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FEDERAL RESERVE BANK of Philadelphia Moving Mountains ißt Treasury Direct The Federal Reserve Bank of Philadelphia is one of 12 regional reserve banks, which together with the Board of Governors in Washington, DC, make up the nation's central bank. w As the central bank, the Fed is responsible for making and carrying out U. S. monetary policy; regulating certain depository institutions; providing wholesale-priced services to banks; and acting as fiscal agent for the U. S. Treasury. Philadelphia District, Fed serves the Third comprising two-thirds The Federal Reserve of Pennsylvania, the southern half of New Jersey, and all of Delaware. It brings a regional perspective to the formulation monetary policy of and also provides a full array of services to financial institutions within its District. 1994 was a year in which the economy showed remarkable strength. With the current expansion slow to unfold in earlier years, the pickup in economic activity and the adding of 3.5 million jobs were welcome developments. Early in the year, with the economy gaining increasing momentum. the Fed turned its attention to sustaining growth for the longer term. Rather than allowing the economy to grow more rapidly than could be sustained-and inflation-the winding up with Fed moved in a number of steps to raise short-term interest rates. Economic growth remained strong through the year. The actions taken by the Fed during 1994, however, should help put the U. S. on a more sustainable growth path in 1995 and beyond. Although monetary policy often gets all the headlines, our day-to-day opera- tions are every bit as critical to keeping the financial system running in a way that serves the broad public interest. One operating area that was put to the test in 1994 was Treasury Direct. the joint project of the Federal Reserve and the Department of the Treasury. A huge computer system developed right here at the Federal Reserve Bank of Philadelphia, Treasury Direct has made it possible to provide improved service to investors who buy Treasury securities directly. Investor demand for that service was never stronger than in 1994. Treasury Direct's success in meeting the past year's challenges is a major source of pride. Certainly ductivity, it's a clear indication and strong service is paying off. C4,4ýb. RV4. -ý to me that our emphasis on quality. pro- A Message From Our First Vice President Treasury Direct, the subject of this year's annual report, is a system we at the Philadelphia Fed are particularly proud of becauseit was developed here. Back in the early 19805when the Treasury Department was looking at ways to make the sale and servicing 0 government securities more efficient, it was our staff that was selected to work with the Treasury to make that happen. Since that time, we have continued to improve Treasury Direct while building on its strengths. In 1995, the Philadelphia Fed will be at the forefront of change once again as We become the site of a Cash/Fiscal product office for the entire Federal Reserve Syste"'' Our successin implementing Treasury Direct, a fiscal area, makes us ideally suited for coordinating Systemwide policies in the cash and fiscal areas. The Reserve Banks Will continue their important role in these business areas, but Philadelphia will provide thz lead on policy and planning issues.The benefits are obvious: greater efficiencies, faster decisionmaking, Common more opportunity for long-term strategic planning. ground for Reserve Banks is particularly important banking is imminent. In time, there Nvi11be greater uniformity Reserve System-and in the cash and fiscal areas. now that interstate acrossthe entire Feder`" ý- ý As technology and innovation bring new and better ways of doing things, the Federal Reserve will be changing apace. Our goal is to continue making enhancemen to Treasury Direct, while applying our expertise in the cash and fiscal areas to a4 exciting new challenge. William First H. Stolle, Jf' Vice Presidc'"I r Y. 0, ý.