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The Federal Reserve Bank of San Francisco
The Federal Reserve Bank of San Francisco
is one of twelve regional Reserve Banks
serves the Twelfth Federal Reserve District,
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which , together with the Board of
which includes the nine western states -
Governors in Washington, D.C., comprise
Alaska, Arizona , California , Hawaii, Idaho,
the nation's central bank.
Nevada, Oregon , Utah , and Washington -
Guam, American Samoa, and the Northern
As th e nation's central bank, th e Federal
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Reserve is responsible for making and
carrying out our nation's monetary policy.
To serve this expansive region, th e San
It also is a bank regulatory agency, a
Francisco Reserve Bank has five offices: the
provider of wholesale-priced banking
headquarters in San Francisco, and offices
services, and the fiscal agent for the United
in Los Angeles, Portland , Salt Lake City, and
States Treasury.
Seattle. Each office provides financial
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services to the public and banking
institutions in its locale.
Federal Reserve Bank
of San Francisco
MAR 1 0 1995
LIBRARY
ECQrn_tne BOQLarD_Om
From le f t, J ames
A. Vohs, Ch ai rmm (1994), Robert 1.
Par ry, P resident , J ud ith
M.
Runstad, Ch ai rman (1995),
and Patr ick K. B ar r on, First Vice P r esident.
Pa int ing in backg r ound:
Nat han Ol ive ir a
Yucatan Secuence Figure 1111982
bb'
o il on canvas 84 x
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The robust economy in much of the West
The accompanying report on banking in
The Report discusses the performance of
during 1994 was reflected in the strong
the TWelfth District notes that while short
the banking industry in the TWelfth District
performance of banking throughout most
term factors continue to cause ebbs and
during 1994, various actions District banks
of the TWelfth District. District banks in
flows in banking, it is the longer-term
are taking to meet the many chall enges
Nevada , Oregon, Washington, Alaska , and
trends that are shaping the future of the
facing them , and the opportunities for
Idaho recorded exceptional performances.
industry. These trends include the
legislated banking reform in this ever
In California , the turnaround in the
fundamental revolution in the processing of
changing environment.
economy also helped boost bank earnings,
risk information and innovations in the field
though the state's economy was not yet
of finance. These developments have
strong enough to keep many community
heightened competition both outside and
we strive to anticipate and meet the needs
banks from experiencing weak returns.
within banking, putting a premium on
of our financial system in this dynamic
efficiency and broadening the horizons of
economic and regulatory environment.
Bank credit conditions in the District
financial services. One response has been
The supervision and regulation of bank
improved considerably, with consumer
consolidation in banking with interstate
holding companies and state-chartered
lending outside of California and Hawaii
banking an important aspect of this. Banks
member banks is a vital area of our
especially strong. The most notable
in the District also continue to adapt by
responsibility. As this Report indicates,
development in lending for the District, and
expanding fee-based products and
maintaining a safe and sound financial
for the nation, was the rebound in
services, including in less traditional areas,
system is becoming an increasingly
business loans at banks.
such as investment services.
complex task. Our goals continue to be
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It is imperative that, as the central bank,
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the prudent supervision of financial
assessment of economic and financial
who completed their terms of service
institutions along with monitoring
conditions throughout our nine western
during 1994: On the San Francisco Head
compliance with community development
states is critical to the formulation of
Office Board , William E.B. Siart (Chairman
and reinvestment legislation throughout
monetary policy.
and Chief Executive Officer, First Interstate
Bancorp, Los Angeles, CAL William L.
the Twelfth District. In wholesale banking,
we continue to enhance the quality, safety,
In particular, we acknowledge the many
Tooley (Chairman, Tooley &. Company, Los
and efficiency of our payments system to
contributions of James A. Vohs . (Chairm an
Angeles, CAl; on the Portland Branch
benefit financial institutions and their
and Chief Executive Officer, retired, of
Board, its Chairman, William A. Hilliard
customers in all market segments.
Kaiser Foundation Health Plan, lnc.. and
(Editor, retired, The Oregonian, Portland,
Kaiser Foundation Hospitals, Oakland ) who
OR), Stuart H. Compton (Chairm an, Pioneer
This Report reviews the Bank's
stepped down as Chairman of the San
Trust Bank, N.A., Salem, OR); and, on the
performance in responding to new
Francisco Head Office Board at the end of
Federal Advisory Council , Twelfth District
challenges and achieving our fundam ental
the year after serving in this post for three
Member and President, Richard M.
objectives during 1994.
years. We are delighted that he will
Rosenberg (Chairm an and Chief Executive
continue to serve the Bank as Deputy
Officer, BankAmerica Corporation , San
Chairman of the Board in 1995.
Francisco, CAl .
We would like to extend our thanks and
appreciation to our Twelfth District
directors for their invaluable counsel
We also would like to express our sincere /
during 1994. The Directors' independent
thanks and appreciation to those directors
9:
c>i~~~~~ ~ T /Z
Judith M. Runstad
Chairman
Robert T. Parry
7
President
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In 1994, banking in the Twelfth federal
Banking in the West turned in a strong
A rebound in bank lending in 1994 proved
Reserve District continued its rebound, with
performance in 1994. Banks in the Twelfth
reports of the demise of traditional banking
banks reporting record earnings as well as
federal Reserve District registered record
to be exaggerated. Buoyed by strong bank
increases in lending. Banking also
profits, improved their asset quality, and
capital positions and economic growth,
continued to adapt to changes in financial
maintained the strong capital positions
credit conditions in the District improved
markets, changes driven and shaped by
built up over the past few years.
considerably after the so-called credit
technological innovations and regulations.
crunch of the early 1990s.
This section examines the recent
The performance of banking mirrored the
performance of banks in the Twelfth
robust economic expansion in most of the
Looking ahead to the 21st century,
District, focusing on the effects of the
region . The long-awaited turnaround in
banking in the District and elsewhere will
growth in the regional economy and the
the California economy also contributed to
continue to be under pressure to adapt.
rise in market interest rates . In addition,
im pro ved banking conditions, though it
Efficiency will remain critical, calling for
this section discusses the adaptations
was not enough to keep many community
continued cost-cutting and consolidation
District banks are making and the
banks in the state from weak
even in the wake of strong bank earnings.
opportunities for legislated banking reform
performances. The sharp rise in interest
furthermore, innovations that have
in the changing environment.
rates spawned by the strong national
dramatically reduced the cost of amassing
economy in 1994 had only a small negative
and disseminating information related to
effect on reported bank earnings in
financial risk, as well as the cost of
the District.
measuring, evaluating, and managing risk,
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _5~
will mean greater competition in traditional
Another example is deposit insurance.
bank business lines, from both outside and
With the collapse of the fSLIC from the
within the industry. Similar forces are
thrift crisis and the heavy losses to the FDIC
behind the greater emphasis by banks on
from bank failures in recent years,
fee-based products and services.
policymakers have been acutely sensitive
to the dangers of extending deposit
The pace of banking's evolution in financial
insurance coverage. Public policy, however,
services, however, is still hobbled by
also needs to be concerned with
regulatory legacies from the 1930s. The
efficiency in financial markets. In recent
most symbolic example is the Glass
years developments have tipped the
Steagall Act. Today, key parts of this
balance between these two considerations.
barrier have been eroded--Iarger banks,
This should open the way to giving more
including some in this District can
weight to the potential gains in efficiency
underwrite securities, and a broad array of
from further removing barriers separating
banks offers investment services and
financial institutions.
mutual funds. Still, limits remain on this
and other fronts.
