Full text of Federal Reserve Bank of New York Circulars : Securities of Member State Banks

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

h

5>

79 f 7

FEDERAL RESERVE BANK
OF NEW YORK

November 4, 1976
S E C U R IT IE S O F M E M B E R S T A T E B A N K S
A m e n d m e n t to R e g u la t io n F

T o C o n fo rm

W it h

SEC

R u le s

T o A l l S t a t e M e m b e r B a n k s in th e S e c o n d F e d e r a l R e s e r v e D i s t r i c t :

F ollow in g is the tex t o f a statem ent issued October 14 by the Board o f G overnors o f the
Federal R eserve S ystem :
T h e Board of Governors of the Federal R eserve S ystem today am ended its R egulation F (S ecu rities of
M em ber State B an ks) to m ake its reporting requirem ents conform to comparable rules of the Securities and
ex c h a n g e C om m ission.
T he am endm ent becom es effective N ovem ber 15, 1976.
T h e Board acted under the D epository In stitutions A ct of 1974 requiring the Board to make its R egulaprQ1 riat”0n *0rm t0
rules unless the Board determ ines that such changes are unnecessary or inapUnder the am ended R egulation, State member banks that are subject to R egulation F will file expanded
quur er y reports to include a condensed balance sheet, a sum m ary statem ent of changes in financial position a
narrative analysis of results of com pany operations, and additional financial disclosures deem ed appropriate by
m anagem ent. T h e amended R egulation provides also for certain changes in accounting procedures, includingrevised reporting treatm ent of the bank’s reserve for loan losses, and repositioning of reports of subordinated debt
unearned incom e on loans and direct loan financing, and for specified additional inform ation in the annual
financial reports of certain larger member banks subject to R egulation F.
I he am endm ent as adopted w as substantially sim ilar to changes in R egluation F proposed by the Board
m February, except that the due date of the new quarterly report w ill be 45 days after the end of the quarter
instead of 50 days as proposed.
M

In subm itting the am endm ent for publication in the

Federal Register , the Board o f Gover­

nors made the follow in g additional statem ent:
XTO4Bn Q 7 fiiCf

Pf 0P°!Td trr lem aking <>f February 26, 1976, appearing in the Federal Register (41 Fed. R eg.

Act ,,f 914 is a m e r d e d
‘° '** »"*hori1 r "V 'er sccti»" 12 (i» of the Securities E xch an ge
her State Banks (1 2 T F R
;C '
/ 1 }’ ProPo s e d to revise its regulations governing Securities of M em is.nlvl h SLnS
vC R
° rf -r that t,K>y be ! ubstantially sim ilar to comparable rules and regulations
sued by the Securities and E xchange C om m ission ( S E C ” )- T h e proposed revisions w ould expand the d isclos­
ure required by the quarterly reporting form under R egulation F (F o rm F - 4 ) , require disclosure of selected
financial data in notes to annual financial statem ents of certain registrants, and change the term inology and place­
ment of certain item s in financial statem ents in order to adhere m ore closely to generally accepted accounting
principles and recently revised supervisory R eports of C ondition and of Incom e.
^ co u n tin g
A A s a result of a review of the proposed revision and o f the com m ents received thereon, the follow in g is
tin only change m ade regarding the proposed am endm ents, in addition to clarifying language changes:
I he due date for filing a Form F-4 has been changed from the thirtieth day to the forty-fifth day after the
^ u h e m e n t s A t hv rh, £ p r
T
’ “ T f ° f each. fiscal
T h is change, which is consistent with filing
rtqu re n u n ts set by tlu SEC with respect to quarterly reports, will allow reporting banks an additional 15 days
m which to prepare and subm it the expanded Form F-4.
i s
LD ua>s

II T h e Board received other com m ents su g g estin g revisions to the proposed am endm ents - how ever the
li’™ ' !'b determ ined that such revisions are not appropriate because they do not conform to generally accepted
(

n a i X ' s i ' r n ib T

........ —

p, r ,ces- W0ULd ? ake. the

amendments not substantially somHar

—




( over)

the suggestion m ay have m erit, the Board believes that adoption of it would not be feasible at this time. A con­
siderable num ber of m em ber banks registered under R egulation F lack the com puter data processing capacity
to com pute average daily balances. F u rth er development of means of com puting average daily financial data by
banks would be necessary before the B oard should require reporting in term s of average daily balances, and thus
the B oard rejected this particular suggestion to avoid placing an undue burden on registrants who do not as yet
compile such data. F u rth e r, the proposed statem ent of changes in financial position conform s to present financial
reporting stan d ard s and to S E C regulations.
A nother com m entator recom m ended that the proposed revision that would require the reporting of subor­
dinated notes and debentures on Regulation F balance sheets as liabilities rather than as capital accounts be
modified to distinguish between different types of subordinated debt instrum ents. T his com m entator agreed that
subordinated debt on which interest and principal are payable unconditionally should properly be classified as
a liab ility ; how ever, the com m entator believes that subordinated debt on which the paym ent of principal and
interest is expressly dependent upon earnings and adequacy of capital should be classified as capital. T his sug­
gestion conceivably m ight be appropriate if there were m any outstanding subordinated debt issues payable solely
out of an issu er’s earnings, as there once were in the 1930’s. H ow ever, since the incidence of such subordinated
issues is rare, if any are outstanding at all, there is no necessity for such a revision to the B oard’s proposed
am endm ent.
C.
T he following two m atters were m entioned in the F e d e r a l R e g i s t e r notice of the proposed am endm ents
and are repeated herein to ensure that the effects of certain of the am endm ents are clearly understood.
1. T he am endm ents to F orm F -4 include a provision for balance sheet data as of the end of the m ost recent
quarter and as of the same date in the preceding year. T h e com parative balance sheet and changes iti financial
position data required by F orm F -4 will not be required for interim periods beginning p rio r to the effective date
of this am endm ent.
2. A s indicated in G eneral In stru ction ( a ) ( 1 ) relating to the use of F o rm F-4, that form is only a guide
for use in preparation of quarterly reports. Q uarterly reports in other form ats, such as reports of condition, may
be filed so long as they provide the inform ation required by Regulation F.

