The URL can be used to link to this page

Home My WebLink About03 SEPTEMBER 1995 ¢ I �IW ' N �r^ City of Palm Desert � � Council Agenda Request Meeting of S�T�� z8• 1995 . To be considered under. Resolutions_ Ordinanas� New Business_ . Coasrnt Calendaz_ Public Hearings_ �r— Old Bwinas_ Infornis�onal Items� 2. Item Title: (Pleau Pm�d�the p'°�ng��d appear as tLe ium's title on UK aB�+�>• Receive and file the Minutes of Investment fi Finance Committee dated August , . prove • , 3. FinanciAL• (ComPlar if aPPlicable) @) Amount Rulua��d (a) Account/Project M (c) p�priation Requirod'! (c) In the Curreat Budget? Apprwed bY Director of Finance: Lpie� G, Armenta, Senior Office Assistant 4. Submitted by: 5- APProvals: Depaztment Head City MansBer AGENDA INVESTMENT & FINANCE COMMITTEE 3:30 P.M. - SEPTEMBER 7, 1995 NORTH WING CONFERENCE ROOM �.�..��*++.��..��..,,,,+......,,.........,++�«.,.��,,...r....:::.......,:,,.��..,.,,,,....:.�.+,.,,...... L CALL TO ORDER II. MEMBERS PRESENT III. APPROVAL OF MINUTES: Rec: Approve the minutes of August 3, 1995 Action: IV. ORAL COMMUNICATIONS Any person wishing to discuss any item not otherwise on the agenda my address the Committee at this point. V. OLD BUSINESS A. Status of Public and Private Partnershios Backeround Checks 1. Sports Park 2. Section Four Rec: Status will be given on obtaining background checks and who should be reviewed. B. Status of Audit of Various Citv and Redevelopment A¢encv Proiects Rec: Action: VI. NEW BUSINESS A. Citv and Redevelooment A¢encv Imestment Schedule Rec: Review and submit to the next City Council agenda. Action: B. Reauest for Aooroval to Invest in Collateralized Deoosits with the Best Bid Submitted on Investments Maturina in the Month of September 1995 Rec: Recommend using funds maturing for purpose of transfening funds to Bank of America . Trust for refunding cash assessment district bonds being refunded. Action• AGENDA - PAGE2 INVESTMENT & FINANCE COMMITTEE SEPTEMBER 7, 1995 C. Finance Authoriri Bond Issuance on Seotember 26. 1995. Review Tvpe of Investments for the Refundine Assessment Districts. Rec: Action: D. Transfer of Trustee Account with Bank of America to Trust of California. Bank of America has Sold their Corporate Trustee Business to First Trast of California Rec: Review package from First Trust of California. Action• E. State of California Local Aeencv Investment Fund Monthiv Report Rec: Informational item for the Investment& Finance Committee to review. Action: No action required. VII. REPORTS AND REMARKS A. Committee Members'Reoorts and Remarks B. Items to be Placed on the Next A¢enda VIII. ADJOURNMENT Next regularly scheduled meeting is October 5, 1995, at 330 p.m. lga �T� � � � Minut e s Finance Committee CONVENE On August 3, 1995, the Investment fr Finance Committee was called to order at 3:37 p.m. by Mr. Gibson. ROLL CALL B. Crites, P. Gibson, M. Magloff, W. Snyder, B. Veazie, M. Rudolph(representing City Attorney), R. Diaz(Acting City ManagerJ, L. Arnzenta APPROVAL OF MINUTES Upon Motion by Mr. Snyder, seconded by Mi Magloff, the Minutes of July 6, 1995, weie APPROVED as submitted. Motion carried unanimously. ORAL COMMUI�IICA770NS None OLD BUSINESS A. Status of Public arrd Private Partnership BarkYround Chea�s{or �rts Park. Section 4. US Filter and the Housing P'noYram No reports were given on any item. B. Status of Audit of Yarious Citv and R�deuelopment Agency �1� Mr. Gibson reported Terri La Rocca met with Oscar Ar»zijo to discuss the housing authority issue and other items the City and Redevelopment Agency �rmould like revieu�ed and audited. In September a proposal �ill be submitted to City Council for reviexa�. NEW BUSINESS A. Citv arul Redeuel�ent A�encv Invatment Schedule Mr. Gibson reported there are no certificate of deposits for the City maturing in the month of August. The Redevelopment Agency's investment schedule basically lists all of the trustees. The investment schedule will be placed on the City and Redevelopment Agency agendas to be fnalized. Minul��s Finance Committee B. l�inance Aut6ority Bond luuance on June 14. 1995 and Au�ust 1, 1995. Review of Invesimenu. The Palm Desert Financing Authority portfolio exhibits tbe final pricing rates on the bond deals. Mr. Veazie commended Mr. Ortega and his staff for doing a superb job. C. Trarufer of Custodian Account witb Bank of Ame�ica to Bank of New York. (Bank of America bas Sold ibeir Corporate Custodian Business to Bank o,f New York� The Bank of America has sold their corporate accounts to the Bank of Ne� York. Currently, the City has tbe custodian account with Bank of America but will be transferred to the Bank of New York. 7Tie Bank of New York has agreed to hold the same custodian agreement as Bank of America. Mr. Gibson has submined the custodian account agreement for the August 24, 1995, City Council meeting for approval of the transfer. Also, the city attorney is reviezving the custodian account agreement. Upon Motion by Mr. Snyder, seconded by Mr. Veazie, H�e Committee iecommended to PROCEED with the transfer of fhe custodian account agreement from Bank of America to the Bank of New Yo�ic Motion cairied unanimously. D. Reyuest by Sunrise Development to PJace an APreement vritb Desert Sands Unified Scbool District on tbe Nat Council Agenda (for Purposes of Paymest of Scbool I�ct F'ees on Indian Ridge Community 1°acility Dishict) Sunrise Development is interested in closing out tbe bond issue but in order to do so, they have to secure agreements with the Desen Sands Unif'ied School District on the remaining funds tbat are owed on the school impact fees. Also, before Sunrise Development fznalizes the bond issue the remaining funds on the street improvements have to be used. 2 MinuL�s Finance Committee Mr. Gibson iequested the city attomey look into the street impiovement contracts that weie submitted by Sunrise Deve/opment to see if the City neeals t�n take any action on these matteis, Mr. Gibson wi/1 be submitting to the City Council for final approva/. REPORTS AND ,RFMARKS A. Anv Committee Members'Repom and Remarkc Mayor Crites requested the Committee members be briefed on the Palm Desen Country Club property taxes reimbursement from the County of Riverside. Mr. Diaz elaborated on the situation. B. Items to be Placed on Next Agenda None NEX7'MEE77NG DATE The next Investment fr Fznance Committee svill be September 7, 1995. �!1�JOURNMENC The Investment fr Finance Committee adjourned at 4:08 p.m. Respectfully submitted, ; LORENA G. RMENTA RECORDING SECRETARY 3 STATE OF CALIPORNIA MATT FONG, Treosurer OFFICE OF THE TREASURER SACRAMENTO : . LOCAL AGENCY INVESTMENT FUND P.O. BOX 942809 Date: 07/31/95 SACRAMENTO, CA 94209--0001 Page: O1 JULY, 1995 STATEMENT ACCOUNT NUMBER: 98-33-621 CITY OF PALM DESERT ATTN: CITY TREASURER 73510 FRED WARING DRIVE PALMS DESERT CA 92260 EFFECTIVE TRANSACTION TRAN CONF AUTH TRANSACTION DATE DATE TYPE NO CALLER AMOUNT BALANCE --------- ----------- ---- ------ ------ --------------- --------------- BEGINNING BALANCE - RSG $18,436,778.56 07/14/95 07/13/95 DD 401 SYS $223,672.76 $18,660,451 .32 07/19/95 07/19/95 Rw 402 ATT -$3,000,000.00 $15,660,451 .32 07/28/95 07/28/95 RW 403 ATT -$2,500,000.00 $13,160,451 .32 --------------- ENDING BALANCE - REG $13, 160,451 .32 NO BOND PROCEEDS --------------- GRAND TOTAL $13, 160,451.32 --------------- --------------- SUMMARY TRAN COUNT TOTAL DEPOSIT AMT TOTAL WITHDRAWAL AMT ---------- ----------------- -------------------- REG 2 $223,672.76 -$5,500,000.00 B/P 0 $0.00 $0.00 ---------- ----------------- -------------------- TOTAL 2 $223,672.76 -$5,500,000.00 N F. t- .--+ C � W t�� r:i � w F- � � � � t dy J LL: : P O� r- w N L+- U C� � ` � y -� c� ~ ` tn � �- � cc� : �.,�.� SIIMMARY OF INt/ESTMENT DATA FOR THE POOLED MONEY INVESTMENT ACCOIINT A COMPARISON OF JULY 1995 WITH JULY 1994 (Dollars in Thousands) JIILY 1995 JULY 1994 CHANGE AVERAGE DAILY PORTFOLZO TOTAL $25,964, 477 $25, 654 ,493 $ + 309, 984 TOTAL EARNINGS ON ACCRUAL BASIS $ 131, 346 $ 105, 087 $ + 26,259 EFFECTIVE YIELD 5. 972 4 . 823 + 1. 149 AVERAGE LIFE OF PORTFOLIO ON THE LAST DAY OF THE MONTH (IN DAYS) 296 457 - 161 SECURITY TRANSACTIONS $37,756,872 $23 ,212, 049 $ +14, 544,823 TZME DEPOSITS $ 72, 190 $ 35, 570 $ + 36, 620 AVERAGE WORKDAY INVESTMENT ACTIVITY $ 1�891� 453 $ 1� 162, 380 $ + 729, 073 NUMBER OF SECURITY TRANSACTIONS 851 527 + 324 NUMBER OF TIME DEPOSITS 7 20 - 13 AVERAGE PRESCRIBED DEMAND COMPENSATING BANK BALANCES $ 150,796 $ 218, 107 $ - 67, 311 FOR SERVICES AVERAGE PRESCRIBED DEMAND BANK BALANCES FOR UNCOLLECTED FUNDS $ 119, 587 $ 240, 618 $ - 121, 031 LOCAL AGENCY INVESTMENT FUND* SIIMMARY OF ACTIVITY JUT,Y 1995 BEGINNING BALANCE DEPOSITS WITHDRAWALS MONTH END BALANCE $9�436� 669� 939 .37 $1�309�928� 194.25 $1,187,543�584. 07 $9�559� 054�549.55 •Local Agency Investment Fund Invested Through Pooled Money Znvestment Account State of California Pooled Money Investment Account Market Valuation 6/30/95 ra��t��s ° � ��a�tc'�aY�ae�w� ; �st�ma�+�d = , ' a�z 3n : • : . �i : �,�.. ;..z <R<S....;:. , A��ru� lrtter��i Purch :; �f8rk�et 1l�Iile . . . <; Ac��ti!n#er�st.; United States Treasu : Bills S 1,234,435,312.30 $ 1,272,813,611.00 NA Stri s $ 1,261,015,500.00 $ 1,397,328,300.00 NA Notes $ 6,146,942,279.54 $ 6,072,085,781.25 $ 96,083,660.86 Federal A enc : Bonds $ 172,025,401.42 $ 170,535,765.38 $ 3,334,577.47 Fioaters $ 219,943,129.80 $ 217,496,875.00 $ 1,623,856.75 MBS $ 184,338,03520 $ 179,335,652.62 $ 1,087,079.07 NA $ 125,499,061.71 $ 125,570,318.75 $ 3,195,137.18 GNMA $ 31,467,559.22 $ 30,849,038.16 $ 202,514.80 FNMA $ 5,157,621.71 $ 4,989,754.03 $ 29,396.00 SBA $ 70,041,586.35 $ 70,653,728.25 $ 828,324.46 FHLMC PC $ 43,397,005.72 $ 45,414,586.73 $ 696,940.90 Discount Notes $ 888,237,683.18 $ 890,054,435.62 NA BankersAcce tances $ 1,616,484,442.62 $ 7,636,675,559.15 NA Co orate: Bonds $ 1,269,784,245.99 $ 1,273,267,053.35 $ 23,525,372.76 Floaters $ 541,172,667.40 $ 540,370,912.50 $ 3,661,434.97 CDs $ 5,354,041,154.94 $ 5,354,041,154.94 NA Re urchase A reements $ 792,670,000.00 $ 792,670,000.00 NA Time De osits $ 272,290,000.00 $ 272,290,000.00 NA AB 55&GF Loans $ 395,817,239.00 $ 395,877,239.00 NA Commercial Pa er $ 6,373,796,440.13 $ 6,373,796,440.13 NA Reverse Re urchase $ - $ - NA TOTAL $ 26,998,556,366.23 $ 27,11fi,056,205.86 $ 134,268,295.22 Estimated Market Value Including Accrued Interest $ 27,250,324,501.0s NOTE: Certificates of Deposit (CDs), Repurchase Agreements, Time Deposits, AB 55 and General Fund loans, and Commercial Paper are carried at book value, Z Z � u. _7 o v D � v � m � ; � � � 0 0 � � H '" Z y N O D c;i T � Z V � � n C '�..: v ? tG O 1 p � z { � < � c. C �. V y � � � N � � A r � �'x" Ol N N d► (A N N M M M �� r ;: � Gf �. d v' 'Z N ��>.;.'.;a,..:'�.>:: fp m � m � N tiQa. o -� N oo N ea V A V V m:; N . O � Cn o0 0 0� p A N �D o �C: �ae�'C � �• C � e �' V t0 G11 00 N O O �E F4 H � � � � � .?;.�'`� �s:.c>.,..:. a � N H N N N N N (1� ��'�^'��"�`�'�'�"'� � �p � '�a�::i."2�:�W::z �p a fD W � � ::O:�o?%;�$sw;s N1 '�w �r "r (Np -+ OD U <JI W N y�^"S�b y�: � � O � A OI V N W ONf CN71 t~D (NJI ��g-. •. ;x4.Y.+�.�$' � � e y.��:,,!:,:F. �5:: , . � ^,::ku��t:.�$:: a . �. u. aw «� d. r.. en �o:` �'��C1; A � w � .� O�cs ..r�*: � .r "` D °' � -+ m w ti w � m�u n''` � G e ee u a a+ w ei w .a�'��z'� � . T fN � e W A Oo W Of o> 01 �% a ah�,<:� ry T !� y3?3:,'AS�,�,' <�i'>:: [��n�vn�Y`�hlC: / 3 7 N N N N N N N N 3�R °� \ c r.� � Q;��,�'�p'�. � � � O � O Nf IV �a � N �F#�;W.i:: � C � 7O�" � U A V fw71 � O ONO O �3�`. �M � m < �f � � Of !A N N N N M 6f^�� ,^ C :fJl::aFx:,:•::Ic1i.�< � V/ � �'r.�b".': rt w � � O c 0:�; � � H w t�'n � � co �;°�S�° y D �i�a�� : , � h �w en u� u� :i.��, .�t..: . � u ODw�d"��` � C 4 ��Ws � N � �'`C L1';: /� � A OD N O �-"��z°�'�: � e V Cn O tD W �'r N �s: � Z '�3�7 � . .. .yy�'he¢ x. ^ . 4► H �:1...<zY.:a.^.< O Y/ :.t:�,<'9 Ck. . Tn'$�YR NW � +a:°Hss n:f y � �i J �'� k {VfR' � e U U ��i�� . O J.�'. ��F.i d r H� v N H H N N,��£'x� . D .a J Qatrk'1"W ' v W � � 4>3!. 0 m CJI �O �II IJ � d'�.ts�)`��3'w5. � O� V tD O �a�.��..2'.. �..':: e �� 1 � ��r.. e� u� a u� e� :��I �_ � 4� , , �:5��,W : N Z �>�.,.o�:.�t � V IJ W � �. :ALt:e�i '..Oli��"ikR�,' $t? � \ tD Qf hf tD O :T$i:o�"oj.�','�':�: � e O t0 U1 Ql O �Y�mx� � S,�s�. ::i..;�:.,„�s?d's: � N M M N - :.No,�f.F r�>;�;:<�^. T7 � � m o + OD Of Np, e0 W f$'Qr�1:> O. O fll Oi N N �:��r�'�'x^.; e � n� o ;,,�.,€.�M�r<"i�:; 3 . :g:",��%Y3„"!' O '� H M N N :;:.:�,�;:;b:u;i: � 'ilil:s:� �>i �p e�:�"'.':.?.: N � y..«..:!Cr. . `G �c.��s�m m � m w V Ct#u.��.�Cf; : � 7 � e N t0 O � ��%:s&��s"a N '��G;"= 3 N N N N �3^��` . ' N �.f N �::ss�'"`s� 7 Oo O � w � :.O-i�:ti��9i�y1y:: D e W W fll V1 ??S�'��s-, {7 3��3�#u,.�.,: O H N UI��x�.; . 7 �' ..�.��..: .�. w��:�«< a;s��=�w < � m o�o -c'�:<a'�a„�:?�:�s<:; C '�.1!��FS:i::i`i[::?M3::. . STATE OF CAUFORNIA MAtt FONG, Treasurcr OFFICE OF THE TREASURER SACRAMENTO ¢ . LOCAL AGENCY INVESTMENT FUND P.O. BOX 942809 Date: 07/31/95 SACRAMENTO, CA 94209-0001 Paqe: O1 JULY, 1995 STATEMBNT ACCOUNT NUMBER: 65-33-015 PALM DESERT REDEVELOPMENT AGENCY ATTN: PAUL GIBSON, TRfiASURER 73-510 FRED WARING DRIVE PALM DESERT CA 92260 EFFECTIVE TRANSACTION TRAN CONF AUTH TRANSACTION DATE DATE TYPB NO CALLER AMOUNT BALANCE --------- ----------- ---- ------ ------ --------------- --------------- BEGINNING BALANCE - REG $19,932,848.07 07/14/95 07/13/95 DD 402 SYS $339,006.36 $20,271,854.43 07/14/95 07/14/95 RW 403 BW -$271�854.43 $20,000,000.00 --------------- ENDING BALANCE - REG $20,000,000.00 � �� r� � � w �., � <<� ;'- w `- ia c E � � � J W L � 07 w N t._ � � • -� r ! � � � J t." � 1.�, ��t�-'� STA7�E OF CALIFORNIA MATT FONG, Tmosvrer OFFICE OF THE TREASURER SACRAMENTO ; �y LOCAL AGENCY INVESTMENT FUND P.O. BOX 942809 Date: 07/31/95 SACRAMENTO, CA 94209-0001 Paqe: 02 JULY, 1995 STATEMENT BOND PROCEEDS ACCOUNT NUMBER: 65-33-015 EFFECTIVE TRANSACTION TRAN CONF AUTH TRANSACTION DATE DATE TYPE NO CALLER AMOUNT BALANCE --------- ----------- ---- ------ ------ --------------- --------------- BEGINNING BALANCE — B/P $4,000,000.00 B/P ID: 8902071 MATURITY DATFs: 08/07/95 BEG BAL: $4,000,000.00 END BAL: $4,000,000.00 --------------- ENDING BALANCE — B/P $4,000,000.00 --------------- ENDING BALANCE — REG $20,000,000.00 --------------- GRAND TOTAL $24,000,000.00 --------------- --------------- SUMhIARY TRAN COUNT TOTAL DEPOSIT AMT TOTAL WITFIDRAWAL AMT ------___.. —^--------------- -------------------- REG 1 $339,006.36 -$271 ,854.43 B/P 0 $0.00 $0.00 ---------- ----------------- -------------------- TOTAL 1 $339,006.36 -$271,854.43 SUMMARY OF INVESTMENT DATA FOR T$E POOLED MONEY INVESTMENT ACCOUNT A COMPARISON OF JULY 1995 WITH JULY 1994 (Dollars in Thousands) JOLY 1995 JULY 1994 CHANGE AVERAGE DAILY PORTFOLIO TOTAL $25,964, 477 $25, 654 , 493 $ + 309,984 TOTAL EARNINGS ON ACCRUAL BASIS $ 131, 346 $ 105� 087 $ t 26,259 EFFECTIVE YIELD 5. 972 4 .823 + 1. 149 AVERAGE LIFE OF PORTFOLIO ON THE LAST DAY OF THE MONTH (IN DAYS) 296 457 - 161 SECURITY TRANSACTIONS $37,756, 872 $23 , 212, 049 $ +14 ,544, 823 TIME DEPOSITS $ 72 , 190 $ 35, 570 $ + 36, 620 AVERAGE WORKDAY INVESTMENT ACTIVITY $ 1,891,453 $ 1, 162 , 380 $ + 729, 073 NUMBER OF SECURITY TRANSACTIONS 851 527 + 324 NUMBER OF TIME DEPOSITS 7 20 - 13 AVERAGE PRESCRIBED DEMAND COMPENSATING BANK BALANCES $ 150,796 $ 218 , 107 $ - 67, 311 FOR SERVICES AVERAGE PRESCRIBED DEMAND BANK BALANCES FOR UNCOLLECTED FUNDS $ 119,587 $ 240, 618 $ - 121, 031 LOCAL AGENCY INVESTMENT FUND* SIIMMARY OF ACTIVITY JIILY 1995 BEGINNING BALANCE DEPOSITS WITHDRAWALS MONTH END BALANCE $9,436, 669, 939.37 $1,309,928, 194.25 $1,187, 543,584. 07 $9,559,054,549.55 *Local 7agency Investment Fund Invested Through Pooled Money Investment Account State of California Pooled Money Investment Account Market Valuation 6/30/95 ��M'l�l�� ' x } a � �W41S�R��.1pi!''U� 4�','$t[Al�4$l�. � i . 3: i>�3� �1'�`Y` a!'E':�'ry' > .'��'�uet� ldtcr�st Purch �: .. �IarlcetU�i�.� �: AcCr�tlln�rest�;� . h3.r.f"gv?s f.�..�... ,. �, x:..o i .. . . ;... . ... .. .. . .... .. ...,..: ....... .. .. ......._.. United States Treasu : Bills $ 1,234,435,312.30 $ 1,272,813,811.00 NA Stri $ 1,261,015,500.00 $ 1,397,328,300.00 NA Notes $ 6,146,942,279.54 $ 6,072,085,781,25 $ 96,083,660.86 Federal A enc : Bonds $ 172,025,401.42 $ 170,535,765.38 $ 3,334,577.47 Floaters $ 219,943,129.80 $ 217,496,875.00 $ 1,623,856.75 MBS $ 184,338,035.20 $ 179,335,652.62 $ 1,087,079.07 NA $ 125,499,061.71 $ 125,570,318.75 $ 3,195,137.18 GNMA $ 31,467,559.22 $ 30,849,038.16 $ 202,514.80 FNMA $ 5,157,621.71 $ 4,989,754.03 $ 29,396.00 SBA $ 70,041,586.35 $ 70,653,728.25 $ 828,324.46 FHLMC PC $ 43,397,005.72 $ 45,414,586.73 $ 696,940.90 Discount Notes $ 888,237,683.18 $ 890,054,435.62 NA BankersAcce tances $ 1,616,484,442.62 $ 1,636,675,559.15 NA Co orate: Bonds $ 1,269,784,245.99 $ 1,273,267,053.35 $ 23,525,372.76 Floaters $ 541,172,667.40 $ 540,370,912.50 $ 3,661,434.87 CDs $ 5,354,041,154.94 $ 5,354,041,154.94 NA Re urchase A reements $ 792,670,000.00 $ 792,670,000.00 NA Time De osits $ 272,290,000.00 $ 272,290,000.00 NA AB 55 &GF Loans $ 395,817,239.00 $ 395,817,239.00 NA Commercial Pa er $ 6,373,796,440.13 $ 6,373,796,440.13 NA Reverse Re urchase $ - $ - NA TOTAL $ 26,998,556,366.23 $ 27,116,056,205.86 $ 134,268,29522 Estimated Market Value Including Accrued Interest $ 27,250,324,501.08 NOTE: Certificates of Deposit (CDs), Repurchase Agreements, Time Deposiis, AB 55 and General Fund loans, and Commercial Paper are carried at book value. _ ' y�. $x OD m o tr�,.��..�s',�O: � N O - �NasA r'�^; #w��. C xv,�•'�x;"� ::i'"�''3�a"QS 7 s:.; �5..>� N H �� '"b�:!a's.:'::.:.: V :;o..>. Rt�< ?.': V %:K`.„sa`S�``.y:,.�; N iA 1'7 {") o Q ik��:`ET��: h M � N 00 r, ?�R:i`''"'�"i�.4fi10; O � C . _i. .iy:y; N N p�� > d ,:,.,:<...$a� � +.<'�'�'i?i;s 'a: N N VP. H . � +„ w:. a � i1�;�S4:. �,.�t e � . W . s;e�s,o5,.` �� 10 O Of 1n e � �� :: h �'7 a0 W a0 C :�{Q:s?;��1p� �T M N O T :'.S�.�s.i'..��.MM'.�.r..ay�i � N 1� y a:.ot;. �'�`::��' H H H N o '�I��< a� .�,,,;�.._ � ,,��,��w..,;,�,,,>. o n e� n e � �p ::;y��3:.; �C7 N tD Y7 O d ;�. ,�..n: N,: O� t0 OD � O W ��z. y,�:." _ � N ;1.�:...o..:'•:.;. c a .<:�<�. N, a � ...... :� 't#�..g�,� �'y. M H H M . � ,. v, �}�,, ,t' ;a°">'�-.4.:� o cc u� rn o e � ��'�`3'�' e�- � N N A A Q nti{O:L�D''},!.. ,�� : .;5�'..�..'�.^S'.��.,,�� :�>::,:R.r<>�i,•,; �....�� t� N .r ,��..:.:.;' . Z y, �.:s.:��k;i.„ w w w w w Q � .;.c�1::S5�. .,. :z'.�.£�3� £,yiE>Y�ii: e . �,�� O 01 I� t0 e W �W� �R. � N N O� 1n � O �'�Oc Q>w,tLF'; N � M . Q � �� Q '�`e�` ��srb< :.,��.�'::� ;,1�; �(y. N H H N . �F ��. .i�>i � O "�`�,l..x. � ,p:as:;;' x;;51:.��F<3F� tn N e � :s::r'i4.s'� e- � O ��: m C �f°'�� ° �.:��,.:� :; � ;�<: ,�:. : f 1\ — ��; H N V • � �,r�� . e. Z � v€�.^°�tlJ: M p� \ � �.�5'�as:n,;.� O Y�Y W < r � 19.:� � W: e- N G��..�5`i��+f'�T�' ' x��3�. � � 3�?.�'w �; N N M YT M . .w.�,�'�,��:, � y ''-'�^�'�� e ; .3 ,�. � Q .�:��q<s. Y7 � � YY M N e �y'�s�?i Ki � cV h V � � � :`�{0`!:,?:• Ri:; � � M '�';�::t::�s�Q;: . � ::.�::..;:;'�r;4,....,. Gi N .L .ww1�^t3<�.:: � � :�2:��''.�ti, 'I,T.: N M H M M N {p °�pM��s,�'F.'0..�`.' � _ � '��'�t�g?>�? O a0 O � h 1� V Y9 e Y :4's�'�'�3'�a::N O N O � M N � r- A p C q,: � N e- � N N O � O O J � �� N ° ��ty; a = Q ��a:,'xi�:; ... C ` :�%5�� ..:��:: N M N N N N N H C G / ibF��ts:r"^•.; ` a+ /�/ ��.t d!� M t�G {`�7 < 1n 1ry QMi {7 � d rr ��.. � �i6-�.�Tld._ e- P1 A M f0 r a Q �G:�ar;c� .:: � � t+l � Ci :�...� �;: a �:��c � � :�. �� d ��n��,`.i.,.f.: H N H N N W H 9 :�iY. �Yi: d L r/j�'��Y'`y�' YY T Y1 t0 W h h tD e C v ��N..u>... N P YJ N N CO M � �V:y�o. ?h iV M Y9 In aD e- d w ;'A�::�.� .r{R: N N �:.`Y�`SiY.Y�'.�n�,•��,1�,,; � � M ;:1.v:,�a�:up: � y �.:. � 3:3:.3:3F:�7.t N N N H H N H V! fl. 'fl O :fy�8::?iS%a�: �i�5i d C :x_::;:� � � � ..� ..�.��cp.<,� to ��'`'�a>,�`�'#E:y� o o�i N 00 1f1 N A '�7 e d 7 � �� 10; h 1� � A W N 0�0 N R L � ��:...+.!:.a�!: N � �D N � ^: a� d � J :.(�:: a :"�.':;:g:.�' � w w w w w w v� � en � 'o s c_ � J ,a Of � z � ;..��r>.;:y;:,:¢s Q: � F- et F, p � � 'x O Z O tr U a :� t r ' v�i „� z a ~ "' w � ti � �. swo^��: W d � N W N N � � w w e^3X2`�f"'�, � � Q � Q m V V �..� w a Z Z ��► First Trust MatCw�w P.W�pw Esawv�Ye�Ptiwern � . � . CRpuW TN�I August 28, 1995 . First Bank System, Inc. (FBS}, a regional ba�►k halding company headquartercd in Minneapolis with approzimatEly 333 billion in assets, takes pleasure in announcing that it has signed a definitive agreement w acquire che wrporate trust business of BankAmerica Co:poration. The acquisition requires regulatory approvals and is ezpected to close by the end of the year. FBS provides trust services thmugh its affiliate, First Trust. Afttt the acquisidon, First Trust will provide corpocate trust secvices for approximately 8,750 clients with 26,500 accounts, in the areas of municipal, revenue, housing, and cocporate bond indenture hvsceeships. John F. Grundhofer, FSS chairman, president and chief �xecutive officer, said, "Corporate Trust is an importar►t wre business for First Bank System. As one of the nation's largest providers of corporate wst services, we have broad experience in the business and in integratinQ coiporate husc acquisiaons." First Trust has bcen in the corporate t�ust business since the mid-1960s. CurrenUy corporate trust offices azc located in Minneapolis/St. Paul, Los Angeles, San Francisco, New York City, Denver, Milwaukee, Portland, Seattie, and other ngional locations. The e�sting Bank of America carporate trust functions in Los Angales, San Francisco, New York City, Pordand and Srattle wilt merge with existing FBS offices. The aCquisition will expand the FBS corporate trust presence to include offices in Chicago, Dallas, Phceniz and Las Vegas. Enclosed for your review is information on First Trust's Coipo�ate Trust services. We look forward to servicing you in the capacity of First Trust. Please feel free to contact me at any time. Sincerely, �� Matthaw P. Wagnu � oiema Memher First 9r.n4: 4�stem - �1 F'irst Trust � FIRST TRUST COMMITMENT First Bank System (FBS), a major regional bank holding company headquartered in Minneapolis, provides trust services through its affiliate, First Trust. First Trust is a premier provider of trusteeship, paying agency, and custody services to debt issuers both foreign and domestic. Types of bond issues administered by Corporate Trust include rated corporate securities, tax�acempt securities, mortgage and asset-backed securities, and high-yield corpordte securides. First'IYust's corporate trust customer base includes clients ranging from small municipalities to Fortune 500 companies. FB5 established its corponte ttust business in the mid-1960's to provide debt administration services to corporate and municipal clients. At year-end 1994, First Trust administere� 7,165 municipal or corpoiate wsteeships representing 5183.6 billion in principal amount of securities issued and outstanding, and an additiona15,348 paying or transfer agent debt instruments. Upon completion of the acquisition of BankAmerica Corporation, Firsc Trust will be the largest provider of domesac corporate trust services as measured by revenues. The acquisition requires regulatory zpprovals and is e�ected to close by che end of the year. 1fic staff at First Trusi within Administration and Operations are well diversified and highly experienced in the administration of debt. First Trust vses a team approach that has proven successful throughout the corporate trust network. Our team approach consisu of a senior adminisvaror, assisted by an associate administrator, and a debt management specialist. 