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recorded exceptional performances, with
The drag on bank performance in
aggregate ROAs of better than 1.30
California was apparent at smaller banks.
The strong economic recovery in most of
percent. In Utah and Hawaii, aggregate
Community banks (institutio ns with assets
the region and the long-awaited
ROAs for banks were only a bit below the
under $300 million) in California reported
turnaround in California helped push up
national average. In Arizona, which had
an annualized ROA of only 0.36 percent
net income for banks in the Twelfth District
strong economic growth in 1994,
through the third quarter of 1994.
in 1994. Profits among District banks
aggregate bank earnings were well below
Community banks operating in Southern
through September of 1994 were $4.6
the national average, due in part to
California , the area hit hardest during the
billion , up from a strong $4 billion for the
isolated losses on sales of securities.
recession , fared worse as a group, barely
comparable period in 1993. Annualized,
breaking even in the first three quarters of
the earnings in 1994 represent an
In California, which accounts for close to
1994. Overall, nearly 20 percent of the
aggregate return on assets (ROA) of 1.19
65 percent of banking assets in the
banks in California lost money in the first
percent. That was a record rate for the
District, the recovery helped to boost bank
three quarters of 1994. That is well above
District and marked last year as the first
performance, with an aggregate ROA for
the national figure of 4 percent and is
since 1990 that District bank performance
the banks in the state of 1 percent
indicative of the lingering effects of the
at least matched the national average.
(annualized) through the third quarter of
nearly three years of recession in the state.
1994.
Much of the strength in earnings in
Within the District, banks in Nevada,
1994, however, was due to the profitability
Oregon, Washington, Alaska, and Idaho
of the large institutions in the state.
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Nevada's commercial real estate loans, and
The bottom-line impact from the overall
Hawaii's residential mortgage and
improvement in asset quality was a sizable
business loans.
reduction in banks' expenses for
The economy gave District banking its
contributions to loan loss reserves. For the
biggest boost through an improvement in
In California , asset quality improved across
first three quarters of 1994, expenses for
asset quality. Growth in the economy
the board. The problem loan ratios for
loan losses for District banks were about
strengthened the financial position of
business and consumer loans dropped to
$1 billion less than for the comparable
borrowers and helped stabilize the value of
levels close to the national averages.
period in 1993. Western banks also
collateral backing bank loans. As a result,
However, with the slower growth in the
reduced their holdings of real estate
problem loans as a percent of total loans
California economy, the aggregate problem
obtained through defaults on loans, as they
have been coming down in the District.
real estate loan ratio remained above the
"cleaned up " their balance sheets by selling
national average and continues to be a
off those nonearning assets.
Outside of California , overall loan quality
drag on bank performance. This is
generally was quite good, with total
particularly true for community banks in
problem loan ratios below the comparable
Southern California, many of which have
U.S. ratios. Moreover, only some states
both a high dependency on real estate
The strong national economy pushed up
continued to report relatively poor asset
loans and a relatively high proportion of
short- and long-term interest rates in
quality for specific types of loans, such as
problem real estate loans.
1994. While the j um ps in rates were
Alaska's construction loans, Ari zona's and
I~ IsE 1D_l o_te ces_L K o.tes
sizable--250 basis points on 3-month
Treasury bills and 200 basis points on 10
sales of only $79 million through the third
the third quarter were about $500 million.
year Treasuries--they had little net effect on
quarter of 1994, compared to a net gain of
While the unrealized losses were larger
the aggregate performance of banking in
$128 million for the same period in 1993.
than the realized losses, they still were
the District during 1994.
Only a limited number of banks in the
relatively small. Unrealized losses in 1994,
District had losses from securities sales
for example, represented only about 1
One reason is that the rise in the average
that materially affected earnings, and only
percent of total equity capital for banks in
yield on banks' assets kept pace with the
in Arizona were the isolated losses large
the District. Moreover, even if District
increase in the cost of bank funding. In the
enough to have a noticeable effect on
banks had booked these losses in 1994,
District, net interest margins, which have
aggregate earnings.
earnings still would have been on a par
been relatively high in recent years,
with their strong 1993 performance.
narrowed only slightly, and then mainly at
The bigger impact on banks was from
the region's larger banks. Smaller banks as
unrealized losses on securities . Banks
~-DEj-tQI=8_ern_oj _D_~-=
a group actually reported wider margins
currently report unrealized losses on
_S_tco ng
in the western states, other than Hawaii.
securities classified as available-for-sale.
District banks held about $53 billion in
Capitalization is another indicator of
Another reason is that realized and
available-for-sale securities as of
financial strength for banking in the
unrealized losses on securities were
September 1994, which was about 62
District. With higher earnings in 1994,
limited. For the District as a whole , banks
percent of their total investment securities.
banks in the District were able to maintain
reported a net realized loss from securities
The unrealized losses reported through
the strong capital positions that they had
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rebuilt in recent years, while also
increasing dividends and buying back
equity. As of September 1994, average Tier
1 and total risk-based capital ratios in the
District were 9.9 percent and 12.9 percent,
respectively. These figures are just below
the high national averages, and compare
favorably with the regulatory guidelines for
identifying well-capitalized banks--the
guidelines include a Tier 1 ratio of 6
percent and a total capital ratio of 10
percent. Within the District, 97 percent of
bank assets were held by banks that met or
exceeded these guidelines for well
capitalized institutions.
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~~~~~~~~~~~~~~_IL~8e~Da_~_[eniliD9Bank credit conditions in the District also
Alaska fell off sharply in 1994. In
Perhaps the most notable development in
improved considerably in 1994. Strong
California, both the economic recovery and
lending for the District, and for the nation,
capital positions and a reservoir of liquid
the turnaround in bank lending lagged the
was the rebound in business loans at
assets allowed banks to respond to the
rest of the District. As a result, bank loans
banks. Competition in the market for
increase in the demand for credit. Total
for the state in September 1994 were only
business credit has been intense for some
loans in the District rose by close to 6-3/4
about 3 percent above the level a year
time, driving down the bank share of non
percent from September 1993 to
earlier. Nevertheless, that was a marked
mortgage business lending over the past
September 1994, following a contraction
improvement from the 3 percent decline
several years. This longer-run trend made it
of over 3-1/2 percent during the previous
the previous year.
difficult to predict when and how much
12 months.
commercial and industrial loans at banks
Consumer lending by banks in the District
would recover after contracting during
Several District states experienced
outside of California and Hawaii was
most of the 1990s.
exceptionally strong loan growth. In
especially strong, as households resumed
Arizona, Idaho, Nevada, Oregon, Utah, and
their borrowing to finance an increase in
Beginning in late 1993, however, business
Washington, total loan growth was over 10
spending. Real estate lending also was
loans at banks began to turn up in the West
percent, compared to the national average
strong in the faster-growing states in the
and in the nation. From September 1993 to
of around 8-1/2 percent. However, in
District.
