Consolidated Reports of Condition and Income

FFIEC 031 and 041

CONTENTS

Instructions for Preparation of
Consolidated Reports of Condition and Income
(FFIEC 031 and 041)
CONTENTS

GENERAL INSTRUCTIONS
Who Must Report on What Forms

1

Close of Business

1

Frequency of Reporting

2

Differences in Detail of Reports

2

Shifts in Reporting Status

3

Organization of the Instruction Books

5

Preparation of the Reports

5

Signatures

5

Chief Financial Officer Declaration

6

Director Attestation

6

Submission of the Reports

6

Submission Date

7

Amended Reports

7

Retention of Reports

8

Scope of the "Consolidated Bank" Required to be Reported
in the Submitted Reports

8

Exclusions from the Coverage of the Consolidated Report
Rules of Consolidation

9
9

Reporting by Type of Office

11

Publication Requirements for the Report of Condition

11

Release of Individual Bank Reports

11

Applicability of Generally Accepted Accounting Principles to
Regulatory Reporting Requirements

11

Accrual Basis Reporting

12

Miscellaneous General Instructions

13

Rounding

13

Negative Entries

13

Verification

14

Transactions Occurring Near the End of a Reporting Period

14

Separate Branch Reports

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LINE ITEM INSTRUCTIONS FOR THE CONSOLIDATED REPORT OF INCOME
Schedule RI – Income Statement

RI-1

Schedule RI-A – Changes in Equity Capital

RI-A-1

Schedule RI-B – Charge-offs and Recoveries and Changes in Allowance
for Loan and Lease Losses
Part I. Charge-offs and Recoveries on Loans and Leases

RI-B-1

Part II. Changes in Allowance for Loan and Lease Losses

RI-B-6

Schedule RI-C – Disaggregated Data on the Allowance for Loan and
Lease Losses

RI-C-1

Schedule RI-D – Income from Foreign Offices (FFIEC 031 only)

RI-D-1

Schedule RI-E – Explanations

RI-E-1

LINE ITEM INSTRUCTIONS FOR THE CONSOLIDATED REPORT OF CONDITION
Schedule RC – Balance Sheet

RC-1

Schedule RC-A – Cash and Balances Due from Depository Institutions

RC-A-1

Schedule RC-B – Securities

RC-B-1

Schedule RC-C – Loans and Lease Financing Receivables
Part I. Loans and Leases

RC-C-1

Part II. Loans to Small Businesses and Small Farms

RC-C-37

Schedule RC-D – Trading Assets and Liabilities

RC-D-1

Schedule RC-E – Deposit Liabilities

RC-E-1

Schedule RC-F – Other Assets

RC-F-1

Schedule RC-G – Other Liabilities

RC-G-1

Schedule RC-H – Selected Balance Sheet Items for Domestic Offices
(FFIEC 031 only)

RC-H-1

Schedule RC-I – Assets and Liabilities of IBFs (FFIEC 031 only)

RC-I-1

Schedule RC-K – Quarterly Averages

RC-K-1

Schedule RC-L – Derivatives and Off-Balance Sheet Items

RC-L-1

Schedule RC-M – Memoranda

RC-M-1

Schedule RC-N – Past Due and Nonaccrual Loans, Leases, and
Other Assets

RC-N-1

Schedule RC-O – Other Data for Deposit Insurance and
FICO Assessments

RC-O-1

Schedule RC-P – 1-4 Family Residential Mortgage Banking Activities

RC-P-1

Schedule RC-Q – Assets and Liabilities Measured at Fair Value on
A Recurring Basis

RC-Q-1

Schedule RC-R – Regulatory Capital

RC-R-1

Schedule RC-S – Servicing, Securitization, and Asset Sale Activities

RC-S-1

Schedule RC-T – Fiduciary and Related Services

RC-T-1

Schedule RC-V – Variable Interest Entities

RC-V-1

Optional Narrative Statement Concerning the Amounts Reported in
the Reports of Condition and Income

RC-X-1

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GLOSSARY
Accounting Changes

A-1

Accrued Interest Receivable Related to Credit Card Securitizations

A-2b

Acquisition, Development, or Construction (ADC) Arrangements

A-2c

Allowance for Loan and Lease Losses

A-3

Bankers Acceptances

A-4

Bank-Owned Life Insurance

A-7

Banks, U.S. and Foreign

A-8

Borrowings and Deposits in Foreign Offices

A-9

Brokered Deposits

A-9

Broker's Security Draft

A-10a

Business Combinations

A-11

Capital Contributions of Cash and Notes Receivable

A-13

Capitalization of Interest Costs

A-14

Cash Management Arrangements

A-14

Commercial Paper

A-14a

Commodity or Bill-of-Lading Draft

A-14a

Coupon Stripping, Treasury Receipts, and STRIPS

A-14b

Custody Account

A-14b

Dealer Reserve Account

A-14b

Deferred Compensation Agreements

A-15

Defined Benefit Postretirement Plans

A-16a

Depository Institutions in the U.S.

A-16b

Deposits

A-17

Derivative Contracts

A-25

Dividends

A-32

Domestic Office

A-32a

Domicile

A-32a

Due Bills

A-32a

Edge and Agreement Corporation

A-32a

Equity-Indexed Certificates of Deposit

A-32b

Equity Method of Accounting

A-34

Excess Balance Account

A-34

Extinguishments of Liabilities

A-34a

Extraordinary Items

A-34b

Fails

A-34b

Fair Value

A-34b

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GLOSSARY (cont.)
Federal Funds Transactions

A-34c

Federally-Sponsored Lending Agency

A-34d

Foreclosed Assets

A-34d

Foreign Currency Transactions and Translation

A-37

Foreign Debt Exchange Transactions

A-39

Foreign Governments and Official Institutions

A-40

Foreign Office

A-40

Goodwill

A-40a

Hypothecated Deposit

A-41

Income Taxes

A-41

Internal-Use Computer Software

A-48

International Banking Facility (IBF)

A-49

Lease Accounting

A-51

Letter of Credit

A-53

Loan

A-54

Loan Fees

A-55

Loan Impairment

A-57

Loan Secured by Real Estate

A-58

Loss Contingencies

A-59

Mandatory Convertible Debt

A-59

Nonaccrual of Interest

A-59

Offsetting

A-63

Overdraft

A-64

Pass-through Reserve Balances

A-64

Placements and Takings

A-65

Preferred Stock

A-65

Premiums and Discounts

A-66

Purchased Credit-Impaired Loans and Debt Securities

A-66

Reciprocal Balances

A-66c

Repurchase/Resale Agreements

A-66c

Sales of Assets for Risk-Based Capital Purposes

A-68

Securities Activities

A-72

Securities Borrowing/Lending Transactions

A-74

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GLOSSARY (cont.)
Servicing Assets and Liabilities

A-74a

Shell Branches

A-75

Short Position

A-75

Start-Up Activities

A-75

Subordinated Notes and Debentures

A-76

Subsidiaries

A-77

Suspense Accounts

A-78

Syndications

A-78

Trade Date and Settlement Date Accounting

A-78

Trading Account

A-78a

Transfers of Financial Assets

A-79

Treasury Stock

A-85

Troubled Debt Restructurings

A-85

Trust Preferred Securities

A-87

U.S. Territories and Possessions

A-87

Valuation Allowance

A-87

Variable Interest Entity

A-87

When-Issued Securities Transactions

A-89

INDEX

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GENERAL INSTRUCTIONS

GENERAL INSTRUCTIONS
Schedules RC and RC-A through RC-V constitute the Report of Condition and its supporting schedules.
Schedules RI and RI-A through RI-E constitute the Report of Income and its supporting schedules. The
Consolidated Reports of Condition and Income are commonly referred to as the Call Report. For
purposes of these General Instructions, the FASB Accounting Standards Codification is referred to as
“ASC.”
Unless the context indicates otherwise, the term “bank” in the Call Report instructions refers to both banks
and savings associations.