'I'his combination assures a high degree of accountability and gives the client access to more than one person who thoroughly understands their account. Our shaff will e�cpeditiously review documents and has done so in order to meet transaction deadlines in as little as 24 hours. In addition to the dedicated team, all adminiscrators have a designated senior back-up to , handle account responsibiliUes in their absenee. Firsc Bank System is highiy committed to Corporate Trust and has a demonstrated record of investment in this business line, in terms of technology, people and serviCe. We will continue to maximize that momenturn, so that our customers may feel secure in the knowledge that no matter what type of financing, we at Fint Trust ue working longez and hazder to put you first. F�irst Bank Sys � 1994 Annual Report l 10 ' " � •�- '� }W �i�'"i; �""' R . : . �� `iah"�F- i:�� _ Y `y�`.,^ )lY� ..A'A . e.�`�� :l�i`&.� :�+. '. :�f ` �`, : �i\r, .� y:. �' � �I: a- C 1 �Y,. . _i�.. , �•Y. �;1.' 4 e,, � : • p• � <.R '�rr' �yr - � �se�' 4'n�' r ��,{�{ �.�,� �t>�uijy.y�`< �". 1��.� r i y}��{ ¢,. }y 5'�Dtrkl} 4' .b P .� d 4�, � �� 7 .Y� '` t �.� « , �' �� .. h � N T . . v"f.•'sd l��3'.r��r ra .�� i �� 1 ��. ,. ��"'��i'�s ��.�} ��rt.�V �e . , . � ,. � �.' ��..�+.. ' i-��, . . i �,; , � J':X+:�'I � . 'A v'y I 4.I ' µ* . . . _ �•.i��'�� C�rB i0i15 - A�.` r "I,y:...A�_: Y S+�! :.rZ�..)i�.i l rn) i ` �� 9�l�P'.'� — II — , �� '�� i .y , ' — �/ , I Yv �1 :i i �}I � �,y� 5i� ttl.: 7 � . _ :lig� Q. ., . . . .. . . -. �.:.�i�' . .-,� . ��f''� A6out Ibc Gunipnny . - "�`,-';� �ifSi�1.:9A:>1'SlChi. Lic..(Fti'�1 C.a i��,/�lntil I:ar'�k h.nldin�rnn��;.ruy unv.uy 11 Pl�W�:^.I.-iC .ritl ��kCC4.V Mu�nUlm sl�ta�:iNnu'�h mni P�h�i -.iy�IprdPwn.� I L.rdyue�rlere:? n Mn r .,i,h��, -HS i,d� �FiL l.iryt I ��V��i i �I ba',k h< rtinr��;pm�a� ni Y 'p:iC 1 'Jlr n n i ., Uu' � ��'�✓ nm�k< tv�Phaln �r�ii;nr.ir �� i1fIL. ai �n �u n W ,,. ,�,�,� � � _,��_ � � � r_«,�,.�u i �. r �� n��; '.'r��_ �mtnaren�uJnii��:6_99� .. _,,,9i_ � Ir,�.�Y� . I ��ei,� ��l �� r '`.,y._✓.r-,�, . . 4�.i.t�� (!�1F �1 �"': FF�SItJiIVu .rttusree�:snS�n,�,lCilnurP�Cal . . iln�,�i ,�'in 1 t.: . . . . '.)':;f�llf �-' tiF�liF , t�iil Iwrs �lqrhark n�i(r,�n:'d;� I ��.I:_„Jr ; .nLi.l �..I,:i. . �.inr:c[of uu r,,;�.nn �. r'�:yG�n ., N��' .v � ket. Wl'��Z „ I�dJr� in r.ir:un i�r E ay.,, . -q..l,.h. . . I � �i,�V��n'�, i.r� �[.i.wr Jf .�:1 �'��,ktr,, • �,rnFOrTtEdfl(1f 6 �.'e�ni�.iJ�, .u�.ile.n� • .��rrr.�blariin•�rt�..•x" - r�(`.:�,. �il `.ti�_�._.�_„ �! ..;i� irar e�f��'.Uu � i un��.�n r V � ��:�:. 1� J.1nr t �i � r , . I � � rtul� n - h r , inin< it �1 id� i nn�.l i � I ul�i b t1f. n Q rt . ,i!I�fr I �-� I ��q�,i, fai� t u �. ..vi� iu nt�i -i�F � �r'd 1 �rni ..� . � �._ �� ,,�a 7 .i�_r.y ! �, .i ' �aI, - � . J[vi a�r r hov,-� r i :on. � t� �. �_�� t N Vr'1... {l�.. J�. , rilli�io ,� i t[ I .: -•� � ' � TI� �iiq�.��.� .{ . t (L �:;, . -J�'�, . I ;4.�r��b��i " 1'1".: :�rn �� - . itu ,•IniHi'd:�.�� rr�tl'irl��.b.r„`�'. '.� l�i �. n "P•; .,, �.Iiul.�,n _e ,� .t..r...if u .,� � �� Wt ' I n"�t�h Y.wtnrl� �nUadE��f l_ ��Ivn . i � � . . .,. �� .��1. „ F -�.�,� i � ,I�u�, _ � . Fb1r.I��IL',� �� D��.il'Jr:' Y) r. L1-�C�. ! . li . . �,.�,�b L ,. ',u , r � rii I -1"�. :-�1 'rnit� a;{y � � � �� '�',�p� ,.•v ' �� N i ` � a��^r � y�'.- ' 'A 91 Y[ tU N ��& im�.�.. y.,�''�l ' ... 4(.. '; -.�".i � - - � �; �.w.. �,. : l►we�Aw�p• aww. E.: ��: IP�rcw�d �� mo6�ni.Mewn.Gwc�h�sivr.+Tewnl .�. Mp ns7wt � � FM�YV��r � � � Inmm�h�fontMipmtel�ce4Cnerges...... .... .. ..... f 41L1 i �tlu 20-6 I. ' Mmrg�o-nlamd G�ergea... Iso nl . { Necvrcomo.. . ....................... ..... t �1l.B S 299.0 409 . i � � , �u Lanwo�7�u■ � '. 4 Incvme 6e�u�a Nw �aroi+ned Charyes ... ... ... ..... f 7.57 5 7.e.7 18.� 9 � 1 j1 ' MeNcr AC{J10C CMnJ�R......�......�....��.�,...... � 1.44) .. E I Net Irvnm� .. t 1S7 S Z.SJ 49.4 : .� � : Oivitlmds P��tl ..._ . _ . _.................. i 1]i S 1 00 t6�0 � Common 5►oroMIMrR Ktyiiry ..... ' � ................... f n.a! S ,A09 6.1 � ij 14h�es AAnpt AtNb . � Bulae Meryerrelated LNr9ec ....................... 1 R7% i.7616 ^ �� ' M��ger-related Lhu�s .................�.......... _� 10.�91 •• I BRciMCYN�tiC' ; RmmnanA�er�qeWsals...........................�. 1.Ori. L1)16 •• lPero�Ml y �� S Il�men■■Annp Cmwon EqoNf ' ..... .. � 19.3X t6a�6 ^ { � � .... ........ �'� �� Me9erMe�etpukdShu9r, .. .... ............... — iZ61 "' I . � PCtum m Averag�W��n Equitr............... ..... ti7% 13.B% " � � NN htemt Morgm......... ... ... .. ... . 5.2l14 5.07'x u j Ellicimcy Ilatio hclae Merperre�ud Chargec.....�.,,.. 67.t% SF.Ak •• a' ' . il r Att��rEM � � - �: i Wans........ ... . . ... ..... ....:...._. it:4711 S1B,779 2.7% I ` .:� � CllavrontefaGred"nlnenan.........,..�..��.,,,,. 01 d23 Z.0 �, � ii Asx�s....... ......_........................... %X�Y 2fi.395 I.U) <. � TOU�unarerolEers'Equiry........................... 2j76 2,2�5 .. , . .';. CommnnEquirymTocelA�ets ........� utc 7.5% .. .� �Sh�rohalders'tqudY to Tobi Accros ... . .........:..... �.7 B.5 .. Tip 1 CODimI Rmio..... � i.� 9� '� AlIOWanC� � Tovtl Rrk�hased Caprt�l Aain.................�....., t=.i 17.3 " . f. COWf�01 Na110 •'�b�wwunpna . .- � dNoap�Aamiw - i; �� IPere■MI .. � lr�.�,.�to5narchoiae�., � � he:Yq2nU2'; 4 F h'.+..�.iyeii�ea;:0i5[e55�qn&Mm`Ytii 1: � ,,,��gpSA3r�ry�finanrin;SttLinBnti 39 r1 - fl.��irir(�nnrnlilLlitlFl�?f1C315f2leiue�.'+. /''' �.. �� — � �'� ^�reti'yCDnS�LtlaLC��nB�H;i:il�dl� '1 ._ . i p Y. 7P. Y �' . ....��011irnr;R OiffC:�fS t`� � ,3c i,�caiinns 83 :{.'. . ��':JIB'.2'JAl? �" {'.. •idan dN tvw�w aNaet� asoWipi01�Y1�IflNVarmfpw. ; . � roumwryrnt992and�497. ' VL. V� rYJ 1J.Lb VL1J JYJ 1JU♦ vUh[ . lnlJl �OJ1U �JUUi whwn I think ebout the prowth proepac[s far Firet Bank SyFtRm. I am npcimi�ti0 b9C.7UfiP w9 daiv@ lremend0u5�Bv¢fs9C frory��our abilky ro increase revenuas epmnst a low cost structwe. Whik this formub for e9min95 prowtn Is simple and avnigtnfawerd. tlevek�ing the means to execute it it not pvertne paat sevval ymars,we have buiit an inyra:nxi cos:control d'+scipline Met�auses on valua in ench decisiun. SVaty,fae-penerating paymdnt SyStema hu5in�.sses complemett OUt co�e benking franchise, Our retail banking paradigm quickly brinQs new prpducts to market thraugh a muhiplQ d'Istributi0n System attaned t0 Customgr ne9d5 Inn(,watipn,ApH2ti, and productivity p4r- ,�+. � :`�rt.:as'�'�r q��=:r;. [!�a IT1232@ Ouf CVlp,lf9, t0 ShBt OU�S[MLM�IC ACV7ntaqes tlanslii0 m!C deNy aCtian. � :al9i'^:t:.,•,L` I•+[':2�'� +111 f . d A5 WE hSVE Sald CM515[enLN pV2'[he pByT tivR yE8�5,We Shrv� fOf pfOfltS.�Ot S�YE.W�haVB bUilt ShB�Bh01dE�velG!enaNSSs mt0 OUr bUCgiUng end mei18g2treni � Sr�,l�;� . ..,rut ".: ��,�a�.:� �� proresses.which provitles a tliSCiplin9tl mothotl for ellocetiny resoumos to hiph�rowth busi- , _ ..,. , -.. ..� ... .�.,, nessas Our g�i i�to n�tim a quairty earninys stream—one that comCinQs stabiliry and divaroitY— i co wQathQr any industry ar ecvnurnic clirnela. In sL•orl we a�e m8n2yiny FifSt 6dnk SySTem io be a � . . .ni.�dr��. � � ' � s�perior lonc�temt invastmsr4. ! i Our shereholtler focus 3bp quides us in decidnQ r+hat we won't clr.+ we wr,n't play Me yieid � i . GUNe WRh hEtS 0�thi CJifQCti011 Of I�W�@5�f2iHS�5Bvaral bBr.kS that did werg hurt ihis past yCt1r � 85 f8S8S CIim�7Pitl• NOf Will w8 IT1CkC BGqUISRI0f15 LhOt dGn'T iOiKi�GpnpmiG 0itn3tl ut dwi t CIV�I�' � va�ue for exis[ing i DS�hareholdere.The panalty ior ovar,�ey��ng for acquisitions is ha�sh�nd IOnq ' Rrs�Y�er Total Rwia• in te�ms of InFt r,�gn�tality antl tliminished fin&ntial pe�iormance. � (P�rcurc} i m FirSt 8?nk System is sustainirp prowth in two ways.FifS6 wB if6 , t�� lxps�d�n�i^'»rkei sham m key sapments af aur core hankinp�usinesses,whicfi uperdta in E � !� !eQion whare ompbYmant, houaehold inoanes,and loan delinquQncy rates arc better than the ,� � i nat+onai�v�regas.Eor example, our portfolio of home equiry loanc has grown an dvertc,M of 76 pery � cent annualiy ovef lhe Ws:'(ivC y?�ro. LoanS t0 Smbll-and mEdi�m-�:zed bUsine5sas havn achiaved ,� sUonp incieases Fur thr�e coriscitutive years.The tremendous qrowth of our woritlPerksA crr�dii Card bus�nes;haS crp�ted huge croas-selling opport�nities� Irn�estment produGt Sales■re yrowing ( r�pidly. Innovative new prMuc�e., imprnved ra.ig�nmer service, entl a devefopinQ sales cultufB � shou!d fuel co��inuBd maiket shere growth in these coie'�ush�esses. � NBw busin�sstt ar�contriLw�ing en important secund gruwth strc0m. In just five years, we „ rumrd ou•corporote and purenasing eard buslne.se-from te�prcduct� into the nation'6 Igrgast `lisa isbul,5. MEfCh2nt proCvssirx]ContinuEs tn t�row r�piply, pla�inq Fir51 Bank nationalh/amonp � - F95 Me industry's largest prOwtlCrs. Fhls report inclutles separace f,nancial information on Thase ••� SiP500 ir�cr�sinyly imporinnt payment syEtems products.These end other fae-genereting buSif�5S85 . �w�°B^M�+B accounted for more than pn�rhiM of a.r total revenue. � WooW S4WN�intlu � i •Cepiul�ppnti�lien pWa Jividends. I I 2 UN/ U/%NS 111LN �(�L1J JMJ 1JUd \Un( . �A�J1 �'vJ1� wjVUS - -- I As for acauiahions, wo're corrtent to W��for the�ght npportu+ity rt tlw riqht prica. Blil once we make a�rcquisition,we mo�+e awckiy.Thanks to our ssandardized pruducts antl centraliied - operations, we atl fU1W iMegrate en acquitBC tlenk's products 6nd operations with our own mueh ,- faster ihan atnlr Ganks. For exempte,we will complata the intogrodo�M the S8 biu�on-asset � Metropoi��n Financal Corporetion within just ono morrth of closinq.SpeedY�nupmtion mearts we achieve a higher ievel of cost takeoun a�see the resuhs fasur than othar banks.We w1�1 cont��e te pursue value-cr68tin0 acouisitions Mowevcx,rf acquiaitipn prices are too high,we��i simply continue m buy bxk stock,�ncroase dividends. or both.Durinp the past two yea�s,we have lnnooation,specG.arJ��rodu� repurchaaed 5700 mAlion of eommon and prefercerl stock. In 7995.we inCreasetl the divicend try 25 psrcent tD Si,Q$pet shnre, end 'dt1hOJ�Cdd OIJf IRS6lI(IDR t0 lBpUh'hdSB 1 B fl'lIII10�1 ihifi5 Of hvity permca!e our c�hure.sn common stoCk tr/the end ui 7998. thatos��:��u��g��aoua-caass We h�va fonified the expense.n�do of our leverage equation wtth standard- var.sls�e imr dai:v zctioa. izad producSs ard�ntralized opefatlons. BecBu58 wa support virtuelly all ptoduCtS with a sinqle SM Of SyStem9,w8 Can add siqnitiG�S nEw business while itldinq IittIE inC��m�ntel cost.Mother ksy flCtO�is our mmperisatiun SysSem,WhiGh ties pay io profitanle revenua gene2tion.All of ou� � .a emptoyees aro eligible}or variable pEy,�nd neprly a hf[h of our paopla hive a subStGnt4il pqrtion oi : . their towl compenSation besed on tfw pefformanc�ot F95,their business IinA,snd their individual reRults. In addRiDn.our tOq 174 manapers paftiCip9tC in one of tN6 industt�s�a99reasiv�man- "�': - agrroent 6lOCk Cw1lEfship programs. Linking compens�Uon--by fOf Our largsb[sYpense—t0 per- bi rrlance places tha longt�rm goal of 7hereholder vafue squirply in th!�ealm of averyday action. We are emong tha nati0�'S 1Y�OSt QffiGQnt benks.Ouf l3r0 Of 1f001�tlfl7t exp8�S2S�t0 revenue6 � � fell m 5�Pp1-eM in S 984 trom nearly 80 pvrcent fioe ynars ago. �Ys atil�me hqh, bu[we're confi• �.!Fi tleni that ws can drive Lhe etficierwy r�tio tn ffie bw SOs in m5 naM few yaNs. 7nia monrh marks my fifth anniversary with First Bank System.fm prou0 of our acoomqish- � mpnts, hut one stands o•�t m my mind as oW�'q oarticuia�ly irrportant. pur cukuro hw chan9ed fmm that of a trgdl[ianal bank to or�e trw-t highry valuea innoveiion, inspires a sense of uryency. d�tl -; is dedir.ated=o increasing produCtivity.TMt h2S matlo the schievement of a.very other q021 QOSSF , ble.And thet is why 1'm canfident thOt F�rst fSank System will cancinoe to win the loyalty of ou� cuStOmere antl the truSL ot our Ir.vestors. � '�_ .. � �� . , '��..� � . • �� .4 .�. � .4r�' ..- � ,. . . / i� John F.Gnmdhol�► � Chairman, President and Chief F�ecuclva��cz�r February t 5, 1995 yL 7 �.; Utl� UI: UJ a1.J4 (JL1J J4J 1JUr �UAf . lAIJ• �OJ1V �JUUL IProc�ress o.n Priorities Recards. Fint B�nk S,+stem set a tot ot tfwm in 1996.Fkcprd BEminqS. nCord profit9biliry.dnd recurd efficiency.The numbers ere pratifyin9 no[only hecau�they aro emonp the best in th� banking indus[ry, bu;cqually important thcY rcflcct pro9ress made apeinst lorq.nrm manepsmcnc . obiecch�s.fiss�funtlamen[a!s may be familiar since we have bng h�id tfiem as guldeposu fnr cflating Shir�h01d8r Nry�ILh,Wg bEIIEVE th6fi ig pr�[ vt!ua in this consistency.Our poopfe knaw what i5 .' , expected of them arw they in tum can drive those values tleaper into our orqanizatlon.Our pner�les �emain:core businessfocus,productivity,disciplinad � acquieRiona,assetquality.8nd EffsCtivB eapital . ' R manrqemenc We co�c�nue[o build our core businesses while imosanp in new rev � z enue sources. Our tnditipnal atrengths in retail end �� i communiry banking,oommercial 6ankinp,0nd ttu5t and investrnent services are now janed W a founh: peyment system^,. Former�y part of retail banking,this tast growing cWleaion of csrd and transactian pro- cessinq businesSrs ha5 beCome a major taus o+Fus[ Bank Systern"s future.7ogath+�r,thaa�four buainess linq pravide earninps st26ility ovef the IOnp tErm, especially in a chanpinq intorest rate environment. We af9 COn[if1V0U6h/invBStins in OUr bu51nB55BE '"" antl eSScsS��g now revenue sources.This long-tsrm F�v Od�s.:..w..r�..rT...� vieion is reflccted in the tremandous tachndogy investments we'v�made in reeent year�tn From from IcR HiolNd�.Zw,�C dovpvn cuscomar reb[�a+shipa and maYirnize producs pratita�iiny. ch�irm�n�nd ehNt fm�nald dlfcer. antl Jo1m i.BrwWMofi�,thairm�n, pnsiEenc enA chkf exewvve offieer. Althouqh our st3ted near-terrn goel is s r�p Of expenaes[o revenuQs in tha 8eck from Ieft;llYillin�E F�IUY� IOw 505.thtlf9 fB211y iS f10 C11tl pOiM t0 pfi6tlUCLivISy gLl�S.TI'1C IEESO�IS tflit�CltllY BVONing LBCFr viee ehairin�n,Oi�uiMroon Group; nolo�/is creatiny p�oduCtivity improvements th�t wora urtthinkeble five yeats aflo. MOfe ifl�prov¢• J.Rohert Nalrm,uucudr�vic� . aasideM�nd chief crcdit olf,ecr; ments are on thq honznn.With anhancorr�nts to our Earninps Anatysis System,we are bullding ��`'�0�°P W0� atrong�r links between our menegemenl aCawnlinp and otber Comput8r SyStem6 io QenEfaLe ➢nrdaiR Comm�ici�l&nkinp; iMll$6.Neulq.viee ehairmen antl deeper leveis of informatan abau�prpducc co^,t and profira6iliiy.This also will pravida a f�amework . p/aeiaent,Reuil Pmducts GmuD� for enalyting the profitabil'rry of individuel customer sepmenu. � ,bhI1M.MorMy.Jr.,eh�inn�nand ehief invemnent o�icer.Firt Trve In feGi,tEehndOgy is rgShaping the wsy wa doli�Qr financ�al products and serviCeS.Cu5I0�n8lS Na:MieYaelJ,o11w�Ye,e�eentive now haw the choice of tradicional benk branches,outomatad t¢Ilor machines,telephones,and vie�pndE�rtt�nE ponenl counsil; "'� and IIoMrtN.Swre,.■.cuew vice o[har aivctronic options.Cumently, �pprwcimately half of First Bank System's consumer transao- s;:,= � presldent tor humen resoumee- tions are initiatatl outside of our branCh neiwork.We will toMinue to invest in technology thet maximizes n.stomer comenience and sales oroductivity. t;. � l.J' V� Vv �a.Jv y�a� vi� a.��'a �✓�� r�� r��4� yra� I ACquigiti0n5 aISO p25En[excellen:oppartunities for eccxlonliES of SG21e IhrOUgh br2nC�1 COnadf IC3yon antl sySIEiT1s iMeqrBtion.Wi hA�'!tl Araven int6�j'afWn modd that nel�u.realize cost se.• Iings more quidcFy tlun anyone m iho industry.We will fully in[e9rate luteuopolitsn F;nancial Corporatipn,an SB hilhon�nstitution wdh 300,b00 Cu4tOmC�h0u5CholdS. within nne month af clwing. I � . We axpanded ocr region and strenginened our exiszing market presf�CE through ecquisiT�pns th�s past year. In March wa an[erEd IliinOws whh sha acquisi• tbn of Boulevard Bancorp, Inc.,a 51.6 billion bnnk FWidiny cumpany in Chicapo.The Metropolitar � P'inancial CorpopSion�c4uia2ian—the la�ql3tin Ourhistory—g�ves us B pr�anra�n lowa, Kansas, Nehraska, and tM/oilliRg,f0�f StetBS GO�ii�uOUS 10 our axisttnp rapion.Ite�sc slrBnqlh- � , ,, . ened oue�t:are in tuur of our curtent SWtes. makirtp Metropoliron nn exce4lenr fit both strategically � _ end ecunomicauy. The,c new,tates have fragmentetl bank�np�nrlustnQs that offer high porenti�l tor builping .,.. :..I��.::". .�.. . market shan thr0ugh acquisRinn. We have a stronp reaxd of doinp just inai. In 1994 we compl8ied or annOlancetl fiV4 iMnarket dcGuiailiuns in ColCrado, Minnesota. North Qekota, dntf m�hucu.._�._..� ,: South Dakota. We alsq�trangthonetl our natianai leetlef5hlp poS�tiOn A5 a cnrporate trust services providei wRh tha completion of uur Fn'9viou6ly announcEd acauisition of J.A. Morgnn'a dumes:ic wrporate � trus�business. � DeSpite[he rise in intere,t mtea,we expect our asae:qualiry t0 OOntinuc to�emoin e�d w9ry high Iwal.At year�r;d, the ratio of non• i85 LNdiw#Mrkal Shnos' aea+an.n iw�cea ^+�+ pertorming ass�ts to�oans and athar reai estate owned wae hinmcou �5 tn J9 petcont. Hiqher interes'i rates may prampt some tompe- -Twin GNee J1 iss niea to compro05i,C Thelr credit standards Firgr.9enk System Caiaede �9 �n wdl not be one af tiiem.Mair�iaining h;gh srantlartls and prio- -Dem�r u +s2 inp based upon n5k i5 Stte a?ry waY to edd profita6le husiness. ' NoM DaMoco _ �4 in p�r lending strltegy remains unchanped. Led by people Menan� _ �� x"d � whh exC9ptipndi harkpmunds in cr80it 8dminlBLri:iO�.�^'� S�D.k� _ _. �� cominue ce focus locauy whare we cLn tum our superior Wymin9 .9 LM m�rkit knowletlye�nto superior credit judgrr�ants.maaa •NM�IeelYtlw Mel�upoOni fnuxi�l MO Finl W�wR.�SoM O�bb acYka EroN�nM Ennl: � merkets Mve proven mo�e resilient ttu+n nthor parLs of the Ihpllt/�qyhil'q�t�wnr.y crmoo.. ��, ,�,� co�ntN during rsCem economir.tlown[urns. F�RWMOmGelpencon 1Qx SoulhP+tob 3Z1 We Menepolhen Fnrrei�l Corporttion ia� M�W«, �,9m rn&nage oui cepitdl t0�xifnlie SharEholtlC�value and Oto- Gra�p Mouman B�neerpereian,ine. 7Q% coiorade � a5 �fde a scrong base foi xqu!sitbns.Durin9 Sbe Past hvo Y��s .I.P.Meryan CnryeromTrust 3Q91 � N�w YorklWtiond WG we rspurchased 3700 miAion of common and preferred � ummd e�nk ot Bicm�rck arts� Nam Dekow �i� ��k.We blso have increasetl our�ommon dividend rat�for �nter+nanei�i Inr.m�a,Ina la% Minnaotr � f'�ve consxucive years. ��Cud�ng our mos�current increase Bauf�v�ud Benccro.lnc. 1495 INinois 1,600 pi 25 peroEnt in FPoruary 1995. w�nncmBmcsnunsofManYna tQ9� Mlnne�uw tte . 5 UV' Ui' Ov 11.J1 VL1J Jy�.' JVY \.U!\1 . 111�Ja yJVyl Ij'� � ' lesMw Oa�criplion 19M NiiAll�llu � C�amwnit� FOS s.�vra mer�than 1.4 mi�ion ■Achi�r�mnsum�r loan prew[h e!17 �w�� 9a�kiny households in a�v.n staha throuyh 200 percent m S�t billien.�IncrwieM rnreY 11M M�e� trankinp bcatians. �.065 Fastbank4 sales of investment produr•t6 21 per- . .r::� ou�anated telbr mxDircs,and 44�our . cem to 842d million.�peepen�d core :,=.+- •..x: FaatLine"�tulephona senice.Our core fia,a�hold penetiti6A t0 an avcragc af •�,� `' �;='•`„�;u .r�+.,;: customers—tFwae v.+ti:cheekinq 3.8�ccounL irom 3.2 eccwnq�vear ... >,�, acceunta—heve en evereg�uf 3.9 apo.�Imprw�d Me ctoaMell n4o on '�•'''i:'..�C. aCCOunSs wilh FDS. hume equiry sales to�n�wnps o12.2 `��;.:c,,_i. ncw producu per cuatom�r,up From � . . L8 in tt�e i993 promotlons.aBooct�d txanch pro0u�.iviN 17 Aercent wer the peat two years;o a,092 muntAly;rans- . _ . iGtipn3 per fulMime eqvivplenc NII�. ' ■SsrvICAO mor�then 24 milliun cus ��. tomef GIIS,uG 34 perunt wer 1�J93, IPerce� rrid increased ca�is servioad�ntir�ry hy our eudia�nsparise unit to 70 pErCEnS, �Impraved cuslo�nur satislaction wiSn � . brancn benk service ta BO pur�wnt iram 85 porunt.�Openetl four new�xrvutc � ��a � � hanking locations in Minneaota. � - ;y ' ;.,�. .�., �isppe FBS servr�epproximataiy 750.400 ■Inc�sesed bus!nass bankinp loans 16 B�nkiiy �mail antl middle-markni huainesses perCBM.�Incr�ea�6usiness ehaekinp '..'`; {prpy9�37 pusire�s bonRiny h�hc antl accounts 73 p2rownt.�F.emM approval ihree MtinStMtt Loan Centers th�?are �s a Sm�il Business Atlrninistrotion Icun ' fNB�QfICO SG G41�I[lY 3ENC ShC�EUIS O� Uf1EQfWfILBf If1 BYpI�'ffl}fF��N'e SNN9. thia important merkat.Atysar-end,o�r 'S.� portfdio ot 55.2 6iilion in Cusineas Wan, accouMetl for 2�p•rc.nt of FBS'a enOro ban pottfdiv� � Y �I ' i MOft�ap0 F85 MOR7age is ane of the lurgest ■Introduced ssveral producta,including ��'' Bakinq resideMial moRpape I�ntl�ra in our Combination Lock 6 Lmn,which aftrrs � i; i { ��, rygipn.Nome loan ofipiM�ipn LOUI�d prYapproval,Mreetlay approval,and �� " 51.8 billion in 1984.At yearentl,our reta proleClwn opuans;a construction �� y�.,��'�� martqaye servicing portfalro was �o-parm loen tnet yw��C¢^,Wth con- (�'�`� i §9.B billion. Sff11CdOn intl permenenl rnortyByO � �inehCinp Whh IusS on�elasirq;end e 't 'rnepE-JumbO" prOtlUe't for bntinwera �j ' wiv�loan neetls exteetlin9 S� million. .. � ■trw;reased IOah5[o i0w�lneoms howe- 'x�•.. w �t'.; ' holtls a7 percefrc antl iwnc to minonti�a �;:i 70 perconl.\linV�'etl CuStON1H fitl6• . �.', faCtion rating 9n loan ofif7if1Mi0P3 M1Q sernang l0 9l1 and 88 p6fG00t feiC9G• ��:; tivNy.hom 87 and 7a percent. ■Achieved Iwn survicinp cosis that . are 12 percant 6abw thoaq o!our peer � banks.�Mmn�ined a delin�uyncy tett � thae wu less than heK the r¢tional `��+ averoga. 6 �� . �� _..�_ .