§ 386 — Profits; how and when to be computed

§ 386. Profits; how and when to be computed. 1. Every savings and loan\nassociation shall close its books, for the purpose of computing its\nprofits, at the end of any period for which a dividend is to be paid and\nin no event less frequently than quarterly. To determine the amount of\ngross income for any such accounting period the following items may be\nincluded:\n (a) All income received or properly accrued, provided that no interest\nshall be accrued upon any interest-bearing asset upon which a default of\nprincipal or interest has existed for a period which shall be determined\nby the superintendent, except for interest-bearing assets secured by\ncollateral the ascertained value of which is at least equal to the\namount at which such asset plus all interest accrued thereon is carried\non its books.\n (b) Amounts added to cost for the purpose of amortizing discounts on\nsecurities purchased for less than par, provided that no discount shall\nbe amortized on securities upon which a default exists.\n (c) Any profits actually realized from the sale or other disposition\nof securities, real estate or other property.\n (d) 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 directors\non account of assets previously disallowed by it.\n (e) 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 (f) Such other items as the superintendent, in his discretion, may\npermit to be included.\n 2. To determine the amount of net profits for such accounting period\nthe following items shall be deducted from gross income:\n (a) All expenses paid or properly accrued, both ordinary and\nextraordinary, in the transaction of its business, the collection of its\ndebts and the management of its affairs.\n (b) Interest paid or properly accrued upon time deposits held pursuant\nto section three hundred seventy-eight-a of this article, interest paid\nor properly accruing upon deposits referred to in section three hundred\nseventy-eight-b of this article and debts owing by it.\n (c) Amounts deducted from cost for the purpose of amortizing premiums\non securities purchased for more than par.\n (d) Any losses sustained by it except to the extent that such losses\nhave been charged against the surplus account or valuation reserves. In\nthe computation of such losses there shall be included all deductions\nfrom the book value of assets made pursuant to the direction of the\nboard of directors or by reason of the disallowance of assets by the\nsuperintendent. The balance thus obtained shall constitute the net\nprofits of such savings and loan association for such period.\n