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

§ 244. Earnings; how and when to be computed; transfers to surplus\nfund. 1. Every savings bank shall close its books no less frequently\nthan quarterly. To determine the amount of gross earnings for any such\naccounting period the following items shall be included:\n (a) All earnings actually received, less interest accrued and\nuncollected included in a previous computation of earnings;\n (b) Interest accrued and uncollected upon debts owing to it, exclusive\nof debts or portions of debts, which its board of trustees or the\nsuperintendent shall have directed to be excluded from the computation\nof the accrual;\n (c) Amounts added to cost for the purpose of amortizing bonds,\npromissory notes or other interest-bearing obligations purchased for\nless than par;\n (d) Any profits actually received from the sale of securities, real\nestate or other property owned by it;\n (e) Amounts recovered on assets previously charged off, including\namounts allowed by the superintendent on account of assets previously\ndisallowed by him and other amounts allowed by the board of trustees on\naccount of assets previously disallowed by it. For the purpose of this\nparagraph amounts transferred to valuation reserves shall be considered\nas amounts charged off;\n (f) Provided the superintendent shall have approved, and only to the\nextent of such approval, any increase in the book value of the real\nestate and building or buildings thereon used by it as its place or\nplaces of business;\n (g) Such other items as the superintendent, in his discretion and upon\nhis written consent, may permit to be included.\n 2. To determine the amount of net earnings for such accounting period,\nthe following items shall be deducted from gross earnings:\n (a) Any expenses paid or incurred, both ordinary and extraordinary, in\nthe transaction of its business, the collection of debts owing to it and\nthe management of its affairs, less expenses incurred and deducted in a\nprevious computation of earnings;\n (b) Interest paid or accrued and unpaid upon deposits held by it and\nupon debts owing by it, less interest accrued upon such deposits and\ndebts and deducted in a previous computation;\n (c) Amounts deducted from cost for the purpose of amortizing bonds,\npromissory notes or other interest-bearing obligations purchased for\nmore than par;\n (d) Any losses sustained by it, except to the extent that such losses\nhave been charged against the surplus fund or valuation reserves. Losses\nto be deducted from gross earnings shall include all deductions from the\nbook value of assets made pursuant to the directions of the board of\ntrustees or by reason of the disallowance of assets by the\nsuperintendent, and shall include amounts transferred to a valuation\nreserve, other than amounts transferred to the surplus fund under\nsubdivision three of this section. With the approval of the\nsuperintendent, any items referred to in this paragraph may be excluded.\nFor the purposes of this paragraph, provision for disallowances may be\neffected by charge off or by establishment of valuation reserve and any\nexisting valuation reserve may be deducted from the related asset in\ndetermining the amount of loss sustained.\n The balance thus obtained shall constitute the net earnings of such\nsavings bank for such period.\n 3. If at the close of any accounting period the net worth of any\nsavings bank, including the net earnings for that period, is less than\nten per centum of the amount due to depositors, including all interest\naccrued and credited for that period, such per centum of its net\nearnings for such period as may be determined by the superintendent of\nfinancial services shall be credited to its surplus fund.\n 4. For purposes of this article, the term "net worth" shall mean the\nexcess of assets at book value, less allocated reserves, over known\nliabilities.\n