News Release

FEDERAL RESERVE PURCHASES PHOENIX SITE
FOR CASH OPERATIONS CENTER

Center aims to meet evolving cash needs of the growing Arizona market

LOS ANGELES, July 15, 1999--The Federal Reserve has signed a contract to purchase a Phoenix site for a future cash operations center. The center, scheduled to be up and running in September 2001, will meet the evolving cash needs of the growing Arizona market, one of the fastest growing regions in the nation.

San Francisco Fed President and CEO Robert T. Parry said, "This action by the Fed marks a significant milestone for this important project. The Fed's presence in Phoenix will provide higher quality cash services to the area and ensure that we will be able to meet Arizona's cash needs into the foreseeable future."

Arizona's population of approximately four million people is serviced by the San Francisco Fed's Los Angeles Branch, which is located about 400 miles from Phoenix. The Fed's Phoenix center will offer Arizona banks more timely access to the Fed's cash services and reduce the costs they currently incur for long-distance transportation.

The selected property is vacant land located near the intersection of McDowell Road and 47th Avenue in Phoenix. The roughly seven-acre parcel is part of the West-10 Crossroads business park.

The cash operations center, which will be operated by the Federal Reserve, will receive, process, and distribute cash. The center will sort out and destroy worn currency and also detect and remove counterfeit notes from circulation. The Fed estimates that initially 50 Fed employees will be needed to staff the facility.

The project's preliminary design was approved last week by the Federal Reserve's Board of Governors. The Fed will now retain architectural and engineering consultants and a general contractor to proceed with the facility's design and construction plans. Costs for the center will be paid by the Federal Reserve with Fed capital and operating funds.

The Los Angeles Branch is the largest Branch in the Fed system. The L.A. Branch serves over 25 million people--roughly ten percent of the United States population--and services a zone that encompasses all of Arizona, southern Nevada, and the southern third of California.