WHO MUST REPORT ON WHAT FORMS
Every national bank, state member bank, insured state nonmember bank, and savings association is
required to file a consolidated Call Report normally as of the close of business on the last calendar day of
each calendar quarter, i.e., the report date. The specific reporting requirements depend upon the size of
the bank and whether it has any "foreign" offices. Banks must file the appropriate forms as described
below:
(1) BANKS WITH FOREIGN OFFICES: Banks of any size that have any "foreign" offices (as defined
below) must file quarterly the Consolidated Reports of Condition and Income for a Bank with
Domestic and Foreign Offices (FFIEC 031). For purposes of these reports, all of the following
constitute "foreign" offices:
(a) An International Banking Facility (IBF);
(b) A branch or consolidated subsidiary in a foreign country; and
(c) A majority-owned Edge or Agreement subsidiary.
In addition, for banks chartered and headquartered in the 50 states of the United States and the
District of Columbia, a branch or consolidated subsidiary in Puerto Rico or a U.S. territory or
possession is a “foreign” office. However, for purposes of these reports, a branch at a U.S. military
facility located in a foreign country is a "domestic" office.
(2) BANKS WITHOUT FOREIGN OFFICES: Banks of any size that have only domestic offices must file
quarterly the Consolidated Reports of Condition and Income for a Bank with Domestic Offices Only
(FFIEC 041). For banks chartered and headquartered in Puerto Rico or a U.S. territory or
possession, a branch or consolidated subsidiary in one of the 50 states of the United States, the
District of Columbia, Puerto Rico, or a U.S. territory or possession is a "domestic" office.

Close of Business
The term "close of business" refers to the time established by the reporting bank as the cut-off time for
receipt of work for posting transactions to its general ledger accounts for that day. The time designated
as the close of business should be reasonable and applied consistently. The posting of a transaction to
the general ledger means that both debit and credit entries are recorded as of the same date. In addition,
entries made to general ledger accounts in the period subsequent to the close of business on the report
date that are applicable to the period covered by the Call Report (e.g., adjustments of accruals, posting of
items held in suspense on the report date to their proper accounts, and other quarter-end adjusting
entries) should be reported in the Call Report as if they had actually been posted to the general ledger at
or before the cut-off time on the report date.

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With respect to deposits received by the reporting bank after the cut-off time for posting them to individual
customer accounts for a report date (i.e., so-called "next day deposits" or "late deposits"), but which are
nevertheless posted in any manner to the reporting bank's general ledger accounts for that report date
(including, but not limited to, through the use of one or more general ledger contra accounts), such
deposits must be reported in Schedule RC-O, Other Data for Deposit Insurance and FICO Assessments,
item 1, and may also be reported in Schedule RC, Balance Sheet, item 13, “Deposits,” and
Schedule RC-E, Deposit Liabilities. However, the use of memorandum accounts outside the reporting
bank's general ledger system for control over "next day" or "late deposits" received on the report date
does not in and of itself make such deposits reportable in Schedule RC-O and Schedules RC and RC-E.

Frequency of Reporting
The reports are required to be submitted quarterly by all banks. However, for banks with fiduciary powers,
the reporting frequency for Schedule RC-T, Fiduciary and Related Services, depends on their total
fiduciary assets and their gross fiduciary and related services income. Banks with total fiduciary assets
greater than $250 million (as of the preceding December 31) or with gross fiduciary and related services
income greater than 10 percent of revenue (net interest income plus noninterest income) for the preceding
calendar year must complete the applicable items of Schedule RC-T quarterly. All other banks with
fiduciary powers must complete the applicable items of Schedule RC-T annually as of the December 31
report date.
In addition, the following items are to be completed annually rather than quarterly:
(1) Schedule RC, Memorandum item 1, on the level of external auditing work performed for the bank, and
Memorandum item 2, on the bank’s fiscal year-end date, are to be reported as of the March 31 report
date;
(2) Schedule RC-E, Memorandum item 1.e, "Preferred deposits," is to be reported as of the
December 31 report date; and
(3) Schedule RC-C, Memorandum items 15.a.(1) through 15.c.(2), and Schedule RC-L, items 1.a.(1)
and (2), on reverse mortgages are to be reported as of the December 31 report date.

Differences in Detail of Reports
The amount of detail required to be reported varies between the two versions of the report forms, with the
report forms for banks with foreign offices (FFIEC 031) having more detail than the report forms for banks
with domestic offices only (FFIEC 041). Furthermore, as discussed below under Shifts in Reporting
Status, the amount of detail also varies within both report forms, primarily based on the size of the
bank. In general, the FFIEC 041 report form requires the least amount of detail from banks with less than
$100 million in total assets.
Differences in the level of detail within both the FFIEC 031 and 041 report forms are as follows:
(1) Banks that had closed-end loans with negative amortization features secured by 1-4 family residential
properties with a carrying amount (before any loan loss allowances) that exceeded the lesser of
$100 million or 5 percent of total loans and leases, net of unearned income, in domestic offices as of
the previous December 31 report date must report certain information about these loans in
Schedule RC-C, part I, Memorandum items 8.b and 8.c, and Schedule RI, Memorandum item 12.

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(2) Banks that had construction, land development, and other land loans (in domestic offices) that
exceeded 100 percent of total risk-based capital as of the previous December 31 report date must
report certain information about such loans with interest reserves in Schedule RC-C, part I,
Memorandum item 13.
(3) Banks reporting average trading assets of $2 million or more for any of the four preceding quarters
must complete Schedule RC-D, Trading Assets and Liabilities, items 1 through 15 and Memorandum
items 1 through 4. In addition, banks reporting average trading assets of $1 billion or more for any of
the four preceding quarters must complete Memorandum items 5 through 10 of Schedule RC-D.
(4) Banks reporting average trading assets of $2 million or more for any quarter of the preceding calendar
year must provide a breakdown of their trading revenue by risk exposure in Schedule RI,
Memorandum items 8.a through 8.e. In addition, banks with $100 billion or more in total assets that
are required to complete Memorandum items 8.a through 8.e must report the impact on trading
revenue of certain changes in creditworthiness in Schedule RI, Memorandum items 8.f and 8.g.

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(5) Banks with less than $1 billion in total assets at which (a) closed-end and open-end first lien and junior
lien 1-4 family residential mortgage loan originations and purchases for resale from all sources during
a calendar quarter, or (b) closed-end and open-end first lien and junior lien 1-4 family residential
mortgage loan sales during a calendar quarter, or (c) closed-end and open-end first lien and junior lien
1-4 family residential mortgage loans held for sale at calendar quarter-end exceed $10 million for
two consecutive quarters must complete Schedule RC-P, 1-4 Family Residential Mortgage Banking
Activities, beginning the second quarter and continue to complete the schedule through the end of the
calendar year.
(6) Banks that (a) had $500 million or more in total assets as of the beginning of their fiscal year or
(b) had less than $500 million in total assets as of the beginning of their fiscal year and either have
elected to report financial instruments or servicing assets and liabilities at fair value under a fair value
option with changes in fair value recognized in earnings or are required to complete Schedule RC-D,
Trading Assets and Liabilities, must complete Schedule RC-Q, Assets and Liabilities Measured at Fair
Value on a Recurring Basis.
(7) Banks with financial subsidiaries must complete certain additional items in Schedule RC-R,
Regulatory Capital.
(8) Banks servicing more than $10 million in financial assets other than 1-4 family residential mortgages
must report the volume of such servicing in Schedule RC-S, Memorandum item 2.c.
(9) Banks with total fiduciary assets greater than $100 million (as of the preceding December 31) or with
gross fiduciary and related services income greater than 10 percent of revenue (net interest income
plus noninterest income) for the preceding calendar year must report information on their fiduciary
and related services income and on fiduciary settlements and losses in Schedule RC-T.
In addition, within the FFIEC 031 report form, banks whose foreign office assets, revenues, or net income
account for more than 10 percent of the bank’s consolidated total assets, total revenues, or net income
must complete Schedule RI-D, Income from Foreign Offices.