September 1994, business credit
Hawaii, soft economic conditions limited
extended by District banks increased by
loan growth, and bank loan growth in
more than 5 percent. That was less than
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the approximately 8-1/2 percent for banks
nationally, mainly because of the lag in the
rebound in California.
The timing of the bounceback in bank
business lending is roughly consistent with
the usual lagged response to an upturn in
the economy, though the lag was on the
long side.
It also reflects the influence of
other cyclical or transitory factors. One is
the shift back to shorter-term financing by
businesses in response to the rise in
interest rates. Another is the slowing of the
balance sheet restructuring by businesses,
which apparently contributed to the
weakness in the overall demand for
business credit in recent years.
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The weak bank earnings and the dearth of
disseminating information related to
related services, one of the last bastions of
lending in the first part of the 1990s
financial risk, as well as the cost of
traditional banking.
followed by the more recent rebound
measuring, evaluating, and managing risk.
Competition among banks also has
suggest that short-term factors continue to
cause ebbs and flows in banking.
For banks this has meant greater
intensified. One example is the market for
However, banking also is being driven by
competition. New competitors are able to
retail deposits, where innovation and
longer-term trends that are broad,
penetrate service areas traditionally
deregulation have meant price competition
relentless , and global.
associated with banking. More open
for small-denomination accounts not only
capital markets have contributed to the
locally but nationally. Innovations,
One key trend is the fundamental
growth of nonbank competitors , like
including those in computing and
revolution in the processing of information
pension funds and mutual funds.
telecommunications technology, also have
about risk. This includes not only
Securitization has changed real estate as
helped bring a national dimension to
innovations in hardware and software for
well as consumer financing . Nonbanks are
competition for mortgage financing as
computer and telecommunications
going head-to-head with banks, as finance
well as certain types of consumer and
technology; it also includes innovations in
companies gain some market share at the
business credit.
the field of finance . These innovations
expense of banks and as investment banks
have dramatically changed the way
expand their consumer and business
financial services are provided. They have
lending. Nonbanks even offer transactions-
reduced the cost of amassing and
13=
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Oregon, and utah allow entry by holding
to Arizona. For states like Arizona, Nevada
companies from all the other states in the
and Washington, the lion's share of
The competition from outside and from
country, while California and Washington
banking is controlled by out-of-state
within banking is putting a premium on
allow access on a reciprocal basis. Alaska
holding companies. Districtwide,
efficiency and broadening the horizons of
and Oregon also permit interstate
consolidation has meant some increase in
financial services. One response has been
branching. Only Hawaii still prohibits
concentration among the top few banking
consolidation in banking itself. While the
acquisitions of commercial banks by out
organizations. Many local banking markets
evidence of the effects of bank mergers on
of-state holding companies (tho ug h even
in the District, though, have had either
efficiency is mixed, cost reduction remains
there a bank holding company has entered
stable or declining levels of concentration.
part of the force driving consolidation in
through the acquisition of a thrift). Though
This has been due in part to entry by new
banking. For the District, the result has
interstate banking in the West is open to
banks and the tendency for smaller
been around a 20 percent net reduction in
holding companies nationally, most cross
competitors to gain market share. Another
the number of banks since the mid-1980s.
border banking in the region has been
reason is interstate acquisitions generally
In 1994, banking consolidation continued
initiated by holding companies with
do not reduce the number of competitors
in the District with 45 mergers.
headquarters in the District.
in local markets. Rather, these, and other
market extension mergers, expand lending
Interstate banking has been an important
The merger activity in the District has
and funding opportunities and allow for
dimension of the consolidation trend. In
altered the banking landscape, changing
greater diversification. The recent
the District, Alaska, Arizona, Idaho, Nevada,
the names on banking offices from Alaska
adoption of federal legislation authorizing
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interstate branching also gives holding
banks rose in 1994, but by less than assets
for loan servicing and for deposit and
companies the opportunity to reduce cost
and earnings did.
trust services.
Ee_e 5_a _s_e_d=_B~QoIj=tl9 -=
Beyond these services, banks in the West
by consolidating their interstate operations
in coming years.
are joining the move into less traditional
Pressures to lower overhead costs in the
Banks also continue to adapt by expanding
areas, like investment services. Although
District also are evident in the decline in
fee-based products and services. The bulk
only the largest banks are involved in
the number of bank branches and other
of this activity is related directly to
securities underwriting, a broader base of
costs, particularly in California. Over the
traditional bank credit and deposit
the banking industry is generating fees
past few years, the number of branches in
services. Among these, certain off-balance
from offering other services. In the
California has dropped by more than 600,
sheet credit services have outpaced on
District, one-quarter of the banks are now
or about 13 percent. California banks also
balance sheet lending. Over the 12
providing their customers with mutual
have cut payroll costs, including a 1.3
months ending September 1994, for
funds and/or annuity products as
percent cut in the first three quarters of
example , loan commitments in the District
alternatives to traditional deposit products.
1994. In other parts of the District, rapid
were up 18 percent and letters of credit
These include a number of smaller
economic growth has eased immediate
rose by 13 percent, compared to the 6-3/4
institutions; for example, the median size
pressures to reduce the number of banking
percent rise in loans. In addition, banks in
of bank offering mutual funds is about
offices. For the same reason, outside of
the District garnered a large portion of
$200 million. Still, mutual fund sales in
California salaries and benefits at District
their noninterest income from charges
the District are dominated by a few large
[5~
institutions. The top 10 banks in the
off-balance sheet contracts on behalf of
concentrated in a few large institutions.
District accounted for around 90 percent of
their customers, including other banks,
In the District, about 10 percent of the
the close to $55 billion in mutual fund
while banks of all sizes use the derivatives
banks reported having off-balance sheet
sales at western banks in the first nine
as part of their own trading activities and
interest rate and foreign exchange rate
months of 1994.
for managing portfolio risk.
contracts. The median asset size for
For the District as a
whole, gross fee income from the mutual
those banks was $1.6 billion, and the
funds and annuities was $225 million, or a
As a group, District banks tend to be
top ten banks accounted for about 97
little less than 3 percent of total
relatively less active than banks nationally
percent of the notional value of interest
noninterest income.
in providing and using off-balance sheet
rate and exchange rate contracts as of
instruments. In September 1994, for
September 1994.