�� : _ � la.l�iey Ab��d �� New Technoloqy: DeEpening Customer Relationships a sophistiums new manaQement syseem thrt focuan on enaro custom�r nlotionships acr6ss vroduct lines will improva our abiGty A sell and servi�011f CV9lOR�rrs.TM RdetiOnShip � Management Svstem(RMSf�e�erepes our axisting customv�data to improvE eustomer saNice, crosr.aelfinq affocciverrass.anU protluc[�vay.RMS will provide detailed re�atlo�ship atra�egies . b39Cd on four cus:OmC*dimensions:prOfitib�lity, nsk,Wibnt�l fOr aarition, and pcop�n3iN to hUy atldiCiunal produGR vr 8etvices. We are a hank industry ieeder m broaGly BppNing cuswmer managemant P�� rotail buxiness.Thls new technology will help us t�ettBr undersldntl Wr customers by iinking multipla tccount usaye intOrmation tu demographica anfl anolYeis it marks an imponont shiTt from account mana9ement ro relati0+15h1p manapenknt. Na Mcom�' IMi�ionsl Direct �flarketing: � Powet�fuf Sales Tool FBSisdevelopinq�w�• � �� kbting alternatives t0 Wr brenrh hank System so[hat cu5lomet5 Cin coFlvenienUy b�nk am/time, a�ywhere. Direc:maflcat�ng,which inc!udos tlifEft origination Of CUS:Ort18r lead5 fOr C'M1het branch or cantralized fuifillment.has Geen a majar contributor to�mproved xles results. Last i year we cun�¢rxd into now producc s2lea 35 percont ot approximetely 680,000 CNSS�TBf p��S - ' to our cencraiized teleph0�e benk center in rosponu to adverc�sing or direct rnaU solicitetioh5. ,;`�; Fiighly targeted, out�i0untl telQmafkerng mlls iesultCtl in tM sele of 68.000 protlucts,a 73 par ws� cent conversion r nw. S.i_'. �� :' " ' pvar.t mark2tinQ is mcreasinq W�housen�id ponetret�on end merlcat share whiYa IOwennp 'rp "�'s. -.. t��e acqwsitio�cost par 3ccaunt and delivGnng higFxqualiLy SEfviee,Ovex thG past four yean, �-p :-:_' rttail asset�alancea origingtedthrough d�roct marketing have prown ropidN. �sl year. nBedY �� '�� 60 perxnt ot our new reu�ii asset ecwunrs were ariginaccd by d�rac�markatirq.The numl»r f;. •^ of cells cunvcrted Into sales has inereaFod signiflcantly while Uie cost per new aecount hea dropped rouqhly ane-Mirtl'or inbcwnd and outbound Cafls. Business Banking: Ag�ressive Purst3it of Sales ,a�cres5we marketing� B�xpansion of uui lrlSiness bonWnp huhc,and a favor�ble ecnnamy help6d sperk s01itl growth in bens over the p25t ihrse years to companies with annual yales�SY5 million or less. ExcWd'+np ac�ulartions, Uur corc business 6anking loens incre26ed 9 percent or$s5�million. M0�1°"°'� 6rowch in foans to businesses with�ess than 31 million in annuel svle!fC'uhed trom neW I�cNr �MiYirnsl ' peAotrnancc incantives antl standerd loan procouing at ow Mainstreet�oen Centers,Th�as ' Ct�any.s heve enluowe�etl oW perspnal banY.era to xll businy�s Ioans.Froe of loan untl4r- ' wribng respons�hiiity,bankers now tocus ur.cauinq eustomers. �x.:�. Branc►� Produc:ivity: Usinc� Technoloyy Effectively Fesnes ;;'t,1�� -. . sreadity improvod che effir�ency and(Xodur.tivity uf lu re[ail banking operationy ovN th0 pest :•,T five yaars. Our D��t��nY,a�meeaured by de�iy transacuons per[eller, is amaq tM besc at ` y • 'i 95,which ic sub5tantiallv a6uve thC Industry nvar�ge.We've set our sights on further produo- ' - tiviiy gains this yap�bv plar,ir.g FaStLina telephones in seletied 6renches to sh�ft mo�C Customar , , service inyuines to our centralized phono bank.We'fP also 8t1c0uf9ging greatef u5e Of iutOfllat+� � teller mach�nes IATMst to improve c�stomer ssrvice and Icwrr tmnsaction Casts.Tests includr ��' ' extBnd��g hours for aam¢�Y�edrtinp on ATM deposiis and replacing drivwup tallers with � � A7Ms. An�lhar initiativa is the rollaut of�esktop Expert.a two-w2y vltleo conferenCing�ystem -;. that ennsncas customor serv�ce and cross�sel�irtp, It ellows bankera anG cusromers to immed� ataly access a mortgs9e or investmynt specialist when one Is unavailaCls on-sije. 'BNan w cimlatin NreR a - . +�/dY�ONmUWteai9a. . . ) � �WchM91lintii2�nat997. � � — Vtl' V � LJ y�1J JyJ yJV♦ VUhfiLnLJl RUJlU �VyJ 5 € - BYEI�N10eSGf��t1�� 1111�11�10� - 6 . . S � C0rp0�d1 FBS otfers[ard produc[s to liefp coR* •Incrnastl N�num6er of corponro pwwM�I f9$ Nympt( t�nies and quyemmerrt arititiea a1 a11 and purthasinp urA nl�[arnhipt with • M�t�n�N yiipy�fficianUy manapc expensea. Fartune 100 eomp�niea ro 43 end rvrt� ' � Three crrdi Comprise thic group: Fortune 500 Induatrial and S�ma com � ':� � ■Corpo1su Card,a npn-revoMing Yisa panies to morc than 750.�AddW mas ��-��"' nrtl isauW to empiayces of curp�ra- :han 1.000 U.S.and sht�yov.mmrnt . � tions wiih�nnw�tqvYl and entarteio- �nlitiC,[o our purchacine card program � ment ezpenses at S1 mlltlon or rtfOr�. ■Invotluced s�iw visa WotldPerk,� �- '°:`��-»-r� NutiN�Bl rank.second.E6t'xhMEC �usiness Card thei p�oviU�t^,trequent � merket$730 6illion dnnu2tly. lrier mila4a Cradit throuph Narifiweat � . ■Purchss�nq Cartl.a Yisa charpd w�d Air:inm.�Introtluced FirytYNW,a � iM2 reducos ihe processirq coat ol dnnktoV report-mitinp softwar�chqt � srtulFdollor purePasts snd lowen the ekows paahasinp caM antl cor0orace - ricY of inapprOpria�e purehases ihrauph certl custornary W nwre closely VaCk �ry'jq��Mtie• cliyntopecitied comrals.Naiional r�nk� their wmpany's ax{renses.�Devebpetl IPe�caN . frst.Estimated markeT.S30aSd00 and piloted the rebcetion card product. • � 6ilhar.ar•nually, d�slynetl and s�rviced m concert with �euanasc Urd,a ravoMnq V1p cro�it Fg5 Mortgape,m sauamline the - mrd for cpnpenies with annuel Vaval r9location process for Fortuna 1000 � anE en�arta�nmom azponeac urWer c�stomarc. " �� S1 millipn,F,66ma1etl rrmrkat:8 milliov � Comppni�e. . Cndn FB51s one of the neiion's 7 0 luyes� •Imroduced tfie new FBS WorldPrrks �;c- �PfodYCR iss�ers of Visa cretlit cards,We hrvY Yi,a Card antl am�acted�Imoct A00.000 . mofe S�in 2.2 million Cartls.52.4 billion CerAhqdars and outsm�ing receivables i�but5ti�tlirl9 Dilintq,�nd annual oi sgpp mitlion_Ann�alized salac � saies exceedinp S6 bilhdL wiume is ma�tha+�S+1 billioo. , ..t . ; •Increextl toml aed��ouunMings '�. 37 perclnt u 52.4 hillian.�Lsun�i�p y " •'%.. test ot Di�scs.Cash,�n unseoured line of , vedit Nr IOw-and motl�wte-income i � cualrxnZro.�SelectBG ia first V a.Eank ' � tu tYsl Y9a TravelMonsy,an irtTemY �onal prepaid UBv61 C�rd that is an alter na[iw[a traveler'a cheques. � Krtlmrr 1Aerchaot FBS is[hc naaon'c sevonth laryast ■IneruaaA mrrchem prxess�ng � 1e� ppYisiag wuCessur ut Visu aM Maste!Gard volume 31 parcrni to St 3.4 billion,our �MlUian! vensacliony,serving appoaimatdy third yoar of prewth of 25 percent w 69,000 merchent IOCPt�p,nationwidc. more �Compke+d i convorsion ot ell processinp to an improvod machent - `� system. � '. 1 IAyElrt F95 is Me natien's thirE larr.�est ■Exp�ndatl ATM nenvark with an ::'� � OYSIMSflS deplayer of off-premqa�W.Omatcd aproemBM to placa moro thm 1.000 r:� t�ll�r rruchinn{ATMa�,wiih more tnon new mechine5 in Cirek K conv�nience �� . 7,d7e Ixations in 14 steto:.FSS dir stores.a Irrcreased ATM tr�nraction "�"�� : tribut■c ite wnil�srtl produets throuqh mlume 8 percem fo 66 million. ma.th.n 800 ind�prnGnt tin�ncNl •?ilotetl the V'W1 Intalirtic proprrm in inctk�+t�o�x w�N�r„on Mnn tvro million Celeredo,which eBawa custometa Tn y, consumer chrckinp aceounb. FBS cur- usc their ATM cards ia maka purchas¢s i, rently oHer;�ATtvt nrtwork brands, at.deeSed ryteikrs.�I�unrhetl Vice . FastbaMc and PEAK,m tho Upper oF+eck prd progrom to Fasttank apants � Midwestand Rocky Mo�a+esin rspiona, in the Upper Midwe�e. - res{wetiudy. ��..:� i � . ;'�; � e ��; _ ,:�� . VV' Ulrb� +�.ee V� N �. �. - �. L��kio0 AYMd � Payment Systems: OpE�ortunity to Gain Markct Share os hankin9'S hisloric roN ay a finanaal intertnodiery movee from a physical ro an Nectmnic � � crwiroon+e��, we sw onormous opportw�iry to turther atrm�then our pasitior.in tlt2 MqionEl paymenl SySt6m.The payment sy+"t^.m co��trols the procesSing nt ttaneaclion5 bCM�Een CUn- s�rcn�rs a�d hus;nesses. I:�5 a hiphly prufitablo wlume business vrith sceep harners to�ntry� � Unlika maSt}in9ncial ins[hiAions.we�q�i�essivalY Pursue bOtn sidP.&CT tRe u.yment syay�m try ptovitl!np both papnent vehides,auch as credh. oharr�e, debit,arki ATnn cards,as wen as paVmant prxass�ng and rreasury itiwnapement s�rvi�s(sec page 11 i. In adtlition to cJanpratinp more fces, "cbaing the bop'"on the payment sysnm r.raetee curno&titive ativanwges bV 9e�• eratinp e unique kvel oi intorrnetion, eHiciency and centrol. N��,�,�. New Technplogy: Inr,reasino Efiic:iency and Flexibility ��i5onsi We are dc+reiopmq a soph�svcated compucar system that vnll eonsolidace systems th�t run ou� -, card ond credit��a pioduetc.The Cards 9od��nes Syslem(CLS!wilV cut WeraCng expensos nnd 'Irk�EaSeflBXibility[06��nce Or irrtroduce productF. Thc devebpMC�#of CLS is AnOthEr exampia of FBS's tommitmert to using teclmola9Y t�improve proaucvviry ana prnfiran�irtr. � �� Corporatc Card: A Rapid Growth Business CoMrollingintorme- tion about the birsinass traveilYr is ihe key to suec855 in the corpurete wrd businrss,In thic repard,we have several competicive tidvantapas that hodo well tor coniinuad stron0 groweh. OnQ im Visa'3 unmetched woAdwftle icGeptenC� Moro tnsn t i million locaticxis means that ' more date is capturCtl:Aata is power when manepiny costs or ne9otiadit9�endor diswunts. �N: ��°';�;. Widespread preasnce also allows cornpen�A5 to clintin2ta axOenSivB Cash advanceS tu naYellin9 emptoyees.Another benefit for eost-tonscious curporotc customen ia Visa's euperinr accQ�r < '� [anc¢at more low-to mediunrpnced rastauronts a�A notels.We will e�cpand�ur entry�nto the . gbbal mafkE[t11f0Uqh partnershiEr wrth intarnational inst�tutions capaWe of oxtentling ow urod- uc[eXpcnisa Oevelopm6nt Of proprultary tachilObQy and sper.i(ic protluct ennancemcnte is . expected w Ifrnlc�ew compatftion in this a[craetive mafk�t Purchasiny Gar1: Emergin� Market, Nt�ge Potential rn� 53063400 billion ennuai markei for purchusinq caCds�s still in its infencV,and we intantl m con- MO��°� � tinua to matkat ag�essively end cunsistentiv deliv9r the innovativr product�th2t made us W�11» i�,sw„xi che ma�ket bedar. We also expecr rha purehating esrtl to continue io help aell a,r mercha�t � procassinp bu3ineas hauu�e the large volum�a enable us t�oitar interrtiv95 fpr sipninp kay vcndo�s to acr.apt Viw.In atltlnion to more tleep�y aeneudting thc Fortune �00 and 50D,wa �:, ar2 suCL�Sstully carving a niche among sta*.e gaeernmQnt3 and tedeml ag8ncles. �`'� WorldPerks ViSa C�rd� Strong Fees and Cross-Selling „:;. O ppo rtu n iti e s A key piace wa�added to our re�ional paymem syslems acrate9y I�sc ''"F y.,,,,.,;th tha award ot the World?erks Visa Card partnarship witfi NortMNest Alr�ines.Ws ha�R '�"y alr�rciy attfaCtCd 81mOSt 4D0,000 C2rdh01ders,tar excwatling our initiel expectatro�s-We expect � sz.,:' [o�ude d'1e WorldPerks card saWs vdume in five yxars to appr0�cimateN�billion. ln th� � �,�,.. ',M� meantima,we will pursue the VemCAAoU9 CrOD&5911ing opportunity th�t lies in tha tact thot a�Y "+ � aboui 15 percent of our cardhoidsrs have i p�Psxistinp eccount rciationship with First Bank Syscem. 'A�Imc Ihe wmulNiW enen ol � auo�arg wqu anLo�nrryv- � � NandchiR�rt992�nOf�i . uo� �� , od ii. a� ucio �y.. �nti .,�n: . .n.,�a y�u.,, i (; ,L;i � BrMmwD�saiyliw 1M4Niy�li�IM . � � . � ..:,. fiblluqNCid F95's Cumrnercial Aen4iny G,pup wkes ■Ao�laved excetlen[mrFi loen yrowd�. �y��:��.'�. leadiy end ma��epea ciedit riak and meikuW Av�ayr(wls��nJlny lu�ns inai�+seJ li�t Inaa�M canpRirively pncitl DfOducis to busi• B parcent over 1993,�ftaduced nurr ° nesses in our markecs whn annuel rew performin9 iis�ts 98 p�rcant to , enuss preater ihan S25 m�lion. 555 million, � � ��s`�> :^��- Mwlpaye . FBS rs ane of the natior'Slarqest �Manayed�usinass sftectiveW duriny Bankiny p�oviders of aeditend other financiel a cyclical declii�e in I(�7n5 m nwrtpapa 8ervicea services to mortpape hankers. benkers antl rep�tl mdustry consoiid'a- ' rb�.Previous ettortsto strenpihen CIiP.�t MlatiORlfiIOS fldU[Qtl Tl1fROV8l. _, , ERici�ory 161is• Neal EsWte F8S provides cretl�t ontl vthar tinenci5l ■Cantmued tn bwld our r��l c�5lotu (Hrc�nd Laedi�y aroducto ond carvicu co sokccod roal portfol�o and daapan client relativrships, estate dewlcpxx for�hs devalepmanr, ■Con�muad m 6uild a e2ronp aceount rnrxwn2ion,expanaion,ecquieition,nr ronm. �ur roNc�onrhlp man�pars haw r�finpnce n1 their r�l yg{e{q prOjEr,tS an averaqB ryf mOnf flum 10 yaArS 6f � roel entate market expB�BnC6.' ,. ��.,,,; '; irp�,ury F85.on�of th•r.gipn'c brg�st tr�r ■Achi�vd a 1•�d�rship ponition in tha �. Mm�g�m�nt sury managament servicee providers, evd✓n9 electronic datr inSerdwngY • Services halps companies.achieve offeaive bu&inew through che introdudion of soc � ncasury upera[ions�hau,yh a full ranqe �u�w EDI,Wrvlccs.■Juined EDI Bank U�dUinpp(iC tl�ld inlurnBUonel rWSL rrv�rt- AlliinC@ tJylww4 EnChinqC(EDIBANXI, � aqement informetian repartinq.end e revauzionery new E�i servlce.CuU� trade finance asrviees. moves hronden our clientY abtlity to H^ . yigineSe anC reuivc finandM EDi trans• �� iGii,�n5.�WD�:ltl CIOSeIy wiih cllents IO tlGvelOp G2IIEN'", 3n IMOva�iVB � Windows•Gascd system ihat enhantes � � ll�d tlblivyry Uf pOmbSli�and interna� � tional informabon re{lWlirig'rnJ l�+nsuG� tion inicietion serncea,�Eateblishea � Hmq lionp�based subsid�ary tc insue ��"�� '� � import leners o1 creaii.�imroducsd �"0��° . '�. Fezport,■ccebrTeing tne delivery ot (��rel ' �' iotters of credlt ta exporters throur,7h � automatipn,�Enhartcad ACH yosiUvr ��.:.; � . paY antl c:sfi w�lt;ran�cl�on ropon�ng. ,,-:;. � ~'��I Corpo� FBS mcor�tha 6road financial nea� ■Orpirutad and syndicat¢d mvn than . '�V s�;'r� . �:LE+� . ;;,r Fin�nc� ef our cliants by syndiraeinQ credir facilf- 52.5 Gillion in lmns, meetinq the full , �.:.'�:i md Lu�e nes and plar.inq e�iral with invasrere. erodrt noatls of F85 diems while � S�ndiealiaro prudenty manaqinp FBS portfolio , �., ..; concontratlons. ,. 4� ' • n;� U aa .�. rr �a..i: y� yyv _ �� OOk1119 NN�� . �; Commercial Bank Culture: Values for Success o��a��6 simpie yet embRious:to meet our cli�n[5'expechtians for a supenor bankiny nlsdonship.'R�e sipnifianl cheracteristics include knowl�d9eabl! pCople, fesponniwness, undersandinq the client's busin�6S,me�ntaininq e lonp-term CommRmant w the client,and compstiliw pricinp, To accompiish this,we era�x,iid+ng a curcure that tauaes or+tr,a ciient anu rewarcss inrtiaeve, �nnovatron andteamwork.We are caninuing to devewp strong leaders to advanoe tne business. t � npt jUst mandgR it.USing!hgorous and d'oci{�fined(NBCESE, WSid Orl teCTs and data,we are Sembadding core valuee inro everyday hu.leess activity.Ony by Continuously avaluatirg ar.tl y shaping now we th;nk antl sa can we makC lav[ing chanpes thet rosuR in eonsistently superior � performance. ;9 ,,�,,,,.�. ~ Corpvrate Banking: A Gore Business Strength c�,�� IMiMiovl � Bankinp is a vitnl part of FBS's ovarall srr5mpy of building a balanced earninps streem.8y deveb � opinp stronp ctient rela[ionships with husinasses in our grogrephit fegion,we C2n translate a supenor mark�t knawlGdya int0 sound�eredd judpmenti 0nd.ultimatily, into�ttraetive retuma for sharenofders. . -y This plst ymer was One Ot cxCCpuoflellV iSrong grrrwth in aur core lending port}olio,which 3�. " helped offs¢t e cvelieal dedino�n loans to the rop�d�4 mnsolidatinq mortqa0e banking induatry. w^ � ` ��y Credit qualM imPraved significarrtly,which continues a fivty92r tr2r.d that roflxSs ouf inCroas- .e . � 3 � vqly stroop crvdit cuhure.w�will nut reveat on cretlit queliry, de:,pite rising compstiiive . .ti:•:=. :,.,'�r .. � pressur98. =�"' �•= + We remain commineG to our loru}cerm goal af deapemng ciiant relauonsnipg through innova- ;:s,';..._ .� ��'`. -?;� we th�nking�nd ozcellance In cliem eervica.As uart af tnese effarts,wE will CO�t�nue to build i,.:T( �:.�. . !.�„��.�.' r� � ' '�;� _;.� our corporate finance expertiae as commercial benking cantinaes ds evolution into an edvisory �t�: �'r;ti � . bu8i�R5s. . . . Electronic Commerce: The Way to bo Business FBShas hocame a leader in the rapid mavement among campanies of aU si�s fmm paper�asd pay- mants to electronic paym�ncs.Althouph we harrt providod electronic data interch2nqe IEDII �ervices for Fivp years.we moved in[o an industTy leadarahip msition whh our chuter mamber- ship in EDI Bank Allienee NetwOrlc Exehange�EDIBANXI_ EDIBANX,s 9�retegic aliunce of 13 oT �� tha country's ipading treas�ry me+egemsnt banke.is arlvancin0 tha futur�of Ebl.The nelwork INee�r I�ml haIDS FaCilaate alrctronic comm6rCE by providing clients Wrch an etflcisnt means m exchenqe EDI tnnaactions wRh other EOlr�pable businv36es. Our leadership pos�Uan in E01 e❑sures ihut FBS clients will have acaQss to information and sorvices t��t w11 h9tp them offectively irnpremertc E01 progrems,thareby taking ad.mrape M -;, cos�and opentinp afficieneies. Ic elso funhor strenflthens our posicion es a repionel leatler in <�' ::.�y � payrt�ent systems(see p�pvs 8 entl 9 for Payment Syacams discuesion} � " Another imponam eNort to help compenies transac2 businass eff�ciently is Gallery"",on�of '� `� the first Windows�twed comput�r 9oftwaro Servicrs to combino intemalional end ComeStit x,� �'�� informetion reparting antl 2ransacvon initiation services. Scheduled for irrc�aduetio�in 7996, �Ile�y enhances ttw value of finandal informetion by eneblin0 Wienu to Integ�ate�ta into th�ir ,,,��;� � SySt�ma ihrough thC use of Ciienya�rver MchnolopY.Companies alia C!�use Gallery ta ini[iate ;�� `� ACH lronsactions,tlomestic and�ncernatbnal wire[ransfe�s,7oreiBn drafcs,end ietters of credic. ''^� FBS aISO i5 intrOducinC irruye serviCes W delivef Check imeg@S to clieMs thfOugh e venery of ^� �� mEtlla.Cli6ntS wi�1 use Ih95e images lo a+siat it1 th8 VOtifiCBUon and reCOnGiliiti0�Of ChYck � proeessi�g funceiens. •allo'.uio a..uf�..n.nA rmuaYn eNiwc sitlla�rriw 11 �MnlddwC��in7BB2rutp7. . . — Un ui � a� �a.�� u�io o�� vnt . iw.oa �o�.� y��y� . � ' . � i'•:_.,. . � � �usiu�aGqcriptiw tllXi�hIf01Mt � . toePenl� F85 la one oi the nat�on'a 70 iaryesl �Compleietl ih!lCGuifldOn Of J.P. �' " �� Tnp'F p�ovidere ef dernenle nunueship, Mar9a�i s�7umastic a,roorate vu5t ��, MM�eeNM piying igv�y.+u+d natedy swiees to � busmess,�RankW lirtt naCbMl4y Z debt issuers.Wa havb in aYcr.as n1 � in the prmcipel emount(513.5 Wlliun! � 5260 hillion in atlmmistared a6svis a�d ef n�w lonpderm mun�cipel usues y 12 nHlr.�c rhat provido e caacS-lo-cov9t �»wardec!tc matsas in 1994. 4 ■Awird?d 5.4 hilGon in e �' presnnce S orpora[e finin:6�SCws.�Implemenled a new ' bontlhdtlGr r6c0�tl��4ping sy5reen (IIMlS11110111 FBS provldCS ai5et manapement av�- ■Increa,ed assets�ndw rnanapeme�rt Man�Whlitll v�cas co�nw�iaw�s md�nseicutiong t 3 per��ent to 524.5 billion.�Grew lhrouaYi comm0�,COIieMrvl,BnC pro0r�e�yiy Fi�si Amerinn munul mutual IVndp,��1tl individu2l p01i}Olio6. fund eaeeta mwE[hBi1 E5 p�fCCnt to � . Sa]bilfion,despite dec�iniuy markot. �� wre�nN ■Intmduc�d iiv�naw mutue!fvndy tOr a t0ul of 27.�Lwnched 8 claae a � `t77Ck-entl" Io20 fl1uL11El fllfltl ShitYS. Nwslmt� FBS's full-aeNiCC Drokerage campsny ■8emme one oT the tirst rr�pr panks � Serviq� diaVibutea municipel antl 4e�mment ;o crorrte n unifiatl saios force,making ? � bonda,equitivs, m�twl funds,and one-stop shnpping for imrestmont proa �ft � � annuili�s te corco�pondent bonks, uets pazsible.�Increesed Ir+wctmant 4 �� caporaipns,public ap�neiaa,end 3aICs iorce to 166 from 135 people � i. �ndividuais. ■EoWblisbOd apprwcimatety 23,000 � ��•�' �' � new retail acceunt�eWt�onships,en " i: �naaoae of 83 percvnt ovtr t 993. , IPBrsoNl FBS provlqes a wick rangn.of irnesr- •Dev=foped new o�qanizalione!Struc- � R�umial menf advi:ory.admin�gi�i;i�e,anii lido- iwe chat climinaces mtefnel 6an+e�s lo iYrvieoe aary curvicvc tor irqmduals,fimlli9b. supfrinr r.lieni servicQ.�9epen creat- and charimhle institutionc. �ng teems oi spqcialists irom vus;pri• Vi16 b2nking,and invggtmant ilnriGes Oo Se+ve iHluFnt househnlds. IoetitYli0q1 FBS providss nnaue.inveatmenti o�n- •Neary Bounied the si=e o�tM. � � TN3t aqemeni,�ntl CustOdial services,pri- Diama�d program, our pund�ed_a0tlk) m0rilytor4011k{�MothYr�mployee p�o�:�x�fors�mllantlmediumsizetl � �� penefil plans. businessea,tu�76 p�m with 5797 mib I�oeiw lion m aasets.�6cpantled Dipmund . �M�M�^�) , pNO�Lm SO ApWil u tompenies with , - up tG 1,5W 6mpI0Y!!S,�Impl�mmnd � Y nbw bticuuntinp SySiEfi1 L11tl STn�tl- : � �-� � � izad Ladilwnal recorOkeeOinp��GrlW . ,r''r:; First Stab!e�unu,whic'�uwe5t5 it � , puamnteea iavn9Vnunt conV8Ct5, � � 95 percent te 8t82�nilliun in asse[5. �. .'Y:; ■Developetl e measuienw�it syats�n . "�� :'j,R' tivt Provides cuatody dients vnlh mi .��;. Independent�,a�si3lent and c:onsdr � aated pertormance evelua6on, � •Enhanced Firs�Access,a Windows- � ' besed,or�lint computer system ihat - i �� allows clknss to roviow their poMdios. ' `�� ■�nCqO insritutional rrtisi sales torce. , , � �� VL vi 4v ia.J�/ V�+r Jlr YJvI IUL�I . lALJI rVJYM1� �yJU1J }. � � . ,� �.MYI��1�e � C�rporate Trust: Technnlogy Incrcases Profitabilitv ,a�W � bondtwider recvrdkoeping system inat+ltad last yco�has s�gnificantty cut our oponVng cases, � making us e low�ce�!pravidar of dom�sile corpor�t�uust services.This sinpb eytt�m enables � ua to hendle all types of securities, 2fiminatinq tha ne�d far muitip�a systerns[hat mo6t of our compEtitors use, It also enebles us to intEgrace acquiartons quiekly and compbteN �mpra�ed { technakpy and bwer costs�r�euenra�in a scale tx;sin�3s such as corporete vust. t Asset Manaqement: The K�y to Growth o�.�r�,rion9-u� �oels is to significanr!y incrnase the Trust 6�InveScmQnt Group's revenue conTrlhuti0n to Firs[ ii 98�A System.TO h¢Ip accomplish this,we completed o rnejor study Wxt yoar that identiiisd ini- ; ti�tivi5 faquickry growinp xaseLs n�anapetl tor both individuals and institutions.We intend to ��A• '` le�enpe our 105 yeon of money managemant exper;enci so capture a larper slice of thi5 rapidly �MBlbna! �� gfOWiRq Illtlllffiry: � ' ■emii NarkM. l�st yeu our 83 percent prowl`,in new investment produc�accounts easily � outpaGCd the industry,We will eontinue to strengthen tha sales efforLs and builtl rr,r.pgmtwn for : i the 27 Pirst Arnerican InvBStment funtls,our prOprieu�ry mutual fund famiiy.N•w protluas, � mutual fu�d whoieseiing,and a sipnificant technologY i�Q��t in a new workssation for .. '� � trokers will fuel iu;ure growth. ■AfMept UI�A�ef. f BS is mwiny loward e fully integr�ted apptoach to servinp the complex .�: � nooda of out most affluent cl'�Ents wrt�hnusQhdd inCOm69 Of At least S15G,000. Ou�nBw '� PrivOtC FinanCiel SefviG�s gr0up Cf88tes d�errt teams whose e�ertise spane our traditwnal trusC !