Shifts in Reporting Status
All shifts in reporting status within the FFIEC 031 and the FFIEC 041 report forms (except as noted below)
are to begin with the March Call Report. Such a shift will take place only if the reporting bank's total
assets (or, in one case, loans) as reflected in the Report of Condition for June of the previous calendar
year equal or exceed the following criteria:
(1) On the FFIEC 041 report form, when total assets equal or exceed $100 million, a bank must begin to
complete Schedule RC-K, items 7 and 13, for the quarterly averages of "Trading assets" and "Other
borrowed money."
(2) On the FFIEC 041 report form, when loans to finance agricultural production and other loans to
farmers exceed 5 percent of total loans, net of unearned income, at a bank with less than $300 million
in total assets, the bank must begin to report the following information for these agricultural loans:
interest and fee income, quarterly average, past due and nonaccrual loans, and charge-offs and
recoveries.
(3) On the FFIEC 041 report form, when total assets equal or exceed $300 million, a bank must begin to
complete:



Certain items providing additional detail on the composition of the loan and lease portfolio in
Schedule RC-C, part I, Loans and Leases; past due and nonaccrual loans and leases in
Schedule RC-N; and loan and lease charge-offs and recoveries in Schedule RI-B, part I;
Schedule RC-A, Cash and Balances Due From Depository Institutions;

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FFIEC 031 and 041





GENERAL INSTRUCTIONS

1

Schedule RC-L, items 1.b.(1) and (2), on credit card lines by type of customer;
Schedule RC-N, Memorandum item 6, on past due derivative contracts; and
Schedule RI, Memorandum item 10, "Credit losses on derivatives."

(4) On both the FFIEC 031 and FFIEC 041 report forms, when total assets equal or exceed $1 billion,
a bank must begin to complete:







Schedule RI, Memorandum item 2, “Income from the sale and servicing of mutual funds and
annuities (in domestic offices)”;
Schedule RI-C, Disaggregated Data on the Allowance for Loan and Lease Losses;
Schedule RC-B, Memorandum items 5.a through 5.f, which provide a breakdown of the bank’s
holdings of asset-backed securities;
Schedule RC-L, items 2.a and 3.a, on financial and performance standby letters of credit
conveyed to others;
Schedule RC-O, Memorandum item 2, “Estimated amount of uninsured deposits (in domestic
offices of the bank and in insured branches in Puerto Rico and U.S. territories and possessions),
including related interest accrued and unpaid”; and
Schedule RC-P, 1-4 Family Residential Mortgage Banking Activities.

(5) On both the FFIEC 031 and FFIEC 041 report forms, when total assets equal or exceed $10 billion, a
bank must begin to complete Schedule RC-L, item 16, “Over-the-counter derivatives.”
Once a bank reaches the $100 million, $300 million, $1 billion, or $10 billion total asset threshold or
exceeds the agricultural loan percentage or credit card lines threshold and begins to report the additional
required information described above, it must continue to report the additional information in subsequent
years without regard to whether it later falls below the total asset, loan percentage, or credit card lines
threshold.
Other shifts in reporting status occur when:
(1) A bank with domestic offices only establishes or acquires any "foreign" office. The bank must begin
filing the FFIEC 031 report form (Consolidated Reports of Condition and Income for a Bank with
Domestic and Foreign Offices) for the first quarterly report date following the commencement of
operations by the "foreign" office. However, a bank with "foreign" offices that divests itself of all its
"foreign" offices must continue filing the FFIEC 031 report form through the end of the calendar year in
which the cessation of all operations of its "foreign" offices was completed.
(2) A bank is involved in a business combination (poolings of interests, purchase acquisitions), a
reorganization, or a branch acquisition that is not a business combination. Beginning with the first
quarterly report date following the effective date of a business combination involving a bank and one
or more other depository institutions, the resulting bank, regardless of its size prior to the business
combination, must (a) file the FFIEC 031 report form if it acquires any "foreign" office, or (b) report the
additional required information described above on the FFIEC 041 report form if its total assets or
agricultural loans after the consummation of the transaction surpass the $100 million, $300 million,
$1 billion, or $10 billion total asset threshold or the agricultural loan percentage.
In addition, beginning with the first quarterly report date after an operating depository institution that was
not previously a member of the Federal Deposit Insurance Corporation (FDIC) becomes an FDIC-insured
bank, it must (a) file the FFIEC 031 report form if it has any "foreign" office, or (b) report the additional
required information described above on the FFIEC 041 report form based on its total assets and
agricultural loans at the time it becomes an FDIC-insured bank.
1

In addition, a bank with less than $300 million in total assets must begin to complete these items when credit card
lines equal or exceed $300 million. These total asset and credit card line thresholds also apply to the FFIEC 031
report form.

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FFIEC 031 and 041

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ORGANIZATION OF THE INSTRUCTION BOOKS
This instruction book covers both the FFIEC 031 and 041 report forms. It is divided into the following
sections:
(1) The General Instructions describe overall reporting requirements.
(2) The Line Item Instructions for each schedule of the Report of Income.
(3) The Line Item Instructions for each schedule of the Report of Condition.
The instructions and definitions in sections (2) and (3) are not necessarily self-contained; reference to
more detailed treatments in the Glossary may be needed.
(4) The Glossary presents, in alphabetical order, definitions and discussions of accounting issues and
other topics that require more extensive treatment than is practical to include in the line item
instructions or that are relevant to several line items or to the overall preparation of these reports. The
Glossary is not, and is not intended to be, a comprehensive discussion of the principles of bank
accounting or reporting.
In determining the required treatment of particular transactions or portfolio items or in determining the
definitions and scope of the various items, the General Instructions, the line item instructions, and the
Glossary (all of which are extensively cross-referenced) must be used jointly. A single section does not
necessarily give the complete instructions for completing all the items of the reports.
The instruction book is available on the Internet on the FFIEC’s Web site
(www.ffiec.gov/ffiec_report_forms.htm) and on the FDIC’s Web site
(www.fdic.gov/regulations/resources/call/index.html).
PREPARATION OF THE REPORTS
Banks are required to prepare and file the Call Report in accordance with these instructions. All reports
shall be prepared in a consistent manner.
The bank's financial records shall be maintained in such a manner and scope so as to ensure that the
Call Report can be prepared and filed in accordance with these instructions and reflect a fair presentation
of the bank's financial condition and results of operations.
Questions and requests for interpretations of matters appearing in any part of these instructions should
be addressed to the bank's primary federal bank supervisory agency (i.e., the Federal Reserve Banks,
the OCC, or the FDIC). Such inquiries will be referred for resolution to the Reports Task Force of the
Federal Financial Institutions Examination Council (FFIEC). Regardless of whether a bank requests an
interpretation of a matter appearing in these instructions, when a bank's primary federal bank supervisory
agency's interpretation of the instructions differs from the bank's interpretation, the supervisory agency
may require the bank to prepare its Call Report in accordance with the agency's interpretation and to
amend previously submitted reports.
SIGNATURES
Either the cover (signature) page of any agency-supplied sample set of report forms, a photocopy of this
cover page, or a copy of the cover page printed from the bank's report preparation software or from the
FFIEC’s or the FDIC’s Web site should be used to fulfill the signature and attestation requirement.

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Chief Financial Officer Declaration
The chief financial officer of the bank (or the individual performing an equivalent function) shall sign a
declaration on the cover (signature) page attesting to the correctness of the Reports of Condition and
Income that the bank has filed with the appropriate supervisory agency.
Director Attestation
National banks, state member banks, and savings associations – The correctness of the Reports of
Condition and Income shall be attested to by at least three directors of the reporting bank, other than the
officer signing the chief financial officer declaration, as indicated on the cover (signature) page.
State nonmember banks – The correctness of the Reports of Condition and Income shall be attested to by
at least two directors of the reporting bank, other than the officer signing the chief financial officer
declaration, as indicated on the cover (signature) page.
SUBMISSION OF THE REPORTS
Each bank must file its Call Report in one of the following two ways:
•

A bank may use computer software to prepare its report and then submit the report directly to the
FFIEC’s Central Data Repository (CDR), an Internet-based system for data collection
(https://cdr.ffiec.gov/cdr/).

•

The institution may complete its reports in paper form and arrange with a software vendor or another
party to convert its paper reports into the electronic format that can be processed by the CDR. The
software vendor or other party then must electronically submit the data file containing the bank's
Call Report to the CDR.