ýýýý+ýý . '. L. "11.. = 1-. w CA . `1.. iýi. i; ýl1aiý . iýýiýýýºý' I. 4/. ýI iý;; 1iý P1t7 9i Ezmýý r10 I rs, regardlessof uphere ýý: IM Iff .p--, i;,,. ý,,, --, How an eight-year-old system based at the Philadelphia Fed faced its greatest test to date rOMMIMIMM-77AMO.! W,. - in the teller area, off the Bank's Eastbxrn Court. Every week the U. S. government borrows about $38 to keep itself running, but the plainly dressed couple in their mid-sixties aren't thinking about that as they head toward the Plexiglas window, beckoned by a flashing white light positioned below it and an Outstretched arm waving behind it. billion are you today: - asks Cynthia Allen. as the two approach her window. It's a Thursday morning in November at the Federal Reserve Bank of Philadel"How phia, and Cynthia, who has seen thousands of such folks and remembers an astounding number of them, is about to explain the facts of life to yet another participant in the largest segment of the money market. The couple, who relax visibly at the warmth Cynthia's welcome, hand her a light-blue of form, neatly made out in ink, and a cashier's check for $10,000. They are buying a 52-week Treasury bill. "You did a good job on this, " says Cynthia, expertly scanning the form. Without waiting for the man and woman to ask, she tells them that, on or around the following Thursday, they will receive a check. Its total will be the difference between the discounted buying price, to be determined and the amount that afternoon paid at maturity, by auction, which, in this particular case, is $10,000. The couple nod their understanding, in droves to what is considered the most secure investment around: Treasury securities. Attracted b)' better-looking interest rates than those available on bank CDs, the investors who prefer to play it safe made the switch to the financial instruments that help fund the U. S. government-Treasury bills, notes, and bonds. For some of them, it was the first time. In retrospect, it was a year in which the demand for Treasury securities pressured the resources of several departments in the Philadelphia Fed. But none was more tested, and subsequently moved more mountains. than Treasury Direct. and smile. "Take good care of our money, " the woman says. PHILADELPHIA AS "CENTRAL SITE" "I will, " Cynthia answers. "Like it's my own. " 1994 will investors-and be remembered as the year small even a lot of large ones-came back To the U. S. Department of the Treasury, which make` the major decisions regarding government securities' Direct:. llarcos Dc1cado, On the other side of .llarcos's partition is the Treasury Issues a nutonter-service operator, responds to an investor's Unit, inhere tenders are processed. The unit is headed request (or auction dates. by Ed Pottichen (above). TREASURY DIRECT' is a computer system tapped into by all the Treasury Department and Reserve Bank sites that sell Treasury securities. To the Federal Reserve Bank of Philadelphia, one of 12 Reserve Banks acting as fiscal agents for the U. S. Treasury, Treasury Direct is not just a system but a department-and it exists only at the Philadelphia Fed. It occupies part of the Bank's seventh floor and its lower level, where managers, analysts, clerks, and customer-service representatives-90 people in total-maintain and service more than threequarters-of-a-million investor accounts in Treasury securities. The securities themselves no longer exist in physical form, but are computerized bookkeeping entries in the records of the Treasury Department. That system, known as "book-entry" for short, is the essenceof Treasury Direct. Development , v, rAe-4 m2V of the system began in 1983, when the Federal Reserve Bank of Philadelphia was chosen by the Treasury and the Federal Reserve Board to be the central site for the Treasury Direct operabecause of Philadelphia's past tion-largely successin designing and implementing two in-house securities-processing systems. The development combined the efforts of both the Philadelphia Fed and the effort, which personnel from Treasury