policy-making functions of the bank. In some banks (particularly banks with officers bearing titles such as Executive Vice President, Senior Vice President, or First Vice President, as well as a number of "Vice Presidents"), some or all "Vice Presidents" do not participate in major policy-making functions. Such persons are not officers for the purposes of this statement.

(b) Not more than one report need be filed to report any holdings of a bank's securities or with respect to any transaction in such securities held by a trust, regardless of the number of officers, directors, or 10 percent stockholders who are either trustees, settlors, or beneficiaries of a trust if the report filed discloses the name of all trustees, settlors, and beneficiaries who are officers, directors, or 10 percent stockholders. A person having an interest only as a beneficiary of a trust shall not be required to file any such report so long as he relies in good faith upon an understanding that the trustees of such trust will file whatever reports might otherwise be required of such beneficiary.

2. Where Statements Are To Be Filed. (a) One manually signed copy of each statement, shall be filed with the Federal Deposit Insurance Corporation, Washington, D.C. 20429. One manually signed copy thereof shall also be filed with each exchange on which any class of equity securities of the company is listed and registered unless the bank has, in accordance with § 335.6(a)(3), designated a single exchange to receive statements.

(b) Statements are not deemed to be filed with the Corporation or an exchange until they are actually received by the Corporation or exchange.

3. Separate Statement for Each Bank. A separate statement shall be filed with respect to the equity securities of each bank.

4. Relationship of Reporting Person to Bank. Indicate clearly the relationship of the reporting person to the bank by checking the appropriate box(es), i.e., Director, Officer, 10 percent Owner, in Item 8 of the statement.

5. Title of Equity Securities and Classes of Securities to be Reported.

The statement of the title of an equity security should clearly distinguish it from any securities of other classes issued by the bank. Persons reporting pursuant to Section 16(a) of the Act shall include information as to changes in the amount of securities beneficially owned, changes in the nature of beneficial ownership, and the amount of their beneficial ownership at the end of the month of all classes of equity securities of the bank even though one or more of such classes may not be registered pursuant to Section 12 of the Act.

6. All Transactions to be Reported.

Every transaction shall be reported even though acquisitions and dispositions during the month are equal, or the change involves only the nature of ownership, such as a change from indirect ownership through a trust or corporation to direct ownership by the reporting person.

7. Reporting of Transactions.

(a) In reporting the acquisition or disposition of a convertible security or a transferable warrant, the number of shares or units subject to the conversion privilege or warrant and the conversion or exercise price per share or unit shall be set forth in the "Comments" space. When a convertible security is converted or a warrant is exercised, the amount of securities acquired as a result of such conversion or exercise shall be reported and, in addition, the disposition of the convertible security or warrant shall be reported as a separate transaction.

(b) The acquisition, disposition, exercise, or expiration or cancellation of a put, call, option or other right or obligation to buy or sell securities (all hereinafter referred to as options) is deemed to effect a change in beneficial ownership of the security to which the option relates and shall be reported in the "Comments" space. If the option is exercised, the transaction shall be reported in the "Comments" space and the acquisition or disposition of the security subject to the warrants shall be reported in the body of the statement. Transferable warrants issued by the issuer of the security subject to the warrants shall be reported (in which case the exercise price and date of expiration of the warrant shall be reported in the "Comments" space).

8. Date of Transaction.

In giving the dates required, the month, day and year shall be given. Dates may be abbreviated; for example, January 9, 1975, may be expressed as 1/9/75. The date shall be set forth opposite the transaction to which it relates. In the case of market transactions, the trade date shall be given and in the case of stock splits, stock dividends, etc., the record date shall be given.

9. Character of Transaction.

(a) In reporting the character of a transaction in Item 11 of the statement, select the category below which most clearly states the character of the transaction reported:

A. Open Market Purchase
B. Open Market Sale

C. Private Purchase
D. Private Sale

E. Acquired by Inheritance
F. Disposed of by Bequest
G. Stock Split

H. Exercise of Options
I. Exchange or Conversion
J. Exercise of Rights

K. Acquired by Gift

L. Disposed of by Gift

M. Redeemed (called, matured, retired)
N. Stock Dividend

O. Exercise of Warrants
P. Other (specify)

(b) In reporting the character of option type transactions in the "Comments" space, select the category below which most closely states the character of the transaction reported:

A. Purchase of Put or Call
B. Sale of Put or Call

C. Exercise of Put or Call

D. Expiration of Put or Call
E. Cancellation of Put or Call
F. Acquisition of Other Option
G. Disposition of Other Option
H. Exercise of Other Option
I. Expiration of Other Option
J. Cancellation of Other Option

(c) If the transaction was with the bank, so state.