The filing of a Call Report in paper form directly with the FDIC (for national and FDIC-supervised banks)
or with the appropriate Federal Reserve District Bank (for state member banks) is not an acceptable
method of submission.
Regardless of the method a bank uses to file its Call Report, the bank remains responsible for the
accuracy of the data in its Call Report. Banks are required to submit a Call Report by the submission
date (as defined below) that passes FFIEC-published validation criteria (validity edits and quality edits) or
that contains explanations for any quality edits that are not passed. These validation criteria are
published in advance of each quarter end. Specific “Guidelines for Resolving Edits” are available on the
FFIEC’s Web site (www.ffiec.gov/find/documents/resolvingedits.pdf).
In order to submit their completed reports to the CDR, banks (or third parties with whom they have made
submission arrangements) must use software that meets the technical specifications for producing files
that are able to be processed by the CDR. (These technical specifications are available on the FFIEC’s
web site.) Vendors whose software has been successfully tested with regard to this ability are listed in
each quarter’s Financial Institution Letter for the Call Report. Alternatively, banks may develop their own
reporting software and test directly with the CDR.
Submitted reports that are unable to be processed by the CDR, or that have not been adequately
validated by the bank, will be rejected and will require correction and resubmission. In either case, if such
resubmission is received by the CDR after the submission date for the report (as defined below), the
submitting bank may be subject to the penalties prescribed for late submission.
Each bank is responsible for ensuring that the data reported each quarter reflects fully and accurately the
item reporting requirements for that report date, including any changes that may be made from time to
time. This responsibility cannot be transferred or delegated to software vendors, servicers, or others
outside the reporting bank.

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A bank filing its Call Report with the CDR electronically or under the paper-based alternative must
maintain in its files a signed and attested record of its completed report each quarter. This record should
be either a computer printout showing at least the caption of each item in the Call Report and the
reported amount, a computer-generated facsimile of the report form, or a copy of the printed report form.
The signed cover page, as discussed under “Signatures” above, should be attached to the printout,
computer-generated facsimile, or copy of the form that the bank places in its files.
State banks should refer to their appropriate state bank supervisory authority for information concerning
state requirements for submitting copies of the Call Report filed with federal bank supervisory authorities.

Submission Date
The term "submission date" is defined as the date by which a bank's completed Call Report must be
received in electronic form by the CDR. Except as indicated below, the CDR must receive the data file for
a bank's Call Report, with all corrections made and all explanations provided consistent with the
“Guidelines for Resolving Edits” (www.ffiec.gov/find/documents/resolvingedits.pdf), no more than
30 calendar days after the report date. For example, the March 31 report must be received by April 30
and the June 30 report by July 30.
Any bank contracting with a third party to convert its reports to the electronic format for the CDR must
ensure that it delivers its hard-copy reports to the third party in sufficient time for (1) the third party to
enter the data into the appropriate format; (2) the bank to research and resolve any identified edit
exceptions; and (3) the third party to electronically transmit the original submission and any necessary
resubmissions to the CDR by the submission deadline. Early submission is strongly encouraged so that
the bank has ample time to research and resolve any edit exceptions identified through the submission
process. No extensions of time for submitting reports are granted.
Any bank that has more than one foreign office, other than a "shell" branch or an IBF, may take an
additional limited period of time to submit its Call Report. The CDR must receive the data file for such a
bank's Call Report no more than 35 calendar days after the report date. Eligible banks are urged to use
the additional time only if absolutely necessary and to make every effort to report as soon as possible,
preferably within the 30-day submission period.

Amended Reports
A bank's primary federal bank supervisory authority may require the filing of an amended Call Report if
reports as previously submitted contain significant errors, as determined by the supervisory authority, in
how the reporting bank classified or categorized items in the reports, i.e., on what line of the report an
item has been reported.
When dealing with the recognition and measurement of events and transactions in the Call Report,
amended reports may be required if a bank's primary federal bank supervisory authority determines that
the reports as previously submitted contain errors that are material for the reporting bank. Materiality is a
qualitative characteristic of accounting information which is defined in Financial Accounting Standards
Board (FASB) Concepts Statement No. 2 as "the magnitude of an omission or misstatement of
accounting information that, in the light of surrounding circumstances, makes it probable that the
judgment of a reasonable person relying on the information would have been changed or influenced by
the omission or misstatement."

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RETENTION OF REPORTS
In general, a bank should maintain in its files a signed and attested record of its completed Call Report,
1
including any amended reports, and the related workpapers and supporting documentation for five years
after the report date, unless any applicable state requirements mandate a longer retention period. This
five-year time period is consistent with the time period specified in Section 7(b)(5) of the Federal Deposit
Insurance Act, which provides that each insured depository institution shall maintain all records
necessary for the FDIC to verify the correctness of its deposit insurance assessments for no more than
five years from the date of filing any certified statement, except when there is a dispute between the
insured depository institution and the FDIC over the amount of any assessment, in which case the
depository institution shall retain the records until the final determination of the issue.

SCOPE OF THE "CONSOLIDATED BANK" REQUIRED TO BE REPORTED IN THE SUBMITTED
REPORTS
In their Call Reports submitted to the federal bank supervisory agencies, banks and their subsidiaries
shall present their financial condition and results of operations on a consolidated basis in accordance with
U.S. generally accepted accounting principles (GAAP). All majority-owned subsidiaries shall be
consolidated unless either the subsidiary is not "significant" or control of the subsidiary does not rest with
the parent bank (see "Exclusions from the Coverage of the Consolidated Report" below). See the Glossary
entry for "subsidiaries" for the definition of "significant subsidiary." Accordingly, the Call Report shall
consolidate the operations of:
(1) The bank's head office;
(2) All branches of the bank, domestic and foreign;
(3) Any IBF established by the bank;
(4) All majority-owned Edge and Agreement subsidiaries, including their IBFs, their foreign and domestic
branches, and their significant subsidiaries;
(5) All majority-owned foreign banks held directly by the reporting bank pursuant to Section 25 of the
Federal Reserve Act;
(6) All other majority-owned subsidiaries that are "significant," including domestic subsidiaries that are
commercial banks, savings banks, or savings and loan associations that must file separate
Call Reports (or separate reports of a comparable nature) with any state or federal financial
institutions supervisory authority;
(7) All nonsignificant majority-owned subsidiaries that the bank has elected to consolidate on a
consistent basis in both the Report of Condition and the Report of Income; and
(8) All variable interest entities (VIEs) in which the bank, or a consolidated subsidiary of the bank, has a
controlling financial interest and, thus, is the primary beneficiary. For further information, refer to the
Glossary entry for “variable interest entity.”
Each bank shall account for any investments in unconsolidated subsidiaries, associated companies, and
those corporate joint ventures over which the bank exercises significant influence according to the equity
method of accounting. The equity method of accounting is described in the instructions for Schedule RC,
item 8. (Refer to the Glossary entry for "subsidiaries" for the definitions of the terms subsidiary,
associated company, and corporate joint venture.)

1

Supporting documentation may include, but is not limited to, overdraft reports, trust department records, and records
of other material adjustments to deposits.