�y ; pnvata bankinp,and invostm@nt a eas. These teams are desipnetl to setisfv client tls5ire for � easy access to a broad rang�of finaneial products and sorvices thro�ph a 5�nqk relatnnship -� � manaeer.Facusiny un each CIiC�Ys eMire roleUonyhip with FBS provides sup�rior^,ErvkC and � Cf0^+:-SC��ing oppORunities in thYs rapidly pfOwing m�lrkRt. „� ■la�ptelionel Nhrkrl. We s¢e enormous opportunity in the fact that onry 9 percent ot U.S. ..� comp�nies whn fewer tnan 7�0 employaes h8ve 407(k>pkns.Ou�D�amv�d 401tk)p�an,wiM,its .� 6tsnderd feah,res, overcomes the primary bamer of wst. Dlamond p!an selee neai ly dOUWEd Iast � year almost exclusiwty on re{errals from busi�esa bankinp.We've onN bepun to tap the cross- selhng potential of F85'S dEep regipnal penet�alion in the businoss bonkinp markec.We have bvgun marketing�ur abiliry to customize the Diamond propram to appeal ro�arger campanies, Mw�snu w� � ' those with up to 1.500 emplOyeBs.We al�o are,trengthening our tlistribution sysum by training IMiGoiui businees bankers to�:eii the Diemond plan,expandin8 referral ircentive proqrams,doublivg our saks fwce.and developing agqressive mor4cetinq and advertising rampaiqns. � Investmenl Perfori�iance; A C��npetitive Advantage , � pCSphC thE dism�l Yeer in 1994fOr thp mutual funtl industry,el!12 FirEt Amariran Inve5tm8nt Funds with a t�aCk rocoM nf lonper than one year ouipertorm�d their pee�group average. Nina of those funds*enked among the cop 20 percent of their imrosvnern eate9ory,accord�ng to Lipper AnaiytiCel Services, Inc. In addi�ion,our core inst�tutional aquity producc has out�arformed '�e*� the 5tantlarcl&Poor's Index of 500 Scocks over the pest one.[hree intl five yeers.Superior z - . investrnent performance and a diversa range ot investmenYstyles giw us a tlistinct competitivC advenuge o�er othe'asset menaflors. i �� ! •e.�a.e�.�oc..n.e a �OWrQmWKIEQ�lYI11YplM1 '"�, ' " ItlalOdd�19O11119$jaM1�.��:�, ' — vriv� . �o aa.vv y�a. v�e aavv �vt\a . a��.i� nvviv .q�rir �� Manegem�nYs Discu�sio�^ .�d Anelysis : Owrviaw E�rniqt SYwm�ry-First Bank SYstern, Inc,(ttw "CompanV"1 reponed net InCpme in 1994 of . � 5419.8 roil�ion �3.57 p�r share),en inc�ease of�121.8 million,a 40.9 p�rcan2,imm 7993. Ne[ income fpr 7993 of 5298.0 milh'an(f2.39 per share)fncludod atwr-tu mer9er-relatad cliarqQs of 560.0 million (5.44 p!�lhatel rOCOrded in connaction with tne ecquieitian ot Colorad0 Nationel . 6ankshnres, 1nc. I"CNB"). Eamings in 199d increaaed 571.8 million,or 20.6 parcent,from 1983, axcludinq margortplated chargea. Net income for 1892 of 53�1.8 million 152.67 Der shuol includec � anQ�-tax me�per-rclated eharges of$d1.6 million(5.78 per sharel related to tho-acquisitiuns oF Western Capirm invostmw,t Cnrporation ("WCIC"1 and Bank Sharss Incorporated("BSI").in addieic to Si57.3 million of Incaria related to the cumulative effeet of ehenges in exnunting principlos. Hetum qn average cammon equiry increased to 19.3 percent in t954 from 13.8 percem in 1993 ar return on average essets inaeased to 1.63 pvrcant from 1.17 percent far the same pe�iods.bxcludin rtl�fgl�*slated chup�=,ntum on avemqe WYnmOn equily wB51B.4 petuBOl 8ntl fBiUf�On tVE�dQE assets was 1.36 in 7993.The eMiciQnry rativ�mprvvstl to 57.2 pvrcMt in 199d from 59.6 par�nt in � 7993,.�xcludinpmergervrel�tedcharges. The improvement in eaminps reflec!e increesea in net intereat incoms on�Uxe6la.equirelent basis ot 559.3 millien, or 6.2 oercent mtl nonirttau[ incom�of 558.4 rnillion, or 10.3 parcent toyithlr with a retluctian in p'ovision fa credit laa,xe of S322 milli0n.0�25J parcent 0nd�Ontrolk nonintsrect axpertse prowth of 324.8 million,a 2.4 percent(excluding mirgM-rql�ed eherges in � � 79931.Comparod with noninterest axperoe for 1983.adjusted to include the aperations vf Boul�varc B�nuo�p,inc.("Bouleverti"�and the acquirW axporate trwt unit of J.P.Mor9an end Co., Incorpor�tec C'J.P.Morpan"1 on�pro firma basi9,nonin[erest expense in 1994 tledined 533.2 million,«3.t perar For turther informotion on the specific Componenis of the 1994 opei8ting r9SUIt5.See[he "Smtemer of incame An�lysie"on p�18. Noeporforming asaete dropped to 5153.0 minion at Decem�er 31. 7884,p dacroaaa of S73.0 millioi or 32.3 percent from poc�mbrr 3t,t993,despita th•eddition of 529.3 million in nonperfortninp a�ee hom the scqaaifion of Eoulevnrd in the firs[yuerter uf 1994.The re[io of the albwance for credit locs� m ronpertorminp loans increased to 385 percbnt.from 2fi9 param at Decernber 3t, 1993. �c�aieNio�s-dn January 24,7995,tfie Company issued approximatafy 21.�mlllion shena fn conrwction with tAe acquisition of Metropoli�n Fin3na31 Corpora6an I'MFC"},a regienal finaneial aervices holdinp company headquartered in Minneapolis, Minneaota.As of Dscemh�r 31, 193d. MFC ha0 appro�amateN 57.9 billion in asaeu,55.5 biltion in deposits and 2ti ofiicws principelly in Nortn Daeom, Minneso�,Nebmske,bwa,Kanses.South Dakota. Wisconsin,and Wyominp.l'he transaetl� ��^ will ba accountad for as�p0olinyyof-intNeStC. On September 2,1884,iho GompanY completed the aoquisition ot the domesri�corporato truat pesiness of J. P. Morgan.This p�6in�st unit providw trwt s�rvicea for approximstely 650 clienta wi�3,8W b0�%1 ISSUfS��l lh�g!@Yy Qf OluiliCipHl,fevenue, housing and corporate pond�ndenture tnut�eahips. On March 25,1994,Lhe Company wmD�eud trw aopuishion p}Boubvard BancorP. ��c.,a corT�mrrci; bank hpldinp cempeny ba6ed in ChiCagp, Il6ndc,with St.6 hiltion;n aRFets and$1.2 hiliian in deposR: The Company exchengmd�pproximataly 6.2 rtWlion shere�af its comrnon 9txk for 8A of V1e oufSWndir cammon swek of Bou6evard and aecourrcad for the transaction ns a purchase.The Company also rapurchasetl Axisting Snsraa oT hs common.s[xk approximately equal co the numbar of sMres�ssut � rt the time of r,lnsing of the BouWvard acqucition. i � � { i I ! i � 1 �4 FIISI B�IIY SY��Vm,IM l��S�h[N.11p3 � Ub� UI �vJ 11.J1 '(�r'1J JyJ 1JVY �Vn1 . In�Ja wJ�lV �u�� 7abb f. Selectad Finaneial Oaro IOe�.v�'m 4'amc.isw��N SMnr Yrcwd /M_ IIA 1! lil 11r - Cosd�llc�d Ieco��SLiM011t . . I� ti+t iMCleK iMm:�ISIM1hlt-%urv�lenl E#xi�� .. ._. ..._ .......... ._......,,, S'.i09.8 f1,ib0.6 S1.a17.0 f 9�1.2 f 8777 ' Pr�:iontarvediUwaea......,.. . .......................__.. ..... _. 93�0 125.2 �B3.a 1021 2i5./ � N�tiMe�astikome:dtnrpmvisionhraNitbsse: . . . ............ .. ..... 1.116.9 1.025.1 �dA 1�9.0 657.3 N9�J!rtCrevi in:ome .............. . ... .... ,.........,........ 6iB.0 569.e 535.7 �97.7 �37.6 �i AM�periCldlltl Ct17fplO IinMudiny 32fi.1:CldOttl�0 ORC in 19921..,...�........ ..... . - 1'l i 1;O.d - - �� (1mer�wn�naras[ezDense...._..................... ............ ... ...... t.a53.� L7l8� 1.d03.9 N&53 9AI.9 ! - i mcome beio�u uMome nxes ana eunWa�i�x etluci i ef ch�ngex in atcoundn�p•Incipies............................ ................. E91 A {91.5 755.8 . i67A i:3 9 Lzi6frnquivilcn;idlunmenl ..... ............... ...............�,........ '15,1 17 7 P2.7 3q� /8.7 ircomeux��......... .. ...................... .. . . .._.. ........ .58.9 tie.e 78.e 25.G B.5 Incoma heforn r.umuletivic e}fxt vf changas in accountinp p�iAtlp!Ei....... .............. 119.8 '27EA 157.5 207.1 57� LII�Wu[iv0 B�t v(CA�Oflp in attoV�tin�Orircipl�c........................... . ... - - 157.7 ' "' pkt income....... �..................._... . . ....... ,...........,. S 418.8 L 298.0 f 311.8 i T1].I S 57.3 � ll�Nm en:�vviGa i5se�5... ..... .... .......... ........ ................��.. y.�71L 13.7� 14.A`% 139076 2 Yl9L i Rewmonav�reQecomm�nrAuu'I . __................_.. ... . ...,....... 1 .7 I . het i�rt�fast mny ni..... ................ .... ............ .... ....,...,,� 5.20 5.07 4.tl5 4.50 3.70 PNicienryrehu............. .._...._... . .......................... 57� fi4.0 tiA 67.8 75.1 ...; . ..._ . Etfluerm roria euludln0 merper-rsia�uJ ci�iaraes......... __........_.............. 5T.2 59.9 6A] 67.9 75 7 Y�r SM�n DM�. ^nmuryinr.omaMfore:umulativiceffeetnfar.rnurrtinpdf7npcs.................. . � .. S �.57 S 2.39 J i.1E S L)9 i .36 Cumabtiw eMx�af au:wminp changes..._............. ......._... _..... - - S A9 - - '� _ FnmBN�w[iP;6'ne.,.....,...�.......... .. . . . ... .....,.......�...,.._.. S 3S7 i 2,39 S 2.67 S 7.79 S .36 iullydiluWint9meCcbrco�miilxtiv�efhct0liCCWntIngCAi�9es . -.� �......._ S 3.b'L S Y•38 S �.z1 S 17B f .38 Gumule�ire e!leei o'accauMieg clunp�s................ ...�.......,...... - - 1.93 ,.. ' Fully dllo:ed net inc6m!. ...... .. .............._...... . S �.52 5 2.38 i 2.64 S 7.7A S .]6 ��a��do�a,a��a. . ..,., ...... s �is s �.00 s ee s .e2 s .az � Ar.ry.sdertee sh.n Om: ... . ..... ._ . .. I� Tuial loms_........................ _... .._..............._.. .. . S 18.5L2 i 1/.%56 i 7G2`u7 518,3{t 319.10A E TaUI daminp�ssea................ __.................__....._. . _. 13.9U1 2?s95 20.983 20.916 ��.597 T�121 LSSEiS .............�............. .............._.._. ,................ 2fi.T62 Z5.67E 23.582 23Af5 26.85! Torrldeoos�u. . . .. .. . . ...............................�..._.. 19.�a3 20,347 �8)�a tB115 �b.SG� _......... Wnp4ermAn6t .__............._.. .. .......................,..__...... 1.2J2 91� 92> 1.21{ 1.652 Ganmon equiry. ..... . ........:............ .... Z.121 1.957 1.T30 1,a02 1�24E .,......., . . ..... Toul ShMCh:lOer�uyuily ....... . . ........... 7.Z52 2.305 2,09? 1.487 1.51L Mu�-�d Balma Shpt DW: � ?owlloans...... .. .... 319.YE1 i76.779 517,076 Stfi�65 f1F,829 ,. . _.......... ......�.. ,....... .........�........ iotal rscr........ ........................ .. ........_......., ,. 26.219 26.385 26.625 23.851 24.80< I Total ikPocita...__..........._..... .. .............�...,........, . 18.791 'l1.:'91 21.190 79.115 19.37A . lang.a'm OECt. ....... . .... . . �, ..... .... .. .. 1.d83 1,015 92Z 9<B 1�SOfi �I Comniun e0uitv ,.... .. ..... . ... . . .... ..�,�. ..... 2.7s9 1.979 �A39 1.474 i.396 TaulshareAolders'e6uhY-... ..._.... .. . .. . .... . ....... ..� . 2,Y75 2.2�5 2.318 1.BSR I.E00 'ObiiMnas qr cn�n han�o��s�mUud b��wtiC a LNB mary�a.CN!Oald tarron dviEm�k e I p s minun in 19921f IB O�r CN6 aharel.u�q f1.e mllion in t991 ma iaG It+G ir'CNE�wn�. WCit ald nu pav aiuiaencc��h.wars dor+. F'.rn YankSptlm.In[.dAE SuhSfdiNicG �S � {�i011iOIl0aiEOoa�iiwo�.......""'" �" _��. ,...,. . ..._„_ ....'_ �, '.' � nY N papiebLr 71 lN M�Ilio��l.fKepl S�^SI J— �` ��d .... . ..... { �.�� f �.�T II ..... . . . . ....... . .. 1 . ,..,.. �..... 135 1.032 ....... .. ......... . iASh�1nd dw Rom u'Intn........ � , ...._ . .. .. .... .... .. .. ,. .. fed�aiwnbsx�a......,.... ,... ... . _.. . ., .. . _ ,.... . . ..... .. .. ....... ....... ... .. 336 5ceumiac W�uO undR�a�eem�"�' o ronlL. -� 77 . ... . ,._ . . �.,. . .. 3,ile �,919 hatlinp eaaum.c=muw .. . ...�...— . , —. . _ ._ .._.. t9.2B1 �8�779 . 0.�'�Ilae�lonsal�facuHbee .,.. .... . , . ,. .. . . . ....._....... ....... .... , L08f15_..�._. .... ........ ..... .. .. ....... ._....., .. . .._,... .. ...,, 4� 42� .�,. ...... . Leu stluwarce lar croctt ioescs. . ... . ...'. _... !tl.8e1 'B35E ....._. .. . ,_._ .. ... .. .. 381 382 Ne[loa�..... .. ... .... .. . __.. . �,.. .,.., .. ...,... . 11tf � Bank w�"^ues and euuipmmi.. . ._.�... . .._ _.. . . . ,..... 153 _ _ ... ................. ... . ., _ . i Interc.t ncoivatlt� .....�.._ . . ._ . ..... ..... � ne iancas . . ..�,. . .,..,. .. . ._.. ...�.. 1.393 9�8 Gu5tomeri IiaEiiirynn�cc�p —.—. . ......... ........ .. ............ . .... .. ^.—^^ 9PMr as�■�.... .. , .. . __ fi. ........................ . . ....... .... 526,217 ........ . ._ . — ....,._. . ......... i Ta�alaifeK. ........ ......... . 1 li�6flnin�od SM�nYoll��s E4tllq �� oeoos�u: _....... f stn s �.+os ..... ... . ........ ,.... ..... _ .... Nanimuast-Dlaring. ........ . ...... . ..... . . 13�014 .... . . .. ... _ _...... � _ u Imemri,d�arinp . . ..� . .. . .... . .. . . 18.791 17.031 Txal deuuaas . . .. . .. . . .... , ...... . .. .. ... . ,... . .... . t.650 S� I .,... ..._ _. .,. . �q . 369 Fndrt01fM0a WrdieeeJ. �... . . . .. . . . ..... . . ...... � ,. . .. ._..__...... a12 S.wde�seldunda�agreemenl:larpmch■sc , ....•,... . ' . ' .,,,,, ...... 65B � ................._. . __..... ....... . .. ......... 1.075 Oth:i slmn.lefm IMdf hatmwYO...... . ...•...... _. _.�.. 1 A � .... ...,... . � ........ .........._. ......... ... . ......_.. 1)fl 196 LwiA'tllm deffi,. ......_ _.,�... ....... ......... ......... _ .. . �._; ..... ...... d:cepfenc�s outateodinp .....• . ..."... .' "" ..... .... ..... . __.._ 67� 574 ....... _ _......,.. _�.... .._. ._........ ..... ......... . ^� O�Acr�rwirtiea _... . ... .... , 2a.110 _,_. . . .. .. ..... . ..........._,.,...... . . rc[al liebilities�....-- . ...'.... ..... . ... Sti7nhaldY�s'Rquiryl 1pE '266 ....._ . .... ...,.... .............. . nrahrred mrJ� ...... . .`.... ..................... Gommonswck ver�auefl:5aan+nauchanc�d200Aoo,00�Nwres: 445 p4 ' , n�Js7�a'rsnan: ....... ....... ...._�_............ ....... . ......-� 674 inued:193/-71G.7�N,.109•�u�tl 19X7- ......... ..........�.. 717 _ .....— _..... _..,.�..._........... 1 47B 1,�28 CsPqllurPlus . .._ __ .. . .. . . ........._. _... .... .. ....... . _ . i1EH) ... . __. fl26i Aacaimd am nps ...... .... .._... . .. . ,.,... ._... . _ ...� _... , . — . lesz:ost of camm�n smck n u.asury:199c 3 621.450 shat�s:1993—h.391. ahaiW •• � . .. .... 2,278 3,2/5 _..... , ..... ......... ._,.,... . ..._. � . .. .. .__.. ?oul shar�Mld¢r5 6vmiY .......... ...„... . . ....,....,._..... l2E.219 • ..,.,_ ._...... .. _ _ ....,. ..,.... ..... � lotxlliabilfSleS��d 6�e•�lul er6 �qu � � . 'NSNrnmdwal�de�NG anC�1 Su��nunu I � � �'I F�rt BanY SyRc�1,In:��nG Su05Vdirtk: 77 1 1 VU� VI � tlJ aa.Jl Vw1J uYJ 1JV-a �.4t�1 . J�\�Ja �V�L� yv�� Con301idated Statemsut ot I�evrt- � � � ao Ylllf b'WO OB�MEE�71 IIO Mdl�tl:f.kRCp�ti-SN�O�NI '. � w.r.•ciko.. s�.sio.� =�,398.6 s�.aeo I to�n� .._.. ._.......... .....�... . . ._...,...,..__ ... .,... . _ . ......_ Saurit�ee 198�7 2t8� iB6.1 ....... .......... ..... � TeiublC_ __ � ._ _........ .................. . . �� . ...... .. .... IyA �/.6 � _......_ . ........ ..... . .. ' F.xempt hom�merel Ineome tu�. ...... .........�.....�.... . .. 3p.d GI.� .........�...... ... 1E.2 ........ . ... . -- �1.6Nt.3 . .. ....... i.6lL! � � Otfier�nurasi!ncome ..................... _. � ......�.... ,. .....�� ... 1.717.1 ..._....... ...... Toai in;ero�t inco�a..� ...�.. ..... ...-. . . IqNm1 fxpm ...,._. Ti:.1 /237 5B8] _........_..., J7.1 i Deaani�s ,. .. __.... _.....�_ . . ... ., . . .. Al2 9t,B . ....,..... ._ _. � 'etlaro�lundzpur_hesadaiMrlOurchou�ayreem�nd ��... . .,,... .. _., 19.0 1tJ ... . . ....... . . . ..... . ........ 18.5 7eher ehon-�.rm tunes em�cw��c .... . . .., 69 S �4 __..._. . w�w's<em debt..... . ... ..... ..�.....�,....., . .. .... . . ....... . __..........,�... 5�23 579.9 � .....,�,_.. .��.. Totnl iniYreSt 2�n.�e._. ..............�•.... �- ........... .. . . .............. . t:Je9 t.1329 • , ...�...... .... ....... .. 793 1 Netmteresllneame. . __,...._ .. ........ ... . 125.2 PfCN1 i0n Im credit Ioi�ei..�.... ._....... ...__.. ..._ . _ . .... .... ... . . .. _.,.,,,, a � , ..._ .........__............. 1.101,8 1.00U 611.7 NI1S In(OfB41 If¢M1P.i�[II DfONY�II�Of CtfEIS lOf1Vi... .......... . .... . . I YenlMa��llncMn� ,. .. V9A 1J1.1 177� I .._.,......_..................... . CrYditcartlfaea ........ �.. ._..�... . .....�.�� . ..... 159.2 946.1 _. . , _ TroiLtee,....... ........__. _....... .........,...,,.....,..._. .. ..,........ � ... �i5.5 t15.3 � 1�BA _ ....... 1.9 I Serv�ce dnrqes an Eepneit ftCOUats,. .. . .,....,�,........ a ..,. ...., l�sl Securirics y�iM Uassesl . . . ,....... . ....,,.... . .... . ... ._ ..... .... _..... .... .... ._. _................. 7T8.0 p0.tl i LL ..._ ._....,._. . QNar...�... ............._........,....,,. _. . _..... , iem�nor.iotcreF income..__ _.......... . ...... ................_.... .. .._......... .... 62A.0 5B9.B `�35. NaointanatEq.d� 3g5,7 389.1 � ]68.7 Salariw.....,..... .�._... ..._........ ......_ _........._ _...,.... . .....,..... . 97.6 d6.3 8fi.5 .........�.....,�.�...�. .. ............. ........... 87.9 Ei11C10'Me O�nditf .... ............. ........ . ea.3 Neto[caPanty ......,.... . ......... ...............�...... eta ... .. .-... .. .. 7P9 72J ........... ........_.. .. . FumAure an0 eCulomem _.. ._.....�. . ....._.... IBA 62�.2 . ,... ... as.o F�IG Insunnee ... . . ... •. . . . ... �� 20.5 20. ' 297 AOvrrtisirg . ...., . . . .�... ........ ..... . ,.. �� - 79.E 30$ 952 Amnr!iuLon et qoodwill an�amer unmpihle asants. ... . . . . .-..- ... . .... 3Z.p 27.5 20.Y �� OMerw+nonnolwsts . . � �... . � .". . . .... 36) 38.7 ..... . .... 33.8 Protess�o�oi senirrs._ . , ..... . .� - - � . ._, 11.9 21 3 22� - MIaPmEeSlin9..... . . . ... . .�. .. ., . .�fu . . .. � � � , ......._ ._... . ..... 12.91 2,2 tnnenwi esun ..._ ... . ......... _..._ ..... ... �2s aaa ......._... - .�Inqe��m imEpntion ....... .......... . __.... ..... ....._._..._. 20L6 �91.t ......... ... I09. Ott�er. __. ....... ......... . ..__.. .................... ......, � 1.053] 1,10�.3 1J19.7 _..... ................ to�.�ronincercst uwnnsa...... . ............ ........... �^ . .... . ... 876,1 a7GA 233.1 ... _......... InCpne bLAae��aRk W�es JnA cumuletiVe e��t M thenges in act0unting y�i�Cip�ea..._,... Z�9 �.�8 ��fi . . _. .. ,..�.�.._ ... . , ADWiuble irxoMC tar�s..... .. ..... .. ......... ... � .............. I � , 419.8 299.0 154. ,...,.,,..._.. IKome hSfore Nn�ulatirt Nfee�ai eM1a�es in xcountin�printiples... . ......._....... ..... 157.3 Ir i�o.,..... .......�_......... . - � Cu11W1vLivelK��fcluupe5inaccOUMingpl q . ..............'..`. _......... ..... .. . ... f 419.8 f 298.� f 3119 N��ncome. ....�...... .._................ _ ....... . . ......_.. Ne[ircome avo'�inde to cummon.quim ... ._. ....... .. ......... . _.... , ... S we.s S 2702 f '�. lMin�L��rCoqllnsnCNM � . . . 1N.5M.EOB 719�Q75A29 105.J61.U77 . ...... . .. ... .. A�nnqecommen�Meommonenurvalen[shares-. ,...... ....-. ........... S 1.18 .. ......... ......._.. S 3.57 f 239 .......... 1.19 � • rnunungPrinciplC�..-. � � C�anurrive0[IkCtoltdunOESiexeount9�principlr: ....._ _ ..,....,..._.... - --� ............ ._._.... ... ^. ....._ ..... .�._.. ....... _..... 1 3.57 i 2.39 i 7.67 Ne�intMliE..._.... . ......... _..,..... S�Na�eftaGortoliWuC�m�q�Vs�n�rao . . b fim.BaN Yyrtem.'�ne end Su4wd��des lly' UI ' tlJ �1.JJ VL1J JYJ UY VU�1[ . �1��J♦ +�Jl'�. �UrJ Co�solidatsd•Statement of Sherehr�'den'Equity -- VKYW�Y �p11IlIpF $��M1��i1Ni7 . ShMa Auly�y Csenc.� Gpl�i RWimC. OnSC�/Itlef, 11YaW 16�1MIMw4EKV�4�KW OYIi�1�A' S� i�wi SW�ui f+minQ� Nnvt1�� q�}�� Tofol _. _.._.__ _ . . .-� Ml�ace D�o�wrw7i.un ... ............-... 102.536.BW T 378.5 1178.5 f�17 6 S a31.8 ! - S 1631 iLtl57.1 I Netinwme........................... ..:... . 711.8 J�t 8 � DivideMs tlEC10fe0: Pnl�nad............................ ..._. � � 13011 130.21 �. Certimon............_ . . I I3.11 11].11 �, ...... ._.._ .. Retiremem ol�u,ii�a:qr�eA in mmycrs ._. ... .. . f290,t 291 IAI 691 1631 � Iswarcc uf�Ynnmon stttk: acq�isi�imolBanl�SAores�neorpara[eC._....... . B,1tl:f,255 10.2 2ooa 7 2tii Atquis¢ianol5'�auxtaM9ankNolCingComparry . 99a,1t7 1.t - 20.6 ��0 DividMd r�inve,tmone.._.__. ..... .. 50A.397 .5 !.n 2.0 17.3 Smck upibn ard stccY p�rchase D4+�R. .-.- .... L537,90A 1 s �7 2 1•6 Y2./ '. Ad■■c.0.embrll.l!!l,.....�.,�... t13,e60.t25 17A5 »'.e 69,] 1,td0.3 - � - 2,318.3 '��. ... Nealncome ,..._ ._._......._...._._...... . 7Bb.a N8.0 0 ividends dwluw[: . Prefv�.ed . . ... . ._,,....... ID.B) (21.8� '', Comnwn __ _ . ...............�.... ' � 1109.7) itU9Jl I PepurcJuc�of cammOn stock ta t2uYry,........... 16,18t.2961 It87.t) {I87.11 Ittumte of eommon rtaok: prvidendreinvwNiw•�L.......................... 221.201 � .D 9.4 6.7 Sta�opNnn nnE simk puclul�pleL . ..... .... 1.,qp5.742 S.l 18.1 fJ.61 11.3 27.6 - RedemPtion of p��hMd C.OdI ..............�...... I I 19 6� 12.61 II 1i21 Unmli:�d p�in an er�ileNe�ho-sale,ecrnties ...... " " �.0 31.0 i Bduee D�oM�Mr 7f,'IYB�........ ....... ',. ...... 109.401.661 P85.9 7a�,ry 876.6 294.6 30A I18d.41 2.2a5�0 I� Na:income ...__ ._...................... 419.@ at9.A o��eobseoeiub� Prelerred_._. . ...�.................._...� 11�.2i In21 ��. Common....._.. . . . . ....... 1130.91 1190.91 �� P�rchase ol ucasuN wnc+ . .. ... ....-.. 16.305.WT� �2"lU.41 1220A) Repurena:e of emct wan�m....................... (2.3i I�.�) ACQu�Siti011 0!BOUIEVe:d BI�l9rp,Inc.t�� eDmmonSfOCr.wartaits.�inls[akuOtioM ... .... G.:ZT.W9 '.7 99.9 t0�j.� P06.2 Othericauis�dant.... ... ................._ 1.3BS.B06 I13.91 46.7 3a2 Iss WMt ni r,pmmnn 6tock: OiviOerd ninvnlmtnL..�...................... 185.890 .I 6.3 6.5 Smek apiion md riaok pwchase OW� _ . .. . 1.2LL5.9l5 1371 (11 fi� 92.7 t6A Stxk wamnla umciaaA....,.�,........._.... 497.566 .110A1 'J.0 6.5 FetlemPtion of n��erteC nock .__.... _. ...... . (160.01 D,01 I�ezol Cho*�e in unroalirod paim/iloposl...,..... .,._.. IM8.11 1120A I . .... YNnu D�e�murr 31,�sw . __.. t 12.67E.�B S 105.9 S115A � 5720.5 51,523.E S 194.11 S(13L.31 52.211.8 'pCIIMQ az f0ul Cpf�ma+�Mn�I�»n�vn f�Ot1 MII��n fiRaury ••(TO�ry„oawYM�M�4�r�.i.fJlliOnhenber7l !$l5.]A!.BBJi�GKImpN3l.lyq{yq2fr.YNa[OKlmlft]I.Ip71. S�c NaMs m im:uliJYtN t+Vm��Y 3i�n.mn ' . � brt:t Bask Sp�em,inc.ana SubuEi��les N ua. ��. n� 11:00 'U[l� o�� idoa ��rtr. .n��a �eaiu �Stii�ty Consolidated Statement M Ca 'lows ,w� ,�a ns YNifnM 9e11miv..9!Iln MilliPs�..� . . ' I 0 Mrin AminU�s �{ NlSlntume . . . ........ ...... ... ......... ... . ............. S 119.H f 29F 0 S 311.8 I 0 0 Adjusrmenu m a�:untiie ne�incun�e w r.er cixr,ororidtd W eperarny act�vsin: ��Q � hoviSlM fOr crxUi�IOS.E/. .... .... . . .. .......�.. .._ . ..... - 0.9.0 1252 .... . .,...._ . ._ ... . �. . ...... . 6Y� SA.6 r8b � oep�ccianon md Imortaation nf henk prcrrses�nn er,uipm�nt. . . . �........ .. _ .._ .. Fr:visionfdMternd��COmeqa4s .. . ........... . .......,.. . 75.7 LA.O ZZZ I .... ..... .. . .. ... .... .. fvnMli28tlGn�t gu�dwll�lfd diher mtmiWcle abs�6... . _... __....... ....... .. _... _. , 39.6 306 75� mm�nintian artl w❑teauwrs er�aen esr��c��u wia�ee imungib�r. ..,...,... . .__.. .....,.-.,. 13.r c�,r.g ta:i 2.6 18.1 47b I Wnle-UfrvrO50fD1116f'ExIe,CJIE. . ,..... . ..... ... ..._. . .... ._.. .... . .._._ _...... .. , _. - n.s e�.a FfaVisianlm rtnrrMrand inte9rition. ............. . ......, ... ..... _.. ........ ....... ..- 1157.31 '� Cumuletivt eRcctolx.r.nunii0q chingac. . _� ..... .. ....... ... .�. ..... . . .