10. Statement of Amounts of Securities.

In stating amounts of securities in Items 12, 13, 14 and 16 of the statement, and in the "Comments" space, give the face amount of convertible debt securities or the number of shares of stock or other units of other securities. In Item 12 of the statement, indicate the total number of shares of each security reported on the last statement at the beginning of the month. In the case of securities owned beneficially through a spouse, relative or other natural person, or through a partnership, corporation, trust or other entity, the entire amount of securities involved in the transaction or owned by such natural person, partnership, corporation, trust or other entity shall be stated. The person whose ownership is reported may, if he so desires, also indicate in a footnote or other appropriate manner, the extent of his interest in the transaction or holdings of the partnership, corporation, trust or other entity through which securities are beneficially owned.

11. Nature of Ownership of Securities. (a) In reporting the nature of ownership of securities, check the appropriate column in Item 17 of the statement. If they are owned indirectly, state the nature of such indirect ownership in Item 18 of the statement; for example, "By self as trustee for sons", "By wife", "By X Trust", "By Y Corporation", etc. If the securities are owned directly and other securities are owned indirectly, the required information shall be furnished separately for each type of ownership. Each type of indirect ownership is to be reported on a separate line. Securities held as joint tenants, tenants in common, tenants by the entirety or as community property are to be reported as held directly.

(b) Beneficially owned securities held in the name of the reporting person or in the name of a bank, broker or nominee for the account of the reporting person shall be reported as directly owned by him. A person is regarded as the indirect beneficial owner of securities held in the name of another person if by reason of any contract, understanding, relationship, including a family relationship, or arrangement, such person obtains therefrom benefits substantially equivalent to those of ownership. For example, a person may be the indirect beneficial owner of securities held in the name of a spouse, a relative or other person if such person may obtain therefrom benefits substantially equivalent to those of ownership. A person may also be the indirect beneficial owner of securities held in the name of a partnership, corporation, trust or other entity if such person or a spouse or relative of such person, individually or collectively, may exercise a controlling influence over the purchase, sale or voting of such securities.

12. Purchase or Sale Price of Securities.

(a) If any transaction reported involved a purchase or sale of securities for cash or an obligation to pay cash, including the exercise of an option state in Item 15 the purchase price per share or other unit exclusive of brokerage commissions or other costs of execution. If the transaction was only partly for cash and partly for other consideration, state the amount of cash per share or other unit and the nature of the additional consideration. If the transaction does not involve cash, describe the nature of the consideration given.

(b) If an option reported in the "Comments" space is exercisable at varying increasing prices, state in Item 15 the price at which it is presently exercisable.

13. Beneficial Ownership at End of Month. Beneficial ownership at the end of the month of all accounts required to be reported shall be shown even though there has been no change during the month in the ownership of securities of one or more class or accounts. For example, a person reporting a transaction relating to common stock shall, in addition to providing all the required information relating to such transaction, report the amount of preferred stock, convertible debentures, etc., owned at the end of the month. In addition, any options owned at the end of the month should be reported in the "Comments" space.

14. Transferable Warrants, Puts, Calls, Options and Other Rights-"Comments" Space. Transferable warrants, options, "puts" and "calls", any combination of "puts" and "calls", such as spreads, straddles, strips and straps (all hereinafter referred to as options), should be reported in the "Comments" space of the form. Title of securities subject to the option, the nature of the

option, the date of the transaction (see Instruction 8), the amount of securities subject to the option (see Instruction 10), the purchase or sale price of the securities subject to the option, the character of the transaction (see Instruction 9), and the date of expiration of the option shall be stated. in reporting the nature of the option state whether it represents a right to buy, a right to sell, an obligation to buy or an obligation to sell, the securities subject to the option. If the warrant is not presently exercisable, state the price at which it will first become exercisable. If a warrant, put, call or option is exercisable at various increasing prices, state the price at which it is presently exercisable.

15. Inclusion of Additional Information.

A statement may include any additional information or explanation deemed relevant by the person filling the statement. If additional space is needed, attach a separate sheet to the form.

16. Signature.

If the statement is filed for a corporation, partnership, trust, etc., the name of the organization shall appear over the signature of the officer or other person authorized to sign the statement. If the statement is filed for an individual, it shall be signed by him or specifically on his behalf by another person, the authority of such person to sign the statement shall be confirmed to the Corporation in writing as soon as practicable by the individual for whom the statement is filed, unless such a confirmation which is still in effect is on file with the Corporation.

[40 FR 47346, Oct. 8, 1975; 41 FR 4897, 4898, Feb. 3, 1976]

§ 335.71 Forms for financial statements (Forms F-9 A, B, C, D and E).