Another fast-growing set of off-balance
example, District banks accounted for
sheet items is financial derivatives. These
about 10 percent of the $15-1/2 trillion in
consist of interest rate and foreign
notional value of interest rate and
exchange rate contracts--including options,
exchange rate contracts reported by banks
swaps, futures, and forwards. (Banks also
nationally, compared with about a 14
hold on-balance sheet derivative
percent share of banking assets. Although
instruments such as collateralized
banks in the District as small as around
mortgage obligations and structured
$50 million in assets use off-balance sheet
notes.) Some large banks enter into the
derivatives, their use currently is
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_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ [~l._[O_Q~JD~9-~6e-aa~
These developments in the financial
losses to the FDIC from bank failures in
and investment banking and perhaps
services industry are changing the face of
recent years. These events have focused
debate the integration of insurance and
banking and blurring many of the
attention on the moral hazard problems
banking or even the mixing of commerce
distinctions between banks and nonbank
that can stem from deposit insurance.
and banking. Balancing the concern to
financial institutions. While the process is
Moral hazard arises when the provision of
protect the deposit insurance system will
being driven in large part by technology, it
deposit insurance severs the connection
be the concern that the current artificial
has been influenced by regulations and
between a bank's risk-taking and its cost of
separation of certain financial activities
legislation that have allowed innovation,
financing, thereby removing a natural
forces the economy to forgo potential
but, at the same time, have tempered its
check on risk-taking. Without the proper
gains in efficiency, resulting in higher
pace and dimensions. A number of factors
safeguards, deposit insurance and
cost and lower quality financial services.
explain the cautious approach to change in
excessive risk-taking by banks can mean
In addition, the artificial barriers may
the legal environment, but a key factor is
heavy losses for the deposit insurance
mean lost opportunities for banks and
concern over the risk exposure of the
system as well as a misallocation of
other financial institutions to diversify
deposit insurance system from extending
financial resources in the economy.
and reduce risk.
In 1995, risk to the deposit insurance
In recent years, developments have tipped
This concern is not surprising in light of
system will be an issue, as the Congress is
the balance between these concerns. In
the estimated $150 billion tab picked up by
likely to consider legislation to recognize
particular, several serious legislative and
taxpayers in the thrift crisis and the heavy
the interconnection between commercial
regulatory measures have been taken to
the federal safety net.
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deal with risk in banking and the exposure
banking industry today is far stronger than
capitalized banks likely present a minimal
of the deposit insurance system. What
it was just three years ago, as banks have
risk for the deposit insurance system.
these measures have in common is the
responded both to regulatory efforts and to
While a bank's capital position can
goal of putting the consequences of bank
market pressure to raise their level of
deteriorate, the impact on the insurance
decision-making, the downside and the
capital. Banks issued equity and longer
system can be controlled if actions are
upside, on the shoulders of the banks and
term debt and used retained earnings to
taken promptly and if those actions are
of some of their liability holders. These
recapitalize. In addition, strengthened
based on measures that reflect the true
measures include having uninsured
balance sheets and an improved outlook
value of a bank's assets and liabilities.
depositors regularly bear losses when
for banking have been reflected in the rise
banks fail, adopting a depositor preference
in bank stock prices from the depressed
These developments should mitigate
rule, enacting Prompt Corrective Action,
levels of the early 1990s.
concerns over the deposit insurance
accounting explicitly for the market-value
system, and perhaps tip the balance of the
of some bank assets and liabilities,
The effect of this turnaround in bank
legislative agenda more toward the
as well as setting risk-based deposit
capitalization has been a tremendous
potential gains from removing barriers
insurance premiums.
increase in the buffer between potential
separating financial institutions.
private losses in banking and the deposit
The most far-reaching change, though, has
insurance system. It is difficult to estimate
been the recapitalization of the banking
precisely the value of deposit insurance,
industry. The capital position of the
but available estimates suggest that well-
[8'---
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_________________ _ _B_OOK OrfLcecs_
Robert T. Parry, Presid ent a nd
Chi ef Executi ve Officer
W. Gordon Sm ith, Vice Pres id ent an d Directo r
Ells wo rth E. Lund , J r., Assista n t Vice President
Patri ck Tong, Vice President
Thomas P. McGrath , Assis ta n t Vice President
Patrick K. Barron, First Vice President and
Chi ef Operating Officer
D. Kerry Webb , Vice President
Elizabeth M. O'Sh ea, Assi sta n t Vice President
Jack H. Beebe, Senior Vice Pres id ent a nd Director
Sallie H. Weissing er, Vice President
Gail G. Quarles, Assistant Vice President
Sara K. Garrison , Seni or Vice Presid ent
Patri cia A. Welch , Vice President
Philip M. Ryan, Assista nt Vice Presid ent
Mich ael J . Murray, Sen ior Vic e Presid ent
Ja mes M. Barnes, Direct or
W. Sta rr Seeg m ille r, Assista n t Vice Presid ent
Ter ry S. Schwa ko p f, Senio r Vice Presid ent
Kenneth R. Binn in g , Director
Susan A. Su the rland , Assistant Vice Presid ent
Laure nce Washti en , Sen io r Vice President
Harold H. Blum , Dir ector
Ja mes J . Ten qe . Assista n t Vice Presid ent
S. Jean Hinrichs, Gen era l Audi tor
Nancy Em erson , Director
Thomas R. Th aanu m , Assis ta n t Vice President
Rob ert D. Mulford, Vice Presid ent and
Gen eral Counsel
Eli ot E. Giuili , Director
David M. vandre , Assistant Vice President
Don ald R. Lieb , Director
Kelly K. Walsh , Assistant Vice President
Eliza be th R. Masten , Vice Pres id ent and
Sec re ta ry of th e Boa rd
J ohn Y. C. Li n, Director
Beverley-Ann Hawkins, Automa tio n Officer
C. Kenneth Arnold , Vice President
Susan G. Porterfield , Direct or
Le lia M. Jones , Exami ni ng O ffice r
Eli zabe th K. Ch risten sen , Vice Presid ent
Wayn e L. Rick ards, Director
Mark Levo nia n, Research O ffice r
Bar bar a J. Contini , Vice Presi de n t
Kenneth M. Kinos h ita, Associ at e Gen eral Counsel
Brian Motley, Research O ffice r
Robert L. Fienberg, Vice President and Director
Paig e Birdsa ll, Assistant Vice Presid ent
Gary P. Palm er, Financia l Analysis Officer
Frederick T. Furlong, Vice Presid ent
Sylvia A. Cunningham, Assistant Vice Pres id ent
Glenn D. Rud ebusch , Research Officer
Willi am K. Ginter, Vice Presid ent
Pete r K. C. Hsieh , Assistant Vice Presid ent
Bharat Trehan , Resear ch O ffice r
Reu ven Gli ck, Vice Presi dent
John S. Hs iao, Assis ta n t Vice Presid en t
Dal e L. Vaug han , Examin in g Officer
John P. J ud d, Vice President a nd Asso cia te Direct or
Deb o rah S. Jackson- Duke, Assistant Vice Presi de n t
David W. Walker, Exam ining O ffice r
Douglas R. Sha w, Vice Presi de n t and Co unse l
Rob e rt C. J ohnson , Assistant Vice Presid ent
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BLGncb···CJ--EITc_ecs
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Gordon Werkema, Sen io r Vice President
John F. Moore, Seni or Vice Presid ent
Sean J . Rodrigu ez , Vice Presid ent
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Thomas D. Th omson , Executive Vice President of
Central Bank Functi on s, ser ved th e Fed er al Reserve
Bank both at th e Board o f Governo rs in Washington,
J~.ortLQo_a=B[·o~o_c~E~_
· _.