Department's Bureau of the Public Debt, took slightly more than three years. By the time the system went live in July 1986, the Treasury and the Federal Reserve had accomplished several objectives: 1) they had reduced the risk associated with holding government securities by eliminating engraved certificates, which could be lost or stolen: 2) they had made the servicing of maturing securities more efficient by creating automated central reposito- W-. CEN LWcr ý. __.. ýý ý ý 1 '1`ý WIT T More . scenes from the scrrnth f1, wr: Bill Anderson, a customer-service representative, photocopies correspondence u'itlt customers. Above him is the tote board displayinti the number of telepltorte in callers the queue. In the 7i-casur), lcsm's (ni!, Fred Henderson looks up from (Imreground) his stack of tenders to greet visitors. Ai", piniinv Williams, ,;r, Lr who enters account data into the Treasury Direct system, and Ed Pottichen. touch the product, " says Ed Cola, a senior vice president at the Philadelphia Fed and its ranking executive on the development team. EXCEEDING Scoring EXPECTATIONS high marks for efficiency and quality, Treasury Direct has emerged an unqualified success, having continually demonstrated its ability to meet investors' deeds. The itself operation 1) maintaining investor involves accounts; several 2) providing from system access to users every weekday to 10 p. ni.; a senior vice new paying interest or discounts president, was instrumental in Philadelphia 1099 forms; merits being issues into investor to investors; and 7) processing at maturity online 7: 30 a.n. secure access to the system 4) processing IRS Ed Coin, 3) assuring processes: or converting accounts; 6) process redemption pa)'- reinvestments into new issues. selected the central site for Through Treasury Direct, the Federal Reserve has Treasury Direct. assumed a large role in the safeguarding and transfer of marketable Treasury securities owned by individli' institutions. And the volumes are huge. As of December 1994, approximately 820,000 als and nonfinancial information; ries of account direct deposit all investors, funds; of interest allowing and 4) they way to continue 3) they had established and principal them had introduced direct sales of government securities single account contains $2.18 billion. ) Meanwhile, the to investors. Today, the Philadelphia Fed supports all 50 sites that offer Treasury securities directly: the Federal Reserve Banks and their branches, as well as several offices of the Treasury. A total of 1,200 employees use the system at these various locations. Perhaps most important, Treasury Direct is a system that inspires confidence on the part of investors, 11 which is important Direct efficient use of the a more accounts were in the Treasury system. More than half of these accounts, or 56.7 percent, totaled less than $50,000. (Only 0.5 percent of accounts had a value of over $1 million; the largest payments immediate for individual when the customer can't see or total value of all accounts combined was $77.9 billiotl' up S17.8billion from 1993. Indeed. the numbers are a testament to the years surging demand for Treasury securities. In 1994, the number of new accounts totaled 271,000, four and five times higher than in the two previous years (66,315 in 1992 and 46,161 in 1993). Rich Sheaffer, the Bank's in charge o Treasury Direct, remembers a time, more than 10 vears ago. When the demand for Treasury securities officer was even higher. Interest rates of around 14% in the early 1980s had sent volumes skyrocketing. With no Treasury Direct system in place at that time, the manual workload was much greater. But now, as Rich says, "The computer doesn't care whether it's one customer or 10,000. " Meeting Sheaffer (above right), BUILDS As it Fed was well turned out, the Philadelphia prepared for the big shift into Treasury securities that began in May 1994. Syndicated columnist Craig Stock helped fuel the demand when, in the Philadelphia Inquirer on March 22,1994, he reported on the higher interest rates being