Enclosed is a copy o f the am endm ent to R egulation F, effective November 15, 1976, w hich
has been reprinted from the Federal Register of O ctober 21, 1976. C opies o f the revised Regu­
lation F form s ( F -4 and F -9 ) will be m ailed to you as soon as they becom e available.
Q uestions on this m atter m ay be directed to our Bank R egulations D epartm ent. A dditional
copies o f the am endm ent will be furnished upon request.




P aul A. Y

olckkr

,

President.

Board of Governors of the Federal Reserve System
SECURITIES OF STATE MEMBER BANK S

A M E N D M E N T TO R E G U L A T IO N F
Effective N ovem ber 15, 1976. R egula­
tion F is amended as fo llo w s:

(2) When the data required by the pre­
ceding paragraph above vary from the
amounts previously reported on the Form
F-4 filed for any quarter, such as would
be the case when a pooling of interests
occurs or where an error is corrected,
reconcile the amounts given with those
previously reported describing the rea­
son for the difference.

1. Section 206.7(c) (10) Is amended by
adding the following new paragraph:
§ 206.7 Form and content of financial
statements.
*
(C )

*
*

•

*

•

•

•

(10 ) * * •

(3)
Describe the effect of any unusual
or infrequently occurring items recog­
nized in each full quarter within the two
most recent fiscal years and any subse­
quent interim period for which income
statements are presented, as well as the
aggregate effect and the nature of yearend or other adjustments that are mate­
rial to the results of that quarter.

(vll) Disclosure of selected quarterly
financial data in notes to financial state­
ments.
E x e m p t i o n . This rule shall not apply
to any registrant that does not meet the
following conditions:
(A) The bank (1) has securities reg­
istered pursuant to section 12(b) of the
Securities Exchange Act of 1934 or (2)
has securities registered pursuant to sec­
tion 12(g) of that Act that also (i) are
quoted on the National Association of
Securities Dealers Automated Quotation
System and (ii) meet the requirements
for continued inclusion on the list of OTC
margin stocks set forth in § 220.8(i) of
Regulation T of the Board of Governors
of the Federal Reserve System; and

(4)
Where this note is part of audited
financial statements, it may be desig­
nated “unaudited.”

I nstruction : If th e fin an cial sta te m e n ts
are covered by a n in d e p en d e n t p u b lic ac­
c o u n ta n t’s rep o rt, an d th e n o te req u ired by
th e above p a ra g ra p h (vii) is d esignated as
“ u n a u d ite d ”, it shall be presum ed th a t a p ­
p ro p ria te professional sta n d ard s an d p ro ­
cedures w ith resp ect to th e d a ta in th e n o te
h ave been followed by th e in d e p en d e n t ac­
c o u n ta n t w ho is associated w ith th e u n ­
a u d ite d fo o tn o te by v irtu e of rep o rtin g on
th e fin an cial s ta te m e n ts in w hich i t is
included.

(B) The bank and its consolidated
subsidiaries (1) have had a net income
after taxes but before extraordinary
items and the cumulative effect of a
change in accounting, of at least $250,000 for each of the last three fiscal years;
or (2) had total assets of at least $200,000,000 as of the end of the last fiscal
year.
C l ) Disclosure shall be made in a note
to financial statements of total operat­
ing income, Income before security gains
(losses), income before extraordinary
items and cumulative effect of a change
in accounting, net income, and per share
data based upon such income for each
full quarter within the two most recent
fiscal years and any subsequent interim
period for which income statements are
presented.

F or this R egu lation to be com plete, r e ta in :
1) R eg u lation F pam phlet, effective D ecem ber 1, 1975.
2) T h is slit) sheet.I
PRINTED

I Ref. At Cir. No. 7984]




IN

NEW

YORK

2.
Section 206.44 is revoked in its en­
tirety and the following is substituted
therefor:
§ 2 0 6 .4 4 F orm for quarterly report of
b an k (F o rm F—4 ) .
B oard

of

G overnors

of t h e

F ederal R eserve S y stem

F orm F -4
Q u a r t e r l y R eport
PART A— SUMMARIZED STATEMENT OF INCOME
(N a m e of b a n k )

( C ity a n d S ta te )

3

m o n t h s e n d i n g ____
(_

F is c a l y e a r to d a te
m o n t h s e n d i n g _______ )

Ttem
111— ■
(c u r r e n t y e a r)

19—
19—
19—
(p rio r y e a r) ( c u r r e n t y e a r) (p rio r y e a r)

L O p e ra tin g in co m e:
(a) I n te r e s t a n d fees o n lo a n s _____________________ ______
(b) I n te r e s t o n b a la n c e s w ith b a n k s . . . _____ ____________
(c) I n te r e s t a n d d iv id e n d s o n s e c u ritie s _________________
U .S . T r e a s u ry s e c u ritie s ........ .................. ..........................
O b lig a tio n s of o th e r U .S . G o v e rn m e n t agencies
a n d c o rp o satio n s.
O b lig a tio n s of S ta te s a n d p o litic a l s u b d iv is io n s ___
O th e r s e c u ritie s ___________________________________
(d) O th e r o p e ra tin g in c o m e _______ _____________________
(o) T o ta l o p e ra tin g in c o m e ____ _________________________
2. O p e ra tin g expenses:
(a) S alaries a n d e m p lo y e e b e n e f its _____ ________________
(b) In te r e s t e x p en se _____ _______________________________
(c) P ro v isio n for lo a n lo sses___________________________—
(d) O th e r o p e ra tin g e x p en se s____ ____________________ _
(e) T o ta l o p e ra tin g e x p en se s____________________________
3. In c o m e before in c o m e ta x e s a n d se c u ritie s g a in s (lo sses). .
4. A p p lic a b le in c o m e ta x e s_______________ _________________
5. In c o m e before se c u ritie s g a in s (lo sses)___________________
6. N e t se c u ritie s g a in s (losses), less re la te d ta x e ffe c t............
7. N e t in co m e:
E a rn in g s p e r c o m m o n sh are:
In c o m e before se c u ritie s g a in s (lo sse s)------------------------N e t in c o m e _________________: _________________________
C ash d iv id e n d s d e clared p e r c o m m o n s h a r e _____________