Anthony Fabi an , Dir ect or
D. C. and in San Francisco before re ti ring February L
A. Kenneth Ridd , Vice Presid ent
Nancy Olmst ead , Direc to r
19 95 . Th omson began his Reserv e Bank career as
Mary E. Lee, Assi stant Vice President
Dar cy J . Coulter, Assistant Vice President
an eco no m ist at th e Boa rd , th en worked in
Rob ert D. Long, Assistant Vice Presid ent
Brent M. Du xbury, Assistant Vice Presid ent
comm ercial banking for a do zen yea rs before
Robin A. Rockwo od , Assistant Vice Presid ent
Rach el A. Romer o, Assistant Vice President
return in g to th e Fed in San Franc isco.
Mary Rector, Offi cer
S_e~alt[B
Eug en e A. Th omas, Senior Vice President of
Gal e P. Ansell, Assistant Vice Presid ent
S.e.o.Loc- O_f_Ljc.e rs_8.eJJ.ce
Jimmy F. Kamada, Assistant Vice Pres id ent
Kenneth L. Pet er son , Assistant Vice Presid ent
S~ali ·[aI.e
C.itj
Feder al Reserve Ban k o f San Fran cis co in 1960 and
Three of th e Bank's se nio r o ffi cers with co m bined
retired February L 1995. Tho mas held positions in
service o f nearly 90 yea rs elec ted to participat e in
the Portland and Los Ang el es o ffices before heading
th e ea rly re ti re men t pr ogram o ffere d during 19 94 .
th e Su pe rv isio n, Regulati on, and Cred it areas in
And rea P. Wol cott, Vice Presid ent
Gerald R. Dalling , Assi stant Vice Presid ent
Jed W. Bodily, Offi cer
su pe r vislo n. Regulati on and Cred it, j oined the
San Franci sco.
E. Ron ald Liggett, Senio r Vice Presid ent o f the
Northern Region , retired J uly 1. Duri ng his 37·year
Richard B. Hornsby, Offi cer
car eer, Liggett se rved in th e Portland , Seatt le , and
Salt Lake Ci ty o ffices.
2TI~
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Th e January implementation of the same
co llection business of a large financial
day settlement provisions of Regulation CC
institution with multi-state operations.
led to a significant, but not unanticipated ,
As a major provider of financial and
decline in th e volume of checks processed.
Elec t ro n ic P a ym e nt s and
payments services, the Federal Reserve
Despite thes e loss es, we increased
F i sca I A ge ncy
Bank of San Francisco strives to be
producti vity and reduced direct costs by
recognized for operational excellence,
more than 10 percent. As a result, the
The focus on efficiency, quality, and
outstanding customer service, and
District moved into the top ranks of
continual improvement in customer service
leadership within th e Federal Reserve
productivity performance in the Federal
was evident in th e performance of the
System and th e financial services
Reserve System. More importantly, we
automated clearing house (ACH) r funds
community. In keeping with these
were able to reduce prices on a number of
transfer, securities services, and fiscal
objectives, the Bank continued its pursuit
services and to maintain prices at 1993
agency operations in 1994.
of efficiency and higher levels of customer
levels ove rall.
ser vice by upgrading automation,
ACH Ser vice registered excep tio nal
maintaining tight cost control, and working
In addition to our efficiency gains, we
financial performance in 1994, due to
closely with our customers to ensure that
made considerable progress toward o ur
careful management of costs and staffIng
our services meet their chang ing needs.
long-term goal of end -to-end electro n ic
and dramatic improvement in productivity.
collection of checks by refining products
Our District now stands as one of the
and services to meet specific customer
leaders in the Federal Reserve System not
needs. At year-end, volumes of items
only in terms of th ese performance
During a year of dramatic changes in our
delivered electro nically were 200 perc ent
statistics, but also for such innovative
business environment, we met ambitious
above th e level attained in 1993. A
customer services as Fed -Mail deli very
productivity goals and saw considerable
particularly noteworthy accomplishment
option for ACH advices whi ch eli m ina tes
growth in electro nic collection services.
was our success in securing th e electronic
costly handling of paper advices.
Check S er v i c es
2[
As part of a multi-year effort to centralize
tenders. At times, the volume of tenders
machines will increase currency
and upgrade the computer processing
processed in the Twelfth District exceeded
throughput, enhance counterfeit detection
systems for the Federal Reserve's key
that of all other Districts, including New
capabilities, and provide for more effective
electronic payments services, we moved
York. By reevaluating our operations and
monitoring of deposit quality.
our Funds Transfer Service to new
improving efficiency, we were able to
nationwide software. As the first District
accommodate this surge in volume and
The Bank also continued its efforts toward
with a sizeable customer base and
improve overall service.
the installation of an automated materials
handling system in the vaults of our San
significant wire transfer volume to shift to
this system, we played a major role in
Ca-sh S e rv ice s
identifying and resolving issues that will
Francisco and Los Angeles offices. Delays
encountered in integrating the automated
speed the process for other Districts. This
In 1994 Cash Services made further
storage and retrieval devices with the newly
new system will improve funds availability
progress in a multi-year effort to upgrade
installed rack led to the use of manually
nationwide, enhance reliability and
automation, efficiency, and customer
operated vehicles for storage and retrieval
recovery time, and ensure a consistent,
service. The renovation of all five offices'
purposes. In 1995 the Bank will work with
high level of funds transfer service.
facilities and the installation of new,
the vendor to obtain the full benefits of an
second-generation currency processing
automated environment.
Improved productivity and highly
equipment moved forward at a rapid pace.
responsive customer service were evident
Nine machines were installed, bringing the
Despite these challenges of automation,
in Fiscal Agency and Securities Services
total to 12 and marking the midway point
our District continued to deliver a high level
operations. Rapidly rising interest rates
in our conversion process. The Salt Lake
of customer service. For example, our Los
brought a dramatic increase in the public's
City office was fully converted early in the
Angeles offlce accommodated a spike in
demand for short- and medium-term
year and served as a national test site for
food coupon volume following the
Treasury securities and a corresponding
improving the processing of poor quality
Northridge earthquake.
increase in the volume of inquiries and
currency. These second-generation
T2 .
