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182
BOARD OF GOVERNORS
OF" THE
.-
FEDERAL RESERVE SYSTEM
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 18, 1942•
•
·-
Dear Sir:
There are being forwarded to you tod~y under separate cover the indicated number of copies of the following
forms, a copy of each of which is attached he~eto, for the
use of State bank members in submitting reports of earnings
and dividends for the calendar year 1942:
Number of
copies
Form F.R. 107 (Revised November 1942), Report of
earnings and dividends-~~alendar year 1942.
Form F.R~ 107a (Revised December 1942), Instru~
tions for the preparation of reports of
earnings and dividends by State bank members
of the Federa.l Reserve System.
There are also enclosed three copies of a memorandum
(s-6ooa) which contains comments regarding the revised form
of earnings and dividends report that should be incorporated,
to the extent you think it desirable to do so, in your letter
transmitting the above forms to the State bank members; and
three copies of a memorandum (s-600b) which contains suggestions pertaining to the handling of the reports by the Federal Reserve Banks.
·
Very truly yours,
L. P. Bethea,
A$sistant Secretary~
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Enclosures
.
TO THE PRESIDENTS OF ALL FEDERAL RESERVE BANKS
http://fraser.stlouisfed.org/
(Enclosures with addressed copies only.)
Federal Reserve Bank of St. Louis
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SUGGESTED COMMENTS 'I'O BE INCLUDED IN FEDERAL }lli!SE~WZ :3AEt~' LB'l"l'EqS
SENDING EJI31HNGS AND DIVIDEHDS REPOR'r FORMS 1'0 S'rA'rE: BANK V..El.:BERS
IN DECI~!~iBER 1942
..
li The fonn of report has been revised and considerably simplified,
particularly in Sections 2 and 3. The revisions are the result of efforts
to brini;; about greater uniformity in forms of earnings and cti·.ddend.s reports,
t~ provide an inlproved form of' report, and to reduce the burden of bank
reporting.
2. The Board of Governors of the Federal Reserve System a.nd the
Federal Deposit Insurance Corporation have adopted substantially identical
forms of oa.rnings and dividends reports, and the Comptroller of the Currency
has adopted an identical itQmirs.tion of earnings, expenses, losses, rc•
coverius, and profits.
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3. The National Association of· oup·arvisors of State Banks has recommended that State banking departments use. in so far as possible, a f'o:rm of
earnings and dividends report like tho.t adopted by the Federal Reserve System
and the Federal Deposit Insurance Corporation, and it is expected that most
of them will do so. ~~~est Sta.te b~:mks, thon•foN, will rondor the sama form
of r~port to both Fvdoral and State ·nanking authori tios.
4. D8tailfJd instructions ht:..ve boon providod for thu gutc.ancG of
Stc.t0 bank mombors in prvpuring their n::ports • Thuso instructions should be
ca.rofully raad boi'oro proparo.tion of th•) roport is br,;gun, and. they should be
prosorvod for futuru usc.
5 ~ In Section 1 tho principal r::Jvisions
n.rG
as follows f
Item l(c), ''Sorvico charges and oth:;r foes on bunk's
loans~, has boon o.ddGd.
If tho r0porting bank's rooords do not permit the detcrminCLtion of th0 actual
amount of such incom~.>, the amount roportod agair,_st
this i tum may bc.l ostimat0d (in so fur t<s the yoe. r
1942 is concerned).
..
Normal or r0curring depreoiution on banking house,
furni tur·,;~ ond fixtures, h'~rutofor<') not sGgrE:g£\ted
from oxtre. ordinary lossus and depr~JCi~tion churges
on r:c:al estf;.to, is now to b,J shown sepctrut,,ly in
current operating oxpens.:,;s •
Taxes on net income:;, h·~rutof'or,_: included in current
oxponsos, u.re now to bo shov<'r~ s0para.tely ~~sa.:i.nst
it<;;m 7 o..s a d{lduction from "Profits b3foru income
•
taxus" •
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Di vidc;nds declared, fo:rm,:~rly shown in Section 2 n.s
a che..rgu a.so..inst undivided profits, aro now to b0
shown o.g~tinst i t0m 9 in Section 1 c.s c.. d:::Jduction
from not profits 1 r,.nd 11 Not p:rofi ts c.d't•.::r di vid"nds 11
&I'G thon to bu carriCdd for'We..rd to S•c;ctior: 2 1
''Chanr;os in Cc.pitr.. l Accounts".
