralph Dauito & Sons
Cedarville, NJ
Vineland, NJ
Steven J. Shotz
Ruben Bermudez
President
President
Quantum Group
Juvante Inc.
Wilmington, DE
Vineland, NJ
Clinton Tymes
Art Daube
Director
General Manager
Delaware Small
WBRE-TV
Business
Wilkes-Barre, PA
Development Center
Newark, DE
Geraldine A. Henwood
President and
W. Gregory Wood
Chief Executive Officer
President
Bio-Pharm Clinical
Hocher Manufacturing
Services
Company, Inc.
Blue Bell, PA
Rehoboth Beach, DE
Thomas E. Hoversen
President
Comarco Products
Camden, NJ
22
Francis R. Muto
Deputy Chairman
Donald L. Masten
Manager & CEO
Dennis S. Mario
Chairman & CEO
Chairperson
Peoples First CU
President & CEO
The Pennsville National
Betty Benfield
Allentown, PA
Main Line Bank
Bank
Villanova, PA
Pennsville, NJ
Credit Union Council
President
KofCFCU
Heloise L. Osborne
Philadelphia, PA
Manager
Steven Brady
Zvi H. Muscal
Gemco Employee FCU
President
President & CEO
Wilmington, DE
Ocean City Home
First Executive Bank
Savings & Loan
Philadelphia, PA
Deputy Chairperson
Sue S. Smiley
Chief Executive Officer
Gary H. Penrose
Association
dpl fcu
President & CEO
Ocean City, NJ
Newark, DE
Mercer County
Beverly K. Brown
Erwin T. Straw
Chairman & CEO
Teachers FCU
Thomas L. Gray
Prime Bank
Hamilton, NJ
President & CEO
Philadelphia, PA
Carnegie Bank N.A.
Treasurer & CEO
CUMCO FCU
James M. Reynolds
South Vineland, NJ
General Manager
Princeton, NJ
Thomas V. Stress
President
Camden Community
Ronald L. Hankey
American Eagle Savings
Bruce K. Foulke
CU
President & CEO
Bank, PaSa
President & Treasurer
Camden, NJ
Adams County
Boothwyn, PA
National Bank
American Heritage FCU
Philadelphia, PA
Leonard V. Shimko
Gettysburg, PA
John F. Tremblay
President & CEO
President
Mary Jane Griffith
Cross Valley FCU
Frederick E. Kutteroff
Bank of Mid-Jersey
Vice President & CFO
Wilkes-Barre, PA
President & CEO
Bordentown Township,
Keystone Savings Bank
NJ
South Jersey FCU
Deptford, NJ
Community Bank Council
Bethlehem, PA
Cathy S. Henry
Chairperson
Frederick A. Marcell, Jr.
President & CEO
Betsy Z. Cohen
President
Heritage Valley FCU
Chairperson & CEO
Willow Grove Bank
York, PA
The Jefferson Bank
Maple Glen, PA
Haverford, PA
David F. LaSala
Executive
Vice President
Benchmark FCU
West Chester, PA
23
Statement of Condition (in millions)
December 31,1996
December 31,1995
ASSETS
Gold certificates
Special drawing rights certificates
Coin
Items in process of collection
Loans to depository institutions
U.S. government and federal agency securities, net
Investments denominated in foreign currencies
Accrued interest receivable
Bank premises and equipment, net
Other assets
Total Assets
$
423
396
43
476
9
15,259
924
138
74
13
$
433
413
26
254
1
16,567
923
169
70
27
$ 17,755
$ 18,883
13,822
$ 16,223
1,297
8
261
—
7
1,762
47
10
1,702
8
251
27
—
237
46
9
17,214
18,503
273
268
190
190
541
380
17,755
$ 18,883
LIABILITIES AND CAPITAL
LIABILITIES
Federal Reserve notes outstanding, net
Deposits:
Depository institutions
Other deposits
Deferred credit items
Interest on Federal Reserve notes due U.S. Treasury
Statutory surplus transfer due U.S. Treasury
Interdistrict settlement account
Accrued benefit cost
Other liabilities
$
Total Liabilities
CAPITAL
Capital paid-in
Surplus
Total Capital
Total Liabilities and Capital
$
Note to Statement of Condition, Statement of Income, and Statement of Changes in Capital: Supplemental information, including 1996
financial statement footnote disclosures, is available upon request by contacting the Public Affairs Department of the Federal Reserve
Bank of Philadelphia.
24
Statement of Income (in millions)
For the years ended
December 31, 1996
December 31,1995
INTEREST INCOME
Interest on U.S. government securities
Interest on foreign currencies
$
Total Interest Income
OTHER OPERATING INCOME
Income from services
Reimbursable services to government agencies
Foreign currency gains (losses), net
21
996
34
965
1,030
41
39
18
18
44
944
$
(80)
1
4
Government securities gains, net
Other income
Total Other Operating Income (Loss)
—
4
(16)
105
64
65
Occupancy expense
8
8
Equipment expense
Cost of unreimbursed Treasury services
9
8
2
OPERATING EXPENSES
Salaries and other benefits
Assessments by Board of Governors
3
24
Other expenses
48
23
47
156
153
793
982
—
(5)
Total Operating Expenses
Income before cumulative effect of accounting change
Cumulative effect of changes in accounting principles
Net Income Prior to Distribution
DISTRIBUTION OF NET INCOME
Dividends paid to member banks
Transferred to surplus
$
793
$
977
$
12
$
11
83
29
Payments to U.S. Treasury as interest on
Federal Reserve notes
553
937
Payments to U.S. Treasury as required by statute
145
—
$
793
$
977
25
Statement of Changes in Capital (in millions)
For the years ended December 31,1996 and December 31,1995
Capital
Paid-in
Balance at January 1,1995 (3.2 million shares)
$
Total
Surplus
Capital
$
$
161
Net income transferred to surplus
161
29
29
Net change in capital stock issued (.6 million shares)
29
Balance at December 31,1995 (3.8 million shares)
$
29
190
$
Net income transferred to surplus
190
$
83
Net change in capital stock issued (1.7 million shares)
83
(5)
$
380
83
83
Statutory surplus transfer to the U.S. Treasury
Balance at December 31,1996 (5.5 million shares)
322
273
$
268
(5)
$
541
Operating Statistics
1996
1996
1995
1995
Volume
Dollar Value
Volume
Dollar Value
SERVICES TO
DEPOSITORY INSTITUTIONS
Wire Transfer of funds
6.9 million transfers
$17.6 trillion
ACH:
6.5 million transfers
$16.3 trillion
Government
58.7 million items
$77.1 billion
Commercial
49.3 million items
$58.3 billion
189.2 million items
$662.0 billion
164.2 million items
$574.5 billion
Check processing:
U.S. Government
All others
20.4 million checks
$21.4 billion
20.9 million checks
816.4 million checks
$932.4 billion
827.3 million checks
$17.0 billion
1.08 billion notes
$15.9 billion
$47.2 million
98.3 thousand bags
$64.6 million
Cash operations:
Currency processed
Coin processed
Loans to depository institutions
961.8 million notes
94.1 thousand bags
457 loans
$1.1 billion
438 loans
$23.7 billion
$996 billion
$942 million
SERVICES TO U.S. TREASURY
Electronic book-entry transfers:
Food coupons processed:
26
1.5 million transfers
156.8 million coupons
$19.1 trillion
$802.5 million
1.3 million transfers
$16.4 trillion
156.4 million coupons
$808.9 million
@FedFRASER