N.Y. Banking Law Section 109
Closing of books

  • profits
  • how to be computed

1.

Every bank and every trust company shall close its books not less frequently than annually for the purpose of transferring its net profits to the undivided profits and surplus fund accounts.

2.

To determine the amount of gross income of any bank or trust company for the purpose of computing its net profits for any period, the following items may be included:

(a)

All income received or properly accrued, provided that no interest shall be accrued upon interest-bearing assets upon which a default of principal or interest has existed for a period which shall be determined by the superintendent except interest-bearing assets secured by collateral the ascertained value of which is at least equal to the amount at which the asset plus all interest accrued thereon is carried on its books.

(b)

Realizable profits resulting from a revaluation to ascertained current market of a foreign exchange position, provided that a consistent practice is followed in the deduction from gross income of losses so resulting.

(c)

Amounts added to cost or charged to amortization reserve for the purpose of amortizing discounts on securities purchased for less than par, provided that no discount shall be amortized on securities upon which a default exists.

(d)

Any profits actually realized from the sale or other disposition of securities, real estate or other property.

(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 directors 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, may permit to be included.

3.

To determine the amount of net profits for such period, the following items shall be deducted from gross income:

(a)

All expenses paid or properly accrued in the transaction of its business and the management of its affairs.

(b)

Interest paid or properly accrued upon debts owing by it.

(c)

Amounts deducted from cost or credited to amortization reserve for the purpose of amortizing premiums on securities purchased for more than par.

(d)

All losses sustained, including assets, or portions thereof, disallowed by the superintendent, and other assets, or portions thereof, disallowed by the board of directors. 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.

4.

The balance thus obtained shall constitute the net profits of such bank or trust company for such period.

Source: Section 109 — Closing of books; profits; how to be computed, https://www.­nysenate.­gov/legislation/laws/BNK/109 (updated Sep. 22, 2014; accessed Apr. 20, 2024).

94
Change from bank to trust company 96
General powers 96‑A
Servicing of mortgages by banks 96‑B
Payroll payment by banks or trust companies 96‑C
Power to act as trustee under self-employed retirement trust or individual retirement trust 96‑D
Banking development districts 97
Power to purchase securities and stocks 98
Power to take and hold real estate 98‑A
Club accounts 100
Fiduciary powers 100‑A
Fiduciary capacities 100‑B
Investments as fiduciary 100‑C
Common trust funds 100‑D
Foreign common trust funds 101
Additional powers of certain trust companies 102
Powers of specially chartered trust companies 102‑A
Limited liability trust companies 103
Restrictions on loans, purchases of securities and total liabilities to bank or trust company of any one person 104
Entries in books 105
Branch offices 105‑A
Electronic facilities 105‑B
Trust offices 106
Deposits by banks and trust companies with other banking corporations and private bankers 107
Reserves against deposits 107‑A
Security for public deposits 108
Rates of interest 108‑A
Acceptance of United States currency 109
Closing of books 110
Surplus fund 111
Profits 112
Dividends 113
Change of location 114
Assessment of stockholders to make good impairment of capital stock 121
Reports to directors 122
Examinations of banks and trust companies by directors 123
Reports of directors’ examinations 124
Communications from department of financial services to be submitted to directors and noted in minutes 125
Reports to superintendent 128
Preservation of books and records 129
Requirement of notice on withdrawal of certain time deposits 129‑A
Requirement of written notification 130
Restrictions on officers, directors and employees 131
Prohibitions against encroachments upon certain powers of banks and trust companies 132
Use of sign, or words, indicating bank or trust company by unauthorized persons prohibited 133
Use of banking institution name 134
Repayment of deposits standing in the names of minors, trustees or joint depositors 136
Change of national banking association into state bank by conversion or merger 136‑A
Purchase of assets of national banking association by bank or trust company 136‑B
Approval of superintendent 136‑C
Effect of merger or conversion of national banking association into state bank 137
Change of state bank into national banking association by conversion, merger or consolidation 138
Foreign branches 139
Saving clause 140‑A
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Accessed:
Apr. 20, 2024

Last modified:
Sep. 22, 2014

§ 109’s source at nysenate​.gov

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