FORM F-9-FINANCIAL STATEMENTS

A. Balance Sheet (Form F-9A).

B. Statement of Income (Form F-9B).

C. Statement of Changes in Capital Ac

counts (Form F-9C).

D. Schedules (Form F-9D).

E. Schedules (Form F-9E).

GENERAL INSTRUCTIONS

1. Preparation of Forms.

The forms for financial statements are not to be used as blank forms to be filled in but only as guides in the preparation of financial statements. The requirements with respect to the filing of balance sheets and statements of income are contained in the instructions as to certain other forms required by this Part. Particular attention should be given to the general requirements as to financial statements in § 335.7, including paragraphs (g) and (i) thereof, which

prescribe when statements of changes in capital accounts and schedules will be filed. Although inapplicable items specified in the forms for financial statements should be omitted, the detailed instructions that relate to applicable items shall be followed. 2. Accrual Accounting.

Financial statements shall generally be prepared on the basis of accrual accounting whereby all revenues and all expenses shall be recognized during the period earned or incurred regardless of the time received or paid, with certain exceptions: (a) Where the results would be only insignificantly different on a cash basis, or (b) where accrual is not feasible. Statements with respect to the first fiscal year that a bank reports on the accrual basis shall indicate clearly, by footnote or otherwise, the beginning of year adjustments that were necessary and their effect on prior financial statements filed under this Part.

A. BALANCE SHEET-Cont. Capital Accounts-Continued

(b) Surplus.....

(c) Undivided Profits

(d) Reserve for contingencies and other capital reserves

22. Total capital accounts

23. Total liabilities, subordinated notes and debentures, and capital.

ASSETS

1. Cash and due from banks. (a) State the total of (1) currency and coin (A) owned and held in the bank's vaults and (B) in transit to or from a Federal Reserve Bank; (2) the bank's total reserve balance with the Federal Reserve Bank as shown by the bank's books; (3) demand and time balances with other banks; and (4) cash items in process of collection.

with

(b) Reciprocal demand balances banks in the United States, except those of private banks and American branches of foreign banks, shall be reported net.

(c) Do not include unavailable balances with closed or liquidating banks. Such balances should be reported in "other assets".

(d) Cash items in process of collection include: (1) checks in process of collection drawn on another bank, private bank, or any other banking institution that are payable immediately upon presentation (including checks with a Federal Reserve Bank in process of collection and checks on hand that will be presented for payment or forwarded for collection on the following business day); (2) Government checks and warrants drawn on the Treasurer of the United States that are in process of collection; and (3) such other items in process of collection, including redeemed U.S. savings bonds, payable immediately upon presentation in the United States, as are customarily cleared or collected by banks as cash items.

(e) Checks drawn on a bank other than the reporting bank that have been deposited in the reporting bank (or offices or branches of such bank) and have been forwarded for collection to other offices or branches of the reporting bank are cash items in the process of collection.

(f) Do not include commodity or bill-oflading drafts payable upon arrival of goods against which drawn, whether or not deposit credit therefor has been given to a customer. If deposit credit has been given, such drafts should be reported as "loans"; but if the drafts were received by the reporting bank on a collection basis they should not be included in the reporting bank's statement until such time as the funds have been actually collected.

(g) Unposted debits should preferably be deducted from the appropriate deposit liability caption. If such items are included

hereunder, the amount shall be stated parenthetically.

2. Investment securities. (a) State separately book value of (1) U.S. Treasury securities; (2) securities of other U.S. Government agencies and corporations; (3) obligations of States and political subdivisions; and (4) other securities owned by the bank; include securities pledged, loaned or sold under repurchase agreements and similar arrangements.

(b) The aggregate amount on the basis of fair market value at the balance sheet date shall be shown either parenthetically on the balance sheet or a reference note for each category of investment securities reported under Caption 2 of each balance sheet required to be filed.

(c) Book value with respect to investment quality securities reported in paragraph (a) shall be cost adjusted for amortization of premium and, at the option of the bank, for accretion of discount. There shall be set forth in a note to financial statements (1) the basis of accounting for book value, and (2) if bond discount is systematically accrued and amounts to five percent or more of interest and dividends on investments, the total of accretion income and deferred income taxes applied thereto.

(d) Include in category (3) of paragraph (a) obligations, including warrants and tax anticipation notes, of the States of the United States and their political subdivisions, agencies, and instrumentalities; also obligations of territorial and insular possessions of the United States. Do not include obligations of foreign states.

(e) Do not include borrowed securities, or securities purchased under resale agreements or similar arrangements.