paid on Treasury securities and advised his readers to consider them as investments: You don't have to be a big-shot investor to buy Treasury securities directly from the goverlllllent, " Stock wrote. "It takes as little as $1,000... and you don't have to leave your home to the officer in Direct, charge of Treasury Treasury recounts hoer Direct has helped his depart- investor ment meet the increase in demand. In the Customer Information Unit, Carl Christian system for information him THE INTEREST the demand in 1994: Rich accesses the that will ýrddrrss r rn<romcr'ý nrcd. help alter: DorothyDonhauser(leltý, atpervisorin InvestorServices, nitors telephoneactivity within Direct, checkingthe lengthof . Bury and how many may bewaiting : hequeue.Meanwhile, in the Auto:rd Output Division, the Bell & :rell llailstar inserternot only stuffs : il into envelopes,but sealsand : -pliespostgoc.Below, Clore Brown take part in the regular auctions of Treasury securities or to receive interest on your investment. " Almost immediately, the phone calls and written requests for more information started to pour III- IIIStaffers in the Philadelphia Fed's Public formation Department were among the first io sensethe heightened interest in Treasury , 2curities, since Stock had referred his read be crs to that office for what turned out to the Bank's most requested pamphlet of all tinge, "Buying Treasury Securities." Demandu for the pamphlet was so great-single 60,000 in just six months-that Automated Output Division, orders exceeded Treasury Direct a large-scale mail oper" tion. had to help fill orders. Meanwhile, Treasury Direct's Customer Inforiiia" Lion Division was facing a seemingly unending streahhl of phone calls requesting further information and tear der forms. Written inquiries, too, flooded the Batik' ,generating considerable activity in Treasury Direct s Maintenance and Correspondence Division. Finally the hard-core evidence emerged: long lines for the teller windows began to form in the Bank's lobby. As rates continued to rise, Stock continued to re' ommend Treasury securities to his readers. And. 011 May 15, his Inquirer column capsulized the benefits O Treasury Direct: The do-it-yourself investor who plans to h°ld Treasury securities until they mature can buy them. '' i, %-signing up for the Treasury Direct system. 12 i Joseph Balent, a supervisor in the Fiscal area, shoe's a new investor hou, to complete a tender for a Treasury this time, present in more the response was nearly investors had learned the Bank applications to submit instantaneous. that they needn't tenders. 725. (-mo statement, compared to 489,000 the month before. mailed Meanwhile, bill. "You can own several different bills, notes, or bonds and get one account statement from Treasury Direct, " Stock continued. "The direct-deposit feature means you can't have a lost or stolen check, that interest or principal payments are instantly available to you, and that You don't lose interest on the money While it's in the mail. " Again, Output More started to come in by mail, By out almost the inquiries from the public contin- ued. In August, some 31,000 telephone calls from investors came into Treasury Direct, a fivefold increase from the previous August. (That total represented local volume only. Volumes higher in San Francisco, Chicago, were actually New York, and Boston. ) That same month, the department received about 4,000 pieces of written correspondence, average of 200 to 300 letters per day. an By late summer, the volume was very big indeed: over 310,000 tenders were processed in August alone. TENDERS T: US As Rich Sheaffer be and keeping staff in Issues Unit busier than ever. the Treasury Eventually, everyone in Treasury Direct got into the act-Reinvestments, Accounting, and, of course, the Automated Output Division. In May alone, Automated Direct is basically points a retail out, Treasury business. But it can't operatelike a store that turns customersaway after it sellsout of a product. If investorswant Treasurysecuhas to oblige. "The