•.. - .._.. . _.. .. ;n�n9ax`n uperatin9 acaPh and IJ611i[ies e+.nludinA t�1 ilfeeta uf yurth7se acqui]ifqn,: . ._... ...,...�.. ._. . ......... 122.!� 79.7 ' S7.I IInC�tlARP.I E2[fQBS!in ltitlu:Y dL(0��2 LSCUtilitl5..... .....�. .. CaClEASu IinCiEdSll III IOBn7 hFld IOr.ala .._ . ._.. . . .��.. . ,. . ... ...... ....._.,... 851.1 . (9;P.fl) �191.<I . , . . . . .... _ d'L8.'� 183.a Czcrliseinf�v:ui:ie.heiEfar[aVe ._ . . . . .. .. ..... . _...., . ! ...._ . 17.8 11U.21 3]. Decreare finnaaad in acCrued recoi��4lts... . ..,.... .�.. � . . . . . . . I.D ' i9acrcaSCl�nr•nacGin dCC�uedlia�ilrtie;._ _ .. . . .. ., ...... .. ,,,,..._ (Il.S; � I152.�1 I . ....,. .. . OihC' PBt . ... . _.. � (37.01 181�1 15. , ... . _....... . ..... ... . ._...,. ... . . . ......... - N![ua�h pio•ir.eA hy opEro[in9�LiNitinr ..... . . .,...�. .. . _. ._..... '�.57fi,2 � 567,3 668.2 Invcsb�uJ Amivititl i No�t35h pmaiAM�osotll6y �m.rost.Cearing deunsils witM ben�s....._ ...... ..........�,��.. 9.7 32T 5 BS7 ! ... .... . ... .. Luansoutm�eirg.. .__. . . _. .... .. .. . .. .._ ... .. . . ,._ .._.. iR5?I 11,42a.7V 1tlu.B _..... SE.u11Iii5 oumhu�d under ag!CEments ro tes¢II. .. � ..� . � .,�... ......_. ............ (30.51 193.11 $�Lu1i1 E]h��tdCtlhl6 Sales .. ..._ . . ... ......... . ........... . ..... 1.W0.1 dG.B 3.5 6 I .. ... ... ... ... ......., ._..... M�lurities.. .. . ...,...... . . .,��.... . .. ..... ...._.. . 730.5 1,235b � ._. .. .... . ... �,.. ..., ,... Purthascs.. ....... _ . ,. ......._. . ............ ...._. I1,Ofl]I I8BG.41 . . ] ._. . ... ..,.._. ......�.... �fO:GEtlS Imm;aIFS/reparmtnN al cPlr mnl csum..... ... .............._. ... ... . ......... 65.8 99.5 • . .__.. ... ..... .._.. 6.a 91.5 97 YT.nW:h�m sa'ct 9f�wnK pr¢miT¢5 antl Yryuipmem.. . ... ....... _. .. ... ..... . _... Purcnaxne al oark ereT.ws nnd e9r�pmeni . .... . . ...__. ....... ...... . . ...,.. .. .._ IB7.9! I>>7.61 I�. __.._ ,...._. 11191 133.61 15 1 o , . __. ._ ._.. . . ...... ._. ., �..._. . .,... )4.5 � 19i1 � Cash antl casS tia.+2ieru of ec uuud suo�idiadea_. _ .. � �� . . G ... ..,.,.. . .. _ _.,. � 8us'iness aWu.anlcns.ne:of ca�h received . ......... . __.... .....__..... . �57 1� 13 0� d).4 � � 1Y.tl � SBleulunLOnxclijat8�7�u;�.d�0�idx . ....�.�._ .. .� __...... . .�.��.... .� _.. . . .... ....... _,.., IIY.21 R6.JI 97.4 � � Otnei-net . . . _ ...._ . ....... , ..__ ...,....._ ..,.... . .....,.. . . . ;_ . ._ 2t6J IBN,01 U]2.a1 NelcashpoviG2ClusCdlbylnve.tingacbritiea. , ..... . . _. . . ... ......... . � fiM�oi�p ActiYi�i�a �' Net ca5r prrcuid�C lusidl oy. `= Ceacvts. .. _...... . ... ......_ ...... ._....... IJ.Ui2.3) I68�61 1]B.B i . . .. .... ................ ..__ _.. . � Federal tunAs purchaseC in�7 aecuribes soln und�r eQre¢mcMs tc iYOurc!13se... . . ...... . ..... . ......�� . ¢iG.B 1198.9; t . `� Snort-iem Corrowi:qs . ,... . . ...,....�...... .....__. ...... Y16T 5�a I32.51 .. Leny�ti;�mOeMtrmteCtion;: q0.0 580.8 " Proceed,_. ..,... .. .._. ......... ....... . _ . .... . .....�,...... 6�10. '2EG tl i7W11 � Principel p7Y:nenl3 .. . . . . ..,, ..., . .._.... �Z! � � . ..... ...... ....... ,.. .. _ %' XeEemption of prele�reU stotk ..... . , ..... ._..... ... . . ............_ I 167.01 I I75 Y! _ � Praceeds horo 9iaiGntl re mes:MeN..,.eck option.and scntk purGh�se P4na� . ... ,_..._ . _..,........� 7l.9 34.5 • aF ,�, .. . i772.7i '�1A7.11 � P41C1lSlOftrtlOSury'+IOLkan07tOctYq�ran!r. ...... �......... ........ . .._........ ..... .. .. t SIOck vnnan4 crcru.^•=n ._. , .. . . `. ... '.. fiE - J .. ...... ... .... . . '. . ...... . . _.... .,.,... ._.. iN2.11 P31b) 1103.31 -% CJshnividenti5�..,.. . . ..... ,....,., ..._ _ . ..- ....... ...... . ... . � Not tasn uasC lry fi:�ancnp uttlu�ties.. .. . ...... ...... . ........ _ __... 1270n.51 �732.0� i61.71 ......... .... .. -. - � Lhdngo m twah antl eaeh tqui✓dIEnIS,........ .. ....... ........... .... 1957.61 1706,71 ��B,1 ._. .... .. � ....... r Ca+handWshequivnlenurtDeQinninculyeai ._. ...... � � . .......... ...._..�,.,..�.�. 2.713.5 JItA.2 2.9fi6.t ...._.. . . ........ �arntlnGcashCQ�iive110198IFrtlalW�r...-.. . ......... ......-... S1J55.9 Z2.713.5 f341A.2 Sce NWiS W�q��16d fi¢nud$Utm�lMf. y$ Fi�t 6u.r sYr.em.�n mtl Sub:7d4�iie �: ._...._._._._,. . .� � "__._... ,r,��. VaiV� rOy y1.Jb V�1J JYJ 1JU� VVA( . 1P��D1 rOJ1U �ULJ iR�part of�Yiansy�n�� Roport of Inder�daot Auditors , The tinanciai statements ot First Bank System, inc were The Boartl oT Rirecmrs and Sharehalders I prepared by management,whicn is rosponsiCi¢tor thwir intry�rity Rrst Bank SYstem,Inc. � and objectivity.The statament.have hee�prepered in conformity ' with generally accepted acwunting pnnciples appropriate in the We have autlitetl the eccompeny�ng consoi�dated balance sheets � Greumstances antl inclutle amovnts that aro basetl on menapr of Firet Btink Syytem, 1i�c.end�ubaidieriea eo ot D�qmber 3�, . menYs best estirtutes and judgment.All finaroaal infartaliun i994 end 1993.ar�l t1�e relaied consolitlated s�aleme��s of income. thrauqtaut the annual report is consistan[with�hat in[he sh�rQholdQrs' �quity snd�tsh flows icx,pch of tha th�vv y��rs in I financiai smtemenU. the period ended DecemAer a1,18s� These financul statements The ComOany mainWins accountinq and internal tontrd ere the responsibiliry of the Company's managemen=.Our roapor+- sysrems that are believed to provide reasonabte assurance that 91tll�ry IS t0 OxpqSS 8n opinion pn th�98 finBnGiDI STatBmB�t� eRsuts arQ salop�ardQd and transactions ara properly authorized ' haeed or,our audits. � arw recarded. To monitor wmpliance,tne Company carries out Wo mnducted our audits in accordance with generally accepted � an eMensive audit p�og�3m.Thi;program includes a review for nudicinq scandartls.Those stendards rer}uire that we plan rM � � compliance with�written pdicies a�d praeduros and a compre- per�torm the eudit to obtsin naaonablo assurance aM�ut wheth�r I heasive review of 2he sdeau�cy antl rNrctiven�ss of intornal eha financial macemen�ere free of material miesieien�ien�.An control systems.Hdwever, there are��.irnits inherent in all systems au�t includes examining.on a tesf basis. evidsnce suppo�tiry Iof intemal accounting control and managQrnent recognizes that tha amounts and disclpsures in ehe ffnrntlai stacemenis An auNt errors or inegulariries mey occuc Based on 2�recognition that also inetudas 2ssessing rha ar.counting pri�cipie&useA anA signili- the costs pf suth systams should not enceed the benef i�?o be , cant estimatrs mede Gy manaprmrnt,es wsil aa evalurtinp ths • tlerivetl, rnanagement Wtyves the Company's sysum prwidrs nveiall Financiel statamant presentaGon.We bzlieva that uur audits an appropriate cost/benefr[belance. pruvide a reasunable basis for our opinion. The Company's independent audirors, 6mst&lbunq LLP,have In our opinion. the tinancial atatsmencs refertetl tn above been angogcd to ronder an opinion on the financisl steterr�n� present fairly, in al1 materiai respectc, the cnnsoiideted tinancial and to aasiat in c2rryinQ out the audi;program dea�it�ld sbove. poshion of First Benk System, Inc.and�ubsiefieries at DeCember 31, ThOir OD�nion on the finencial statements is beyed un piocedures 1994 and 1J33,and the consolidated rvsu�ts of thcir operations perfomx:d in ecr�o�ctance wi�h yer�eraly accepted audiunp standaros. antl tne��Ga3n floWs for each of 2he ehree years in the perloG including tests of the accounting records m tM�xunt necessary ended December 37,199a, m contnrmity mnth genarai�r accepted to allow diem co report on the faime,cs oi the financial&tetements arcnunTing principles. , Emst&Young LL�'nas fuu eccess to the Audit Committ... . 7ho mpnagemern of the Comparry is c;ommitced to and hbs �� aiways ma�nWined antl enforcetl a philosopYry of hiph ethical smndaros in the conduc[af iu business.Written policies covsring conflic[s of ince�esc aM r�ther eub�ecus ara formulated In a Cafe Minneapolis.Minnesota of Eth�CS whiCh is uniformly appiicabla to slt officara and �aN 21,1995 " employees oF the Company. � �' % JeM i Hueidv Chacman.Fheaaem and Ch��e+Eucutrve Dff:cer � Yx Chalnnan aid Chie!Fna�c�al�m C� �rw D�vNdPilfi� � Sm��a Yxe PraideM and Lo�moller fi��t O��k 9A«�,in[.md SuusiON�i�f M VLrJI : GJ 11. JY �L1J Ja� i�V� y1i11� . 11��J� 1�JJ1V VyU�V Cansalidsted Balancs 5hest—.�MMYeer SummarY `q� �„ ,� �i,M . � ��w 1�17 ��_7'�.�� c��ovn��;u� —� � � 13.61X � . , .. s 1.627 S 1.W12 i 1.B1R S 1.GB3 S 1.67I I � Ivs�tt . ... . �710 �;508 1.602 161.81 �` l:Ath eM1d dU!Tla+'�WnW.. ..... .... ..�... .. ...... .... �71 1 33B � .• � � . ... . .. . 327 410 � FndYRIlmEs SoIO�M1 r¢5a1�o9�lunonu .......... .. ..• � — y5� 13fi �U.O . . .._ _........ .... .. �. 55 �� .. iMeroso-ea�nn9 doPamin wNi harJco,.. �• ... s36 � — ities _. ..... .... ... . . .. _... . 2Ns *,ndinY��aunz cecu� .. .. - - ..... ...._ .. . ,.._. . � � ..'... py4 I28.T1 , SauCtias haiC Po��a�e.... . ..... 1.155 i 541 I.Bt6 SFcuriilea' ... ..��. .. �� . 1,155 '..577 B.0 � u.S.L•wawry....... . .. .. . ....... . .. 7ei� �300 ..SA3 . � ...•. . 16tl 166 435 i 19.21 Mon�^Aa-backedsecurtua .. ...�. . . _ . .. .... 17tl � t75 a�� eip .. �.._. 3'Is +9 . �.... � 262 Staro ar�d aniitic�l tahmvisms..... 4ytl �`� ' 152i .. .... ..... ........_ .. _ . __� -�' 3,912 Y.SDS 3A06 � � U.S.egorcies an0 othsc� ��-�� . 3�,� 3.319 q,7 .......... 17.07F 16,3l5 1fi.B'N _ tin,ne rou�:ecuricaa.. .,......_. ... ts.sel �� 2.s. .,,, ......,�� e�a wH � 427 ...... ....__.._..... �.� L�ei Biluw�np fOr crldi .._. . ..... 4 .�.� 16�37b � 27 ........�.......... ...�. ... _ �-. 15.938 , ii�es. . tB.A41 78.]58 '�fi.fi2H .,... .. .... . ' iJSa 11NJ 1.30F� Z5.7 � .,.. ...... ...... -' z.05s 1.635 �.� Nu[loana. ...... -... . . i ...... ..��. ^ -�-. '�- R�.BM 1.61�10 ...,...... j29b5, ,,.. ._. �fi25 Otna�asse's.�...._...... Sl8,365 .,...... ..._. _.. .,.. SYs,2t9 �alaf 7sse�s ..._. ..... .. .. . I� � Lie6i�i�in�o�s6�n�R�W�' I IS�.9H 0¢poshs: S 5,7�7 i 7.Iu9 S 6,011 f 4.1'[9 s �'�' 1 �3.91 ;• .._ _... m,m un2 t5.0e3 � '� Noni!ItEMst-hEaiIP9•..... ..... ..... .�....,..�._. fq 13.64i . . 13,0 �1—� " � .........._. .. �,_� , , ' lnlemSl-hYOtiM ... ..�.. .... ..... .�•.. ...._. ',tEb t9165 79378 � . . „ tB�i71 ��1�� 1.303 1.651 �I i11E YacaldtPoths-... .... ..... .. . ....... ...... .... .450 16.1 v. .._...�., 2.A22 � 9A8 �� ...,. ...-.._. . 1.0!5 ..._. ,... 1pN3 �� Snortqem M�rovn�ws .....,..._. � fi69 �t. long-ieim aYha_ _..... .�... ' _ e{8 '60 � 841 �-�. ...� ,... ..... �q� 1.0 Othe�Ii29111tiec . . .. � ..... . . � Za;3� 14.7d � _ 23,9� i.e� 1 s00 t: .... .... . • � 2.3t8 Ymd 4lamlitic. . . .... ._.� _ 2.275 L.G4�.,_�_ .� , ..,... .. _�- f24.W6 I.i 52�,951 .. ......� 76,fi25 �- $n.rehoi6ei%Nu7N.�_. .... ... S2f..219 SZc.�BS = _ .... .. _.. T9iil IiahilifiEs�A shp�unalEErs''Wuity . .-� . .... i •Milio�4fOhl+ie in',y9/�n�.lYil ••Nm nYi��NW� ; 1 y� Yutt ant Sy�am.Irt,m0 Su05itl�onp , •. G011301100I60 'JIdIBO111Y�YI u11:Vlnr, -n�e-��Yt HW�M�IOI�•• . �•• y� . V V-.. y�_• � _ _ 1 ��+ I Yc�baraaumON]i0nrn-��xnl f� �Mt � �wi � tlf1 MFtr I Iwr.allaeen. � ., � i Luans . ..... ,..�._. ... .................�...... ... S1 51C.7 S'.J'Jb.h 51,418.8 51.626.3 E1,9221 � B1YP. I I� !.r;ytitiµ: � -aAOWE .......................... .. . . ...�.,....;.;�.,. '. 167� 'I °x�mp�Fr�mtnd�nlinco!netims...... .. . ,.,... , . �'i 216.Z 1�i.4 77L1 471.7 (77,8� . ,. �J.O 14.6 IYA l&I � 31.9 I '. ucner inunwi ir.comn....................._ . .. . ......... 'LS 9 ]0.� tl1.4 97.5 �a6� �'�� U7.11 ,. Tato1 m�emet incomG.. ,.....,. . . . �. . ................_. 1.7A7.1 I.6G�.8 1.fil1;1 1.962.5 2?77.8 :. S 1 I _�� IWnat Ex�nra� I D�.posrs.............. .... . .. ... ..,..�......... ... ... l7?.1 �T3.1 .'iG87 872.e IJ9tp I:i.91 . ................ 9'Lt 31 8 37.i 57 9 !3A.0 t�fi.0 I Fadcml furvda puscMud end•spuahesc Ny��mnma .__ . O�hn�INrt tam tvros 6cnevnd.... _... .. . ............... iA 5 19.7 � ta.3 ie.2 7a.s �R.CI I lang-term JCO� ... .. ............_........ . ....._......, tl9 5 SM1.6 Nti.1 100.3 152.2 27.8 . _.. .. ! Torol intnmct upinsc........ .. .... ....._...... .. ..... uu2.3 '528.7 68fi�E '�.�SS.Z 1�553.2 4.4 ` -. . ( ; w�rinnrasclneane..._... .................._. __............. �,194.8 '.,132.9 995.1 906.6 x7afi 5.5 p .... 3.E c.er9�eleuC}�,. ........ 99.0 125.2 t�l b 20I.2 115�� !I5.71 ! NclitlKf�ltlnCP�i[ea9ie9{IOY�iIan'Fu�rc.'a'ni�ae�„�,.�._......�.. , .. �aa+..e t,W� 7 BI1.T T04.tl 60➢.Y �I 8.7 �I � I�OOIilMesIGICWII� �'�, � IGaCitcardlars....�............... ... ....__........,_......_... t19.0 137�t 11E.9 90/ 71.6 �i 9C.6 I - Iruz2�lP3............................ ..............�...._. ._.... 159Z tAfi.1 117.8 f155 108.1 N.0 � � S9nitetl��qesonJuuusflauoums .. . . -,_ � . . �� .�. ��. 115.8 i1E7 Ip8.4 972 91.8 .Y $pcwi�iaspanslb�sasl.. . 13.81 7 1.9 eN 3.fi Othar 1)A.0 170.9 1507 ?81.7 tn7 �I 41 fTorbinenintera�in�ronm.... ....................._..._.. R8A SF9fi 535J 4d7.7 937.6 ' f0.1 No�i��t Exl�� I Safariee _............................._. .._ . ......_.,... 3957 389.1 3tlX1 37;.7 391.6 I 1.7 Em01ar!lbOnu(ils.................. ..............._.. . _........ 91�.fi A6.3 A5b 79.3 77.3 6.1 NPt xtupencv. .......... ........... ......__........ _ . ... . 86.3 A3.1 97.9 M.0 83.J ' I]fil i fum'ttLtG Cnd CQuiUrnunl..��,�........... .�. ...__...... . ._ . ... 78.3 7�� BL2 ua e 6T.! !.� �I fO�C iiuurenm....... ............. . __ . . ......... 4&0 1fi 4 �23 9tl 5 i52 ,I L51 �. Adv�rtisinp...... .�.,.�.......... .............. � ............ 29,7 20.5 20.0 Yt.N 26.0 . 41.9 Amonira[ion o4 poadwd;anJ ullier�nWnp�01!asaeis...... .�� . a35 7o.E a5.? 2t.a i�7 I 29_4 II ONB�GBfcnnnRlroSLT..... . ....�.. ......,��.,,�................�,... 322 27.5 7a.2 17.8 n fi �. 17.1 kafes7ional wrvices ... __.... ..................................�.., 93 P 36.7 36 7 37.9 ae.a �� Q.Bi� �au V�acvssm� . .. . ... ............. 17.9 21� 2Z.a 33.5 t7.t I 13u1 _.......__ _...._.... . Od�cr re�l esta+e p9il7 IncluMs S26 d mergeo-relalWl.__. �............... I2.9i 2.2 s7.2 7o.G 42,4 Ir+i 8) II Meryef a0d iMe9n�nn ....... . ..... . ............. � 72.2 9t 0 - - ' . __. _. ... . .... adror............. . . ..... 208.� 2m.E 1'r.t 17Pfi IB7.0 5R �I _.___... ... .. _._ .__..�. . reUi�m�cc�esteKOonse._ .. .. �.053.: 1.100.5 �,tiA:Y 969.� 981A (E.31 In�pinp bpton ixamt�Oxt7 a�d cumul,ltiwi Mfact . � IN chinge6 in acsounvmg pinciplq......... ............�.. 876.7 478.9 . 293.1 2�.0 65.8 1l.9 kPIka0lcinwme�a�as .....,�............. . . ............�. 2s�a 178.8 78.8 zs.9 e.�, 4�J I� Cu�Jal�c�.oh c ofatiwettect of d�lnpec in nr,enmrcing prilktOiYe......_.... . .............. 419 A 288.0 154.0 307.1 57.3 II 10.9 I � thangee m 9GC011114f1q D�Cipks... ......... _ ..� � 757.5 - . rk�inemx ......_ _. ........ ._ . .... ...._ _._ S 419.8 S 2se.o S 371.A L ZP7.1 3 57.3 G0.9Y. NE!i�CumC applicrJ�IC i0 tommnr,�quiry . -... ... .,, S 408.8 � R'/0.1 S T61.6 Y 183.d f 33.6 »x� �ww�.�gnd � fint Bark SY:�<m.Mc.+�d Sukf�O��riu 71 Consolidated DailY Averags Baleaee Sh�et and Relsted 1r�lda�nd Nates ' aa ��,.� +� �«, cu�ad�ea cw�� 1-- � � "°"" �` rnevw�;�r,*+na� _ nem� -. ' r'A°' e_��ex .�nwon �- � o-�m�rt W k�. � Ywse _` p�ann �r�.� p.M7'�:.��_� --� 9.Ob9, �.v SY5% 1 L 1719 S ��'� 6.17 scutlri.�. . _....... F 1.559 s 91.9 t.uf6 tt st . ,..,�.. ... .. . � .. 1.73� aiA 5% 1 �� 22.1 US.hc�ury . .... ..... _. . .. 1A1 t9.7 10�! � ��J S.fi6 Mu.ryo9v S�k�d,acuntic . .. . . _ . ..... �qj 74.2 e.27 6.81 Suu 6 Dcllt¢�I .... . . _. .. y0,. �9,970 21t 6 u.S.Aqrcrf Ondwh•r. .. . ... ... - 3.7a7 2172 , - TaW�s�WntieL.... ..... ....... .. •.. .... � .�) . 3.478 � UNCotiMdlOiSn+�vLlfeGe�Po�-wlc�acVibc'..�... ........... 3.6�9 � 117 4J 6rt2 .....,... . .� ra 31 �b6 2a5 NalOc�viul................. .�. .... ... _ ` 755 7R3 . ......... ...._ � � 15.5 4.Q7 I hOdiM�eCOU�I ilGM�liw....... ..._ _. . l . . HOmiwM�saiAmdrw�eNJnanEOn . ." _... .... ..�..� .. 1 ryp�i a17.5 7J3 iw�rs� 7,a15 521.5 r.5t j 1.5�A {i� 2.77 Cemn:�cul: ..�.. ,.,... � 2Kf � ... ............._ �:.an �'� to�.nert�at............ .. ...... ...... . ....�..�. , Fmu�alimumtnna..__ ... I i.5>> 125.� 7.39 .. L657 ta�.7 8� . � Zp�� ts.7 t B.o/ ..... ......._. � 71.3 65t ... .-....... 9.329 61G.4 famm�rGiN mnrtpi9� ....... ....... . . _ _�- 1Y�� 7.0 ; CpiNuct{or..�............. . . . .....""' .._ ...�.. . ' 10iG1 � 7� IopIWmlMMel....,,.. ....••'... 1�$fi fi1.9 2,162 til.y 7.12 ,� �.0 6.8E CWiLimec ..... ..... .............. .. 3� ji.B 6.85 �� t1]1 8.77 p..�e.a[Ia1 ma�9e,...._....... .... .... ... ..... �� 170.9 &71 I 71sa 237 i 1J./! IksiMMi�Imn�ly�l9BAtl71�M1k............. .. .... .. , 121Y �� it6.5 9.p1 , ...... - 2.06� 7iB.9 11p�o9UMu�W�ecar�amon9�7 .... �...... . ... 179.E 10.7� ' 9��1 .... ............... 1,117 GnNlcxd... ..... ....... ........_. 8.42T � . ... .�,........ .._. _.,- 9N . , _.._ _.,. � e.ef_5 n.rse trosp 791 er. _.... ..... .. ....,�,......_..... 1E.562 15797 E.79 q7 Taal mnwmer..._... .,... . .. TolallWm......_ ..... .... ........_ ..... _.... �....,. �M9 17.709 ..... .'.. ....... .. 1bd17 `t7�r 'a07 q11ow��IOr ue0i1105a%i..--.. ...._. ... � /.� �.� Nillaim... .....�... ..•... .... .._...,,....... 726.�- ' 2I.G% 1.679.5 .... ............ t.7621 7. ....... ... 22.9Ut i t 7P0 OU�t(nmin�oaun ..... ............_ .... .. Toul��min9�iTh: .. _ .... ._....... ..... ._. ..... . t.67e 1 fi07 ..... ................ . l 1,69p . ' .��95 Cath u�auE hoR eM��........ ,... .,.... � .�.... .......... .,..... AS762 OtlrrutteV.... .... ..... ..., ... .. .... ...... .... � TaLlJeutF. ... _..�. Sg�7ti ►�.en�a•o�swr.ian Ea.�r S fi.057 ,.e� ...... .... 30.6 - sin-.._. ..... ._,._..,... i xAy Nonima�st•6Eeiin9�7° .., 2.59D 3�'.] 1.41 � 397J 102.9 YBt Initqri-ImuinOdcD�in� ..... ........... ... .... . � 3f67 IO�A 2,T! tA11 9{l.i it4 mn��s:drekin4.............. .. ...... ... _.�.... 1.498 7U.< 2.OJ 1Ni.f S.BB MonBY oraiut�Gamn�.. .......... .,.,, ,_ 0.7) G.957 5.4+ in BCCauUtS ... ... .. .,,� ......•...... �,IYI 111.� 1��18 � O�n�Sir Y� .. � .... .... 57.8 6.70 3.� ...�. ..�. ' 997 _.,... .- 13.�� Yi] 5arinyS�Nfiaus -.... .... . ...._.... _` -!- 7Tl.t A.N lW C�rtiflCi9R wN iIOJ.GW.......... ..... ...........� ..��. 1J,086 2.I7� 109.7 S� i i.ynjy y{_� 5.96 TWaI iirtl�sl�Mentq dN� ..••. ...�..�....... ....�..,...... 1.I32 �.5 528.9 3:1E � $AOR-tnmho'mxNBs ...... .... . ... . _ 552�7 7.71 16.11� .� ionp.pmhM... _._... ... ... . ... tEfiBO � 110 .... __, re'S 310 imiINR�1a�+nryliab�iitix. � ... � IJ7 t.i51 � Gtha lia6d'NG.... ...�,.. � I �f ....... . � . ... ... . .., .,�..,. .. .... 1.14} I�` hdortlKwlY._... ..�.., '.'...._.�... ..... .......�.. ..... 125.76t �� LommWawuiN .,... _.,.-. ..._ � 51.15Q6 �otallnbiliiiaanEshmehaltMis�qa'Y� ..... ....... ..� ..... . 31,N9.n 4•� � ...... 1.90'r. �. .; .............. � . ._,_. ....-. � ; Ik��troRinearf!_........ ...... �J2� . ...... ........�..,... ; f.mcs innrY�1 n�at9i0.�_. .. ... ..... - � 7 Bgy, �, G�aa ime�ul rnfnJui wilhout W a61C�em�wlEnt incnmen�s..... . 7. 2, P�mM�ME�miqllws ...... .... ... . .. T.�� ~ �. ....... 5 ' Imm�a iacane. ...... ._....�.. ... � � ..,.._.......... _... Sfg 4 . ........._. , IMCred uPE11Y ...�., ,...... �. ........ ..... ._.., G.T2�R i . ..................- _ . Ncl{nRRslmir9in..... . .......... Akt i0t�t mOrpin�i1MN 9iiCleiM�iYaknl Ycr�ttu�l� ......... NN92.fY9l�nJ1990� I�uAanC�s a��R"�^'a�V��+��e175 p�'�tfol l!%�'b�� . bW an iRbMIE In M�IN'Gn OWw•a. �IIIi�Vi�iK0A�11dwmtMlYYl1[IR�O�l�OM��tl1f.�NNEOII6O'-0Ntl1YYNbl�.ln-YtlItl�IV�9 'V�O��/l4�M�tl1a 1Mi!l��tY U�I[bsfl{wd ��(Rqi�l(��NI �. 1 n flrn8o�.kS'ntem.InE.E�d>aWeloin o.�. �� . bo �.�.v� r�ae e�a.. ivv-� �..... . _..�.�� -�r..� 'cierr � I ` .� � Isi 1M1 1117-1M . . ... yq�yy In�nnt ' b�wesl ' YMI�i � Y�YWf I YI�N4 S CIrRa eounw �n:o�a1 a�l�w. � l�nM1v munn ��dti�e� . 9.�,rm uwm� �nCWR� oww9PYawin r . .. r � _ . .. � ( 1 s �.5ev s 97.� c.�x s sss s n,o J.e�x s �m s n.a s.roz , ns�ix I ?53 m9 7.35 L7i2 IILt t9J 157ti 155.E 9A7 �� 5.l i 152 1tl,t n.91 tn 27.5 n.a 50t 629 1077 � i!i7) 266 176 fifi7 30B 257 .6.46 55B 'tY.i 513 I I1.BI �� 2.900 M2.8 6.99 ?9M a1117 na3 ' .3.6BS 325.T 8.91 ', (a.sl ' 3.90C � 2.94C 3.685 Ibyl 19 � E�5 !]1 n6 1%7 5xN +A5 15.9 Ii56 7761 � Lvrd /5.� 3.12 7.17L 75.9 5.87 1,3� >>0� 8.16 1�6./1 � 5,87� �51°. }.6f � 0,777 6785 9.{3� II 9,3�a 891.1 10.64 1S.tl �� 1,Up6 N11 3.%! 710 312 7.J9 SS! 39.e S� I 127�I � 1.SOY 7286 e5tl t.391 � q5.1 971 , 1.161 t33,1 IaJO � s.l I 15B p.: 7.Ab ! T.B 7D.5 9]0 ; r65 �G t 9.9I I 77 5 . ^�-'B.731 6tlJ 7.Ya i.J� 9.t02 P15.i 9Ad � i0.6B1 1.1W.3 tn3a '.,.. S.� I ' 2.��3 t87.G O�E2 i, P,OTd tB25 an> >u08 293.5 �Oos ',, � 16.01 nN SH.' 8119 � 671 6t.5 Y.5/ 7bB 7B.'. 1C.17 I 162.7I j � 1,087 93.8 9.82 ' E51 16.0 9.13 6�5 77.7 11.51 �tS t.709 7an iaY2 L195 .173 11.51 t.UAI t7e.i 75.% t6G i 1.9c3 __21t.e u.za 2093 777.7 12.76 1.978 775c tt.31 4a11 i 7626 7Ci.0 10.5/ 1.139 8136 flA0 7.420 B4B,.! 1111 L 16.t57 t�363 0.Ra 46.3Jt 1.6IIi.0 tO.OG iA.�Oa 1,952] 10.79 4.5 /67 1;{� � NB � IAI . ! 15,790 . 75,lAO 1J'030 �� I ]7i N.3 i.IS �61 tU 7.05 277 21.B tl.Ur I�O.W I2o.Ye3 �.�oa.0 e.i2 � 2�.9i6 �.896a 9be �, 2Y.5i7 2.�25.9 �o.ne .Y i +..510 ' 1.777 �. 7 aRa II.q � !.566 I,ffi! �I 1.954 5.2 ft9,592 i23.075 S25A56 .7w � f<.B'0 ',. 3 J.E7E � f 3.518 '�. IS.B!% 2�9¢ SI.7 2.75 1.D97 575 7.03 I 1.lM 91.7 n.RS 5.5 3,P�a i14.5 3s1 3�607 �94a 5.�1 3.291 226.0 tl.tl: P.71 1.172 3a.Y 3.02 99A 47.A a!a �. :.010 St.O 5.It ', 6.2� 5,29F �.6 1.89 5.504 uY!i J 91 � 5,5�8 615.7 9AJ �i i15A� _... 1,/fiA 99,1 6.19 2_3W , nt.; 7.37 ' �.J>E 383.0 A.75 120.Yf 13.9fd sbe.� aC7 16.676 B72B 6,99 15.%6 1.191 a lA5 16.11 � +.f06 51.4 d.66 �]tls b1.� 5.93 I 2.5d7 YP�,ti 8.36 88.T � �27 66.t zti f.M� t00.J fl.G � 1.652 tS12 9.21 31.9 4 15,997 61bI 4.�8 '. 16.974 1.055.P L.73 '�.. 70.1A5 1.951.2 77� � 3.6 I W6 � 578 � 3A 379 7ffi 251 Iti'lA) II i j,7zo �.wz �za5 � e.� S!l,S�IT 327.075 R5,9S6 I .7� �I 37.U1%,$ �, S sn1 �- S B72J � 3.t3! 7.71% 25TK 1I 1725 3�1'M tA7X I 1.:2X 9.Say. . 1U2BX �� 3.27 6,01 P 5a /.BG 1.50 3�� IJI% ' 1,74% 3.�"� nrn Bent SAnm.k¢.and Suhsfdi�ri�� 73 r. " . �� . �v ��. �� V��r .i'av a.iva �.�� . ��.�• n�r�r .v .i.- Ouerterly Consaiidatsd Finencial Date ao � . � � T�ia SLL9^7 F✓�I 1� -J`� �. f�nt �'M �M1p� �� Thii/ Secanc ��` p�MM �� _ �� R J�ci^ CW"� � _ (I�iM�Y�on;�Fx�o�PnAvtl�a_�I ,_ -�•- .u S�:.� S 7579. 3 �tl.fi s�.y I�Yl�cl-� � i l!9.2 S 38�.! S 3622 S Yf0.2 I . ue�e� �� ` _ _ 5BA �wns........._. ...�.. _... ... _.. at.5 5 �.8 �4 �� `a7 7.2 3.l 3e SCC'JnLEs t� �� 11 S ...... _... .. 3.0 3.� 3A � Tuielc. ...... ..... . .. ..... ... 29 FB a9 . . + atWm�i�rcnmeu.es.... .... .... ... .. 6� I.Y � -��---�-��78,5 I Em�n{xfru . 71 63 - I ' p�9 �17.� .... .......... � __�.