TCBON 2025

Line Item	Reference	Amount (£ s. d.)
INTEREST INCOME
Interest and Fees on Loans		[Amount]
Interest on Investment Securities		[Amount]
Interest on Deposits with Banks		[Amount]
Total Interest Income		[Subtotal A]
INTEREST EXPENSE
Interest Paid on Customer Deposits		([Amount])
Interest Paid on Borrowings (e.g., Fed Funds)		([Amount])
Total Interest Expense		([Subtotal B])
NET INTEREST INCOME	(A – B)	[Subtotal C]
PROVISION FOR CREDIT LOSSES		([Amount])
NET INTEREST INCOME AFTER PROVISION		[Subtotal D]
NON-INTEREST INCOME
Service Charges on Deposit Accounts		[Amount]
ATM and Interchange Fees		[Amount]
Gain (Loss) on Sale of Securities		[Amount]
Total Non-Interest Income		[Subtotal E]
NON-INTEREST EXPENSE
Salaries and Employee Benefits		([Amount])
Occupancy and Equipment Expenses		([Amount])
Data Processing and IT Expenses		([Amount])
Other Operating Expenses		([Amount])
Total Non-Interest Expense		([Subtotal F])
INCOME BEFORE TAXES	(D + E – F)	[Subtotal G]
INCOME TAX EXPENSE		([Amount])
NET INCOME		[FINAL NET INCOME]

Here are three critical areas that go beyond the basic Income Statement:

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📈 1. Comprehensive Income

The Net Income figure is only one part of the story. Banks are required to report Comprehensive Income, which includes certain unrealized gains and losses that bypass the main Income Statement but still affect equity.

This typically includes:

• Net Income: The figure calculated in the basic Income Statement.
• Other Comprehensive Income (OCI): These are items like Unrealized Gains/Losses on Available-for-Sale Securities. When a bank holds investment bonds, their market value fluctuates. These changes are recorded in OCI until the security is sold.

The calculation is:

Net Income+Other Comprehensive Income=Total Comprehensive Income

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📉 2. Allowance for Credit Losses (ACL) & Net Charge-Offs

While the Income Statement includes a single line for the Provision for Credit Losses, the full financial accounts must detail the associated balance sheet account, the Allowance for Credit Losses (ACL).

The bank must provide a reconciliation of the ACL, showing the key movement:

• Beginning ACL Balance
• + Provision for Credit Losses (Income Statement Charge): The expense added to the allowance.
• – Net Charge-Offs (Actual Losses): The total loans deemed uncollectible (charged-off) minus any later recoveries.
• = Ending ACL Balance

This detail is crucial as it informs investors about the bank’s asset quality and management’s view on future expected losses.

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📑 3. Statement of Cash Flows

A comprehensive set of financial statements always includes the Statement of Cash Flows. This statement explains how the bank’s cash balance changed over the period by categorizing all cash inflows and outflows into three main activities:

1. Operating Activities: Cash flow from the bank’s core services, such as interest received, interest paid, and operating expenses.
2. Investing Activities: Cash flow related to long-term assets, such as buying or selling securities and purchasing property/equipment.
3. Financing Activities: Cash flow related to debt and equity, such as changes in customer deposits (a major financing source for a bank), issuing or redeeming stock, and taking on short-term debt.

The sum of these three sections reconciles the beginning and ending Cash Balance on the Balance Sheet.