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  netearnings for such period as may be determined by the banking board 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.