Our Bank led the Federal Reserve's zero
access to Federal Reserve services, and
Economic education expanded with
based review of customer service levels in
non-centralized automation services.
workshops for teachers on money,
cash operations. In this effort to provide
banking, and two new topics. The new
for a more consistent level of service
This office expands our existing Federal
programs focused on instruction in the use
nationwide, we met with several dozen
Reserve System responsibilities for
of Bank software on monetary policy and
customers, whose input will help shape the
customer electronic access, which cover
the System video/collaborative material
new policy to be announced in 1995.
such facilities as Fedline and Computer
product, The Federal Reserve. Using a
Interface connections. A key 1994 initiative
satellite distance learning program, we
was the development and piloting of FED
brought together 360 Oregon high school
Mail, which uses e-mail technology to
seniors to learn about the Federal Reserve.
System Support
Prod uc t .O f fi ce
deliver low-security data to customers. By
In recognition of our strategic contributions
year-end some 300 customers in four
The Audiovisual staff completed several
to Federal Reserve System payments
Districts were receiving FED-Mail service,
major projects, among them "Closing the
services, our Bank was given responsibility
which will expand nationwide in 1995.
Gap," a System-wide Community Affairs
for the System's new Support Product
Office in 1994. This new office is part of an
program explaining 10 basic fair-lending
:~Ubl_Lc __
IoI orma tj_o~
overall restructuring of the System's
guidelines. "Your Money Matters," a
training program to help cash handlers
management of financial and payments
Media outreach continues to focus on
detect counterfeit currency, was revised for
services, which also includes the creation
expanding awareness and understanding
the Treasury and the Board of Governors.
of product offices for retail payments,
of the Federal Reserve System . Media visits
wholesale payments, and fiscal services.
ranged from Oregon and Washington to
The Research Library introduced FedWest
This office will be responsible for setting
California's central valley and Arizona.
Onl.ine. a public bulletin board service
strategic and tactical direction for the
containing economic and banking
accounting functions, customer electronic
information produced by the Bank.
-23=
Approxim ately 300 users log on each
saving, stock returns, and budget and
discussions and data on developments in
month to read or download flies.
trade deficits. Several issues in bank
District states. Pacific Basin research and
capital regulation and bank lending were
analysis is disseminated by th e Center for
Employee communications grew as the
examined.
Pacific Basin Monetary and Economic
District newsletter, 12L Times, increased
NAFTA, interstate banking, the California
from quarterly to bi-monthly, and received
economy, and the convergence of income
two national awards for d esign and
levels across states.
Regional studies dealt with
content. In addition, we introduced 12L
Studies.
Economic Research staff delivered 67
speeches to non-profit organizations.
Newswire, an e-mail bulletin board, for
Ajoint conference with the Center for
Public outreach efforts also included 75
San francisco employees.
Economic Policy Research at Stanford
meetings between staff and officials who
University brought together academic and
visited the Bank from the U.S. and abroad ,
System economists to discuss monetary
particularly Pacific Basin countries.
E_CO_D_QmLc~e_s _e_oLc_h ~=
policy in a low-inflation environment.
S_u_~e CY_LSJ _O_D, __ ~ ~
This year's research addressed a wide
Reil_llLg j j _Q D,
variety of policy-related issues. Some
Policy issues were presented to the public
studies exam ined monetary policy issues in
through various formats. The Weekly Letter
the U.S., including the effectiveness of
presents analyses of policy issues and
various targets and indicators, while others
economic developments for business and
During 1994 the Supervision, Regulation ,
covered monetary and exchange rate
academic readers . The Economic Review
and Credit department was reorganized
policies in East Asian countries. Other
contains technically oriented research.
into two departments, one focusing on
macroeconomic studies included various
Fedviews is a monthly video discussion
safety and soundness supervision and
aspects of business cycle behavior in th e
between two department economists on
regulation (Banking Supervision and
U.S. , as well as international research on
current macroeconomic policy issues.
Regulation), the other on credit,
inflation and growth , investment and
Western Economic Developments contains
compliance and community affairs.
o.nd__CI e_d iJ_ _
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__IS2LQOO9-ement
c
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Fr om lef t, Rober t T Parr y. P r eSident and Ch ie f Execut ive O ffi cer . Michael
J
Mu rray , Senior Vice President.
Corpor a te Adm inistra tio n. Patr ick K. B arr on, Fir st Vice P r esident and C hief O per at ing O fficer .
and Thomas D. Thomson, Executive Vice P r eSident. C entr al B ank Funct ions.
Pai nt ing in background:
B yr on Gardner
Ribbon Landscape 19S\
acr ylic on canvas 6S x 50 li S'
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2_5~
B_QJJ ~9 -S_u_p_e~Vj_SjD_D _
_
a_n([::E~e9u JaJjDIL-
these, international examiners examined
financial, and supervisory information on
92 agencies and branches, 15 Edge Act
financial institutions.
offices, and 4 representative offices. This
ance-a~n d
Examiners conducted 68 examinations of
Bank was actively involved in the
Cred~Compl i
commercial banks. Outstanding formal and
development of a new Supervisory
C_ommuniJf _ B ££ajLs _
informal supervisory actions involving state
Program for Foreign Banks with initiatives
member banks declined from 25 at year
designed to improve the supervision of
Community Affairs provided information to
end 1993 to 22 in 1994.
Foreign Banking Organizations operating in
more than 600 lenders by sponsoring six
the United States.
small-business lending seminars. They
helped District bankers learn how to make
Examiners completed 130 on-site
inspections of bank holding companies, 8
Domestic application filings totaled 257, up
small business loans profitably, how to
more than 1993 because new bank holding
from 252 in 1993. Applications to form
integrate public sector programs and
companies were formed and problem
bank holding companies or acquire
lending criteria successfully, and how to
institutions required heightened
additional banks or nonbanking businesses
enhance their institution's CRA program.
supervisory attention. At year-end there
increased significantly (from 52 in 1993 to
Two other seminars, "Resolving Legal
were 58 outstanding supervisory actions
83 in 1994), reflecting continued interest
Issues When Lending on Indian
(not including supervisory letters) in place
in consolidations and the desire of banking
Reservations," focused on resolving legal
at holding companies in less than
organizations to expand during favorable
and jurisdictional issues, sovereign
satisfactory condition, 13 less than 1993.
economic conditions.
immunity questions, and underwriting
problems that arise when lending on
Indian reservations.