�-^ ._^ {11A 6thn i�rtcnal incxme........... ...... . /9 s 4:5.9 992.5 . .. ......... RtlR TOWI mtEre�i'vuome . ..... . .. �, � �� 107�0 1 . �� i sa.o �s t� Mdmt[xP�c• � ... t01.� 9+.9 �6 9.1 T.6 . . 9.0 5,1 » I O�W�its .... ...,. _. ...... .. ...... ... 31.1 �ll.l 73 �1 ....._� 5i 3� 7.6 qd t7.0 �9.1 FeOerallune!.purc�vnmand�OPurw+:+peeemnnts,. B,5 }7.4 17Y _ � ..__. ,.. . 1fiR . ... ,e7 -- iaa Oo�c�shon��k�rfundsbar0v+ed ..,.. 71.� � �.- 12yy t3Z.G ...... .. ... _� tit� lmpaermdeb� .. ..._. ...-. .... .._ 1zgd 111.Y �- '� 165.8 145.! _� -� �` �� 184.8 2732 ToL1�Int�me expCnsa .... _�.. ..... ..�. ... �_ RB13 ��e � 76.� 31t0 ]u62 �.3 n0 27.0 �� sa.a »a sa.a �.- s�' I N��inceie+lncamr�...... ..... .... . 7aE ' 26Z.6 1iH,7 251J Pmuizmn lor acait Im�Gs..._ .... _.. �....� .. ..... _ �-71Li.2 1133 15t:3 �w.o NC�itrtGnt iMA��he.perfwn fo�crcJ1�lartr. . . �y Tl.G _.. 31S J6.B 35S E9,t �fS.S xi.0 35.5 Mo�riMo�Mc� gp.3 3e6 I� 37.5 �'A � .......__. M t 1p,0 3n.3 �. ...�. ..... .., a1.1 38.5 78.6 ' crcdacard+an............. ... �� 29,i � 26A a Truftfoc: .. ._...... ...... ..... ._........ 77.y 29.2 ^ � - $owrcacAaiyetOnJcfm�itocr.nWR. .......... • `. J_it.5 Ki.6 _ ... - pn1 -is�le � � �sie i t�SJ aaz � 81 ... ..�... aa.T 619 �'0 r' 1ra.5 M1 H.2 O�N .... .. . _ SMwid�tgsinslloaes y ��o ...._ ..... �.�. .,,� ......... - 151.7 .. ..... ... ..... te�t �ou.nonln��st mcou�e ..... 9).� 97.3 9G.5 98�+ ' 4 I YS.O No�iirt61K1Fxi�a� 100.2 ' fi0 27.8 7C .. 10I.0 2�.) 13E r Salenas. . . ..... ... _ . .... .. ... . .� 210 3+�+ A.3 12.8 II92 2SE . ... .. t�.5 72.8 �8.5 t72 , .. ...... Yt.O 24.2 EniD��'eebeneuls .. ... y0.6 � 192 !/•8 itA . ... .. 18.8 tA� 9.l i pl NetuuuD�ncv ... . ... 7n.2 ��5 11.5 Il.a +7 � fwnnwcnnocVu�pm�lft . ... . . .... 719 1�,p IZ7 G.0 5.l 1�.7 9.7 7.5 � f�ICinmrcrc,,.. . .. .._. .. .. _. �� 6.2 a.� �� r7 � B.0 ��7 5.5 '• Mvert wnp ... .. . ..... .. ... .�. .... 111 iA.S 9.9 71 dE ' . 8.B 1J &S � B.6 8: + AmuR'EB:iuf�tlyouJwill� loR�rlroa�064au�u.. ... . 0�1 76 10] 9.t [ ...,,...,_ Bti B5 8.5 . , �p 6. � d Olht fRr50Ancl coni . ...... .... 102 �3 IA :, ... .,.... ... 3A 3.8 3.5 i 123 . _ • P�Meseiurwl�dricni.... ........_ .... .. ... iR ' ' ' . .... _.._ . _ - 5/.0 � � Dn:Pmur,ing..... ........... . . � �i 32.0 ...,. ~ a7.o 48.5� 5t1 �,� �"" Mu�'nM��,Ittenrnion_, . ...._ .... ' 5�S 55.0 255 7 732.G =9 ............. . --^^� .,_ 757�3 I 7�: _��. aM Tani ranmuns eryc+x.. .. . .. . 2'�0.� 266.9 Ni1.I 60.Y I lP ..._. .... `�� ' '- 1M.8 � n ....... ... 1�. 175.7 16/.t 155;8 ` 157�' �S �r�� {� ... _.... . . ei.� s3 � �� I�cdne Oetore intDmt UMW... ...... 69.9 67.8 � s 9l 1 3 37.5 S T .. _. ..,...�... �_�_ s 911s S 959 p�pf�ca7le i�xomi:�xes....... •_. _. � � - t 110.5 S t1Y1 I i ��l�) ' . ..... .. y aa4 S �7 S 1fiJ i t .................. . - S IOOX S 990 - N��inctima._. ..... S �OQ2 JI S .13 S . ... ... S '.W.6 ee S .81 �i Nnincomeippliw�l�mwmmnmurty .. ... s .� S 51 S .D7 S ............. Egning;(R�wmmen shn ._.... =773� Y16. L1i919 �8•�� yy Sd�cNdM+r19�6�1�� St9�0A7 SiB.G& S18.aW StA,G33 ��1D IY�a55 �: ...... ._....._. . p.W p.oB! 2�.205 23.276 23.d7D 25.7�7 � Lwr .. �. ...._. . _... .....,_.. �296 n . ............. 2.�060 ]fi.1t5 P5.067 YU.281 1£ ...... ... 2U.97o 70118 . 6rolno.no�s,..,......._._. -25.9ES 19.601 _....,.._..... . 1n.7�1 1 B.Y+S Bi7 ....... .... �� 9t6 Tnul i33o��...... ..... ..... 18�5�7 ........_...... /279 1.71� �'� 1 SN �.90Y �aW3iit ,... _.-. ...._. ._ ._. ifGE ' 1.%7 ........... 2.Ifi! 2�17��--�I� _........... . tuq'fi�m GD� . ...... ... ....... 2.170 CummOPlOYity.... _...........�.. ... ........ � (��tiy��l nyV19f O��N�IRIU'M S�I.2 milYT N Ilm W�1�btuA tM•M'i�LOhMCIW�"��Ilp Cllpcvu NNCnaI YiM4W If.I�C.�%OVVIINII. 74 Fint B.nk S4s'•m.1na ana SUtl3i4iuip . �� u� �� : oe ii.Yi y�lo otio •oUy �uAt . lA�-0a �Oo1u �jVJ1 � 3upplenrontal FinaaeiaJ Data Eerni�ps Per Eh�re Somesr� . � � _.. . .. � � Mu t1n t� Lumaueiree'f'ectotxxunfinpchanues'�!of eaocntm cna u........ f3,51 R.J9 Si.�B Si.79 ¢:a5 � ry A �9 _ . .. . - � 1.65 �. Primnyneiinmruv........... .... . . ....._ _......... .�, . S3.h/ 52.79 S2.L7 -., s175 5.36 �I Fultydiiui.lm<incwrrehebrncunu4�nva�effa[of�uuwningciuny��... � f3.57 t23B 51.11 SI.78 5.36 GeTWa[rveeflec�oLcwun�inqenaipes.... .,,,. ,. . .. - _ �a� I� ._... . ... . . _ - F�IydiWtedneeincoirc ....... .... ......� . . ._ .._......... ' 59.52 �2,39 52.E4 fi �e 3:�a i R�tios ... .._ 11l� ffil tlla iMt 4a1 RCtiRn Oli BVitiQC 8LS01i. . . 1.EJ'M :17°A 1.32�L .. ._. ... .... . ....... . .�� .� Remm on weripe common ehanholdar:'.qu�ry.__._ _. ... . t 9.7 �3.B 16A 1„1 Z,) . AYengeluWicyuitytu+reray�ayoea_�.._..��. .................... tl.] 9.0 � 6.9 7.3 5.8 I pindn:�ds Der share to,�el id;ume pn�hu�u....... _, , .. .. 4i.tl 33.. 45.8 • , ........ 325 n I •NotmrnnlrqM . .. ._ Otker Stetiaeiee _ , +w +� �sa � xr f,ommanenaesautstandin9-Yearend'.......... .. .__.. it2.679,658 1�9.40Lfifi1 113A5�.A75 Iro,F36.867 iat.o�s,est � Awrape euTmon sha:ac wtstanding anC tammar.slpck equivaiaMs�. � Primury .. ............ ..... .._..,.......,...... H4.54A.BOG 715.016A29 t05,767,022 102,SJ,7.2B1 93.302,38p fu8y diluvtl .......... .. ... . .. ......___..........._. 1:O.Z3B.3W 1;6.784,958 1U9.671.2W IG16E6.9°3 9�.302.720 Numeer ef ihereholtlen,-yeer�entl".........._.....�,.....� ........ Z2.09a 22,100 15,625 TJ,9li Z5�d64 I Avem9enumberu(umplavvsputl-cimeeQuivaien7l...... ....... ..... ti,yy; 12�3W 12�8� 72]97 �a.y76 '' � Ca�monnlvid¢M¢M�Imluiorsj .... ................... . .�.,. 51308 $109.7 . . .. 573.1 565.! 558.8 � i ' '7,�nnaamWcumnu�:hmrn:u:smm�vmbW.+¢ia�n�mwry. 'F •Wn.cenn�rNroteom^�onuxl�M•dM1Meroai,:a�i Stock Pric�Ranep and�ivid�nAe �w �p ��' :uefRk< O�r+kM> S+bRae p.. '- ' Dirb�m� _.. ._ Hi7A ` Iw YaiC MI'h Lew 7�i0 �� ,_:::,_ firs�Quana:.._ .. _.....................__......._. . ,..,. .. 333.:3 �519.98 ' S.28 532.00 527.1J 5.25 �.��-:: tuadCueREr.............. .. :_._ . 39A� 31.50 75 3�.W 25.28 .15 ` , .....�.. . .............. ; :.,�! lAifEOuarG:i.._..� .. _. ... . _. ... _..... . . .. 39.50 35.75 .29 :tA.F,3 ?.9..ri0 _25 :�.�... f�urtnqwrt.r. . ....�................. . ............ .___ . 3L50 32.13 . .23 34.19 29.0a .2u ` � '�-'� �"9G�CF-O�e�mherJl . . '��'Ji:�i, ....... ........................... 33 22 30.75 .��''k,..��Ys�enneno�F��.,l9aik5pllm.Int.h9dde9on111eNM'YEtlSIMYE+G�On'Jc � .. e litic AauA Syf1.n�.L¢,u�J Solcidimir.s 7i UYrV� , b.I 1J.ve y�l� JYJ LJUY VVTI . lAtJl �JJ1U 1�JVJ• Commueiol U��Mswdtiet�ei S�-�ilirltT to Cw�eps ia lM�nst Reb� — � W�� ' � � FIYw �AF�Ye. . y�yy t�py�lvwf MYSlb6 yoYw�hri+.�YMiMr�uuma+ -1"_'� —� —f-��` f . ... fC,133 S1.1W 14 � ....... ... . 196 ..._.... .... t�n �' ... . _... � _ ......... Cnrrn�rcw� .. ....... . ......,,... _..... ...... ... _......,._ ......, . .. . Fmr�e�ei msnr�iic��s....�... _..._ .... A��Ies�Mr � . ....... 9 Gt6 �t� _ ..... .. . ...... . ia ,......... � ,a Commweiol murtFi�9� ........... ...... . .,....... —��. � .. .. .... . —_— i ..... ._..._....,.... _..... Connructian ..,,.. . �.... ......� S ay J __. .... se.eie si,�oo ,.. .... .... ..... � Totel ,�,.. .... -.,_. ... ....•... UNie flNAha � (�Ynr Toa• ' CmWv ��_.— --- J^r— � S A15 S 902 S t,llT ��_ .. .... ... .....�.... ...... .... ... 1,435 0.698 ...... ..... _....,. . . rates.............. ....._. 7263 Lunns at fi�c6 intB.¢i� _...,. ....,._ ^.� ____��= ............ ..._.... . ........... ...... nR LOi�s et varu6le intC'ntt Iriec .... ....... StO. � ..�................... . . ... ,....... C6.0I8 fZ.937 iotal ... .... . _ .......,_. ....,... _,... � 7M:veumms oll�an�bv.n Mxw�n Loutl an IaMbnny K�duletl�eD+Ymenrn . TiAe Csrufloalos at O�poeit a�!Other 77�n�O�potib fn��noMiedioRs of=t00,000 or M�n�t�ec�a��t oK� u.n. �wa�e i.wiw . m� p sn M,,,iM tew nnmh "�p°°' ��__��_. ' IInM�M1anal�_^� '� �-- S1� , Slgg f2�6 f � .. ...... Z� �� 1.061 .__ �......., _.... . � ...,..... �.. ,.. .. . 1W 799a .....,.....�............ ....... " 770 '. � , ... �p ry�l 1.3T0 � 19&9...._ .... ....... .. �. , . ... ...,... . 46s . _�T� � —��--- � . . . ..,... .._ . 1992..... ...... __....... ...... . _. . ! � � ]�' Fint oY�e Syftlfll.In4.en0 S�b:iaix�w � o.�. �.. : a.. �L.a� y�1.i Y�ee �oav �vA� . u�LJ� �oJrV _ WJVJJ S��rt-Tsrin F��as i0rrow�d � Mu+P Wnnun �+qe YN�pn.d O�M flubiw�lin0 bu�mNp bW�e I IM Mipiu¢I ��"�V 1M/H YenMMllnO P�d hnnp Imn�P AIn ! - , w WmEM Owutlip . I�Hino Ilr Y�v it Mv�EnE 1lYI TI � Fednalfw�0�purChocyaiMsrtunheesolEunaer I , iO�rt1En31C RD11fCIYfl._ _............. . SZJ6C f2.019 �7,8�3 . ............... . I /.fi2% S�2�I Ccher.... ._........_. ..._,. ....�. . B58 593 �' 7Fa . .. ............... 5.21 5.7y � �ami... ._........ . .. ....._,..., 52,8I2 52.371 ................ . ... 3.772 4 63 y.;i7 I 19Ri i � FoE�nl fimd�nurch�sed anE sKurir��s aom w�ou ,� I aq�uummutnrepurchaae ........ � qjj S �0 11,798 • ........,�... . , . ............ Dther,�...... . . .�...._. �...... .... 3.M16 Y.15ri1 . ................ ..... aiz 2B0 nz aJ9 xe� � .. roiei ...,..,.._. ._ si,rsa I ........_............. it.27o i.Nz _..... ........... A,O� 3.01 tY2 hd�raHunds purchd:d Bnd aetuHti�t Spld under og�eemenccearlWrU�u:u.............. .........., 51.12P S 9t2 I i1.1t0 anq, 9i91F Oui�r............... . . . .......... . . ... ...... 7Y8 264 � 3Y6 5.12 . 7.09 TonL............ . . . .. ........... Si,asa S1JOB tA79 l.65 . . ...._ .....�...... .. I an E � 1 � . ' fbat Benk SR�.��.+�d SvYsiJimiCs 77 Clty of Palm Desert Preliminary Schedule of Investments As of August 37, 1995 Aceou�t Purehase Invesfinent Face MarkeY Shted Maturity Investment Deseriptlon: Number Date Value Value Value Rate Date USTreesudas I I US Treasury-Note QA7509000 10/27/94 3,983,750.00 4,000,000.00 4,034,360.00 6.50%'�. 11I30/96 US Treasury-Note OA7509000 t0127/94 1,996,875.00 2,000,000.00 2,027,180.00 675°k�. 2128/97 USTreasury-Note QA7509000 t0127/94 1,782,562.50 1,801,692.00 1,801,692.00I 5.875% 5l31196 USTreasury-Note OA7509000 10/27/94 1,787,062.50 ' 1,808,154.00 1,808,442.001 625% 8/3T196 USTreasury-Strip (�A7509000 10/27/94 7,000,566,42 1,097,000.00 1,064,539.77 '� 2l15/96 USTreasury-Strip QA7509000 10/27/94 1,003,937.62 1,132,000.00 1,069J51.32 ': � 8H5/96 USTreasury-Strip QA7509000 � 10/27/94 1,003,182.98 1,078,000.00 1,060,665.76 ' 11N5/95 i i SubTotal - USTreasuries � � � � � 72,557,937.02. ��- 12;918�,846.00� �72,866,630.85 Bank of America=Savings � �i SubTotal��- Savings�, � �0628-6-852?2��.�. � . 2,168�,593:U2s 2.00% State-I.AI:E . '� SubTotal - L.RJ�:F. � �9&33-621 � � .13,160,451:32'�: 5.910% Collaterelized Certifuates of��Depostt: Glendale Federel 887-036488-8 3/9/95 1,000,000.00 6.40°k 9l7/95 Glendale Federal 887-036267-6 3/9/95 1,000,000.00 6.40°� 9/7/95 Glendale Federal 887-036488-8 5l18/95 1,500,000.00 '� 5.60% 9/21/95 Great Westem 389-608937-6 7/27/95 1,500,000.00 5.65°/a 70/27/95 Great Westem 389-607877-5 7/27/95 1,500,000.00 5.65°h 7027/95 Great Western 389-G07878-3 7l27/95 1,000,000.00 5.65% 10/27/95 Great Western 389-6084583 7/27/95 1,000,000.00 5.65% 70/27195 Home Savings 589-0031023 7/27/95 1,500,000.00 5.47% 70/27195 HomeSavings 589-003118-9 7/27/95� 1,500,000.00 5.47% 70/27/95 Home Savings 589-003110-6 I 7/27/95 1,000,000.00 � 5.47°h 10Y27/95 Home Savings 589-003126-2 I 7/27/95 1,000,000.00 � 5.47% 10/27/95 I Sub Total - Certificates of Deposk 13,500,000.00� '� �Funds Loaned to RDA 11,334;000.00 �;Rate=to LAIF 5.910°k . '.:._�..� ....�. . , :,,_.a . . . . �.-�. . � I Bond Issues: � Indian Ridge CFD 91-1 307-6021500 �'� USTreasury-Strip 301-6021577 17I19l93 462,250.00 500,000.00 492,050.00 5.30% 11/15/95 USTreasury-Strip 301-6021577 17/19193 795,013.50 850,000.00 848,130.00 5.50% 8/15/95 ResoWtionFDG-Strip 301-6021580 11/19/93 539,165.48 733,000.00 � 653,967.94 6.20°h 7/15/97 Bank of America-Pideliry Treasury � � I i 301-6021575 ' ' 276,816.54 '�, 276,816.54 276,816.54 I 5.60% 307-6021580 343,032.56 343,032.56 343,032.56 5.60°hi 301-6021577 2,441,152.48 2,441,752.48 . 2,441,152.48 5.60°h � I SubTatal.- IndianRidge 4,857,430.56 � 5;144;001..58� 5,055,149.52 i Sierre Nova 92-1 � I�3018028400 � � Bank of America-Fidelity Treasury 307-6028478 9,813.82 9,813.82 9,813.82 5.60% � 301-6028480 239,998.72 239,998.72 239,998.72 5.60°k 301-6028482 ' 0.07 0.01 0.01 301$028481 ' '� 2576 2576 2576 5.60% Sub 7otal - Sierra Nova 249,838.31 249,838.31 249,838.31 �City of Palm Desert Page 1 of 2 Pmliminary Sehedule of Investments As of July 1995 Continued Aecount Purohase Invesfinent Faee MarkeN Stated MaturLLy Investment Description: � Number Date Value Value Value Rate Date i I Bond Issues:Continued II AD 874 I B of A-Pacific Honzon Treasury Fund t 17178400 318J5 318.75 37875 �� 117178401 350,215.49 350,215.49 350,215.49 � � I i AD 87-1 - Sub Total . � � � .�.350;534.24..�� 350;534'.24�� 350,53424 '� Big Horn 94-1" 301-8200000 � USTf@eSUry-Stflp 301-8200080 222,059.23 275,000.00 236,582.50 5.30%I 2/15/98 USTreaSury-Stfip 301-8200080 311,122.00 350,000.00 331,730.00 6.40% 8/15/96 Bank of America-Fidelity Treasury � 301-8200077 46,384.39 46,384.39 46,384.39 5.60% 307-8200075 7.31 7.31 7.31 5.60°h 301•8200078 1,076.39 1,016.39 1,016.39 5.60°h'�, 301-8200080 100,551.53 100,551.53 100,551.53 5.60°h 301-8200757 223,354.79 223,354.79 223,354.79 5.60°k � Sub Total - Big�Horn 904;495.64 ,�. �996,31A;41' � 939,626�.91 i Sunlertace 94-2 301-6064800 �� Bank of America-Fideliry 7reasury � 301-6064875 150,166.52 150,166.52 150,166.52 5.60% 301-6064877 739,852.23 139,85223 139,852.23 5.60°h 301-6064880 189�123.45 189�123.45 189,123.45 5.60°/a Suti Total.- Sunterraca 479��,14220 �� 479,142.20 . 479,142.20 ! I Mereno 94-3 301-6065600 ' �� Bank of America-Fidelity Treasury I �� 301-6075676 26,533.26 26,53326 26,533261 5.60% I � 301-6075677 1,000,965.54 1,000,965.54 1,000,965.54 � 5.60% �— 301$075680 ' 128,450.97 128,450.97 128,450.97 5.60% 301-6075681 '� � 32,507.00 32,507.00 32,507.00 5.60%i Sub TMaI--.Merano �1,188;456.77�� 7;188,456.77� 1,188,456.77 �� ,"'°F3, i;IRE. "Monthly reports are rypicalry received up to one PoII month after cuvent month end. ! Information contained in this report is most recent received. "Bank experiencing difficulry with statement for this account. I cert/ify that these investmeMs comply wlth all State laws pertalning to the Investm Lowl Agency funds. ', ,.! "`,''c1 'N��-yl.�C�`�'�'�— 'IPaul S.Gibson,Treasurer cc:08/02/95 Paul S.Gibson ' B.Wright I� ' Investment File schedjul.xls � Page 2 of 2 � ' Palm Desert Redevelop--�t Agenty � Date: lovestment Portfolio De� -Investments 8/31N5 I Purchase Book Face Market Stated Maturity Fund Description Date IValue � Value Value Rate Date Invested t,��i'T�t[Swxtei::: I US Treasury-Strip 100 Mil I 0.00 0 0 Acct#301-6019000 5,424,083.61 5390000 . 5479258.4 6.88% 3/31/97 Escrow FD 148,225.25 205000 187,001.00 5.90%i 2/15l97 Proj#1 393,627.48 400000 397,752.00 4.30%' 12/31/95 392,065.00 400000 396,624.00 4.00% 1/31/96 1,359,305.94 1497000 1,452,314.55 5.73% 2/75/96 393,752.48 400000 397,752.00 4 JO% 2/15/96I 394,757.48 400000 398,376.00 5.10% 3/31/96 296,878.77 300000 299,439.00 5.50% 4/30196 396,762.46 400000 400,376.00 5.90% 5l31/96 Fed Natl Mtg Assn 11,080,997.15 11100000 11,105,550.00 6.10% 11/9/95 I 1,173,869.40 1254000 1,251,241.20 5.30% 8/15/95 1,429,462.44 1554000 1,528,980.60 5.60% 11/15/95 688,055.28 748000 735,957.26 5.60% 11/15/95 9,986.22 11000 10,671.65 5.70% 2/15/96 � 246,251.55 250000 248,595.00 4.30% 12/31/95 ; 245,079.68 250000 247,890.00 4.00%, 1/31/96 246,173.43 250000 248,595.00 4J0%� 2/15/96 � 248,134.38 250000 248,437.50 4.70% 2/29/96 ' 246,879.66 250000 248,985.00 5.10% 3/31/96 247,582.80 250000 249,532.50 5.50% 4/30/96 243,796.88 250000 247,110.00 4.30% 5/15/96 ' 248,523.43 250000 250,235.00 5,90% 5/31/96 i 248,562.501 250000 250,625.00 6.00% 6/30/96 � . 248,796.88 250000 250,937.50 6.10% 7/31/96 � 249,023.43 250000 251,772.50 6.20% 8/31/96 249,882.80 250000 251,952.50 6.40%� 9/30/96 ' 241,057.60 250000 245,702.50 4.50% 11/15/96 � 249,657.55 250000 252,265.00 6.40% 11l30/96 ' 248,128.13 250000 251,172.50 6.10% 12/31/96�� ' 248,368.75, 250000 251,562.50 6.20% 1/31/97 � 248,837.50' 250000 252,500.00 6.40% 5/15/97 246,095.301 250000 252,265.00 6.30%, 6/30/97 Fed Natl Mtg Assn �. ' 4,376,437.02 4390000 4,392,195.00 6.10%i 71/9/g5 '� �' 304,780.23 359000 323,100.00 6.20% 5/15/97 New Project #1 Bonds � ' Acct#301-6076000 '� 6/1/95 536,118.75'i 540000 537,467.40 5.64%�. 11/30/95 500,312.50 500000 501,250.00 5.91% 6/30/96. 5,597,109.38 5500000 5,597,955.00 6.05% 11/30/96 999,843J5! 1000000 1,000,630.00 6.17% 71/30/97 - 706,380.62 692000 705,840.00 6.35%�' 5/31/99 � 14,233,492.66 14342000 14,220,953.52 6.20% 1/31/98 St#�tvta#t�STteasuF+as :':: �5,�67.p?i::;?cy �5:&�24p4:i�a S5>82021�6�.;:. I< t: US:Tf80guLf93::: ;�:NOTE: Yet to receive July Statements! � ................_._.. .:. Project Area #2 - P��7 #Z Acct#301-6023000's 24,178.701 26,000.00 25,825.26 5.40%' S/15/95 234,961.10 251,000.00 249,343.40 5.30% 8/15/95 �� 11,804.26. 13,000.00 12,542.92 5.80% 2/15/96 '. 908A2 1,000.00 964.84 5.80% 2/15/96, '� 12,712.28 14,000.00 13,507J6 5.60% 2/15/96 . � 361,964J5 397,000.00 383,224.10 5.80% 2/15/96 '� 40,359.15'� 45,000.00 42,799.05 5.90% 5/15/96. . 885.47 1,000.00 940.00 5J0% 8/15/96' � 67,962.90 70,000.00 65,800.00 5.70% 6/15/96 68,181.19i 77,000.00 72,380.00 5.70% 8/75/96 190,376.05 215,000.00 202,229.00 5.60% 8/15/96 243,562.50 250,000.00 246,875.00 4.30% 5/15/96 '� ' 248,210.93 250,000.00 250,625.00 6.00% 6/30/96 248,367.18 250,000.00 250,782.50! 6.10%� 7/31l96 Palm Desert Redevelopc-ht Ageocy �— Date: Investmeet Por[folio Det �Investments IS/31/95 I Purchase IBook Face Market Stated Matwity Fund Description Date Value Value �Value Rate Date Ilovested ' 248,554.68 250,000.00 251,172.50 8.20% 8/31/96 299,250.00 300,000.00 302,532.00 6.40% 9/30/96 New Project Area #2(19951 . Acct p301-6076100 ! 1,317,781.25 7300000 1,317,778.00 6.10% 6/30/97 710,207.50 104000 110,045.52 6.40% tt/30/99 �� 232,407.66 237000 231,145.53 6.17% 11/30/97 2,726,896.88 2115000 2,717,749.50 6.29% 12l7/97; i �#T WS Tr#�iSi#sE� :;: :8 tX��:i4$ . :., 8:18 0�7�.�}: . . � 14�.265,9�:::;; ,: I I ! Bank of America-Savings 0.00 I � I State LAIP � 24,000,00O.00j 24,000,000.001 24,000,000.00 5.98% � l�aSsr£3�t5$a 8aeut IS4y�0 � US Treasuries Note W/int � IHousing ACCT#117507400's 1,487,578.10 1500000 1,499,295.00 4.63% 6/15/95 � 1,468,378.88 1500000 1,497,660.00 5.13% 11/15/95 984,765.60 1000000 998,440.00 3.88% 8/31/95 � 982,109.35 1000000 997,030.00 3.88% 9/30/95 979,999.95 1000000 995,620.00 3.88% 10/31/95 981,796.85 1000000 995,470.00 4.25% 11/30/95 296,696.25 298000 299,117.50 6.13% 7/31/96� Fidelity Treasury Fund I 1,246,286.34 1,246,266.34 1,246,266.34 5.60% .::...�M#�C798@Ci;:f1fl6U ::::: .ti�3.A#"`�.a5`9?„„3'1, . ....B:C�'+A«2$83i#;; i5!'�.� s$HSSA� i�: . ��;' . ':: .'s: Teui+Yi�$'idelTtiX<:It5l�ttiUlODaP:;�US::7reasuries RATED AAA 7.8 MilLow/Mod Ho � 773,358.47 773,358.47 1,288,051.90 I 100 Mil Bondlssue � 7,658,032.36 7,658,032.36 6,649,898.41 5.60% 1995 Proj # 1 Bondsl 807,175.37 807,175.37 807,175.37 5.70% 1995 Proj k2 Bonds �� '� 182,895.73 182,895.73 162,895.73 5J0% � 17 Mil Bond Issue �� '� 2,567,418.89 2,561,418.89 2,561,418.89�. 5.60% I Sf)DtiiTS{ W$:. �;ACct :;; :�:"I:;l. S�,$8C#;�2 'f'E!.r96�.88I3$�;:. 3'3.y�4H&.+Lk03U .'.;' .. ��, -' i, i Loan Funds to RDA �, ' 0.00 i I � TOTAL POOLED CASH 105,795,096.29I 106;569,147.18� 105,980,820.62I 'i ' � '• Monthly reports�typically are received up to one full month after current month end informstion contained in this report is most re I certif that these investments c�omply with all State laws pertaining to the investment of Local Agency funds. L' � ! �� , Paul S. Gibson, Treasurer i �� INTEROFFICE MEMORANDUM PALM DESERT REDEVELOPMENT AGENCY DATE: SEPTEMBER 7, 1995 TO: INVESTMENT COMMITTEE FROM: DENNIS M. COLEMAN, REDEVELOPMENT ANALYST SUBJECT: 1995 TAX ALLOCATION REFUNDING BONDS ($6,305,000) RECAP Recommendation: To receive and file this report. Background: On July 31, 1995, staff executed the necessary documents to close the 1995 Tax Allocation Refunding Bonds in the amount of$6,305,000. This bond issue was used to do a current bond refunding of the 1998 Tax Allocation Bonds issued for public improvements in the Palma Village area. The original bond issue, as well as the refunding issue, uses the low and moderate income set-aside funds as the source of repayment. The refunded issue saved the Agency $925,428 in debt service payments. The present value savings is $641,548, which amounts to 9.97% of the refunded principal amount of the bonds. The maximum annual debt service was lowered to approximately $680,000 from the original issue's amount of$760,000. The coverage ratio was lowered from 1.3 on the original issue, to 1.15 on the refunding issue. We are attaching several schedules from the underwriter, Miller and Schroeder Financial, Inc., which detail the sources and uses, the debt service schedule, the yield statistics, and the debt service comparison of the original and refunding issues. The net interest costs of the refunding issue is 5.293%. The true interest cost of this issue is 5.311%. If you have any questions, please feel free to ask. REVIEWED AND CONCUR: ( �� Dennis M. Coleman Redevelopment Analyst Executive Director DMC:mh Attachments (as noted) . ^a5Y M.-liMa � sGhhucJ=:, �Iri�; �, J ,� l� �_'S7 1J9; � :/PC ��GL'6i�4C, r � " _ _ �� 11Ri��er �Schro�derFinanci��.xa,c. 505 Lonw Sansa Fe Dri�e•Suim !00•P.Q 9ax 946■Solana Snch, Califomu 92Q75-0946'•(fi19j 481•5894 MEMORA� NDUM I)ATE� Scptanber 7, 1495 TO: Dennia Calemen FROM: Victor P. Dhoogc�D RE: 56,30S,OO,U Polm Deeert FSp�andn{Aathartiy Tu AJlocatlon Refuadiac Bondr 1995 9eries Attached, pleaae 5nd the Sourx & Uta aad Debt Service Schedulea fa t6e rtfa'enced transaction. The actu�l eavinga are 5925,428 and present vatue savinga, 5641,S�18 (9.97°1. of the refunded princip�l amoum of bond�). Plesse wntact me if you have a�ry questions. VPD/nct Attachment Hudqwerms:►SiaeapoW,M(nmme� (kFce.:S.v Dieqo A.•..•9on PraaelKo A�a•i.+r Anreks Ara�s•Se P�ul•ClwtLud•Columhoa•Seaa�•Orl.nda�Du Mdnec NAoben Narimd Mnd�er�o!&cmnw Onlew,Ls. ' Mrnler N Je 9avnn!�lm+wPmaY�Cwwn�m :itON: ;�;liLin �, 3CrkCED�ii _ �iaJ) U�, 0� �� J9,��ST, c�.�;/V0. '��L��G4e . F' 3i5 nwi oc�tr Reoer[�anwr �rcr v�wicr ueu Mo �, �s �oW TIY[ KLOGTIaI �EMIDiMG �OIG� [� 0F 1995 �m � � pnetl y07/79v5 prliv�ry i/01/1995 P�r Nbint bi �a11tle.....................:......... l6.305,000.00 Tr�sfa�a fra�►Mar lswe Ds Futle.............. 776.6W.i0 Cwh Cs�trtWtio�................ 