6. Section 2 has b~~n compl~toly revised. Hurotoforu this soction cQllod for th·~ gross nmounts of' all transfe;rs to D.nd from surplus 1
reserves for conting..::ncivs, rosurves f'or dividc:nd~> 1 e;tc., in Ci.ddi tion to
the.; •unow1ts of assossmnnts 1 rodu.ction of co.pi tr..l not r..::paid to she,roholdcrs 1
dividends p~id, utc. In r0visod ~action 2f all dobits Qnd cr0dits r~pr~
scmting r.1or'Jly trr,nsf(.;rs from onu ce..pi tc. l c.ccount to c,noth0r hr..v;_; b;;on
:::limint..tod, th.JNby groo.tly simplifying this soctiou of th8 r::;pcrt. All
thr~t is !lOW required is th<) ruporting of trD.nsc.ctions thc.t rosul t ei th-:.:r
in o.n increase;, or 1:~ avcrl)r.~su in th8 ~ of all capi tc.l c..ccounts,
7. SectJon 3 likewise has been radically changed~ Heretofore,
banks were required to show in this section the total profits, assessments,
contribution:;, etc,, since the organization of the bank, together with
the a.istribution thereof. 1'his inform&:cion has been coupletely eliminated.
All that is now required is that the banks show, as of' the beginning and
end of the report p~1riod, the balance in each capital account. '£his in ...
formation ma;y be readily taken from the bank's books •
•
8, Only calendar-year totals are to be reported in the current
report• An inttJrim semi-annual report, perhaps i::-:. condensed form, nay be
required a.t tho end of June •
•
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...
BUGGES'.i:'IOllS IN CONNECTI<,.;·N WITH HANDLING AND BXAMINi:..TION OF
S'l'ATE B.<..lm 1vL~WJt~H Ei..EWINGS i~ND DIVIDENDS RSPORTS BY
FEDERAL RESERVE BANKS
..
December
1942
i~ copy of the Federal Reserve Bank's lett0r to State bank r:tembors trE:.nsmi tting tha blcmk forms should bd furnishr;;d to the Board of
Govornol~s as soon as practicable, and a copy of the' lottur and aecompany•
ing forms should be sen-e -co tho banking dr~partmont or uach Stat:::: which
lies in tho Federal ResarvG district,
Whun r'.Jports on lt'orm F.H. 107 hav0 b0<m filed wii:.h the F0deral
Rusurvc Banks thoy should be carefully checked and any necessary corrections obtained t if practicablf;J, boforo th6y an forwardo<i to th~· Board
of Governors. Corr;.:ctions should be clearly shown on the copir s forwarded
to th:, Board, with an indication o1' th.::; u.uthority for tho correction, including thu iui tia.ls of cho pc.;rson a.t th,.., Fod'"'ral R.:~sorvc Bunk who mb.kes
thum. Whon necossary to clarify thu oorructions • a copy of 'the pertinent
correa}Jondenco should b,; fll.rnishDd th<:: Board"f If th0 obtainint: of corrections is lik..:1ly to dulay the ·transmi tta.l of' sny reports to th<1 Board
bGyond throe wo~ks from th..; olos:J o£' th; roport p<-,riod, such ruports, together with pertinont oorrespondonco or notes of outstnndin~ correspondence,
shoulu bo forvmrd,;;d to th~ :bo~rd, to be followed later by appropriato
a.dvic'~ of corroctions,
Tho roports should bo examined to sec
that~
among othDr things--
'£h-.; h-.:Jading of tho roport und r.:Jquircd sigrw. ture o.rccompl;;to;
All footings o.ro correct;
Amounts r.;;portod against c;o.ch i t<Jm in Section 1 do
not appoti.r to be obviously inconsishmt vii th th0
amounts shovm on pr(~codinE rCJport ( s) for compr.l.ro..blu
p~1riods;
"Othor curr~mt opcn,ting o&rnings", "Other curront
operating cxpons0s 11 , "R;covuriGs c..nd p:rofi ts- ..All
othor", c. nd "Losses o.nd chf.,rg0..-offs- .. .;.ll othsr 11 &.to
prop;:rly it•..'nlizcd;
Tho munb.)r of' off'icor3 u.ncl <:Jmploy.::;.;,s o.s shown against
itoms 2(a) and 2(b) appe~rs to be subst~ntially con~
po.ro.bl8 with prior r~ports;
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The net chungo in total dupi tal o.ccounts shown o.g~·,inst
i turn 14, Section 2, agroos with thd dii'.f'cronco bGtwOclr. .
th0 ·totals sho·wn in th.:; first and second columns of
Soction 3;
Increas1;7s and decr<.:>ases in oapital in Sootion 3 ar.:.·
in corresponding entri..;s in Section 2;
reflvct~d
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All items in the first column of Section 3 agree
with corresponding items of the report of earnings
and dividends for the same date;
The amoWlts shown in both columns of Section 3
agree .-d th corresp,mding i terns (or combinations of
items) in condition reports, F'orm F.R. 105, if such
reports are ren<iered as of the same dc.tes.
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It is desirable that, in so fa:r as practicable, examination of
and corrGsponderrce with the State bank membE;Jrs pertaininb to capital
accounts, as shown in earnings e.nd di1/idends reports and condition re•
ports , be conducted at the sar~~e time •
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