At year end, there were 142 agencies and
In another major project, staff completed
branches of foreign banks in the District,
validation of District data in the National
19 Edge and Agreement corporation
Information Center database, the Federal
At other conferences in San Francisco,
offices, and 42 representative offices. Of
Reserve's central repository of structure,
Honolulu, and San Diego, more than 900
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From lef t, A ndre a P . Wolco tt, Vice P resident,
Salt Lake Ci ty, J ohn F. M oore, Senior Vice President,
Los A ngeles, and Gordon
R G . Werkema, Senior Vice
P re sident, Nor thern Re9 ion
A. Kenneth Ridd, Vice
P resident, Por tland, was not ava ilable f or the pho1 09ra ph
Paintin9 in back9raund:
Fritz Schold er
Galloping Indian After Leigh 1978
erchinq and actJatint 15/ 90 Lt 3 112 x b2 1/2"
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bankers, housing and small business
During 1994, 56 depository institutions
reflecting reduced amounts borrowed
developers, representatives of non-profits,
borrowed from the discount window
under adjustment credit. This Bank held
Native Americans and native Hawaiians,
compared to 64 in 1993, and 587 loans
$39.0 billion in collateral accounts at year
and government officials heard nationally
were extended, compared to 483 loans in
end compared to $29.3 billion at the end
recognized speakers discuss community
1993. The dollar amount of funds
of 1993, as banks had been pledging
reinvestment, economic development,
borrowed declined from $5.1 billion in
additional assets to their collateral pools.
lending on trust lands, fair lending, and
1993 to $3.5 billion in 1994, primarily
other related issues.
5_umrno_[ 1-0=£ 0-r_eLQtLo_os
In its continuing role in the guidance of
non-profit mortgage banking consortia, the
department was key to the development of
the Association of Reinvestment Consortia
for Housing which represents over 300
commercial banks, thrifts and savings and
loans, with loan commitments and
fundings of over $700 million.
Custod y Serv ices _ _
Volume (in thousands)
1992
1993
1994
Cash Services
Currency notes paid into circulation
Food stamp coupons processed
3 ,758,533
604,544
4 ,069,935
651 ,348
4,212,494
694,306
150
766
113
702
216
805
2,978,582
76,781
33,496
2 ,994,572
73 ,648
32,709
2,269,690
69,567
29 ,941
19,416
19,962
19,925
380,448
406,220
459,032
910
483
587
78
64
56
Security Services
Other Treasury original issues
Book-Entry Securities processed
Po/ ments Servi.c.e s
Check Services
Commercial checks collected
Government checks processed
Return items processed
Electronic Payments Services
Some 2,000 regulatory inquiries were
received, about the same as previous
years. These usually involve truth-in
lending issues, but there was a notable
increase in fair lending inquiries.
Wire transfers processed
Automated clearinghouse
transactions processed
Discou nls_o _o a - A c{y_onC eS
Total discounts and advances"
Number of financial institutions
accommodated"
*who le number (not in thousands)
28
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___-__-__= Eor o1ogs-ooirExp-eos-e-s_
_
(lo_t5D:us_o_od_s_o_LcLoJln_cs)
December 31,
199Lt
Current Earnings
Discounts and Advances
United States Government Securities
Foreign Currencies
Income from Services
All Other
1993
611
834
.
.. 1,919,419 1,943,930
130,257
182,225
..
78,131
86,370
..
.
936
622
lbtal Current Earnings
2,129,354 2,213,981
Current Expenses
lbtal Current Expenses
.
Less: Reimbursement for Certain Fiscal Agency
and Other
Expenses
.
Net Expenses
.
Cost of Earnings Credits
Current Net Earnings
.
196,427
190,474
16,058
180,369
15,584
174,890
19,536
19,800
December 31,
199Lt
Profit and Loss
1993
Additions to Current Net Earnings
Profit on prior period Adjustments
Profit on Sales of United States
Government Securities (Net)
Profit on Foreign Exchange Transactions (Net)
All Other
lbtal Additions
..
..
.
..
392,452
2
352,494
4,503
39,161
8,198
51,862
Deductions From Current Net Earnings
Loss on Sales of United States
Government Securities (Net)
Loss on Foreign Exchange Transactions (Net)
All Other
Total Deductions
..
..
.
..
2,177
13
2,190
61,817
61,817
Net Additions (+) or Deductions (-)
..
350,304
(9,955)
Cost of Unreimbursed Treasury Services
..
(4,755)
(4,260)
..
1,929,449 2,019,291
Assessments by Board of Governors
Board Expenditures
.
(21,315)
.
Federal Reserve Currency Costs
(28,180)
Net Earnings Before
Payments to the U.S. Treasury
.. 2,225,503
Dividends Paid
.
30,255
Payments to the U.S. Treasury
(Interest on Federal Reserve Notes) .......... 2,177,906
1,866,540
17,342
494,875
512,217
44,580
450,295
494,875
Transferred to Surplus
Surplus, January 1
Surplus, December 31
..
..
..
(20,692)
(44,506)
1,939,878
28,758
29~
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CQ~_QLatL\Le_St~!-=emeOJ_o_C~C_C_O_UOJ
( _Lo~_5o_us~a_rldS __oI_cLoJLoLs)-
_
__
December 31 ,
199Lf
Assets
..
1,102,000
904,000
33,059
Loans to Depository Institutions
.
33 ,295
Federal Agency Obligations
.
342 ,931
Gold Certificate Account
Special Drawing Rights Certificate Account..
Other Cash
United States Government Securities:
Bills
Notes
Bonds
..
.
..
.
..
December 31,
1993
199Lf
Liabilities
1,392 ,000
904,000
60,625
°
541 ,512
16,726,325 18,722,081
13,592,343 15,419,200
4,054,557
4 ,619 ,775
Federal Reserve Notes
.
Items in Process of Coll ection
Bank Premises
Operating Equipment
34,373,225 38,761,056
34,749,451 39,302 ,568
..
.
..
544,324
155,956
38,263
1,554,904
150,876
31 ,746
31,023 ,861 26,322,759
Deposits:
lbtal Depository Institutions
Reserve Accounts
Foreign
Other Deposits
lbtal Deposits
..
.
.
..
4 ,938,398
20,515
80,318
5 ,039,231
6,790,730
20,503
21,320
6,832,553
Deferred Credit Items
Other Liabiliti es
.
..
639,717
394,728
1,016,233
271,689
Total Liabilities
Total United States Government Securities
Total Loans and Securities
1993
37,097,537 34,443,234
Cap ital A ccounts
Capital Paid In
Surplus
..
..
5]2 ,217
512 ,217
494,875
494,875
Total Liabilities and Capital Accounts 38,121,971 35,432,984
Other Assets:
Denominated in Foreign Currencies
All Other
..
.
3,207,077
1,073,067
3 ,295,072
862,844
Interdistrict Settlement Account
(3 ,685, 226) (12 , 12 1,65 1)
Total Assets
38,121 ,971 35,432,984
~O'--
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_ _Eeafrcal=~e_s_er~e=S_ook_o_t SOD_Ecooc_Ls_c_Q_B_o_OCd_o_t 0 lrectors
Chairman of the Board and
Federal Reserve Agent
Judith M. Runstad
Partner
Foster, Pepper &:. Shefelman
Seattle, Washington
Deputy Chairman
James A. Vohs
Chairman and CEO (Retired)
Kaiser Foundation
Health Plan, Inc. and
Kaiser Foundation Hospitals
Oakland, California
Gerry B. Cameron
Chairman and CEO
U.S. Bancorp
Portland, Oregon
Krestine M. Corbin
President and CEO
Sierra Machinery, Inc.
