(in millions)

ASSETS For the years ended:
December 31, 1996 December 31, 1995
Gold certificates $624 $621
Special drawing rights certificates 543 584
Coin 25 24
Items in process of collection 688 265
U.S. government and federal agency securities, net 23,173 22,014
Investments denominated in foreign currencies 1,257 1,476
Accrued interest receivable 209 224
Interdistrict settlement account 5,007 220
Bank premises and equipment, net 131 87
Other assets 23 19
Total assets $31,680 $25,534

LIABILITIES AND CAPITAL For the years ended:
December 31, 1996 December 31, 1995
Liabilities:
Federal Reserve notes outstanding, net $29,861 $23,524
Deposits:
Depository institutions 856 1,161
Other deposits 15 11
Deferred credit items 280 232
Statutory surplus transfer
due U.S. Treasury
37 0
Interest on Federal Reserve notes due U.S. Treasury 0 39
Accrued benefit cost 43 40
Other liabilities 10 9
Total liabilities 31,102 25,016
Capital:
Capital paid in 292 259
Surplus 286 259
Total capital 578 518
Total liabilities and capital $31,680 $25,534

(in millions)

For the years ended:
December 31, 1996 December 31, 1995
Interest income:
Interest on U.S. government securities $1,382 $1,400
Interest on foreign currencies 29 55
Total interest income 1,411 1,455
Other operating income:
Income from services 50 47
Reimbursable services to government agencies 23 22
Foreign currency gains (losses), net -109 70
Government securities gains, net 2 0
Other income 1 3
Total other operating income (loss) -33 142
Operating expenses:
Salaries and other benefits 68 67
Occupancy expense 8 7
Equipment expense 9 9
Cost of unreimbursed Treasury services 2 2
Assessments by Board of Governors 34 33
Other expenses 43 43
Total operating expenses 164 161
Income before cumulative effect of accounting change 1,214 1,436
Cumulative effect of change in accounting principle 0 -4
Net income prior to distribution $1,214 $1,432
Distribution of net income:
Dividends paid to member banks $16 $16
Transferred to surplus 34 1
Payments to U.S. Treasury as interest on Federal Reserve notes 854 1,415
Payments to U.S. Treasury as required by statute 310 0
Total distributed income $1,214 $1,432


(in millions)

Capital Paid in Surplus Total Capital
Balance at January 1, 1995 (5,150,561 shares) $258 $258 $516
Net income transferred to surplus 1 1
Net change in capital stock issued (24,775 shares) $1 $1
Balance at December 31, 1995 (5,175,336 shares) $259 $259 $518
Net income transferred to surplus 33 33
Statutory surplus transfer to the U.S. Treasury -6 -6
Net change in capital stock issued (674,545 shares) $33 $33
Balance at December 31, 1996 (5,849,881 shares) $292 $286 $578

These statements are prepared by Bank management. Copies of full and final financial statements, complete with footnotes, are available by writing the Corporate Communications & Community Affairs Department of the Federal Reserve Bank of Cleveland, P.O. Box 6387, Cleveland, OH 44101, or by calling (216) 579-2001 (key in 1-5-3).


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