Kinabalu

Response to Raymond James' Q3 Conference Call

I don't believe that bank accounting rules are any different than the accounting rules available to any financial services entity. Accounting rules allow entities to classify financial instruments in 1 of 3 categories, Trading, Available for Sale and Held to Maturity. Trading securities are always marked to market, with the adjustments included in P&L; Available for Sale instruments are marked to market but the adjustments are not run through the income statement but through Comprehensive Income (direct to Shareholders Equity); Held to Maturity financial instruments are carried at cost and not marked to market, but the entity has to be able to prove intent and ability to hold to maturity. Banks, because of their deposit funding structure and their traditional long term treatment of loans will often find it easier to prove intent and ability than other financial service entities.