P art B . B a la n ce S h e e t

F u rn ish , insofar as p racticab le in th e m a n n er p resen ted below, d a ta as a t th e end of th e
la te s t fiscal q u a rte r an d for th e end of th e corresponding q u a rte r for th e preceding fiscal
year.
A s o f -----------19— A s o f ------------ 19— 11
(c u rre n t y e a r)
(p rio r y e a r)

A ssets:
1. C a s h a n d d u e fro m b a n k s . . . . . .
------------------------------- . . . . .
2. In v e s tm e n t sec u rities:
(a) U .S . T r e a s u r y s e c u ritie s ...................... .............................................................
(b) O b lig a tio n s of o th e r U .S . G o v e rn m e n t agencies a n d c o rp o ra tio n s .
(c) O b lig a tio n s of S ta te s a n d p o litic a l s u b d iv is io n s ......................................
(d) O th e r s e c u ritie s -------- --------- -------------------------- -----------------------------3. T r a d in g a c c o u n t s e c u ritie s --------------------------------------------------------------------4. F e d e ra l fu n d s so ld a n d se c u ritie s p u rc h a s e d u n d o r a g re e m e n ts to re s e ll.
5. L o a n s:
L ess: re serv e for p o ssib lo lo a n lo sse s........... .............. ................................ ..........
L o a n s, n e t ----------------------------------------------------------------- -----------------------6. D ir e c t lease fin a n c in g .................................... .................................. ........ ....................
7. B a n k p re m ise a n d e q u ip m e n t........................... ...................................- ....................
8. R e a l e s ta te o w n e d o th e r th a n b a n k p re m is e s ......................................................
9. I n v e s tm e n t in u n c o n s o lid a te d su b sid ia rie s a n d a sso c iated c o m p a n ie s ...
10. C u s to m e r s ’ a c c e p ta n c e lia b ility ....... ..................................................... ....................
11. O th e r a s s e t s . .................................. ............................ ..............- .................... — ..........
12.
T o ta l a s s e ts .. .
..................... .................. .......................... ........... .. - ...............
L ia b ilitie s a n d c a p ita l:
13. D e p o sits:
(a) D e m a n d d e p o sits in d o m e stic o f lic e s ................
................
... .
(b ) S a v in g s d o p o sits in d o m e stic oflices............................ — .........................
(c) T im e d e p o sits in d o m e stic oflices................... .................................. ............
(d) D e p o s its in foreign offices-------- ------------- ---------- -------------------------14 . F e d e ra l fu n d s p u rc h a s e d a n d se c u ritie s sold u n d e r a g re e m e n ts to r e p u r­
ch ase.




2

P a r t B. B a l a n c e S h e e t

(Continued)

15.
16.
17.
18.
19.
20.
21.

O th e r lia b ilitie s for b o rro w e d m o n e y . . . . . . ----------- ------- - - - .............
B a n k 's a c c e p ta n c e o u ts ta n d in g ............................................................. - ..........
M o rtg ag e in d e b te d n e s s ........... . .................. ...................................... .................... .
O th e r lia b ilitie s ------------------------------------------------ ---------- ---------- --------T o t a l lia b ilitie s (e x c lu d in g s u b o rd in a te d n o te s a n d d e b e n tu re s )...........
S u b o r d in a te d n o te s a n d d e b e n tu r e s ---------------- ------ ------— ............
E q u i ty c a p ita l:
(a) .C a p ita l s to ck :
C o m m o n s to c k ............ ..............
....................................................—
P re fe rre d s to c k ----------------- --------------------- -----------------------------(b) S u r p lu s ............... - ............- ..............................................................................
(c) U n d iv id e d p ro f its ----- ---------- --------------------------------- ---------------(d) R e s e rv e for c o n tin g e n cie s a n d o th e r c a p ita l re se rv e s--------------22.
T o t a l e q u ity c a p i ta l................................. - ...................... ..................................
23.
T o t a l lia b ilitie s a n d e q u ity c a p ita l (ite m s 19, 20 a n d 22).................. .

t D is c lo s u re of c o m p a r a tiv e b a la n c e s h e e t d a t a s h a ll n o t b e re q u ir e d fo r in te r im
d a te o f th is a m e n d m e n t.

periods beginning prior to e ffe c ts

Part C .— Changes in financial position
Else

norths

(current year)

(prior year)

8 o o ro e s o f fu n d s :
O p e ra tio n s :
N e t i n c o m e . . .................................................................. ................. ...
C h a r g e s t o i n c o m e n o t a f f e c t i n g f u n d s ______________
T o t a l f u n d s p r o v i d e d b y o p e r a t i o n s ______________
E q u i t y f u n d s —s a l e p r o c e e d s ______________________________
S u b o r d i n a t e d n o t e s a n d d e b e n t u r e s — s a l e p r o c e e d s ___
I n c r e a s e ( d e c r e a s e ) i n l i a b i l i t i e s **_________________________
T o t a l ................................. .......................................
A p p lic a tio n s of fu n d s :
P a y m e n t o f d i v i d e n d s ......... ..........................
P u rc h a s e of p ro p e rty a n d e q u ip m e n t
I n c r e a s e ( d e c r e a s e ) i n a s s e t s *_________
T o ta l

1 D is c lo s u re o f c o m p a r a tiv e s o u rc e a n d a p p lic a tio n o f f u n d s d a t a s h a ll n o t b e r e q u ir e d fo r in te r im p e rio d s b e g in n in g
p r io r t o e ffe c tiv e d a te o f th i s a m e n d m e n t.
* S o u rc e s a n d a p p lic a tio n s o f f u n d s ite m s s h a ll b e s h o w n s e p a ra te ly b y a m o u n ts w h e n th e y ex c e e d 5 p e rc e n t of th e
a v e ra g e o f to t a l f u n d s p r o v id e d d u r in g th e re s p e c tiv e re p o r te d p e rio d s.