challenge is rities, TreasuryDirect handling the volume, no matter what it is," Rich says. 13 Pat DiGregorio, Unit Head of the teller area, has a devoted following of investors who routinely seek out her window for assistance with tenders. those who have heard-and answered-nearly every question related to Treasury securities is James Frames Unit Head of Customer Informatio11Like the tellers, James has learned tO anticipate the questions. And like neatlý' everyone in Treasury Direct, he has held Among To meet that challenge, the department had to make some changes. Operational units were restructured. The Investor Service staff was enlarged. The phone inquiries use of overtime was increased. Daily training sessions were instituted to instruct employees new to the counseling function. customer-support The move to boost staffers' knowledge of the Treasury securities business really paid off on Monday, Not only does he respond to teleand assist investors in one-on-0 sessions, but he frequently address large and small groups ; «king is asked to inforinatioi' about government securities. An effective speaker whose manner is both pi-OtCS- November 21, when a couple of hundred would-be sional and benevolent, James keeps his explanations simple but complete. When asked by a senior citizen investors formed in November a line that stretched around the perimeter of the Bank's lobby. That day, tellers would accept 464 tenders, more than double the 200 or so had represented a busy day. Pat previously DiGregorio, head teller, recalls that all available hands that were recruited including to help out behind the windows. a recently retired employee who had come in that day to visit. Meanwhile, "Tenders 'IZ' Us, " a group of around 15 employees familiar with the intricacies of buying Treasury securities, walked up and down the line. checking tenders and answering customers' questions. I, to be versatile. "competitive" whether her bid should be mark"" or "noncompetitive, " James explain` that if she submits a competitive bid whose into rý'st rate is considered too high by the Bureau of Puhl" Debt, it will be rejected; he quickly adds, howc\ " that if her bid is lower than the average, she will h.J\" to accept the lower rate, period. He advises her check the box on the tender marked "noncompet11 tive, " as do most investors, to be assured of obtainin=r at least the average accepted by the BI V. "You havL to know what you're doing, " James s:av . Certainly that's true of the folks in 1FC,IIur\ I )ircTt' of the rust. _ijl As head Lmm"FORM, LLI .L I Duiial(i/. Kctrnrd), 1.;,,:: > 1I I 1, 1 .:, . Board of Director; 1n1994, James M. Mead ryas appointed chairman of the hoard of Directors, and Donald J. Kennedy was appointed deputy chairman. Terry K. Dunkle was elected a Class A director, replacing Gary F. Simmerman, and Joan Carter was appointed Class C director. a Pan Jýnnrý -l. Hýý; ýii . C. zrrc'r CHAIRMAN H. BERNARD LYNCH JAMES M. MEAD President and CCt:t )=. V'enttiveOfficer Cap tal Blue Cross Harrisburg, Pennsylvania CHAIRMAN 1)U\ALD J. KENNEDY Bu, incs lfanager , Iruerrtational Brotherhood OfElectrical 11 orkers LocalLrrion #269 Trenton, N'CirJo CARLL. CA\n, tlt=u President and Grief Executive Officer Ke)'stortc Financial, Inc. Harrisburg Penrtsylrvnia TERRY K. DUNKLE Chairman Cr'ited States \. tiorral Bank °hnsrouar, Pennsyltartia President and Chief Executive Officer The First National Band ii( iI jromi, z II j'orning, Delaware JAMES A. HAGEN Chairman, President, and Chief Executive Officer Consolidated Rail Corp. (CO\RAIL) Philadtlphia, Pi1uiýplvania J. RICHARI) JONES President and Chief Exccutirr O ticir Jackson-Cross Company Philadelphia, D.A'ic H. 13crnard Lynch ý.x; chai-10"t' D.; ..., I i: H; . u:. Pennsylvania W HUGGINS President and Chief Executive Officer RATS Technolegies,Inc. Marlton. \'eu, Jerse), JOAN CARTER President and Chief Op eratiq Officer C.. I Holdi, s s Ltd. ((OrºnerlyUnited Medical Corp. ) Haddonfield, Vu, jersey Carl L. Campbcll Trrr,. K. P In 1994, Michael E. Collins became senior vice president