N.Y. Banking Law § 244: Earnings; how and when to be computed; transfers to surplus fund

§ 244. Earnings; how and when to be computed; transfers to surplus

fund. 1. Every savings bank shall close its books no less frequently

than quarterly. To determine the amount of gross earnings for any such

accounting period the following items shall be included:

(a) All earnings actually received, less interest accrued and

uncollected included in a previous computation of earnings;

(b) Interest accrued and uncollected upon debts owing to it, exclusive

of debts or portions of debts, which its board of trustees or the

superintendent shall have directed to be excluded from the computation

of the accrual;

(c) Amounts added to cost for the purpose of amortizing bonds,

promissory notes or other interest-bearing obligations purchased for

less than par;

(d) Any profits actually received from the sale of securities, real

estate or other property owned by it;

(e) Amounts recovered on assets previously charged off, including

amounts allowed by the superintendent on account of assets previously

disallowed by him and other amounts allowed by the board of trustees on

account of assets previously disallowed by it. For the purpose of this

paragraph amounts transferred to valuation reserves shall be considered

as amounts charged off;

(f) Provided the superintendent shall have approved, and only to the

extent of such approval, any increase in the book value of the real

estate and building or buildings thereon used by it as its place or

places of business;

(g) Such other items as the superintendent, in his discretion and upon

his written consent, may permit to be included.

2. To determine the amount of net earnings for such accounting period,

the following items shall be deducted from gross earnings:

(a) Any expenses paid or incurred, both ordinary and extraordinary, in

the transaction of its business, the collection of debts owing to it and

the management of its affairs, less expenses incurred and deducted in a

previous computation of earnings;

(b) Interest paid or accrued and unpaid upon deposits held by it and

upon debts owing by it, less interest accrued upon such deposits and

debts and deducted in a previous computation;

(c) Amounts deducted from cost for the purpose of amortizing bonds,

promissory notes or other interest-bearing obligations purchased for

more than par;

(d) Any losses sustained by it, except to the extent that such losses

have been charged against the surplus fund or valuation reserves. Losses

to be deducted from gross earnings shall include all deductions from the

book value of assets made pursuant to the directions of the board of

trustees or by reason of the disallowance of assets by the

superintendent, and shall include amounts transferred to a valuation

reserve, other than amounts transferred to the surplus fund under

subdivision three of this section. With the approval of the

superintendent, any items referred to in this paragraph may be excluded.

For the purposes of this paragraph, provision for disallowances may be

effected by charge off or by establishment of valuation reserve and any

existing valuation reserve may be deducted from the related asset in

determining the amount of loss sustained.

The balance thus obtained shall constitute the net earnings of such

savings bank for such period.

3. If at the close of any accounting period the net worth of any

savings bank, including the net earnings for that period, is less than

ten per centum of the amount due to depositors, including all interest

accrued and credited for that period, such per centum of its net

earnings for such period as may be determined by the superintendent of

financial services shall be credited to its surplus fund.

4. For purposes of this article, the term "net worth" shall mean the

excess of assets at book value, less allocated reserves, over known

liabilities.