P u rsu a n t
S e c u ritie s
h a s

d u ly

s ig n e d

to

th e

E xch an g e
cau sed

o n

th e re u n to

its

re q u ire m e n ts
A ct

th is

b e h a lf

of

q u a rte rly
by

o f

th e

1 9 3 4 ,. t h e

th e

re p o rt

b a n k
to

be

u n d e rs ig n e d ,

d u ly a u th o riz e d .

(N a m e o f b a n k )

Date
B y
( N a m e a n d t i t l e o f s ig n in g o ffic e r)

3

to

G eneral I n st r u c t io n s

Use o f F o rm F -4 .

(a )
g u id e

fo r u se

p o rts

to

in

b e

in te rim

(1 )

F o rm

p re p a ra tio n

file d

re p o rt

w ith

s h a ll

th e

be

F -4

is

o f q u a rte rly
B o a rd .

file d

n o t

a

q u a rte rs

n eed

b e

file d

of

each

fo r

fis c a l

th e

a n d

ch an g es

re ­

th e

(2 )

T h e

la te r

th a n

y e a r. N o

fo u rth

of

s h o u ld

a d d itio n ,

th e

c a le n d a r p e rio d

E x p la n a tio n s
in c lu d e ,

b u t

of

n o t

in

th e

m a te ria l
be

lim ite d

v a r io u s e le m e n ts w h ic h
an d
ex p en se
le v e ls . I n

a n a ly s is

s h o u ld

in c lu d e

a n

ex­

p la n a tio n
o f th e
effe c t o f a n y
c h a n g e s in
a c c o u n tin g p rin c ip le s a n d p ra c tic e s o r in th e

re p o rt

q u a rte r

sam e

y e a r.

to , c h a n g e s in th e
d e te rm in e
re v e n u e

45 d a y s a f te r th e e n d o f e a c h o f th e firs t th r e e
fis c a l

d a te

p re c e d in g

an y

m e th o d

of

fis c a l y e a r.

m a te ria l

effe c t o n

( b ) P ersons fo r w h o m th e in fo r m a tio n is
to be g iven . T h e r e q u i r e d i n f o r m a t i o n i s t o

(h )
O th e r fin a n c ia l in fo r m a tio n . T h e b a n k
m a y fu r n is h a n y a d d itio n a l in fo rm a tio n r e ­

b e

la te d

g iv e n

b a n k
w ith
it

as

file s
th e

s h a ll

to

th e

re g istra n t b a n k

c o n s o lid a te d

b a n k

n eed

th e

a n d

n o t be

b a n k

a n d

its

in fo rm a tio n

its

c o n s o lid a te d

g iv e n

s e p a ra te ly

ifie d . I t

fo r th e

th e

is g iv e n a s to
th e

s ta te m e n t

m a tio n

is

n o t

§ 2 0 6 .7 ( b )

re q u ire d

m ay

a

be

to t h a t e ffe c t a n d

c o n s id e re d

A m o u n ts

to

a

fo rm

in g

fo rm a l

to

in fo r­

a u d ite d

n o ta tio n

to

in

th a t

or

e ffe c t is

to

its

s to c k h o ld e rs

p u b lis h e s ,

w ith in

or

th e

b y
If

in fo rm a tio n

re fe re n c e
c o p ie s

to

o th e rw is e

m ay

su ch

th e re o f

a re

be

file d

as

a n d

is s u e s

w as re q u ire d
u n u su a l

d u rin g

fis c a l

o n

is o f

w h ic h ,
s ig n ifi­

a n d

th e

th e

q u a rte r
to

m o st

o r
be

a

to b e file d r e p o r t ­
c h a rg e s

or

w h e th e r
file d

ch an g e

c re d its

re c e n tly
d u rin g

in

co m ­

an y

F o rm

th a t p e­

in d e p e n d e n t

fin a n c ia l

in fo rm a tio n

p ra c tic e s re fle c te d in
in c lu d e d

in

to

b e

in ­

s h o u l d be p r e p a r e d i n
a c c o u n tin g p rin c ip le s
th e

th e

fin a n c ia l s ta te ­

a n n u a l

re p o rt

file d

w i t h t h e B o a r d f o r t h e p r e c e d in g fis c a l y e a r,
e x c e p t fo r a n y s u b s e q u e n t r e g u la to ry re v i­
s io n s a n d c h a n g e s r e q u ir e d to b e re p o rte d b y
§ 2 0 6 .7 ( c ) (5 )

s ta te m e n t
e x h ib it

T h e

m e n ts

in c o rp o ra te d

a n

F -3

re p o rtin g

(i)

p re s c rib e d

p u b lis h e d

re p o rte d

c o n s id e ra tio n

c lu d e d in th is re p o rt
c o n fo rm ity w ith
th e

f o r f ilin g th e r e p o r t, a f in a n c ia l s ta t e m e n t
c o n ta in in g th e in fo rm a tio n re q u ire d b y th is
fo rm , s u c h

a

a c c o u n ta n ts .