in charge of the Department of Supervision, Regulation. and Credit (SRC). replacing Thomas Desch, who retired. During the course of the year, five other officers the Bank: Peter M. DiPlacido, Administrative Joan M. Immel, Rutizer, Services; senior vice president, Robert examination retired A. Dobie. review assistant vice president, officer, SRC; from General vice president, SRC; SRC: Edward and Elizabeth G. S. Webb, assistant counsel, Legal Department. As a result of the retirements from SRC, a number of organizational changes were made. Michael P. Zamulinskv was promoted to assistant vice president, responsible for safety and soundness examinations. A. Reed Raymond was promoted to assistant vice president and examination review officer. Beverly L. Evans was promoted to applications and structure officer. Also in SRC, Thomas L. Tweedale, assistant vice president. was given the job of overseeing strategic planning and budget activities and conducting special assignments. Robert N. Downes. Jr.. assistant vice president, assumed responsibility for consumer affairs and specialty examinations. Sherrill Shaffer, assistant vice president, joined SRC from the Department of Research and Statistics and now heads SRC's Credit and Banking Studies Group. In the Department of Research and Statistics, Loretta Mester was promoted to the position of assistant vice president and economist, and John Bell was promoted to the position of assistant vice president. "l)WARD G. BOEHNE ) resident FREDERICK M. MANNING Assistant Vice President Vice President and Community /ILLIAM Affairs Officer BEVERLY H. STONE, JR. First Vice President ROBERT N. DOWNES, JR. STEPHEN A. MEYER L. EVANS Applicationsand Structure Officer PALMDINO JEANETTE Assistant Counsel A. REED RAYMOND Assistant Vice President and Examination Review Officer Vice President and DONALD F. DORos Executive AssociateDirector of Research Vice President Louis EDWARD J COIA Senior Vice President E. COLLINS SP1nor ['ice President a'id I-codling Officer Vice President and Director of Research Assistant Vice President EUGENE E. HENDRZAK Vice President SHERRILL SHAFFER Assistant Vice President Vice Presidentand GeneralAuditor AKUN and Economist JAIN Assistant Vice President RICHARD MILISSA M. TADEO HENRY T. KERN B. LANKFORD Vice President A. SHEAFFER Assistant Vice President Assistant Vice President HERBERT RONALD R. SHELDON E. TAYLOR Vice Presidentand Secretary Assistant Vice President ALAN L. KIEL Assistant Vice President MARIE RONALD Senior PATRICK M. REGAN B. SHAFFER W. LANG Soonor International Examinations Officer Assistant Vice President RICHARD V. HEELAN N. SANFELICE Vice President JOHN MICHAEL JOHN VISH P. VISWANATHAN Deputy Check Product Manager MARY M. LABAREE TKACZYK Vice President Assistant Assistant General Auditor D' BLAKE PRICHARD Senior Vice President SHARON N. TOMLINSON EILEEN P. ADEZIO Assistant Vice President THOMAS P. LAMBINUS Assistant Vice President Assistant Vice President THOMAS L. TWEEDALE ROBERT J, Bucco vife President JOHN G. BELL Assistant Vice President KEVIN J. MCCABE Assistant Vice President Assistant Vice President ANNIE J' WARREN V'Ce BOWMAN, JR. President PATRICK L. DONAHUE vice President 'ILLIAM I'ice GERARD A. CALLANAN Assistant Vice President JOSEPH L. MCCANN Officer and Planning Administrative SHIRLEY L. COKER Assistant Counsel President H. FRODIN vice President and Check Product Afauqer JERRY Vise and Economist DEAN Assurance Officer BERNARD M. WENNEMER Assistant Vice President ANTHONY J. WHITE Financial Services Officer KATZ President LORETTA J. MESTER Assistant Vice President and Economist CROUSHORE ResearchOfficer and Economist EDWARD MORRISON Systems Development Officer RICHARD Audit A. VALENTE officer MICHAEL P. ZAMULINSKY Assistant Vice President JOHN J. DEIBEL Assistant Vice President EDWARD M. officer THEODORE M. CRONE Assistant Vice President JOANNA Operations WARD Services officer ALICE J. MENZANO Disaster-Recovery Planning and Quality EVANS, JR. R. MAHON CAMILLE M. OCHMAN Assistant Vice President v'te President and