511,212.50 Tat�l Mre�s !7,l4S.051.90 Toul utlerrriter'a Ofemnt (1.iSoi)............. f�.117.io CaH oi Iwrne�................................. 70.3Ii.40 GroM bftl I�WRent ►reolu�...................... '3Z.000.00 Mpoeit [o p�bt fKviE! �Merve Futl (OiYF)....... 6lO,S00.00 epecit m iscrw Fud............................ 6,TJ6,700.00 iotd Iku f7,S4S,QS1.90 Mill�r Z Id�rs�dl� F(ew�ci�(. Irc. F[LE � MLI�t VWlie Fier�oe 7l�1/1iPJ 2�Z/ PN iC1UIJl IY.i�L:.II K CLCa:1�L'ULA ��il�l �:• � I „� JS� ..Ji �� - -'• �,. i��. .,��.... '� :�bi . '+. � P�UI DEfERT REDEYELWMENT AGENCf PIIOJECT 11RE11 110 1� !1f ME�O� vuc uuurtw �ruiosKa sami f i81� OF 1945 pEBT SE1lYICE SCNEOULE OATE PRIMCIV�L m1PO1 IMTEQEii OE9i S�Y[CE 9ro�i�vvs - - • - vro+nvAs xs,000.00 a.e000az 3sz,Sss.sa ss�,sss_sa 9/01/19i7 3E6.000.00 4.0OOOOX 29S.e62.4A 6Tb,E62.'30 9�p1/ �.00 000.00 4. 78 90 A SO :'^�i'�'.�'.s`:�.�'��'�3�S�fi�;"�`i�6'.�',ia'��9�:'.� 9/01/Z000 i35,000A0 4.SOOOOf 2t3.610.00 47l,670.00 9/ot/�at Irss,000.ao c.70aoai Z7F.o35.po 679.o35.oa 9/Otl2002 �75,OG0.00 4.90000X 202.6'50.00 6T7,650.00 4 1 �V! 0 00�Y�( i.000 ,yy,:e,,�,��1y79�.,,�3�7y5.y0y0y 6 4 315.��00,.• �y• •X•'•�:l��C9FR�kk8;�,tA�!QfP�FiTll�fnt'�i'Af�#'k�%YY�^S k 5�t•A 8 9/01/ZOOS SS0,000.00 S.2�OV2 12i.fOS.OQ 67�.105.00 9/07/2006 SBO,000.00 S.3C000'x q9.Sd5.00 i7p.505•00 9/01l2007 610,OOD.00 5.i5000x 68,7Ff.00 576,766.00 9/07/20Q6 640,000.00 S.SS000'i 35,5?A.00 675,520.00 raru s,sas.000.00 - 2,soa,re�.oi �,eos,�s�.oc 1S(Ller i t�h�oeAer Ffernef�l, Inc. iILE � PALMBNt P�blfe FSiw�ce 7/20/ipp5 2e16 w� 1'IEID STATI6TlCS I�crued interese frar OB/01/1pP5 to 0!/01/1475... - llrerp! Life...............�...................... 7.TS4 IEARi �pd Too�s........................................ L8r89D.4Z llwng� Caqen•--•................................ 5.7190626x Fare !OL WSphtatl MIC............................ S_29i1612S FOf'11 e7SE Yelpb[ad Averape N�turity............... 7.754 YHIRS Met ]etenst Cost <MtC>.-•-•••--•-•••••-......__.. 5.24376f2Y Yara1 Tldd for Arbltr�pe ►urpo�N................. S.�2f106� Tns lrKenat CwL CTIC)"""""""•"....._... 5.77099TSL Fff�eti�s interes[ Cost (EtC>..................... 5.48EOZ65% :[1U1'J'i F'..iL��C� Sy :bR:wE11L;] �.7l.l �d. � f `Jv Jb . :J/ i::• VL:: J., I',�. :vv..i � !y�Jl . �i � v11Lq OESEpi REDE�ELOPMENf Wdp MIWEG7 AI�71 YO i, Af Al1iM�� nuc uiacana r�anro[ro mics 15911E OF 1995 pE�T tplYICE COIPARIIW lR011 8/01/19VS DATE PRINCIPAL EQJ�pf IMT/REfT DisT lE0.Y(CE PlTOQ p/S 6�y�tl6t 9J01/19Y5 - . - ' - 9/O7/t99d 34S.00O.W 3.9GOOGR 33i.S3.X 677.553.5i TS0.665.00 61,717.i6 9/01/199T 395,000.00 i.000007L Z9Y,l6;.50 670.C6Z.60 7G3,605.00 64,7�i2.50 4/O1/199s 40 ,000.00 .. .4.ZOOOOX �I�62.50 67s�i6i.So 7L1, 25.00 63,OG2.30 i62 '�i�`"'�flF�lG3�+�:?a. "�. „° � �d3��3i,Bk�6,' ''6ti5Bf�`.'.�:��r?Pi$�`�(Ob`e�cea'�`-'8i�:�shfa: �5s''xa , 9/01/2000 i35,a00.00 4.gppppx 243,610.QD 67A,610.Oq 741,610.00 63,2G0.00 D/o1/2001 45l,000.00 4.7000Qt 226.QY�.00 i79,09f.00 744,f20.00 66,Of5.00 9/01/2002 475,000.00 4.9000�17L 2u2,450.00 6T1,69�0.00 746,460.00 70,6t0_00 9/01 49S OOQ.00 S.00OOOX 179 375. 67i 00 26S.00 75.6i0.00 �A1� � :6av"�>a,3��F�vtS8.Y01�7ii::%4'?�� , .'�,#ad:��. y�51�'a:":.$:cbc�"�':� 9/07/2006 SSo,ara.00 5.20000� 778,105.00 f7e,toS.00 756,150.00 7l,o45.a0 9i01/20oG Sl0,000.00 5.30tl00x 9P,30S.o0 6�9.SOS.00 754,SW.00 75.0�.00 9/01/2007 610,000_00 S.GSOOQi 66,f6S.00 67a.T69.00 760,01C.00 N,2R5.00 9/ot/2o0E ff0,000.00 S.SSOOOi 35,SZa.00 67g,5I0.00 T61,HSp.pp l6,3S0.00 toA1C 6,305,OOo.00 - 2,502,7St.04 /,807,7t1.04 9.763,16D.00 425,4ffi.qf MilLer L �ahrarda� Fiti.�ial� lne. ftLE � PAtMBBR GibGie ffernce 7/20/1995 2:i8 PN GR00� PR6iBIT YALIE D9i iERV[CE f�Y1NCf i641�S�,p.Gy OtMr Nnefits.................................... - Depesft to D�bt iervie� fuM...."""-""'...... - MiwK nlrud ffal� Prior iraue D!R Fuds........ . Otl� Ces[s.........................�............. - Gth Cantr56utSan................................. • Tfanfere fran Prier fssur D�bt qrvice FHId...... - � NET �RE9lMT Y�LI.F iENFFIT f6{9��j4d,6� SavSnyR r� � ; Of rcfvidetl lwrd principsl mnt.. 9.9774?8�% INTEROFFICE MEMORANDUM CITY OF PALM DESERT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: RAMON DIAZ, ACTING CITY MANAGER SUBJECT: JANUARY 30, 1995, AUDITOR'S LETTER DATE: SEPTEMBER 12, 1995 During the September 6 meeting of the Palm Desert Investment & Finance Committee, City Attorney Dave Erwin mentioned the attached letter from the City's auditor dated January 30, 1995. The city attorney and staff are currently reviewing the letter and its recommendations. Council will receive a report by mid-October which will outline recommendations being implemented; recommendations which may require Council actions; and, reasons as to why those recommendations should not be implemented or considered appropriate. Please note that although the letter is stamped "draft" it was released. � �-`�._ . �.� MON DIAZ ACTING CITY MANAGER Iga C�u,ne�E, �un�r.rn-� C�3�_"( Gi�;r-v 7p Lm�u�rni��` . / '�t;;,� S g��2� li�f['L DRAFT ,,�,� �. ��$ Finance Committoe City Council Clty of Palm Deserc Palm Deacxt, California Currendy, the City of Palm Desert has wmerous aereemeMs, contrac.ffi and othsr financial azrengemeMs with orher public syencies and private business organizations. The City's Dirxroz of Finance, Mr. Paul Gibsoa,has provided us with a compreheasive listiny of these financial 8rrangameadE. We have reviewed the listinQ provided by Mr. Gibson, aith the objeaive of identifyin� wh2k types of iniernal coatrois anA proeedures could be uacd cegarding these tinancial amngemuRs, m heip prevaa loeses and safeguard the Ctry's esseu. Also, 3n Me near t�ature, the City wilt commmce work on various devdopment projects. This wilt resuit in a large increase in the flnancial transactiooa that must be processed, reoocdod snd conttolled by the City's Finance DepartmerR. We have reviewed these developmeM proJects, with the objective of idcacifying potentiai problem aress and suggestin� ways that the finance staff can be reorgenized ar expande� to deal with the increased financial aaivity. Our comments and observauons aze pr�senteQ herein under We foltowing general categorIes: 1. Limitations cegarding[he City's syatem of internel accountinB contmis. 2. Bacic imernal control concepts. 3. Internal controf approaches that the City may wish to consider. a. Speciflc suggestiooa re�ardioQ imemal control systema and pcocedures. LiM[TATIONS REGARDlNG THE CT1'Y'�SYSTEM OF 1 NAL A � .O iN1ZA1G CONTROLS Managemem of rhe Ci2y of Palm Desert is xesponsible for esteblishing and maintainin� an adequaze internat control system for the City. In fulfillina thia reaponsibility, estimates and judYemenu by manayement aze required to assess the expected benc6ts and zelated costs of internal control policies and procedures. The objectives of an interna!control system uo to provide naana�ement wid�reasonable,' but not absolute, assurance thu azsas are safeguarded against loss, ac�d that transactions are executed 1a accordance with managemem's authorization and recorded proparly to permit the prepitation of finanCial statements in accocdance with geaerally accepted accountiny principles. Howevet, 6ecause of inherant limitations in any imernal conCrol system, errors, irreQularitia or iosteoees of noncompliance may nevertheless occur and not be detected, Also, ehe projection of any evaluation of the imernal control system to future periods is subject to the risk that procedures may become inadequate because of etianges in conditions or that the eftecdverc�ss of the design and operation of policiss and procodures may deteriorete. I �jUJ✓ - >dJU FO OJO� ._ PS� O.i:� Noted beloa zre three ba�ic internal control wncepts rhat are necessarY in ordu £or the City's assets to be properly safeguarded. 1. 5e�regazion of Duties: The responsibility for custody of assets should not be placed with the same petaon that maintains the accoundug records. � Nou: 'Itie cancern is primazlly with assets that can be misappropriated or stolan, suct� as cash and imestments, imentory and .personal property - office aquipment and supplias, automobiles, etc. 2. Verificaci�n of Data: The wozk of one emqloyee shwid be checked or veri6ed by another employee. 3. '1'he cost of implementin� an intart�al comroi ahould not exaed the cost of the ass�t or expenditure whic6 is subject to comrol. Example- The Ciry s6ould n.ot add a 530,000 per yeaz storekoeper to contmt an inventory with av�age morrthly purchas� 55,000 aad am average momhly iaventory value of$10,000. INT�RnAI., CONTROL A$PROAC ES THAT THE CITY MAY WISH TO CONSIDER 'I'here are various Qmcedures tfiat the City can use tb help prevent losses and saftguard its essets. Many of these procedures can be implemeated by City personnel throuYh an "imernal wdit funccion". These procedures also can be perfanmed by outside CPA firms or other outslde consultants. Some of . these procaiures aze sammazizcd below•: 1. Incernal Auditing Procedures: a. A new position could be cr� by the City, with a dtle such as "Director af Internal Audits". This position could be Hlled by a newly-hired employa, or an existing employee. 'Fhe position would be accountable to, and report directly W, the Pinance Committee. 'Ihis person could work alone, or could organize an "Internal .Aud9t Department", wheieby other employees would work in the in[ernai audit function. b. The Director of Intecnal Audits would bc rasponsible for az�alyzing agreaments end concracts with outside public and private emities, recommending new intemal wauols to help prevent Iosses and perForming "compliance audits" on the vazious ayreenneuts. 2. Services of Ouuide CPAs and Other Indzpendent Coasuttarns: Also, �he Ciry can utilize outside CPAs or othar independent conaultants to monitor compliance with rhe various agreements and wntracts. If CPA services are used, two common serviceg that could be utilizcd are summarized below: 2 p (Coatinued} a. Limited Procoduree Revlew: This type of engaQement is very cost effectivo. 'the CPA performv selocted procedures, and repores on ffie results. However, this type of review does noc constitute a "cere[fled ; audit". b. Cettffied Audit: In thia engagemert, che CPA firm "certiSes" d►at the financial infozmation is mazezially co�rec2. This engagement is much more time consuming and cosdy than a limked procedures review. cv�C P1C SUGG�'ST10NS R c'A INC INTE NAL CONTROi SYSTEMS AND PROCEDUB�S 1. Cash and Imestments: Noced beiow are some general imernal control pmeedures to help safeguard cash and imestrnentv. To some extent, the Ciry cuzrently may be applying these procedures: a. It is our undeescanding chat the City will be hirin6 a new "investmam officez" W hendle the Tceasury function. In detecmining his or her duties,job ffinctions should be assigned so that d�e funaions of record keeping and custody of cssh and invesdments are propaly segregated. Someone other than the investment officer should receive copies of inveannent advises directly from banks and broker dealers, and then prepare the accouMing eMriea for raco�n�io the City'a general ]edger. Alternatively, if the generel ledgu soutce entities originaze with the im�eatment officer, another City employee should independently test the acwracy of t6e recorded data. b. Wirz Transfus: To safeguazd cash and investments,strict conttols should be plaeed over wire uansfers, inaludinQ the foliowing: ]. The City shouid specify in writing: . �'bat officers or employ�s are authorized to rnalce wire aansfers � . What deposits or i�rvestments may be acquited by wire aansfers . The authorized dollar limit for wire�fers. 2. Wire transfers �ver a specified dollaz limh should xequixe� approvai. Dual approval cen be accomplished by a number of procedures, such as: a) One Ciry official phones in the wire trans£a; fhe bank d�en ca11a back and wnfirms the transfer with another authorized City officiai. b) One C�ty official phones in the wire tru�sfer; a second City official sends a FAX or follow-up letter with their signamres suthorizing the[razuaction. Note: As is obvious from the 1TM situation, wtside investmeat advisers should nQt be authorized to make wire transfers for the Ciry. 3 SPECiFIC SUCGESTIO�S �GARDINC I[vrFR�1AL CONTROL SYSTEMc AND PROCFDUREc (Cominued) � c. Delivery vs. Payment: Once a "wire transfer" is completed, the tunds are gone, wt of the Ctty's posaession. To make sure thaz equivalent essets are returned, the City ahould execute trensactiona oa a "delivery vs paymeM" ba�is, as explained below: Ex��e of"Delivery vs. PavmeM": I) The City Treasurer or 9nvestment o�cer phones Ba�k of America's Investment Department anfl advises the Bant that the City ia going to purcMase a Bankers Acceptance £rom Merrip . Lynch. 2) 'Ihe Treasurer or investmeiat officec sends a FAX to B of A with a description of the invutmcnt, doltar amounrt, CUSIP number (if applicable), ecc. 3) vVhen the underlying sxurity is "delivaed" (by doctronic funds transfez)to B of A'a custodial agent, the Bank is then authoriud fn simultaneausly "debit" the City's cash accow�t and transfer funds to Merrili Lynch. d. Confirmacion of Transactions: All deposic and investment transactinns should be followed up with timely confirmatioms. Tt►e Treasurer or investment ofFicer ahould reaive a hazd-copy advice or receipt from the flnane3al institution or broker�ealer within, say, 24 hours of the deposit or investrnem transaction. e. Deposits witt� Banks and Savings and Lnens: It is too costly, and impractical, for the City co audit the vazious banks and savings and loans whare h has imestments. As a safeguard, we xecommend that the City: 1) Do not invest more than the S100,000 FDIC insured amoun[in a bank or S&L, unleas thece is adequate collatenl for the excess amount. (Caveat: checking accoura balances o8en go above S10U,000, and those amounts could be at risk). 2) When investing amounts over 5100,000, invest only in large, finencially-sound banks and 5&I.s. (if a defalcadon or irregutarrty occurs, the bank or S&L should have the financial capacity to make the City whole.) f. Cash Disbursements: 1) Blank checks (for ap accounts - general, payroll, arc.) shoutd be under lock and key at all hours, and should only be accessible to authorized personnel. 2) Signawre plates (for ail accounts)should be unda lock and key at all hours, and ahould only Ae accessihle to authorized personnel. 4 1 � evcrrFr� cr•^ �crTc]MS REGARDING Il�ITERNAL GONTRO SY�'�'� S ANll P OCFDU S (Contimied) Y. Bank Reconciliadons: Bank raonciliations should 4e perFormed on s moathly basis. 2. Transactions With Other Govunmental Agencies: it is our underscandinq that the fotlowing agencies currently have a certified audit performed by outside CPAS: Coschdla Valley Associscion of Governroea[s Coachella Ve11ey Joint Powers Iosurance Authority Coachella Valley Parks and Recreation District Care Community Public 5afety Commission Palm Springs Desert Resort Convention anci Visitors Burceu County of Riverside Also, it is our understxn8ing that the City has made contributions m the following aYencies: Family YMCA RCCADV Sbeltec from the Smrm Food in Need for Distriburion School-Parents 7eacher Association Claamber of Commerce Humane SoCiety CV Counseling Children Museum July 4th Fiteworks Senior Centet Historical Society Living D�sert If the City has concerns regarding the propriety of any of the financial transactions or balances with any of t6ese agencies, we suggest the following procedures: a. if the agency is aadited, request copies of the current sudit reports. (1n future audits the Ctty should reques[that the outside wditor perform special audit procedures ieguding the aansact�oas oc batances with the City, and report on suc6 aadu pmcedures in supplementary schedules to the audit report. 1'he City of Palm Desett may be required m pay for t6e additionel audit fees). b. Obtain a representation letter trom the management of each organization, stating that the «ansactions or balances with the City axe accurate, to the bes� of their Imowle�ge and belief. S i SPE IF1C SUC�GESTIONS R�GARDiNG 1NTERNAL CONTROL SYSTEMS AND PROC D[IRFS (ContinueQ) 3. County of Rivert,ide: It is our understanding that the City of P�lm Deaert hu contracts with the County foc fire, police, animal conttol and street maiMenance, and that the City would like e review as to how the County is c�alculating certain merhead char��s that the County is billiny the City. 7troae chazges change on a yearly basis aad to our Imowledge, the County Aaz not provided the City with any documenWtion supportiog thae chugea. We zecommend thac a limitsd proceduzes review be performed on the County'a a�st allocation procedures, and proceduras for billing the City. 4. County af Riverside-Housing Authority: In prior years, the City issued bonds to acquire low-income housing proJecu in the City of Yalm Desert. As a result, tFie City purchasod 7 hvusing projects whict� were tumed ovea� w the Housin$ Authority. The Ciry is responsible for providing subsidies£oz tenatrts(housing assistance paymems) that live in d►ese projects based on amoums billed by the Housing Aurhoriry. It is our undastanding � that the Chy has the following concerns: � � . Are project's exper�es only related w Palm Desert pro)ecxs? . Are ovabead charges reasonablo? . Ace tenants qualified for occupaneyT . Do projec[s have the pmper mix of tenama (i.e., low income, very low-income, etc.)? In addition, when the bonds were issued, two other cities were involved.(Palm Springs and Caona). Wo understand that the City has following concerns with the respect [o these bonds: . How were the bond issuanc:e cost allocaced? . Hu the reyuired reserve for debt service been established? . Has the required reserve for operations beu� established? In order to veriFti the above informacion, we cewmmend t6at either a limited-procedures rcview or a certified audit be performed on the HousinY AuH�orhy. 5. kormla Palm Mohile Home�ark: This is a mobile home park owned by an Association. This group initially purchased �he park from an individual. At first, the Ciry provided a 5600,000 loan w the Association. The Asaociatron also �ot addi�ional financing ftom a private lendiny insdtution (approximately 1.4 million) ta complete ' the purchue. Subsequent to chis, the Ciry 6ad ro buy out the 1.4 roiUion loan, because the ' Association was not able W service this loan. Hoth loans are supposod to be repaid from the sale of i�ividual lou in the pazk. Sales havc been slow, aad the Associuion is now 8 months in default. The City currently is renegotiating the loans with chis group. The Asaociation has a management com�any that is responsible for managlny the park. The City wan[s to have assucances that these loans will be paid back. w,,,,�� .�:-e� t.._ .-/�� V /,��. /��,�+.�- CQ C't't�"�• I 0 �� 6 � i SPECiFIC TION F �ARDING I 'j�(�,RNAL CON1'RQ . YC7�?M At�m r4nrF'nTTRFS (Comirn�ed) 5. Portola Palm Mobile Flome Park: (Corninued) With regard to this Association, we recommeod d►ac initiilly, a "certified audit" be puflormed on fhe. books and rocords, to assess t6e wrrent financial condition of the Asaociatioa, and its ability to repay the loans. In subsequmt yeazs, a limited procedures review should be perfiormed on an annual baaia. 6. Civic Center Barrio- Desert Rose Projec[: This project 9nvolves the construction of 161 low income houaes by a pcivate dcvola,per. 'I'hese homes aze going to be purchased and later sold or rented to low incame families by a uonprofit corpozation that is going to implement thia project for die Ctty. 1be City ia providing all of the fuadiny through a letter of credit thac has beoo pledged on tax exempt bonds that the noaprofit isaued to purcbase theae homea. The Cky miso has contrit+uted the land. The objeetive of thi9 project is to sell ell homes witfiin S yeus. T'he nonprofit is entiUed[o B�a managemeM fee and a flxed sales commission(around 555,000 per unit) for each unit sold. Tbe City alsa is going to provide 6ousing subsidies w tenams that would be livinY in these homes. In addition, the City is required to maintain a ESOO,UOU eserow accoimt that will be usod by rhe no�rofit W ensure the fiscal viability oFthis project. The ptices of the tomes have already ban determined and t4e developez will be paid as homea are wmpltted. The City is entitled to ahare in the prot"ita of eny homes aold later by any of the ori�inal buyers. As we understand u, the City's concerns are as tollows: . Are disbursements of proceeds to pay for homes properly documented and approved? . Are rentalfees being handled properly? . Are fimds in escrow accounts being handtod proQedy7 To help ensure that the City's invescment in this pruject is secure, and that funds are handled in a prnper manner, we suggest the following procedures: a. 7'he City shnuid require ffiat an annual cercified audit be performed on the no�roflt corQoration. (7his requiroment may alxeady be sec forth in the bcmd indenture associated with the tax-exempt bonds). : b. In connection with a cer[ified audit,the audit procedures would indude an e�ninacion of the escrow statements associated w[ib ach homa sale, and ezaminatipn of tental agreementc with low-income cenants, independent comF'innation of escrow accounrs, and uther verification proeedures. i` ,,� 7. Franchise Agrcements: � ��' J,�'�,fc/��,J"r V�'e undecstand that the City has&anchise agreements with Colony Cable, Waste Managemem, Southero California Edison and Southem California Gas. �.�/�}�E"�µz.2.1�i� Wich regard to each ftanchise agceement,we raeommeud that the City have an cmptoyce or ouaide CPA: a. Iicview each agreement. b. Prcpare a limi[cd-ptocedures review program w test compliance. 