m ade.

p e rio d

h av e

re p o rte d .

o f d o l­

In c o r p o ra tio n b y re fe re n c e to p u b ­
lish e d s ta te m e n ts . I f t h e b a n k m a k e s a v a i l ­
o r

u n d e r

w as re q u ire d

rio d

(d )

a b le

as

o f m a n a g e m e n t,

m a te ria l

in c o m e

F -3

a p p ro p ria te .

th o u s a n d s

an y

p le te d

(see

a n y o th e r q u a li­

n ec essary

b e s ta te d

p e rio d s b e in g

ch an g es

a n y F o rm

sp ec­

T h e

th e

o p in io n

th a t

in c o m e

d o lla r a m o u n t o f s ta n d b y le tte r s o f c re d it.
I n a d d itio n , th e b a n k s h a ll in d ic a te w h e th e r

o f th is P a r t) . T h e re p o rt m a y c a rry

a n o ta tio n
fic a tio n

fu rn is h

p re s e n ta tio n .

in g

b an k .

T h e

to

th e

a p p lic a tio n
n e t

c a n c e to in v e s to rs , s u c h a s th e s e a s o n a lity o f
t h e b a n k ’s b u s i n e s s , m a j o r u n c e r t a i n t i e s c u r ­
r e n tly fa c in g th e b a n k , s ig n ific a n t a c c o u n t­

s u b s id ia rie s , it
fo r

to

in

B o a rd ,

o f in fo rm a tio n

is n o t n e c e s s a ry

fin a n c ia l

if

ite m s

th e

c o n s o lid a te d

P r e s e n ta tio n o f in fo r m a tio n .

(c )

c a lls o n ly

la rs

o r, if

s ta te m e n ts

a n n u a l r e p o r t s file d w ith
cover

s u b s id ia rie s . I f th e
th e

fin a n c ia l

th e ir

o f th is P a rt.

to

th is re p o rt.

§ 206.71 [Amended]
3.
Section 206.71 is amended as fol­
lows:
a.
The balance sheet format denoted
“A. Balance Sheet" (Form F-9A) Is re­
voked and the following format is sub­
stituted therefor:

(e)
E x tra o r d in a ry ite m s a n d c u m u la tiv e
effe c ts o f c h a n g e s in a c c o u n tin g p rin c ip le s.
I f p re s e n t w ith
re p o rte d

re s p e c t to

h e re in ,

c u m u la tiv e

an y

in te rim

e x tra o rd in a ry

effe c t o f

a

ch an g e

p e rio d

ite m s

in

a n d

a c c o u n tin g

p r in c ip le s le s s a p p lic a b le in c o m e ta x e ffe c t
s h a ll
be
a p p ro p ria te ly
s e g re g a te d
an d
in ­
c lu d e d
(S ee

in

th e

F o rm

A c q u is itio n s .

(f)
te re d

in to

a n o th e r

a

p o rte d
y ear

o r

in

th e

th is

a n d

th e

of

th e

b a n k

h a s

re la te d

p u rp o se s

re s u lts

of

b o th

th e

p o o le d

s e p a ra te
fo r

th e

a

fo o tn o te
case th e

b a n k

a m o u n t

in

a c q u ire d
a

in g

p u rp o se s
p e rio d s

a n d

p er

as

a

tre a te d

p u rc h a se ,

c o v e re d
re v e n u e

sh a re ,

by

th e

a n d

n e t

s h o u ld

be

fo o tn o te .
( g ) M a n a g e m e n t’s

T h e

a

o f

tio n s

a n a ly s is

e x p la in in g

ch an g es

in

th e

th e

a m o u n t

p e n s e ite m s b e tw e e n
a n d

th e

b e tw e e n
sam e

q u a rte r
th e

re c e n t

fo r

re v e n u e

of

4.

F ed eral

fu n d s

6.

a n d

c u rre n t

a n d

s e c u ritie s

a g re e m e n ts

to

p u r­

r e s e l l ---------

ex­

D ire c t

n e t _______________________________________

le a s e

f i n a n c i n g ------------------ ------------------------

7. B a n k

p re m is e

8.

R eal

e s ta te

9.

p r e m i s e s ____________________________________________
In v e s tm e n t
in
u n c o n s o lid a te d
s u b s id i­
a r i e s a n d a s s o c i a t e d c o m p a n i e s ------------------

m a te ria l
an d

s e c u r i t i e s -------------------------------

s o ld

u n d e r

L o an s,

a

o p e ra ­

p re c e d in g

th e

a c co u n t

p ro v id e

p re c e d in g

q u a rte r

T ra d in g

5. L o a n s
___________________________________________________
L e s s : re s e rv e f o r p o s s ib le lo a n lo s s e s . _

q u a rte rly

s h a ll

re s u lts

th e

a p p lic a b le , b e tw e e n




of

s e c u r i t i e s ------------------------------------

3.

to ta l
in

s e c u r i t i e s ------------------

s u b d i v i s i o n s ---------------------------------

O th e r

ch ased

e ffe c t

d is c lo s e d

im m e d ia te ly

m o st

cal

of

b a n k s ---------------------------------

tio n s
____________________________________
O b lig a tio n s o f S ta te s a n d p o liti­

(d )

of

fro m

O b l i g a t i o n s o f o t h e r U .S . G o v ­
e r n m e n t a g e n c ie s a n d c o r p o r a ­