General Counsel 19 Advisory Co it ncils The Bank's four advisory councils include representatives from many of the Third District's leading industries. The regular meetings between members of the councils and the Bank's senior officers provide a venue for the exchange of important information about local business and the economy. The 1994 members of the advisory councils are listed below. SMALL BUSINESS/AGRICULTURE ADVISORY COUNCIL CHAIRMAN GERALDINE A. HENWOOD President and CEO Bio-Phartn Clinical Services Blue Bell, P-3 RAYMOND L. BLEW; JR. President THOMAS J. MCGINLEY Centerton V-un-erieý President and CEO Bridqeton, McGinley \J Alill> Easton, P4 DEPUTY CHAIRMAN GREGORY L. SUTLIFF President Sutliff WILLIAM J. OYLER Oyler's Farm Chevrolet Company Biýlcrvillc, P-1 Harrisburti*, P4 CLINTON WILLIAM R. C.A\1EI Eli. III Owner TYMES Director Delaware Small Business Camerer's Farm Jersey Shore, P4 Development Center Newark, DE G. WALLACE CAULK. SR. President CREDIT Exchan;, c Tract Linkitcd ADVISORY UNION COUNCIL II bodcidc, DE CHAIRMAN ARLENE COGGINS DAVIT) BAKER Secretary President C<<ý,,in; II"Iste York Educational FCU 11anoqemcnt, Inc. . Ocean City, \j loork, P-1 DEPUTY KENIEL G. D. Aü'KI\s ROGER CHAIRMAN KASE President President Keppirodco Development and Construction, Inc. Dover FCU Philadelphia, Dover, DE P4 BETTY C. WILLIAM HAINES President BENFIELI President Larcinnont Farms K of C Federal Credit Union Mt. Laurel, \J Philadelphia, ALLAN HAWKINS PA SUSAN BILKING Owner CEO Hawkins Cleanin' Service Philadelphia, P4 :Mobil 1167FCU Paulsboro,\j TAMARA M. CICCIOLI Ma"agetlTreasiirer Bridgeton THRIFT INSTITUTION COUNCIL ADVISORY H. WILLIAM ALBERT F. FARNSCHLADER President KIICK First FederalSavings Bank Hanover, PA and CEO Lehigh Valle}, Postal Employees FCU Allentown, PA FISCHER President and CEO CEO Franklin Barrington FCU 13a r Pill'toit, First Savings Bank II'ilkcs-Barre, PA NJ STEVEN BRADY BRUCE K. FOULKE President/Treasurer ERWIN T. STRAW President President and CEO FarmersNational Bank of Mullica Hill PA Philadelphia, ANDREW FCU L. JAEGER CEO and Manager '\. IDOT CU Trenton, THOMAS V STRESS :NJ American EacIe Savings Bank, PaSa Commonwealth State Bank PA Nemwtonwn, Boothuv? m, PA Zvi KACZNIARCZYK DEXSTA FCU wilnringtart, DE H. MUSCAL President President and CEO First Executive Bank Ocean City, NJ Farmers' & Mechanics' Philadelphia, STEVEN G. HARRIS, JR. Savings Bank, SLA Burlington, I\J PAUL H. MYLANDER Savings & Loan Association CRAIG W YATES Artisans' Savings Bank : DE II'ilinington, P_4 President and CEO Delaware National Bank President and CEO BANK COMMUNITY Georgetown, DE COUNCIL ADVISORY M. OWEN O. FREEMAN. JR. Chairman CHRISTINE Manager Mullica Hill, \J President President Ocean City Home A Hericau Heritage Philadelphia, P4 Nazareth, P4 JOSEPH H. DOBLE THOMAS H. VAN AIiSDALE LINDA Bank Maple Glen, PA Prince Bank DEPUTY CHAIRMAN S. ERIC BEATTIE Nazareth National and CEO President JR. President and CEO President Federal Savings CHAIRMAN Nj MARCELL, Willow Grove Onized FCU Bridgeton, A. FREDERICK JOHN H. O'NERL HERBERT HORNSBY President CHAIRMAN President and CEO Cape Savings Bank, SLA Cape May Court House, IvJ RAY L. WOLFE Mount Holly State Bank President and CEO Jlount Holly, Aj Farmers Trust Company' LEýNAkll President V SHIMKO CrossValley FCU WilkeS_Barre, PA BRUCE R. HOSTLER President and CEO Reliance Savings Bank Altoona, PA Executive Vice President CHAIRPERSON DEPUTY BETSY Z. COHEN Chairperson J HN D. UNANGST President Frarrklin Media, Mint FCU PA MARELIN K. SITES Carlisle, PA and CEO The Jefferson President and CEO Keystone Savings Bank Haverford, Bethlehem, PA J. GERALD BAZEWICZ PA of ?tIercersburg P4 fercersburg, HAROLD L. SLATCHER President President and CEO DENNIS S. MARLO The First National President and CEO Bank of Bernick Bernick, PA Sayings Bank Villanoya, PA Bank Bank FREDERICK E. KUTTEROFF Main Line Federal First National County Bank Rehoboth Beach, DE HARRY W VAN SCIVER President Burlington Count), Bank Burlington, \J '1 Statement of Condition ASSETS Gold certificate