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Exclusions from the Coverage of the Consolidated Report
Subsidiaries where control does not rest with the parent – If control of a majority-owned subsidiary
does not rest with the parent bank because of legal or other reasons (e.g., the subsidiary is in
1
bankruptcy), the subsidiary is not to be consolidated for purposes of the report. Thus, the bank's
investment in such a subsidiary is not eliminated in consolidation but will be reflected in the report
in the balance sheet item for "Investments in unconsolidated subsidiaries and associated companies"
(Schedule RC, item 8) or “Direct and indirect investments in real estate ventures” (Schedule RC, item 9),
as appropriate. Other transactions of the bank with such a subsidiary will be reflected in the appropriate
items of the report in the same manner as transactions with unrelated outside parties. Additional
guidance on this topic is provided in accounting standards, including ASC Subtopic 810-10, Consolidation
– Overall (formerly FASB Statement No. 94, “Consolidation of All Majority-Owned Subsidiaries”).
Trust accounts – For purposes of the Call Report, the reporting bank's trust department is not to be
consolidated into the reporting bank's balance sheet or income statement. However, information
concerning the bank’s trust activities must be reported in Schedule RC-T, Fiduciary and Related Services.
Assets held in or administered by the bank's trust department and the income earned on such assets are
excluded from all of the other schedules of the Call Report except when trust funds are deposited by the
trust department of the reporting bank in the commercial or some other department of the reporting bank.
When such trust funds are deposited in the bank, they are to be reported as deposit liabilities in
Schedule RC-E in the deposit category appropriate to the beneficiary. Interest paid by the bank on such
deposits is to be reported as part of the reporting bank's interest expense.
However, there are two exceptions:
(1) Uninvested trust funds (cash) held in the bank's trust department, which are not included on the
balance sheet of the reporting bank, must be reported in Schedule RC-O, Other Data for Deposit
Insurance and FICO Assessments; and
(2) The fees earned by the trust department for its fiduciary activities and the operating expenses of the
trust department are to be reported in the bank's income statement (Schedule RI) on a gross basis as
if part of the consolidated bank.
Custody accounts – All custody and safekeeping activities (i.e., the holding of securities, jewelry, coin
collections, and other valuables in custody or in safekeeping for customers) are not to be reflected on any
basis in the balance sheet of the Report of Condition unless cash funds held by the bank in safekeeping
for customers are commingled with the general assets of the reporting bank. In such cases, the
commingled funds would be reported in the Report of Condition as deposit liabilities of the bank.
RULES OF CONSOLIDATION
For purposes of these reports, all offices (i.e., branches, subsidiaries, VIEs, and IBFs) that are within the
scope of the consolidated bank as defined above are to be reported on a consolidated basis. Unless the
instructions specifically state otherwise, this consolidation shall be on a line-by-line basis, according to
the caption shown. As part of the consolidation process, the results of all transactions and all
intercompany balances (e.g., outstanding asset/debt relationships) between offices, subsidiaries, and
other entities included in the scope of the consolidated bank are to be eliminated in the consolidation and
must be excluded from the Call Report. (For example, eliminate in the consolidation (1) loans made by
1

In contrast, by definition, control of a VIE is deemed to rest with the parent if the parent or its consolidated
subsidiary has a controlling financial interest in the VIE and, thus, is the primary beneficiary, in which case the VIE
must be consolidated for purposes of the Call Report.

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the bank to a consolidated subsidiary and the corresponding liability of the subsidiary to the bank,
(2) a consolidated subsidiary's deposits in the bank and the corresponding cash or interest-bearing asset
balance of the subsidiary, and (3) the intercompany interest income and expense related to such loans
and deposits of the bank and its consolidated subsidiary.)
Exception: For purposes of reporting the total assets of captive insurance and reinsurance subsidiaries in
Schedule RC-M, Memoranda, items 14.a and 14.b, only, banks should measure the subsidiaries’ total
assets before eliminating intercompany transactions between the consolidated subsidiary and other
offices or subsidiaries of the consolidated bank. Otherwise, captive insurance and reinsurance
subsidiaries should be reported on a consolidated basis as described in the preceding paragraph.
Subsidiaries of subsidiaries – For a subsidiary of a bank which is in turn the parent of one or more
subsidiaries:
(1) Each subsidiary shall consolidate its majority-owned subsidiaries in accordance with the
consolidation requirements set forth above.
(2) Each subsidiary shall account for any investments in unconsolidated subsidiaries, corporate joint
ventures over which the bank exercises significant influence, and associated companies according to
the equity method of accounting.
Noncontrolling (minority) interests – A noncontrolling interest, sometimes called a minority interest, is the
portion of equity in a bank’s subsidiary not attributable, directly or indirectly, to the parent bank. Report
noncontrolling interests in the reporting bank's consolidated subsidiaries in Schedule RC, item 27.b,
"Noncontrolling (minority) interests in consolidated subsidiaries," of the Report of Condition. Report the
portion of consolidated net income reported in Schedule RI, item 12, that is attributable to noncontrolling
interests in consolidated subsidiaries of the bank in Schedule RI, item 13, of the Report of Income.
Intrabank transactions – (For banks with foreign offices.) While all intrabank transactions are to be
excluded from the Call Report, one intrabank relationship that is eliminated in consolidation is required to
be identified and reported in the Report of Condition. Specifically, Schedule RC-H, Selected Balance
Sheet Items for Domestic Offices, requires the reporting of the net amount of "due from" or "due to"
balances between the domestic offices and the foreign offices of the consolidated bank.
Deposit insurance and FICO assessments – When one FDIC-insured institution owns another FDIC-insured
institution as a subsidiary, the parent institution should complete items 1 through 11 (except item 9.a) and
Memorandum items 1 through 5 of Schedule RC-O by accounting for the insured institution subsidiary
under the equity method of accounting instead of consolidating it, i.e., on an “unconsolidated single FDIC
certificate number basis.” (However, an FDIC-insured institution that owns another FDIC-insured institution
should complete item 9.a of Schedule RC-O by consolidating its subsidiary institution.) In contrast, when an
FDIC-insured institution consolidates entities other than FDIC-insured institutions for purposes of
Schedule RC, Balance Sheet, the parent institution should complete items 1 through 11 and Memorandum
items 1 through 5 of Schedule RC-O on a consolidated basis with respect to these other entities. However,
all deposits of subsidiaries (except an insured depository institution subsidiary) that are consolidated and,
therefore, eliminated from reported deposits on the balance sheet (Schedule RC, item 13.a or 13.b, as
appropriate) must be reported in Schedule RC-O, items 1 through 3 and Memorandum items 1 and 2, as
appropriate. Similarly, the interest accrued and unpaid on these deposits, which is eliminated in
consolidation from reported other liabilities on the balance sheet (Schedule RC, item 20), also must be
reported in these Schedule RC-O items.
“Large institutions” and “highly complex institutions,” including those that own another FDIC-insured
institution as a subsidiary, should complete Memorandum items 6 through 17 of Schedule RC-O, as
appropriate, on a fully consolidated basis.

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Cutoff dates for consolidation – All branches must be consolidated as of the report date. For purposes of
consolidation, the date of the financial statements of a subsidiary should, to the extent practicable,
match the report date of the parent bank, but in no case differ by more than 93 days from the report date.

REPORTING BY TYPE OF OFFICE (For banks with foreign offices)
Some information in the Call Report is to be reported by type of office (e.g., for domestic offices, for
foreign offices, or for IBFs) as well as for the consolidated bank. Where information is called for by type
of office, the information reported shall be the office component of the consolidated item unless
otherwise specified in the line item instructions. That is, as a general rule, the office information shall be
reported at the same level of consolidation as the fully consolidated statement, shall reflect only
transactions with parties outside the scope of the consolidated bank, and shall exclude all transactions
between offices of the consolidated bank as defined above.

PUBLICATION REQUIREMENTS FOR THE REPORT OF CONDITION
There are no federal requirements for a bank to publish the balance sheet of the Report of Condition in a
newspaper. However, state-chartered banks should consult with their state banking authorities
concerning the applicability of any state publication requirements.

RELEASE OF INDIVIDUAL BANK REPORTS
All schedules of the Call Report submitted by each reporting bank, including the optional narrative
statement at the end of the Report of Condition, are available to the public from the federal bank
supervisory agencies with the exception of any amounts reported in Schedule RI-E, item 2.g, “FDIC
deposit insurance assessments,” for report dates beginning June 30, 2009; Schedule RC-F, item 6.f,
“Prepaid deposit insurance assessments,” for report dates beginning December 31, 2009;
Schedule RC-O, Memorandum items 6 through 9, 14, and 15, for certain assessment-related data for
report dates beginning June 30, 2011; and Schedule RC-P, items 7.a and 7.b, for representation and
warranty reserves for 1-4 family residential mortgages sold made to specified parties for report dates
beginning June 30, 2012.
In addition, information reported in Schedule RC-T, Fiduciary and Related Services, on the components of
fiduciary and related services income (but not “Total gross fiduciary and related services income”) and on
fiduciary settlements, surcharges, and losses (Memorandum item 4), will not be publicly disclosed on an
individual bank basis for periods prior to March 31, 2009. Data reported in Schedule RC-N, Past Due and
Nonaccrual Loans, Leases, and Other Assets, in column A, "Past due 30 through 89 days and still
accruing," and in all of Memorandum item 1, "Restructured loans and leases included in Schedule RC-N
above," will not be publicly disclosed on an individual bank basis for periods prior to March 31, 2001.