3. Trading account securities. State the aggregate value at the balance sheet date of securities of all types carried by the bank in a dealer trading account (or accounts) that are held principally for resale to customers. Indicate parenthetically, or otherwise in a note to financial statements, whether the inventory is valued at (1) cost, (2) lower of cost or market, or (3) market. If cost basis of valuation is used, furnish aggregate market value of the trading account inventory at the current fiscal year balance sheet date.

4. Federal funds sold and sccurities purchased under agreements to resell. (a) State the aggregate value of Federal funds sold and securities purchased under resale agreement or similar arrangements. All securities purchased under transactions of this type should be included regardless of (1) whether they are called simultaneous purchases and sales, buybacks, turnarounds, overnight transactions, delayed deliveries, etc., and (2) whether the transactions are with the same or different institutions if the purpose of

40-028 0-79—16

the transactions is to resell identical or similar securities.

(b) Federal funds sold and purchases of securities under resale agreements should be reported gross and not netted against purchases of Federal funds and sales of securities under repurchase agreements.

5. Other loans. (a) Total other loans. (1) State the aggregate gross value of all loans including (i) acceptances of other banks and commercial paper purchased in the open market; (ii) acceptances executed by or for the account of the reporting bank and subsequently acquired by it through purchase or discount; (iii) customers' liability to the reporting bank on drafts paid under letters of credit for which the bank has not been reimbursed; and (iv) "cotton overdrafts" or "advances", and commodity or bill-of-lading drafts payable upon arrival of goods against which drawn, for which the reporting bank has given deposit credit to customers.

(2) Include (i) paper rediscounted with the Federal Reserve or other banks; and (ii) paper pledged as collateral to secure bills payable, as marginal collateral to secure bills rediscounted, or for any other purpose. (3) Do not include contracts of sale or other loans indirectly representing bank premises or other real estate: these should be included in "bank premises" or "other real estate".

(4) Do not deduct bona fide deposits accumulated by borrowers for the payment of loans.

(5) Deduct unearned income on loans. If material, report on the balance sheet or in a note to financial statements the amount of unearned income deducted.

(b) Less reserve for loan losses. State the balance of the loan loss allowance at the end of the fiscal year. Include in this reserve only the valuation portion-that is, the amount established through charges against income. If the amount shown on this line differs materially from the reserve accumulated for income tax return purposes under the Internal Revenue Code, reconcile such amounts in a note to financial statements.

NOTE. For financial statements filed subsequent to August 31, 1976, the allowance for loan losses shall be divided into its three components, that is, the valuation, contingency, and deferred tax portions. The valuation portion represents that part of the allowance which was established through charges against income. The contingency portion represents the aggregate of transfers from undivided profits, net of related deferred taxes. The deferred tax portion represents the aggregate deferred taxes associated with the differences between loan loss expense reported for income tax purposes and the amounts reported on statements of income. For financial statements

filed subsequent to August 31, 1976, the valuation portion of the allowance shall be deducted from other loans; the contingency portion shall be included in undivided profits; and the deferred tax portion shall be reported as an other liability. For purposes of this allocation, the entire allowance for loan losses as of January 1, 1969 may be considered to be a valuation allowance unless a material distortion of reported figures would result. The instructions in this NOTE are to be retroactively applied to all financial statements submitted in accordance with the provisions of this Part, regardless of the period reported.

(c) Net other loans. State the difference of items 5 (a) and (b).

6. Bank premises and equipment. (a) State the aggregate cost of (1) bank premises owned, (2) leasehold improvements, and (3) equipment less any accumulated depreciation or amortization with respect to such assets.

(b) All fixed assets acquired subsequent to December 31, 1959, shall be stated at cost less accumulated depreciation or amortization.

(c) All fixed assets acquired prior to January 1, 1960, that are not presently accounted for by the bank on the basis of cost less accumulated depreciation or amortization, may be stated at book value. Any such assets that are still in use and would not have been fully depreciated on an acceptable method of accounting for depreciation if the bank had recorded depreciation on such basis shall be described briefly in a footnote, together with an explanation of the accounting that was used with respect to such assets.

(d) The term "leasehold improvements" comprehends two types of situations: (1) Where the bank erects a building on leased property; and (2) where a bank occupies leased quarters or uses leased parking lots and appropriately capitalizes disbursements for vaults, fixed machinery and equipment directly related to such leased quarters, or resurfacing or other improvements directly related to such parking lots that will become an integral part of the property and will revert to the lessor on expiration of the lease.

(e) Bank premises includes vaults, fixed machinery and equipment, parking lots owned adjoining or not adjoining the bank premises that are used by customers or employees, and potential building sites.

(f) Equipment includes all movable furniture and fixtures of the bank.

7. Other real estate owned. (a) State the aggregate cost of all real estate owned by the bank that is not a part of bank premises.

(b) With respect to real estate acquired through default of a loan, aggregate cost