account: Special drawing rights certificates: Other cash-coin: S393,000,000 Discounts and advances Loans and securities: Federalagencyobligations U.S. Government securities Total loans and securities Other assets: Cash items in processof collection 17,335,000 7,675,000 142,232,312 175,784,193 14,256,425,618 12,582,512, S14,415,992,930 $12,765,971,650 332,247,278 444,950,469 736,989,986 857,835,800 308,740,033 270,021,524 on securities 19,706,810 2,232,230,904 CAPITAL S18,833,390,043 ACCOUNTS Note liabilities: FederalReserveNotes Deposits: Depository institutions' 1994 S16,773,224,939 reserves Foreign All other Total deposits Deferred availability 1,491,487,639 cash items 47,217.110 14,991,019 920,991,595 $16,059,518 (117 1993 $13,025,971,909 2,248,443,645 4,714,480 5,337,641() 26,438,005* 6,891.942* 1,522,640,124 All other 32,287,227 183,052,053 2,260,673,190 431,812,549 113,614,769 Total liabilities $18,511,204,343 $15,832,072,417 Capital paid in 161,092,850 113,722.800 Surplus Total liabilities and capital *Includes payable due to Trea ur 22 14,909,088 20,629,762 Total assets accounts: 303,000,000 19,240,182 24,968,870 Interdistrict settlement account: Capital 303,000,000 Operating equipment-net All other Other liabilities: ----ý $399,000,000 47,273,050 Irrterest/premium AND - Bank premises-net Foreign currencies LIABILITIES 19 93 1994 161,092,850 113,722.800 518,833,390,043 S16059 51R011 current earnings: From U. S. Government securities From discounts, advances, and miscellaneous sources From services to depositor), institutions Net expenses: 1994 1993 $771,979,992 S598.122,497 673,326 39,055,693 48.571,087 39,574,727 Total current earnings $811,709,011 Operatiiitr expenses (,! f-ter deducting reimbursable expenses) S84,893,395 S77,310,333 26,331,165 23,892,111 Cost of earnings credits S686,268,311 Total net expenses 8111,224,560 5101,202,444 Current net earnings $700,484,451 S585,065,867 Additions to current net earnings: Gain on sales of Government securities Gain on foreign currency transactions Miscellaneous non/operating income SO 81,003,004 10,195,174 3,411 $81,006,415 Total additions S1.372,820 14,126 511,582,120 Deductions current from net earnings: Loss on sales of Government securities $955,915 Miscellaneous non/operating expenses 1,979,806* Post retirement benefit obliýation so 1,654.422* 0 33,089.175 5,139,600 5? 18.700 13,944,751 12.787,760 S22,020,072 S52.750,057 Assessment by the Board of Governors: Board expenditures FederalReservecurrency Total deductions Net additions/(deductions) Net earnings (beforepaymentto the U.S. Treasury) $759,470,794 S543.89 7 93u . vistribution of earnings: Dividends paid Paid to U. S. Treasury Retained to equate surplus to capital Net earnings $8,328,151 $6,873,347 703,772,593 540,619,683 47,370,050 $759,470,794 (3.595.1011) S54 3,89 1.93(1 *Includes cost of unreintbursed Treasury services 23 Operating SERVICES Statistics TO INSTITUTIONS DEPOSITORY 1994 Volume Check processing: Dollar Value 49.5 million items S115.1 billion Commercial 143.7 million items S463 billion 120.8 million items $457 billion 22.4 million checks S23.2 billion 21.4 million checks $23.8 billion S1.1 trillion 1.2 billion $1.7 trillion 902.7 million checks U. S. Food coupons processed: 24 $64.6 billion ý checks S11.8 billion 943 million notes $11.9 billion Coin processed 73.1 thousand bags S41.1 million 101 thousand bags $67.3 million' 781 $1,165 million 715 TREASURY transfers: 43.9 million items $15.3 trillion 825.2 million notes 1994 Volume Electronic book-entry 5.8 million transfers Currency processed Loans to depository institutions: TO Dollar Value Government All others SERVICES Volume $13.2 trillion U.S. Government Cash operations: 1993 5.9 million transfers Wire transfers of funds: ACH: 1994 1.1 million transfers 161.6 million coupons 1994 Dollar Value S12.7 trillion S815.7 million 1993 Volume 997.1 thousand transfers 145.4 million coupons $830 milli'" 1993 Dollar Value $13.5 trillion $751.1 million , 1111in t: ()S. MI) I
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