(c)

a n d

e q u i p m e n t -----------------------

ow ned

10. C u s to m e r s ’ a c c e p ta n c e

th e m o st re c e n t q u a rte r

c a le n d a r q u a r te r in

a n d , if

o f

an y

th e

in c o m e , in

reaso n s

(b )

a c c o u n t­

d u rin g

b a n k
th e

fo r

re p o rt,

a n a ly sis

in c o m e s ta te m e n ts .
n a rra tiv e

in

s ig n ific a n t

tra n s a c tio n

th e

th e re o f o n

a

g iv e n

th e

to

In

a s s e ts

be

of

p rio r

d u e

I n v e s tm e n t s e c u ritie s :
( a ) U .S . T r e a s u r y

re fle c t

W ith a p p r o p r i a te e x p l a n a ti o n . (2 )
h a s

s h o u ld

an d

e n titie s .

re s u lts

p e rio d s

2.

re ­

c u rre n t

th e

th e

assets

1. C a s h

a s a p o o lin g

o p e ra tio n s

y e a r— s h o u ld

o f

A. B a la n c e S h e e t

e n ­
w ith

b u s in e s s

re s u lts

e n titie s

c o m b in a tio n

in c o m e ,

p re c e d in g

of

c o m b in e d

n e t

o f I n c o m e .)

c o m b in a tio n

re p o rt— fo r

c o m b in e d

D is c lo s u re

If

o th e r

fo r a c c o u n tin g

in te re s ts ,

th e

(1 )

b u s in e s s

b a n k

tre a te d
o f

d e te rm in a tio n

F -9 B , S ta te m e n t

11.

it,

O th e r

o th e r

th a n

b an k

l i a b i l i t y ---------------------

a s s e t s __________________________________________

1 2 . T o t a l a s s e t s ____________________________________________

th e
y e a r,
year

4

L I A B I L I T I E S A N D C A P IT A L
13.

re c la s s ifie d
(1 )

D e p o s its :
(a )

D em an d
d e p o s its
in
d o m e s tic
o f f i c e s ____________________________________

(b )

S a v in g s d e p o s its in d o m e s tic o f ­
f i c e s ______________________________________

tio n ;

s o ld

u n d e r

a g re e m e n ts

to

p a rts

lia b ilitie s

n o te s
20.
21.

a n d

i,a )

th e

an d

each

C a p ita l s to c k :
s t o c k ____________________

(c )

U n d iv id e d

(d )

R e se rv e

c o n tin g e n c ie s

23.

T o ta l lia b ilitie s a n d e q u ity c a p ita l (Ite m s
1 9 , 2 0 a n d 2 2 ) ______________________________________

c h a rg e d

of

a ll

b a la n c e

o th e r

b an k s

an d

to ta l lo a n s

s io n s
in

a b le

u p o n

a rriv a l

o f

goods

d ra w n , fo r w h ic h
th e
g iv e n d e p o s it c r e d it to

Is

(2 )
th e

In c lu d e

(a )

a g a in s t

p ap e r

each

tio n

p ap e r

p le d g e d

as

c o lla te ra l

to

to

(4 )

in

D o

n o t

c u m u la te d
lo a n s

if

re d u ce

su ch

d e p o s its

u n p a id

L ess:
th e

th is

fid e

fo r th e
do

n o t

b a la n c e

of

(b )

o f th e

en d

a llo w a n c e

Note:

lo a n

o f th e

re a l

d e p o s its

ac­

p ay m en t of
im m e d ia te ly

th e

lo a n .
lo a n s .

o n ly

F o r

b an k s

fo r

lo a n

th e

o n

p u rsu a n t




to

v a lu a tio n

p o rtio n

th ro u g h

c h a rg e s

re se rv e

lo s s e s ,
IR S

lo s s a llo w a n c e

fis c a l y e a r. I n c lu d e

re s e rv e a c c o u n t re p re s e n tin g
c u la te d

be

" o th e r

in c o m e o n

t h a t h a s b e e n e s ta b lis h e d
a g a in s t in c o m e .
a c c o u n tin g

or

th e

m e th o d
s in g le

of

v a lu e

th e a m o u n t c a l­

re g u la tio n s

in

to

p o rtio n

of

b e d e d u c te d

R e p o rt o f C o n d itio n .
o f th e

fo r

re se rv e fo r

a b s o rb in g

T h e

lo a n

c u m u la tiv e

re g u la tio n s , a n d

lo s s e s c h a r g e d
p e rio d

th e

p ro v i­

a g a in s t in c o m e

s in c e

D ecem ber

31,

b e n e fit, s h o u ld

be

in c lu d e d

in

re la te d

to

T h e

th e

a m o u n t

of

c o n tin g e n c y

s h o u ld

b e

d e­
p o r­

d e fe rre d
re p o rte d

th e r a r e c irc u m s ta n c e s w h e re th e

in c o m e
to

th e

h av e

c a lc u la te d

p u rsu a n t

th e

p e rio d

s in c e

tire

b a la n c e
a

exceeded

b ad

d e b t
to

IR S

D ecem ber

o f th e

re se rv e

v a lu a tio n

c u m u la tiv e

re se rv e

ac co u n t

re g u la tio n s

31,

1968,

fo r

lo a n

th e

In
e n ­

lo s s e s

is

re se rv e .

c.
The Statement of Changes in Capi­
tal Accounts format denoted “C. State­
ment of Changes in Capital Accounts” is
revoked and the following format is sub­
stituted therefor:

R ese rv e fo r P o ssib le L o a n Losses.

b a la n c e

a c c o u n t a t th e
in

b o n a

b o rro w ers

D ed u ct u n e a rn e d

(b )
S ta te

p re m is e s ”

d ed u c t

by

th e

(5 )

"b an k

lo s s e s

d e s c rib e d a b o v e c o n s titu te s th e

c o n s id e re d

b ills

p re m is e s o r o th e r re a l e s ta te ; th e s e s h o u ld

lo a n

D e­
lo a n

a m o u n t, n e t o f a p p lic a b le In c o m e

ta x

a g a in s t

D o n o t in c lu d e c o n tr a c ts o f s a le o r
lo a n s
in d ire c tly
re p re s e n tin g
b an k

in c lu d e d
e s ta te .”

th e

p o rtio n

p o rtio n .