Sparks, Nevada
Gary G. Michael
Chairman and CEO
Albertson's, Inc.
Boise, Idaho
Richard L. Mount
Chairman, President
and CEO
Saratoga Bancorp
Saratoga, California
Cynthia A. Parker
Executive Director
Anchorage Neighborhood
Housing Services, Inc.
Anchorage, Alaska
Carl J. Schmitt
Chairman and CEO
University Bank &:. Trust
Company
Palo Alto, California
Fe_d _eCOC ~_dY LSO~y=
C _O_U ncLI_JS
2Lem5_ec
Edward M. Carson
Chairman of the Board
first Interstate Bancorp
Los Angeles, California
E. Kay Stepp
Principal and Owner
Executive Solutions
Portland , Oregon
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[Qs- H;LXO-gele_s_Bcanc_6_B o~a[a oJ-=OLcecJ_Qcs_
Chair of the Board
Anim E. Landecker
Western Regional Vice
President
Local Initiatives
Support Corporation
Los Angeles, California
Anne L. Evans
Chairman
Evans Hotels
San Diego, California
Antonia Hernandez
President
and General Counsel
Mexican American Legal
Defense and
Educational Fund
Los Angeles, California
David L. Moore
President
Western Growers Assn .
Irvine, California
William S. Randall
Chief Operating Officer
First Interstate Bancorp
Phoenix, Arizona
Steven R. Sensenbach
President and CEO
Vineyard National Bank
Rancho Cucamonga,
California
Thomas L. Stevens, Jr.
President
Los Angeles Trade
'Technical College
Los Angeles, California
32
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Chairman of the Board
Ross H.. Runkel
Professor of Law
Willamette University
Salem, Oregon
Cecil W. Drinkward
President and CEO
Hoffman Corporation
Portland, Oregon
John D. Eskildsen
President and CEO
U.S. Bank of Oregon
Portland, Oregon
Elizabeth K. Johnson
President
TransWestern Helicopters,
Inc.
Scappoose, Oregon
Marvin H.. O'Quinn
Chief Operating Officer
Providence Portland
Medical Center
Portland , Oregon
Carol A. Whipple
Owner/Manager
Rocking C Ranch
Elkton, Oregon
Thomas C. Young
Chairman , President
and CEO
Northwest National Bank
Vancouver, Washington
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- - - -'0-_ 33
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of - Qi.ce_ct oJ:s
Chairman of th e Board
Gerald R. She rratt
Presid ent
So uthe rn Utah University
Ced ar City, Utah
Richa rd E. Davis
Presid ent and CEO
Salt Lak e Convention
&:. Visitors Bu rea u
Salt Lake City, Utah
Nancy Mortensen
Vice Presid ent-Marketing
Zion s Cooperative
Mercantile Institution
Salt Lake City, Utah
Dani el R. Nelson
Cha ir ma n and CEO
West On e Bancorp
Bo ise , Id ah o
_
Con stance G. Hogland
Executive Director
Boi se Neighborhood
Hou sing Serv ices, Inc.
Boi se, Idah o
Roy C. Nels on
Presid ent
Bank of Utah
Ogden , Utah
3~
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Chairman of the Board
George F. Russell , Jr.
Chairman
Frank Russell Company
Tacoma . Washington
Em ilie A. Adams
Presid ent and CEO
Better Business Bureau
Foundation
Seattle, Washington
Th omas E. Cleveland
Chairman and CEO
Enterprise Bank
Bell evu e, Washington
Tornio Moriguchi
President
Uwajimaya, Inc.
Seattl e, Washington
Cons tance L. Proctor
Partner
Alston , Courtnage, MacAulay
&: Proctor
Seattle, Washington
John V. Rindl aub
Chairman a nd CEO
Seafirst Corporation
Seattle, Washington
William R. Wiley
Seni or Vice President for
Science and Technology
Policy
Battell e Memorial Institute
Richl and , Washington
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3-5
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Chairman
Donald Butler
Chairman
Agrolink Corp.
Tucson . Arizona
Vice Chairman
Bailey S. Barnard
Former President
Heller First Capital Corp.
San Francisco, California
Barry Baszile
President
Baszile Metals Service
Los Angeles, California
Jerry D. Caulder
Chairman, President and CEO
Mycogen Corp.
San Diego, California
Karla S. Chambers
Vice President
Stahl bush Island Farms, Inc.
Corvallis, Oregon
Walter F. Payne, Jr.
President and Chief Executive Officer
Blue Diamond Growers
Sacramento, California
Nancy G. Learned
President
Learned-Mahn, Inc.
Boise , Idaho
Leslie 'Tang Schilling
President
L.T.D.D., Inc.
San Francisco, California
Lawrence S. Okinaga
Partner
Carlsmith , Ball , Wichman ,
Murray, Case &. Ichiki
Honolulu, tlawai i
Peter H. van Oppen
President and Chief Executive Officer
Interpoint
Redmond , Washington
Peter Ii . Parra
Executive Director
Employers' Trai ning Reso urce
Bakersfield , California
Bob L. Vice
President
California Farm Bureau Federation
Sacramento, California
_
_____ ___ _ _ _ __.. Lwm '---'~
This Report wa s prod uced by Ka ren
The background paintings in the
Sa n Fra ncisco O ff ice
Fla mme, designed a nd illustra ted by
photographs are from the art collection of
P .O . Box 7702
Ma rk Hendri cks. Western Ba nk ing wa s
the Federal Reserve Bank of San francisco.
Sa n Fra nc isco, Ca Iifornia
wri tten by Fred erick T. Furlong a nd
Acquired between 1981 and 1987 with
G ory C. Zi mmerman wit h ed floria l
funds designated as part of the budget for
Los A ngeles Bran ch
as si sta nce from J ud it h Goff.
the construction of the new San francisco
P.O . Box 20 77 Termi na I Anne x
Highlig hts was writ ten by Borbar a
and Los Angeles facilities, the collection is
Los A ng e les, Ca li fornia
Bennett o nd Koren Flomme. Color
comprised of over five hundred artworks by
pho togr aphy by Pau l Schu lz.
artists from the Twelfth District. The objects
Portiand Bra nch
are installed in public and work spaces in
P.O . Box 343b
the San francisco headquarters and the
Portla nd. Ore gon 9720 8
9 4120
90 051
four branches where they provide an
environment that is not only enjoyable and
Sa It La ke C ity Bra nch
stimulating, but educational as well. While
P.O . Box 30 780
its primary emphasis is on contemporary
Sa It La ke Ci t y. Uta h 84 125
art, the collection is given added
dimension by a select sampling of
Sea tt le Bra nch
traditional crafts.
P.O. Box 35b 7, Termi na I Annex
Sea ttle, Wa shington 981 24
@FedFRASER