7 -- - --, SPECIF7C SUGGESTfONS RE ARDIN I NAi ONTROi CVS � ��m n (Continue�l) 8. Future bevdopment Projects: a. 5eetion 4: This projecc ca]is for t6e conswction o:f two golf couraes by the City and the developmem of the infrastructure requirad to build a major hotel,time/ahaze condos,a professional eommeccisl office ce�ter and a ciub house. It is the Chy's intem to own and operate the golf cours�and club house az�d aiso to sell the land around thc golf courses. The City has bcen negotiatiny w[th one devcloper (Palm Desert Goif/RE Assoc.)so far. It is our understanding that the City's conceros are as follows: . Are expenditures for coostruccion and devalopment af prOjoct being properly controlled? . Wili the golf couraes and club house be prop�ly managed7 . Ace revenues from speciat auivities (i.e. ytouad lease ayreements) being properly racorded? b. Odekirks: This is a speros complete that a privata investor wants to build in Pa1tn pesort, pdeklrks, the developer, is proposing to invest St mtllion out of the projected 54.2 mil(ion coat. The City has agreed co provide thc financing for the differenca In retura, the City is expected tp shue in the pro6ts of this project. The project will be owned and operated by the developer. The city's concerns with this project are simitar m the ones relaced to 'I't�e Hrothers. c. Madison Realty/$uatise: Regarding this property on EI Paseo, the Ciry l�as agreed to pay �S million tha� will hdp pay for che construction of a parking awctu�e that will be built if this project is developed. Regarding the construction phase of these projec[s, we recommend ffie following: a. Priot to tlie wnstruction of esch pzoje�,-t, City personnel, or an outside CPA, should develop interna] coMml procedures for controlling conshuction costs. Ihese procedures s6ould verify: . whaz comrols aze in existence over estimatinY and biddinY procedures by subcontraetors. . The documentation required by the City to substantiate mazerial, payzoll and overhaad costs. . What wat accounting records will be maincained by the developers. . The formac for progress reports to the Ctty during conscruetion(show(ng a detailed comparison of budget vs. acival for each major cost category). b. During eonstruccion, a City employee should periodicatly visit the construction site, to eompare ttie progress at the job with enst repo�ts provided by the developer. c. An annual cer[ified audit should be made on the project during the construction phate. During the operucional pha�es of these �rojeas, annual limited procedure reviews can be pecformed to monitor the City s panicipazion. S . • • • • � � • • • a We have not discussed every icem om the listinQ provided by Pau1 Gibson. Thc putpose of this letter is to provide you with an overall framawork for approact ing ieternal coatrois over dte Clty'a assots. We will be happy to explain this informatioa in g[eater detail. Oacar G. Armijo, CPA William 5. Morgan, CPA pirxWr of Manegpnent Consulting Die61, Evens& Campany 9 INTEROFFICE MEMORANDUM CITY OF PALM DESERT TO: ALLDEPARTMENT HEADS FROM: RAY DIAZ, ACTING CITY MANAGER SUBJECT: JANUARY 30, 1995, AUDITOR'S LETTER DATE: SEPTEMBER 12, 1995 Please review the attached auditor's letter dated January 30, 1995, and submit comments to me by Friday, September 22, 1995. A staff committee will be created to report, review, and implement the letter's suggestions, and those received by staff. The City Council will receive a report by mid- October. Nothing recommended in the January 30 letter is sacred. ON DIAZ ACTING CITY MANAGER Iga ,��";�,�h� b�-"� CC�Y G1ai.N TO�--''""�""— �°�ii '-la�lS,f �,`v'T'L ,N�=.-„�.�a �RAFT ,�� . ��s Finance Committee Ciry Council City of Palm Desert Paim Deaert, California Curready, the City of Palm Desert hes aumerons a@reemerns> contrads and other ftnancial azrangemeMs with other public syencies and private business organizaziong. The City's DireCGor of Finance, Mr. Paul Gibson,hat provided us with a compreh�sive listing of tlsose financiat arrangemeadE. Wc have reviewed the listinQ provided by Mr. Gibsoa, wit6 the objeaive of idedtifyin� what typm of inierna► controls and proceduras could be uaed regarding these tinancial arrmgemec�ts, m help prevau losses aad safaguazd the Ciry's assUs. A1so, in the near future, the City will commmce work on various devdopment projeds. This wi11 result in a large increase in the financial transactions that must be procassed, re�ded and wmroileA by ihe Ciry's Finance DepaameM. We have raviewed these develapment projects, with the objective of idendfying potential problem aress and suggesting ways that the finance staff can be re0rgaaized or expanded to deal with the increasad financial activity. Our comments and observations aze presented herein under the foltowing general categories: 2. Limitatio�s rey?arding the City's system of intema! accountin� Coatzols. 2. Basic internal wntroi cnacepts. 3. Internal control approaches that the Ciry rnay wish to consider. 4, Speciflc suggestions re$azdin� irtteznal coMrot systems and pcocedures. LIM �TIONS REGARDING THE C17'S"S SyS'I'EM OF INTE1tNAL AGCO�IN7'IAIG GONTROLS Management of the City qf Palm Desert is responsib�e for estebli8hing and maintainin� su adeyuate internal control system for the City. !n fulfillinE thia rasponsibility, estimates and jud�ements by manarement aze required ro assess the expected benefits and related costs of internal control policies and proceduros. 'fhe objectives of an imernal coMrol system aze w ptovide managemeot with reasonable,' but not absolute, assurance thac usds are safeguarded against loss, and tbat transachons aze axecuted ln accordance with managemem's authorizatioo and tetorded proparl y ro permit tbe prepiration of financial statements in accordance widi generally accepted accounting principfes. Aowever, because of inheroat limitations in any internal concrol systan, errora, irreeularities or insteaces of aoncompliance may neverthaless occur and not be detecteA, Also, the projection of any evsluatioa of the ieternal wntrol systcm to future periods is subjed to the risk that procedares may become iaadequate because of changen in conditions or that the effutivere�s of the design and operation of policies and procedures may detcriorate. 1 3u�� - sc�u ?(.- UJC�' -. �C' OJi% � ctf` RSrrc�oi.rer, rONTROL CONC�PTS Noted below are thrae buic iaternal control conceprs that aze necessazy in order £or the City's assas w be properly safeguarded_ 1. SeYregazion of Duties: The responsibiiity foz cussody of assets should not be placed with the same petaon ffiat maintalns the accoun�ing records. Note: 'IYie concern is primarlly with asseu that can ba misappropriated or atola�, suct� as cash and investments, imrentozy and personal property • offia equipmert and supplies, automobiles, etc. 2, V erification of Data: '1`he work of one employee shwld bo checked or verified by another employee. 3. Tha cost of implementinQ an incerc�al comrol should not ezcecd the cost of the asset or expenditure which is subject to comrol. Example- The City should not add a 530,000 per year storekoeper w comroi an invcacory wzth average moirthty purchases E3,000 and an average monthly inventory value of$10,000. INTERNAI. CONTROL.ApPROACI ES THAT TH� CITY MAY WiSH TO CONSiDER There aze various pmcedures that the City can use to help prevent losses and safeguaxd its assets. Many of these procedures can be nnplemeated by City porsonnei throuyt► an "intemai audit function". 'Thae procedures also can be perfonm�d by outside CPA firros or other outside conaultants. Some of ffiese proceduros aze summacSud betow: 1. Internal Auditing Procedures; x. A new position coutd be created by the City, with a dtle such as "Director of Internal Audits". This posi[ion could be filled by a newly-hired employa, or an e�cisting emptoyee. 'Fhe position K�ould be accountable to, and report dirxtiy to, the Finaace Committee. This person could work alone, or could organize an "Internal Audit ' Department", whexcby other employees would work in the internal audit function. ' b. The Direcwr of Internal Audits would be reSppnsible fot anal}zing agreements end contracts witb outside public and private emides, recommending new internal conaols to help prevent losses and performing "cotnpiiance auditt" on the various a�reements. 2. Scrviccs of Ouuide CPAs and Other Independenc Consultarns: A1so, tF�e Ciry can utilize outside CPAs or other independent consultanu Co monitor compliance with ehe variovs agreements wd contracts. I£ CPA services are used, two common services that couid be utiliud aze summarizal below: Z �1'[�RNAL CONfItOL APPROACHES (Cominued) a. Limited Procodures Review: lyis type of enga�e�ent is vary cost effective. The CPA pert'orms selected procedures, aod reports on 16e results. However, this type of raview does tac constihtte a "certified audit". b. CeRified Audit: In this engagement, the CPA firm "certi$es" d�at the financial information is mazezially cocrett. This engaBement is much more rime consumiag and costly than a limited procedures review. cvprrFlG SUC STIONS RFGAR�ING Rv''''�RNAL CONTROL SY$TEMS AND PROCEDC�� l. Cash and Imestmenta: Noced beiow are some genecal imernal wntroi pracedares to help safeguard casb aud icrveatmnnts. To some excenc, the City currendy may be applying these procedures: a. I[ is our undastanding that the City will be hirin�a naw "investmem officer" td handle the Tzeasury function. In determiaing his or hec duties,job functions should be aasigned so that the functioas of cecurd keeping a� custody of eash and invesamants are propaly segreyated. Someane other than tLe investment officer shouid recei�e copies of investment advises directly from banks and broker dealera, and then prepaze the accourning emries for reco�nS ia the City'a : generef ledger. Alternatively, if the genersl ledga source eMitios origlnate with tha imesunenc officer, another City employee should independenUy test the acrnracy of the recorded data. b. W'uz Transfers: To safeguard cash and invcstments, strict coutrols should bc placed over wire uansfers, inaludin� the£oliowing: 1. The City should specify in writiog: . Wdat officers or employees are 3uthorSzed to rnake wire aansfers � . What deposits or imestments may be acquited by wire transfers . The authorized doliar limit for wire tta��fers. 2. Wixe transfers crver a specified dollar limit should zeguize�I. apprmal. Dual approval can be accemplished by a number of procedures, such as: a) One City officisl phones in the wire trans£er; the bank t}ien calls back and confirnu the uansfer with anotber authorized Cky official. b) One City official phones in the wire trec�fer; a second City official sends a FAX or follow-up leuer with their signanu'es authorizing the transaction. Note: As is obvious from the ITM situation, wtside investmeat advisers should �( be aut�orized to make wire transfers for the City. 3 CPR('iFI S C E TION R�,SARDING LNTFRTVAL CON7ROL SYSTEMS AND PROCEDURES (Cominued) - - c. Delivery vs. Paymein: Once a "wire transfer" ia completed, the fuuda are gone, out of the City's possession. To make aure that equivalent ess�s ere returned, the City ahould acecute trensactions on a "delivery vs payment" basis, as ezplaioad below: ��le 4f'.Delivery vs�Pavment": 1) Tbe City Treasurer or investment o�cer phones Hank of America's Investment Aepartment and advisw the Bank ehat the Ciry is going to purefiase a Ban6e[s Acceptance from Mercill Lynch. 2) The Treasurer or investment officer sends a FAIt to B o£A with a description of the investmcnt, doltar amount, CUSIP number (if applicable), etc. 3) When the unde�lyi�g sxuxity is "dclivaed" (by eloctronic funds transfez)to B vf A's custodial agent, the Bank is then authorized m simultaneously "debit" the City's cash accouM and transfer funds to Merrill Lynch. d. Confirma[ion of Transacdons: Ali deposit and investment trxnsaetinns skiould be followed up with timely coafizmations. '1'he Treasurer or investment ofFicer should receive a hazd-copy advice or receipt from tt�e flaancial insticution or broker�ealet withia, say, 24 houcs of tho deposit or iervestrnem transaction. e. Deposits witb Banks and Savings and LosnS: It is ton costly, and impcactical, foc the City [o audit the vazious banl� and savings and loans uhzre it has investmcnts. As a safeguard, we recommend that the City: 1) Do not invest more chan the S 100,000 FDIC insured amount in a bank or S&i, ueleas there is adequete oollateral for the excess amount. (Caveat: chakiny account balances often go above 5100,000, and those amoums could be at rlsk). 2) When invnsting amounts over 5100,000, invest only in larRe, financially-sound bu�ks and 5&La. (If a dcfalcation or inegularity occurs, rl�e bank or S&.L shouid have the financial capacity co make the City whole.) f. Cash Disbursements: 1) Blank checks (for ai] acwunts - genecal, payxoll, ac) should be under lock and key at all hours, and should only be accessible to sutborized personnel. 2) Signawre plaus (for all accounts)should be under lock and key at all houxs, and should only he accessible w aumorized personnel. 4 .. __. ..._ ; � crTr CTif1 �c uFrpRDIN NTERNAI, CON'1'ROL cy��AN17 PROCEDUBES (COntitdl9d) ��. $, $ank Reconciliations: Bank rcconciliations should 4e performed on a montbly basis. 2. Transactions With Other Go�ernmental Agencies: $ is Our uoderstanding that the following agencies currendy have a certified eudit performed by outaide CPAs: Coachella Valley Association of Governroents Caachella Vellcy Joint Powars Insurance Authonity Coachella Va11ey Parks and Recreation District Care Community Pubtic Safety Commission Palm Springs Desart Itesort Convention and Visitors Burean County of Rivecside Also, it is ou� understanding that ihe City has made contributions to the£olloaing ayencies: k'arnily YMCA RCCADV Shelter feom the Smrm Food in Need for Distriburion School-Pazents Teacher Association C6amber of Commerce Hamane Sociaty CV COunseiing Children Museum ' July 4th Fireaorks Senior Centet Historical Society Living A�sert If the City has mncerns regarding the propriety of any of the financial transactions or balancea with any of ttese agencies, we suggest the foiiowing proce�ures: a. if the agency is audited, request rnpies of the current audit repons. (Jn fitture audits the City shouid requeac that the ou[side audiWr perform special audit procedures iegazding the aaasactions or balan«s with the City, end report on suc6 audit procedures in supplementary'schedules to the audit repott. 'f6e City of Palm Desett may be requited m pay for tbe additlonAl audit fees). b. Obtain a representation letter from the management of each organization, stating that the transactions or balances wlth the City ace accurace, to the bes� of their lrnowtedge ead belief. S I crFfrFIC SUGGEST[ONS REGARDING IN'I'ERNAL CONTROL SYSTEMS AND PROC DURFS (Continued) 3. County of Riverside: It is our underseanding that the City of Palm Deaert has contracts with the County for fire, police, animal wnttol and smet maintenance. aod that the City would like a review as to how the Cowaty is calculating cettatn overhead char��ffiat the County is billiny the City. 'ILwe charges change on a yearly basis aad to our imowledge, the County has not provided the City with any docume�rtacion supportiag these chazges. We zecommend thac a limitsd pmcedures review be petforcued on the Cwnty'a a�st allocation procedures, and pmcedures for billing tt�e City. 4_ County af Riverside -Housing Authority: In prior yeats, the City issued bonds to acquize low-inrnme housing projects in the City of Falm Desert. As a result, the City puxchased 7 housing projects which wtte turned over co d�e HousiuY Authority. 1'he City is responsible for prpviding subsidies£or tenants (housing assistance payments) [hat live in these projec[s based on amou�biped by tl�e Iiousing Authority. It is ouc undozstanding � rhat the Cicy haz the fotlowing concerns: � • . Are project's expenSses only telated to Palm Desert proJects? . Are ovuLead charges reasonable? . Are tenan�c qualified for occupancy? . Do projec[s hava the praper mix of tenams (i.e„ low iowme, very low-income, ecc.)? In addition, when the bonds were issued, two other cities were invotved (Palm Sptings and Corona). We understand thxt the City has following concerns with the respect to these bonds: . How were the bonG issuance cost allocated? . Has the required reserve tuz d�t service been established? . Has the required reserve for operations been established? In order co verify the above informntion, we recommenfl that either a limited-procedures review or a certified audit be performed on the Housiny Autborlry. 5. Pormta Palm Mohiie Home Park: This is a mobile home park owned by an Association This group initially purchased the park from an individual. At firs[, tt�e City provided a 5600,000 loan to the Associa[ion. Ttie A58ociation also IIot addicional financing from a private lendin$ institution (app�oximately l.4 mitlion) to complete ' the purchase. Subsequent to this, [he City had to buy out the 1.4 million loan, becwsc the ' Association was not able W service d�is loan. Both loans aze Supposed to be repaid from the sale of i�ttlividual Iots in the park. Sa1es have been slow, and the Association is now 8 months in default_ ['he City currently is renegotiating the loans with this group. The Asaociation haa a management com�any that is responsible for managlny the park. The City wants to have assurances ttiat ffiese loans wi11 be paid back. �,�.,,,�F � � �ti� �- �-1�` u ��'=�• �,�,a,F ,�,r��„ ; 6 � SpECiFIC SUGGEST[ONS REGARDING j�[J'FRNAL �4NTROL SYSTEM AND P�iOCEDURES (Cominued) 5. Pornola Palm Mobile Home Park: (Corninuad) With reQard to this nssuciation, we recommend thst initially, a "certified sudit" be performed on tha. kwoks sad records, to assess t6e wrrent financi�l rnndition of t6e Association, a�d ia ability to r�ay the loana. In subsequcnt years, a limited procedur� review should be performed on an annual basia. 6. Civic Center Hazrio - Desat Rose Projecc: This project involves the cons�uction of 161 low income houaes by a private developer_ 'x'hese homea aza going to be purchased and later sold or reitted to low incame families by a nonprofit coYiwration 13�ac is going m implemrnt thia project for the City. 11ie City is providing all of the fundiny through a letter of ccedit thac has been pfedged on tu e:empt bonds that the no�rofit issuad w pnrchue ffieae homea. The City also hu contriMrted the land. T6e objutivc o£this project is to seli ell homes within 5 yeus.: The nonprofit is entitlad to e�a managemert fee and a fixed sales commission(around 555,000 per ueit) for each unit sold. The City also is going w provide housing subsidies to tenants that would be IivinY in tt�ese homes. In addition, the City is required to maintain a 5500,(100 escrow accoimt thac will be usod by the nonprofit to ensure tha fisca]viabillty of this project. 1?ae prices of the homes have already ban de�ermined and the developer will be paid as homes are compltted. 7'he City is entided to share in the prof'its of eny domes aold later by any of the ori�i»al buyecs. As we u�eratand it, t6e City's concerns are as follows: . Are disbursements of�rceeeds to pay for homes properly documonted and appmved? . Are rental feas being handied proQerly? . Are funds in escrow a:.counts being handled properlyR To help ensure that the City's investment in this pivject is secure, and thaz funds are handled in a praper manner, we suggest the following procedures: a. The City should require that an annual certified audit be perfiotmed on thc no�roflt corporation. (This cequiremenc may already be set forth in the bemd indenture associated with the tax-exempt bonds). b. In connection wich a eertified audit,the audit procedures would include an examinacion of the escrow statements associated witb ach home sale, az�d ezaminatlon of rental agramenGs with low-iaoome tenancs, independenc conf'irmation of escrow accounu, and other verification procedures. � � i�` �' 7. Franchise Agreements: J��r�y,ti'�" V�'e undc�tand that Ihe City has franchise agreements with Colony Cable, Waste Managemem, Southern Califirnia Fdison and Southern California Gas. �,., ��,� �'�. Wich regud m each franchise agreement,we recommend tt�at the City have an emptoyee or ouaide CPA: a, Review eack� agroement. b. Pcepare a limice�-procedures review progcam W test compiiance. 7 � - - _. N (Contiaued) 8. fwcure Devdopment Pro)ects: a. Seetion 4: This project ca]Is for the consauctlan of two golf cours� by the City and the developmem of tkie infrastructure required to build a major 6ote1,time/shara condos, a ptofessional eommercial office center and a club house. It is the Chy's intent W own end operate the go1£courses and ciub house acd also to sell the land around the golf courses. The City has bcen negotiadnQ with one developer (Paim Aesert Golf/RE Assvc.)so far. It is our understanding that the City's concerns are as follows: . Are expendituras foc coastruction and deveic�ment of project being properly controlled? . Will the golf courses and club house be properly managed7 . Are revenues from special activitses (i.e. yxouad lease syreements) being propedy recordedT b. Odekirks: This is a spnrcs rnmplete that a private investor wents tp puild in Paltn Desert. Odekirks, the developu, is proposing to invest$1 mlllion out of the projected 54.2 million coat, The City has agrad io provide thc financing#or the differenca In retum,the City is cxpected to share in the profits ot'this project. 'Ihe project witi be owoed and operated by che develc�er_ '[Le eity's concerns with this ptoject ara aimilar w the ones related to The Brothers. c. Madison Realty/Suaxise: Regardin�this property on EI Pasec�, che City has agrecd to pay �S million that will hclp pay for che construction of a parking structure that will be built if dtis pzoject is developed. Regardin�the constructioo phase of ihese pzojects, we recommend the followu►�: a. Prior to tlie construction of each project, City personnei, or an ourside CPA, should develop internal eornml procedures for controlling eonahuction costs. '[hese procedures s6ould verify: . What concmis are in existence over estimatiny and biddiny procedures by sabcontractors. . The documentation required by tLe City to subsiaatiate mazerial, payzall and overhead costs. . What cost accounting records will be maintained by the developers. . The formac for progress reports to the City during construttion(showing a detailed comparison of budget vs. actual for each major cost category). b. During wnstruaioa, a City employee should periodica(ly visit the construction site, to compare the progress at the joh with co5t reports provided by the devdoper. c. An annual certified audit should be msde on the project during the construetion phase. During U�e operational pha�es of these �rojects, annual limited ptocedure reviews can be performed to monkor tha City's patticipation. S . � • • • � • • • • s We have not discussed every item on the listinA provided by Paul Gibson. The putpose of fhis letter is to provide you with an overall framawork for approachiug internal coavols ovet Ihe City'e sasota. We will be happy to explain this informatioa in gteater detaii. Oscat G. Armi,jo, CPA William S. Morgan, CPA Director of Managanent Consuiting Diehl, Evens & Company 9