IR S

re d u c tio n

tra n s fe rs

p a y a b le , a s m a r g in a l c o lla te r a l to s e c u re b ills
re d is c o u n te d , o r fo r a n y o th e r p u rp o s e .
(3 )
o th e r

in

a v a ila b le

rep o rt

Note: I n

w ith

se c u re

th e

c u m u la t iv e p r o v is io n s f o r lo a n lo s s e s c h a r g e d

h as

a n d

fo r

s in c e

by

v a lu a tio n

In c o m e ta x p o rtio n a n d
in " O th e r lia b ilitie s .”

w h ic h

re d is c o u n te d

F e d e ra l R e se rv e o r o th e r b a n k s;

th e

D eferred ta x p o rtio n .

“ a d v a n c e s ,”
d ra fts p a y ­

re p o rtin g
b an k
c u s to m e rs .

p e rio d

re d u c e d

is r e q u ir e d

v a lu a tio n

fo r lo a n

fe rre d

c o m m e rc ia l

(d ) " c o tto n o v e rd ra fts ” o r
c o m m o d ity o r b ill- o f - la d in g

to ta l

lo s s e s a t J a n ­

th e “ u n d iv id e d p ro fits ” a c c o u n t.

paper purchased in the open market; (b)
acceptance executed by or for the account of
the reporting bank and subsequently ac­
quired by it through purchase or discount;
(c) customers’ liability to the reporting bank
o n
d r a f t s paid under letters of credit for
w h i c h the b a n k h a s not b e e n r e i m b u r s e d ;
a n d
an d

is

th e

p u rsu a n t

( a ) (1 ) S ta t e t h e a g g r e g a te g ro s s
o th e r lo a n s I n c lu d in g
(a)
a c ­

of

each

re se rv e

re s e rv e w h ic h

C o n tin g e n c y

b.
The instructions concerning “Loans”
included in the Form F-9A Balance
Sheet are renumbered and new subpara­
graphs (5) (a) and (b) and a new Note
have been added, as follows:
c e p ta n c e s

in

an d

to

O n ly

ta x

Loans,

lo s s e s , t h e

c o n s id e re d

re c o v e rie s

1968. S u c h

5.
v a lu e

fo r lo a n

a m o u n t e q u iv a le n t to t h e d iffe re n c e b e tw e e n
tra n s fe rs to th e b a d d e b t re se rv e c a lc u la te d

o t h e r c a p i t a l r e s e r v e s _______ ______
e q u i t y c a p i t a l _______________________________

T o ta l

p o r­

p o rtio n .

v a lu a tio n

lo a n lo s s e s
lo s s e s .

an d

22.

ta x

re se rv e fo r lo a n

fro m

p r o f i t s _____________________

fo r

c o m p o n e n ts :

c o n tin g e n c y

p e rio d s in c e D e c e m b e r 31, 1968. T h e re ­

s u ltin g

d e b e n t u r e s _______

lb ;

re se rv e

th e

1969, is

a

lo s s e s

s u b o rd in a te d

P r e f e r r e d s t o c k ____________________
S u r p l u s ____________________________________

in

lo a n

th e

C om m on

(2 )

d e fe rre d

cem ber 31, 1968,

d e b e n t u r e s _________________________

S u b o rd in a te d n o te s
E q u ity c a p ita l:

e x is tin g

to h a v e b een e n ­
reserve. S u ch b alan ce Is
increased by th e a m o u n t o f provision for
lo a n lo sses c h a rg e d to in c o m e i n e a c h p e r i o d
s i n c e D ecem ber SI, 1968, a n d t h e a m o u n t o f
1,

u a ry

tire ly

r e p u r c h a s e ._

(e x c lu d in g

(3 )

o f th e

b a la n c e

1 5 . O t h e r l i a b i l i t i e s f o r b o r r o w e d m o n e y _____
1 6 . B a n k ’s a c c e p t a n c e o u t s t a n d i n g _____________
1 7 . M o r t g a g e i n d e b t e d n e s s __________________________
1 8 . O t h e r l i a b i l i t i e s ______________________________________
19. T o ta l

an d

th re e

p o rtio n ;

V a lu a tio n p o rtio n . I f p r i o r t o J a n u a r y 1 ,
1969, a b a n k d i d n o t d i s t i n g u i s h t h e d i f f e r e n t

(c ) T im e d e p o s its i n d o m e s tic o fflc e s .
( d ) D e p o s i t i n f o r e i g n o f f i c e s ____________
F e d e ra l f u n d s p u rc h a s e d a n d s e c u ritie s

14.

in to

v a lu a tio n

w ill b e

5

C. Statement o r C hanges

Preferred
stock S___
par

Increase (decrease)

in

C apital A ccounts

Common
stock $___
par

Reserve for
Undivided contingencies
profits
and other
capital
reserves

Snrphis

1. N e t in c o m e tra n s fe rre d to u n d iv id e d
p r o f its _________________ _____________
2. P re fe rre d s to ck a n d c o m m o n s to c k so ld
(p a r o r face v a lu e ) ------------------ -------------3. S to c k issu e d in c id e n t to m e rg e rs a n d
a c q u is itio n s -----------------------------------------4
P r e m iu m o n c a p ita l s to c k s o ld ....................
5.
’ A d d itio n s to , o r re d u c tio n s in , s u rp lu s ,
u n d iv id e d p ro fits, a n d re serv es in c id e n t
to m e rg e rs ........................................................-6. C a s h d iv id e n d s d e c la re d o n p re fe rre d