APPLICABILITY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES TO REGULATORY
REPORTING REQUIREMENTS
For recognition and measurement purposes, the regulatory reporting requirements applicable to the
Call Report shall conform to U.S. generally accepted accounting principles. Nevertheless, because the
Call Report is a bank-level report, each bank (together with its consolidated subsidiaries) is considered
an "accounting entity" for regulatory reporting purposes and normally must prepare its Call Report on a
separate entity basis. Furthermore, when reporting events and transactions not covered in principle by
Call Report instructions or authoritative GAAP standards, banks are encouraged to discuss the event or
transaction with their primary federal bank supervisory agency.

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Regardless of whether a bank discusses a reporting issue with its supervisory agency, when a bank's
supervisory agency's interpretation of how GAAP should be applied to a specified event or transaction
(or series of related events or transactions) differs from the bank's interpretation, the supervisory agency
may require the bank to reflect the event(s) or transaction(s) in its Call Report in accordance with the
agency's interpretation and to amend previously submitted reports.
The Call Report instructions contain certain specific reporting guidance that falls within the range of
acceptable practice under GAAP. These instructions have been adopted to achieve safety and
soundness and other public policy objectives and to ensure comparability. Should the need arise in the
future, other specific reporting guidance that falls within the range of GAAP may be issued. Current Call
Report instructions providing such specific reporting guidance include the nonaccrual rules in the
Glossary entry for "Nonaccrual Status," the treatment of impaired collateral dependent loans in the
Glossary entry for "Loan Impairment," the Glossary entry for the "Allowance for Loan and Lease Losses"
which references the 2006 Interagency Policy Statement on this subject, the separate entity method of
accounting for income taxes of bank subsidiaries of holding companies in the Glossary entry for "Income
Taxes," the push down accounting rules in the Glossary entry for "Business Combinations," and the
treatment of property dividends in the Glossary entry for "Dividends."
Certain provisions of AICPA Statement of Position (SOP) No. 92-3, “Accounting for Foreclosed Assets,”
have been incorporated into the Glossary entry for “Foreclosed Assets,” which banks must follow for Call
Report purposes, even though SOP 92-3 was rescinded subsequent to the issuance of ASC Topic 360,
Property, Plant, and Equipment (formerly FASB Statement No. 144, “Accounting for the Impairment or
Disposal of Long-Lived Assets”). The application of these provisions of SOP 92-3 represents prevalent
practice in the banking industry and is consistent with safe and sound banking practices and the
accounting objectives set forth in Section 37(a) of the Federal Deposit Insurance Act.
There may be areas in which a bank wishes more technical detail on the application of accounting
standards and procedures to the requirements of these instructions. Such information may often be found
in the appropriate entries in the Glossary section of these instructions or, in more detail, in the GAAP
standards. Selected sections of the GAAP standards are referenced in the instructions where
appropriate. The accounting entries in the Glossary are intended to serve as an aid in specific reporting
situations rather than as a comprehensive statement on bank accounting.

ACCRUAL BASIS REPORTING
All banks, regardless of size, shall prepare all schedules of the Call Report on an accrual basis.
However, banks may report particular accounts on a cash basis, except for the four listed below, if the
results would not materially differ from those obtained using an accrual basis.
All banks must report the following on an accrual basis:
(1) Income from installment loans;
(2) Amortization of premiums paid on held-to-maturity and available-for-sale securities (see the Glossary
entry for "premiums and discounts");
(3) Income taxes (see the Glossary entry for "income taxes"); and
(4) Depreciation on premises and fixed assets.
All banks shall establish and maintain an allowance for loan and lease losses at a level that is appropriate
to cover estimated credit losses associated with its held-for-investment loan and lease portfolio.
Accounting for loan and lease losses is discussed in more detail in the Glossary entries for "allowance for
loan and lease losses" and “loan impairment.”
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No interest or discount shall be accrued on any asset which must be carried in nonaccrual status. Refer
to the Glossary entry for "nonaccrual status" for further information.

MISCELLANEOUS GENERAL INSTRUCTIONS
Rounding
For banks with total assets of less than $10 billion, all dollar amounts must be reported in thousands, with
the figures rounded to the nearest thousand. Items less than $500 will be reported as zero.
For banks with total assets of $10 billion or more, all dollar amounts may be reported in thousands, but
each bank, at its option, may round the figures reported to the nearest million, with zeros reported in the
thousands column. For banks exercising this option, amounts less than $500,000 will be reported as zero.
Rounding may result in details not adding to their stated totals. The only permissible differences between
totals and the sums of their components are those attributable to the mechanics of rounding.
On the Report of Condition, Schedule RC, item 12, "Total assets," and Schedule RC, item 29, "Total
liabilities and equity capital," which must be equal, must be derived.

Negative Entries
Except for the items listed below, negative entries are not appropriate on the Report of Condition and
shall not be reported. Hence, assets with credit balances must be reported in liability items and liabilities
with debit balances must be reported in asset items, as appropriate, and in accordance with these
instructions. The Report of Condition items for which negative entries may be made, if appropriate, are:
(1) Schedule RC:








item 8, "Investments in unconsolidated subsidiaries and associated companies,"
item 9, “Direct and indirect investments in real estate ventures,”
item 26.a, "Retained earnings,"
item 26.b, "Accumulated other comprehensive income,"
item 26.c, “Other equity capital components,”
item 27.a, “Total bank equity capital,” and
item 28, “Total equity capital.”

(2) Schedule RC-C, items 10, 10.a, and 10.b, on "Lease financing receivables (net of unearned income),"
and Memorandum item 13.b, on “Amount of interest capitalized from interest reserves on
construction, land development, and other land loans that is included in interest and fee income on
loans during the quarter.”
(3) Schedule RC-P, items 5.a and 5.b, on “Noninterest income for the quarter from the sale,
securitization, and servicing of 1-4 family residential mortgage loans.”
(4) Schedule RC-R:




item 1, “Total equity capital,”
item 2, “Net unrealized gains (losses) on available-for-sale securities,”
item 4, “Accumulated net gains (losses) on cash flow hedges and amounts recorded in AOCI
resulting from the initial and subsequent application of FASB ASC 715-20 (former FASB
Statement No. 158) to defined benefit postretirement plans,”

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







GENERAL INSTRUCTIONS

item 7.b, “LESS: Cumulative change in fair value of all financial liabilities accounted for under a
fair value option that is included in retained earnings and is attributable to changes in the bank’s
own creditworthiness,”
item 8, "Subtotal,"
item 10, “Other additions to (deductions from) Tier 1 capital,”
item 11, "Tier 1 capital,"
item 21, "Total risk-based capital,"
item 26, “Other additions to (deductions from) assets for leverage capital purposes,” and
column B, “Items Not Subject to Risk-Weighting,” for the asset categories in items 34 through 43.

When negative entries do occur in one or more of these items, they must be reported with a minus (-) sign
rather than in parentheses.
On the Report of Income, negative entries may appear as appropriate. Income items with a debit balance
and expense items with a credit balance must be reported with a minus (-) sign.

Verification
All addition and subtraction should be double-checked before reports are submitted. Totals and subtotals
in supporting materials should be cross-checked to corresponding items elsewhere in the reports.
Before a report is submitted, all amounts should be compared with the corresponding amounts in the
previous report. If there are any unusual changes from the previous report, a brief explanation of the
changes should be attached to the submitted reports.
Banks should retain workpapers and other records used in the preparation of these reports.

Transactions Occurring Near the End of a Reporting Period
Transactions between banks occurring near the end of a reporting period may not be reported by the
parties to the transaction in such a manner as to cause the asset (or liability) either to disappear entirely
from the Reports of Condition submitted for that report date or to appear on both of the submitted reports,
regardless of the time zones in which the banks are located, the time zone in which the transaction took
place, or the actual zone clock times at the effective moment of the transaction.
In the case of a transaction occurring in different reporting periods for the parties because of time zone
differences, the parties may decide between themselves on the reporting period in which they will all,
consistently, report the transaction as having occurred, so that in any given reporting period, the asset (or
liability) transferred will appear somewhere and without duplication in the reports submitted by the parties
to the transaction.
If, in such cases, the parties do not agree on the reporting period in which the transaction is to be treated
as having occurred on the reports of all parties, i.e., if they do not agree on which party will reflect the
asset (or liability) on its reports for these purposes, the transaction will be deemed to have occurred prior
to midnight in the time zone of the buyer (or transferee) and must be reported accordingly by all parties to
the transaction.
If, in fact, the parties, in their submitted reports, treat the transaction as having occurred in different
reporting periods, the parties will be required to amend their submitted reports on the basis of the
standard set forth in the preceding paragraph.

