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funds on deposit for predictable periods of time.’” Id. at 562
(quoting Citizens & S. Corp. v. Commissioner, supra at 500); see
also Colo. Natl. Bankshares, Inc. v. Commissioner, T.C. Memo.
1990-495, affd. 984 F.2d 383 (10th Cir. 1993).
Core deposits typically consist of low-cost accounts such as
regular savings accounts, deposit transaction accounts (e.g.,
regular checking accounts), time deposit open accounts, etc., see
Citizens & S. Corp. v. Commissioner, supra at 465, but do not
typically include “Adjustable rate deposit accounts”, such as
certificates of deposit, money market deposit accounts, and super
NOW (negotiable order of withdrawal) accounts, which are designed
to be sensitive to market interest rates, see IT&S of Iowa, Inc.
v. Commissioner, 97 T.C. 496, 517 (1991); Peoples Bancorporation
& Subs. v. Commissioner, T.C. Memo. 1992-285. In Citizens & S.
Corp. v. Commissioner, supra at 465-466, we described core
deposits as:
a relatively low-cost source of funds, reasonably
stable over time, and relatively insensitive to
interest rate charges. A bank typically invests the
funds from deposits in loans and other income-producing
assets, and receives fees for services rendered to its
depositors. A bank also incurs expenses in
establishing, processing, and maintaining deposit
accounts. The excess of the income generated over the
associated costs represents the profit attributable to
core deposits. * * *
In Citizens & S. Corp., the seminal case involving deposit
base, the taxpayer sought to amortize the deposit base that it
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