stock—___ ___________ _________

7. C a s h

d iv id e n d s

d e c la re d

on

com m on

8. S to c k d iv id e n d s i s s u e d , ........... s h a re s a t
p a r v a l u e . , ............................................ - .........
9. A ll o th e r in c re a se s (d e c re ase s)1. . ............. .
in . N e t in c re a se (d ecrease) for th e y e a r ------11. B a la n c e a t b e g in n in g of y e a r 2............. .........
12. B a la n c e a t e n d of y e a r . . ...................................
i m a te s e p a ra t ely a n y m a te ria l a m o u n ts , in d ic a tin g c l e a r l y t h e n a t u r e o f t h e t r a n s a c t i o n o u t o f w h i c h t h e i t e m a r o s e .
» If t h e s ta te m e n t is filed as p a r t o f a n a n n u a l o r o t h e r p e r i o d i c r e p o r t a n d t h e b a l a n c e s a t t h e b e g i n n i n g o f t h e p e r i o d
d iffer fro m t h e closing b a l a n c e s a s f il e d f o r t h e p r e v i o u s f is c a l p e rio d , s t a t e i n a f o o t n o t e t h e d i f f e r e n c e a n d e x p l a i n .
d . S c h e d u le
(D )

is

fo rm a t

I I I — O th e r L o a n s in

re v o k e d
is

an d

s u b s titu te d

S chedule

th e

fo llo w in g

F o rm

e. Schedule VII—Reserve for Possible
Loan Losses in Form F-9(D) is revoked
and the following guideline format is
substituted therefor:

F -9

g u id e lin e

th e re fo r:

III—

O t h e r L oan s

S ched ule V II-^ R eserve for P o ssible L oan
L o sses 1

Book
v a lu e

T ype

Ite m :
L oans

in

d o m e s tic

R e a l e s ta te lo a n s :
In s u re d o r g u a ra n te e d b y th e
U .S .

G o v e rn m e n t

o r

B a l a n c e a t b e g i n n i n g o f p e r i o d - -----------------R e c o v e rie s c r e d ite d to r e s e r v e —
-------------

Its

A d d itio n s d u e to

a g e n c i e s ----------------------------------------------------------

fo r p u rc h a s in g

s e c u ritie s
cu re d )

in c o m e
L osses

o r c a rry in g

(secu red

o r

LD

o

n o t

re se rv e

L oans

in s tru c tio n s

h o ld ,

fa m ily ,

an d

fo r

o th e r

p e r­

s o n a l e x p e n d i t u r e s __________________ ___________
A ll o t h e r lo a n s ( I n c l u d i n g o v e r ­
d ra fts)
L oans

in

__________________________________ ___________

fo re ig n

o n

l o a n s -------------

A— L o a n s” o f th e

v is o ry R e p o r t o f C o n d itio n
refere n ce

d a te

p ro v id e d

m ay
c o p ie s

s u b m itte d

a c c o u n t.

e q u ity

S ee

c a p ita l,

of

in

a

fo o tn o te

any

su ch

b rie fly

in

a

fo o tn o te

th e

b a s is

be

In c o rp o ra te d

a re

file d

w ith

th e a llo w a n c e a t th e e n d o f th e p e rio d .
4 I n d i c a t e i n a f o o t n o t e w h e t h e r t h e b a n k ’s
fo r

fo rm u la .

su p e r­

b ad

In

re c o n c ilia tio n

fo r th e

d e b ts

c o m p u te d

fo r

F e d e ra l

a d d itio n ,
of

an y

set

fo rth

m a te ria l

a

su m m a ry

d iffe re n c e

b e­

tw e e n
th e
re s e rv e f o r p o s s ib le lo a n
lo s s e s
re p o rte d h e re in a n d th e re se rv e fo r b a d d e b ts

by
th e

c o m p u te d fo r F e d e ra l in c o m e ta x r e t u r n

re p o rt.




p ro fits

22,

in c o m e ta x r e t u r n p u r p o s e s Is a t t h e m a x i­
m u m a llo w a b le p u r s u a n t to th e T r e a s u r y ta x

s h e e t --------------------------------------------- -----------------

y e a re n d

ite m

to

s e g re g a tio n s

b rie fly

re se rv e

in c o m e

T o ta l o th e r lo a n s re p o rte d in b a l­

sam e

to

p e rta in in g

by

a d d itio n .
3 D e s c rib e

L ess:

“ S c h e d u le

e n trie s

e s ta b lis h e d

fo rm F -9 A .
2 D e s c rib e

in

N o t e .—

p e r i o d 3 4 ----------- -----------------

an y

b a n k ’s u n d i v i d e d

T o t a l l o a n s , g r o s s ----------------------------------- -----------------

an ce

r e s e r v e ---------------- -----------------

of

u s e d in d e te rm in in g th e a m o u n t a c c u m u la te d

o ffic e s :

U n e a rn e d

to

en d

a c c o u n ts

of th e

h o u se­

a t

in c lu d e

L o a n s t o f a r m e r s _______________________ ___________
C o m m e r c i a l a n d I n d u s t r i a l l o a n s _________
In d iv id u a ls

a b ­

s t a t e m e n t ---------------------------- -----------------

c h a rg e d

B a la n c e

u n se ­

__________________________________ ___________

to

m e rg e rs a n d

s o r p t i o n s 2 _________________________________________
P ro v is io n
fo r
lo a n
lo s s e s
fro m

O t h e r _________________________________ ___________
L o a n s t o f i n a n c i a l i n s t i t u t i o n s . - ------------L oans

Am ount

o ffic e s :

p u r­

poses.

Effective date: This regulation shall
become effective November 15, 1976.
By order of the Board of Governors,
October 8, 1976.
T h e o d o r e E. A l l i s o n ,
Secretary of the Board.
[F R

FEDERAL REGISTER, VOL.

41,

NO.

D o c .7 6 - 3 0 7 7 4

F ile d

1 0 -2 0 -7 6 )8 :4 5

205— THURSDAY, OCTOBER 21, 1976

6

am ]