Jerald P. Lewis, president and chief executive officer
First American Trust Company

n impressive 18 percent increase in assets under administration, from nearly $1.1 billion in 1996 to $1.3 billion in 1997, is reflective of First American Trust Company's successful year. The group also realized $10.3 million in operating revenues, a 15 percent increase over the prior year.

    First American Trust Company also became a direct participant with the Federal Reserve Bank in 1997, enabling it to wire money directly into the bank's system. Previously, we used a traditional method of having a paid intermediary make the transfer. By transferring the money directly, costs are reduced for the company and our customers.

    The Trust Company plans to increase its presence in the Southern California market in 1998 by adding two offices in San Diego County.

irst American Capital Management, Inc. (FACM) continued to grow successfully throughout the year. This group had managed assets through the Trust Company's investment division for more than three decades. In December 1995 it became a separate company, offering its services on a national basis. The group ended 1997 with $1.03 billion in actively managed portfolios.

    This SEC-registered investment group developed and offers First Choice Funds, a First American family of mutual funds. These proprietary funds are a mix of cash reserve and U.S. Treasury Reserve funds. We also offer individual securities, cash management products, and short-term, client-directed investment products. FACM has been successful in attracting individuals, corporations and pension plan providers, municipalities and banks as investors. In 1998, we plan to introduce to our investors the ability to track their funds on line via the company's web site. Additional funds of varying types are also planned for introduction during the year.

ollowing a decade of consecutive yearly improvements, First Security Thrift again had its most successful year to date, ending with a pretax profit of $2.8 million, a 15 percent increase over 1996. This Southern California-based thrift organization also saw its deposits increase to $62.5 million from $51.3 million the prior year, an increase of 21 percent. Its loans receivable base rose by 17 percent to $65.5 million.

     An F.D.I.C.-insured Industrial Loan Corporation, the thrift continues to attract high-grade borrowers with very few delinquencies when compared with industry norms. The loans are primarily commercial and industrial real estate-secured transactions. First Security Thrift has also maintained a stable group of local area depositors, and plans to increase its representation soon in the San Diego area. The group also expects to benefit from a projected increase in local commercial building in 1998.

     While the company enjoyed financial success in 1997, it also suffered the loss of its founder and president, Richard (Dick) L. Hulsizer, who passed away in October. Dick had led First Security Thrift with professionalism and grace, playing a large role in the company's reputation for personal service. He also formed and managed a team of professionals whose efforts are carrying on the company's impressive operation. The majority of the staff has been with the company since the inception of First Security Thrift, including James Bresnan who succeeds Dick as president.