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SEPARATE BRANCH REPORTS
Each U.S. bank with one or more branch offices located in a foreign country, Puerto Rico, or a U.S.
territory or possession is required to submit a Foreign Branch Report of Condition (FFIEC 030) or an
Abbreviated Foreign Branch Report of Condition (FFIEC 030S) for each foreign branch (except a foreign
branch with total assets of less than $50 million, which is exempt) once a year as of December 31.
However, a branch must report quarterly on the FFIEC 030 report if it has either $2 billion in total assets or
$5 billion in commitments to purchase foreign currencies and U.S. dollar exchange as of the end of a
calendar quarter. A foreign branch that does not meet either of the criteria to file quarterly, but has total
assets in excess of $250 million, must file the FFIEC 030 report on an annual basis. A foreign branch that
does not meet the criteria to file the FFIEC 030 report, but has total assets of $50 million or more (but less
than or equal to $250 million), must file the abbreviated FFIEC 030S report on an annual basis.

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RI - INCOME STATEMENT

LINE ITEM INSTRUCTIONS FOR THE CONSOLIDATED REPORT OF
INCOME
The line item instructions should be read in conjunction with the Glossary and other sections of these
instructions. See the discussion of the Organization of the Instruction Books in the General Instructions.
For purposes of these Consolidated Report of Income instructions, the FASB Accounting Standards
Codification is referred to as “ASC.”

SCHEDULE RI – INCOME STATEMENT
General Instructions
Report in accordance with these instructions all income and expense of the bank for the calendar
year-to-date. Include adjustments of accruals and other accounting estimates made shortly after the end
of a reporting period which relate to the income and expense of the reporting period.
A bank that began operating during the year-to-date reporting period should report in the appropriate items
of Schedule RI all income earned and expenses incurred since commencing operations. The bank should
report pre-opening income earned and expenses incurred from inception until the date operations
commenced using one of the two methods described in the Glossary entry for "start-up activities."
Business Combinations, Push Down Accounting Transactions, and Reorganizations – If the bank entered
into a business combination that became effective during the reporting period and has been accounted for
under the acquisition method, report the income and expense of the acquired bank or business only after
its acquisition. If the bank was acquired in a transaction that became effective during the reporting period
and push down accounting was used to account for the acquisition, Schedule RI should only include
amounts from the date of the bank’s acquisition through the end of the year-to-date reporting period. If
the bank entered into a reorganization that became effective during the year-to-date reporting period and
has been accounted for at historical cost in a manner similar to a pooling of interests, report the income
and expense of the combined entities for the entire calendar year-to-date as though they had combined at
the beginning of the year. For further information on business combinations, push down accounting, and
reorganizations, see the Glossary entry for "business combinations."
Assets and liabilities accounted under the fair value option – Under U.S. generally accepted accounting
principles (GAAP) (i.e., ASC Subtopic 825-10, Financial Instruments – Overall (formerly FASB Statement
No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”), ASC Subtopic 815-15,
Derivatives and Hedging – Embedded Derivatives (formerly FASB Statement No. 155, “Accounting for
Certain Hybrid Financial Instruments”), and ASC Subtopic 860-50, Transfers and Servicing – Servicing
Assets and Liabilities (formerly FASB Statement No. 156, “Accounting for Servicing of Financial Assets”)),
the bank may elect to report certain assets and liabilities at fair value with changes in fair value recognized
in earnings. This election is generally referred to as the fair value option. If the bank has elected to apply
the fair value option to interest-bearing financial assets and liabilities, it should report the interest income
on these financial assets (except any that are in nonaccrual status) and the interest expense on these
financial liabilities for the year-to-date in the appropriate interest income and interest expense items on
Schedule RI, not as part of the reported change in fair value of these assets and liabilities for the year-todate. The bank should measure the interest income or interest expense on a financial asset or liability to
which the fair value option has been applied using either the contractual interest rate on the asset or
liability or the effective yield method based on the amount at which the asset or liability was first
recognized on the balance sheet. Although the use of the contractual interest rate is

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an acceptable method under GAAP, when a financial asset or liability has a significant premium or
discount upon initial recognition, the measurement of interest income or interest expense under the
effective yield method more accurately portrays the economic substance of the transaction. In addition, in
some cases, GAAP requires a particular method of interest income recognition when the fair value option
is elected. For example, when the fair value option has been applied to a beneficial interest in securitized
financial assets within the scope of ASC Subtopic 325-40, Investments-Other – Beneficial Interests in
Securitized Financial Assets (formerly Emerging Issues Task Force Issue No. 99-20, “Recognition of
Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial
Assets”), interest income should be measured in accordance with this Subtopic. Similarly, when the fair
value option has been applied to a purchased impaired loan or debt security accounted for under ASC
Subtopic 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality
(formerly AICPA Statement of Position 03-3, “Accounting for Certain Loans or Debt Securities Acquired in
a Transfer”), interest income on the loan or debt security should be measured in accordance with this
Subtopic when accrual of income is appropriate. For further information, see the Glossary entry for
“Purchased Impaired Loans and Debt Securities.”
Revaluation adjustments, excluding amounts reported as interest income and interest expense, to the
carrying value of all assets and liabilities reported in Schedule RC at fair value under a fair value option
(excluding servicing assets and liabilities reported in Schedule RC, item 10.b, “Other intangible assets,”
and Schedule RC, item 20, “Other liabilities,” respectively, and assets and liabilities reported in
Schedule RC, item 5, "Trading assets," and Schedule RC, item 15, "Trading liabilities," respectively)
resulting from the periodic marking of such assets and liabilities to fair value should be reported as “Other
noninterest income” in Schedule RI, item 5.l.

Item Instructions
Item No.

Caption and Instructions

1

Interest income:

1.a

Interest and fee income on loans. Report in the appropriate subitem all interest, fees, and
similar charges levied against or associated with all assets reportable as loans in
Schedule RC-C, part I, items 1 through 9.
Deduct interest rebated to customers on loans paid before maturity from gross interest earned
on loans; do not report as an expense.
Include as interest and fee income on loans:
(1) Interest on all assets reportable as loans extended directly, purchased from others, sold
under agreements to repurchase, or pledged as collateral for any purpose.
(2) Loan origination fees, direct loan origination costs, and purchase premiums and discounts
on loans held for investment, all of which should be deferred and recognized over the life
of the related loan as an adjustment of yield in accordance with ASC Subtopic 310-20,
Receivables – Nonrefundable Fees and Other Costs (formerly FASB Statement No. 91,
“Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring
Loans and Initial Direct Costs of Leases”) as described in the Glossary entry for "loan
fees." See exclusion (3) below.
(3) Loan commitment fees (net of direct loan origination costs) that must be deferred over the
commitment period and recognized over the life of the related loan as an adjustment of
yield under ASC Subtopic 310-20 as described in the Glossary entry for "loan fees."

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Item No.

Caption and Instructions

1.a
(cont.)

(4) Investigation and service charges, fees representing a reimbursement of loan processing
costs, renewal and past-due charges, prepayment penalties, and fees charged for the
execution of mortgages or agreements securing the bank's loans.
(5) Charges levied against overdrawn accounts based on the length of time the account has
been overdrawn, the magnitude of the overdrawn balance, or which are otherwise
equivalent to interest. See exclusion (6) below.
(6) Interest income earned on loans that are reported at fair value under a fair value option.
Exclude from interest and fee income on loans:
(1) Fees for servicing real estate mortgages or other loans that are not assets of the bank
(report in Schedule RI, item 5.f, "Net servicing fees").
(2) Charges to merchants for the bank's handling of credit card or charge sales when the
bank does not carry the related loan accounts on its books (report as "Other noninterest
income" in Schedule RI, item 5.l). Banks may report this income net of the expenses
(except salaries) related to the handling of these credit card or charge sales.
(3) Loan origination fees, direct loan origination costs, and purchase premiums and discounts
on loans held for sale, all of which should be deferred until the loan is sold (rather than
amortized). The net fees or costs and purchase premium or discount are part of the
recorded investment in the loan. When the loan is sold, the difference between the sales
price and the recorded investment in the loan is the gain or loss on the sale of the loan.
See exclusion (4) below.
(4) Net gains (losses) from the sale of all assets reportable as loans (report in Schedule RI,
item 5.i, “Net gains (losses) on sales of loans and leases”). Refer to the Glossary entry
for "transfers of financial assets."
(5) Reimbursements for out-of-pocket expenditures (e.g., for the purchase of fire insurance
on real estate securing a loan) made by the bank for the account of its customers. If the
bank's expense accounts were charged with the amount of such expenditures, the
reimbursements should be credited to the same expense accounts.
(6) Transaction or per item charges levied against deposit accounts for the processing of
checks drawn against insufficient funds that the bank assesses regardless of whether it
decides to pay, return, or hold the check, so-called "NSF check charges" (report as
"Service charges on deposit accounts (in domestic offices)," in Schedule RI, item 5.b, or,
if levied against deposit accounts in foreign offices, as “Other noninterest income” in
Schedule RI, item 5.l). See inclusion (5) above.
(7) Interchange fees earned from credit card transactions (report as “Other noninterest
income” in Schedule RI, item 5.l).

FFIEC 041 FFIEC 031
Item No. Item No. Caption and Instructions
-

1.a.(1)

1.a.(1)

Interest and fee income on loans in domestic offices. Report in the
appropriate subitem all interest, fees, and similar charges levied against or
associated with all loans in domestic offices reportable in Schedule RC-C, part I,
items 1 through 9, column B.

1.a.(1)(a)

Interest and fee income on loans secured by real estate:

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FFIEC 041 FFIEC 031
Item No. Item No. Caption and Instructions
1.a.(1)(a)

1.a.(1)(a)(1) Interest and fee income on loans secured by 1-4 family residential
properties. Report all interest, fees, and similar charges levied against or
associated with all loans secured by 1-4 family residential properties (in domestic
offices) reportable in Schedule RC-C, part I, item 1.c, column B.

1.a.(1)(b)

1.a.(1)(a)(2) Interest and fee income on all other loans secured by real estate. Report
all interest, fees, and similar charges levied against or associated with all loans
secured by real estate (in domestic offices) reportable in Schedule RC-C, part I,
items 1.a, 1.b, 1.d, and 1.e, column B. Include interest and fee income on loans
secured by 1-4 family residential construction loans, but exclude such income on
all other loans secured by 1-4 family residential properties.

-

1.a.(1)(b)

Interest and fee income on loans to finance agricultural production and
other loans to farmers. Report all interest, fees, and similar charges levied
against or associated with all loans (in domestic offices) reportable in
Schedule RC-C, part I, item 3, "Loans to finance agricultural production and
other loans to farmers."

1.a.(2)

1.a.(1)(c)

Interest and fee income on commercial and industrial loans. Report all
interest, fees, and similar charges levied against or associated with all loans
(in domestic offices) reportable in Schedule RC-C, part I, item 4, "Commercial
and industrial loans."

1.a.(3)

1.a.(1)(d)

Interest and fee income on loans to individuals for household, family, and
other personal expenditures. Report in the appropriate subitem all interest,
fees, and similar charges levied against or associated with all loans (in domestic
offices) reportable in Schedule RC-C, part I, item 6, "Loans to individuals for
household, family, and other personal expenditures."

1.a.(3)(a)

1.a.(1)(d)(1)

Interest and fee income on credit cards. Report all interest, fees, and
similar charges levied against or associated with all extensions of credit to
individuals for household, family, and other personal expenditures arising from
credit cards (in domestic offices) reportable in Schedule RC-C, part I, item 6.a,
"Credit cards." Include in this item any reversals of uncollectible credit card fees
and finance charges and any additions to a contra-asset account for uncollectible
credit card fees and finance charges that the bank maintains and reports
separately from its allowance for loan and lease losses.
Exclude annual or other periodic fees paid by holders of credit cards issued by
the bank (report in Schedule RI, item 5.l, "Other noninterest income").

1.a.(3)(b)

1.a.(1)(d)(2)

FFIEC 031 and 041

Interest and fee income on other loans to individuals for household,
family, and other personal expenditures. Report all interest, fees, and similar
charges levied against or associated with all other loans to individuals for
household, family, and other personal expenditures (in domestic offices)
reportable in Schedule RC-C, part I, item 6.b, "Other revolving credit plans,"
item 6.c, “Automobile loans,” and item 6.d, “Other consumer loans.”

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FFIEC 041 FFIEC 031
Item No. Item No. Caption and Instructions
1.a.(4)

1.a.(1)(e)

Interest and fee income on loans to foreign governments and official
institutions. Report all interest, fees, and similar charges levied against or
associated with all loans (in domestic offices) reportable in Schedule RC-C, part I,
item 7, "Loans to foreign governments and official institutions."

1.a.(5)

1.a.(1)(f)

Interest and fee income on all other loans. On the FFIEC 041, report interest,
fees, and similar charges levied against or associated with loans reportable in
Schedule RC-C, part I, item 2, “Loans to depository institutions and acceptances
of other banks,” item 3, “Loans to finance agricultural production and other loans
to farmers,” item 8, “Obligations (other than securities and leases) of states and
political subdivisions in the U.S.,” and item 9, “Loans to nondepository financial
institutions and other loans.”
On the FFIEC 031, report interest, fees, and similar charges levied against or
associated with loans in domestic offices reportable in Schedule RC-C, part I,
item 2, “Loans to depository institutions and acceptances of other banks,” item 8,
“Obligations (other than securities and leases) of states and political subdivisions
in the U.S.,” and item 9, “Loans to nondepository financial institutions and other
loans.”

-

1.a.(6)

1.a.(2)

Interest and fee income on loans in foreign offices, Edge and Agreement
subsidiaries, and IBFs. Report all interest, fees, and similar charges levied
against or associated with all loans in foreign offices, Edge and Agreement
subsidiaries, and IBFs reportable in Schedule RC-C, part I, items 1 through 9.

1.a.(3)

Total interest and fee income on loans. On the FFIEC 041, report the sum of
items 1.a.(1) through 1.a.(5) in item 1.a.(6). On the FFIEC 031, report the sum of
items 1.a.(1)(a) through 1.a.(2) in item 1.a.(3).

FFIEC 031 and 041
Item No. Caption and Instructions
1.b

Income from lease financing receivables. Report all income from direct financing and
leveraged leases reportable in Schedule RC-C, part I, item 10, "Lease financing receivables
(net of unearned income)." (See the Glossary entry for "lease accounting.")
Exclude from income from lease financing receivables:
(1) Any investment tax credit associated with leased property (include in Schedule RI,
item 9, "Applicable income taxes (on item 8)").
(2) Provision for possible losses on leases (report in Schedule RI, item 4, "Provision for
loan and lease losses").
(3) Rental fees applicable to operating leases for furniture and equipment rented to others
(report as "Other noninterest income" in Schedule RI, item 5.l).

1.c

Interest income on balances due from depository institutions. Report all income on
assets reportable in Schedule RC, item 1.b, “Interest-bearing balances due from depository
institutions,” including interest-bearing balances maintained to satisfy reserve balance
requirements, excess balances, and term deposits due from Federal Reserve Banks. Include
interest income earned on interest-bearing balances due from depository institutions that are
reported at fair value under a fair value option. However, exclude earnings credits associated
with clearing balances due from Federal Reserve Banks, which are applied to an institution’s
monthly billing service charges to offset the cost of eligible Federal Reserve services.

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FFIEC 031 and 041

Item No.
1.d

RI - INCOME STATEMENT

Caption and Instructions
Interest and dividend income on securities. Report in the appropriate subitem all income
on assets that are reportable in Schedule RC-B, Securities. Include accretion of discount
and deduct amortization of premium on securities. Refer to the Glossary entry for
"premiums and discounts."
Include interest and dividends on securities held in the bank's held-to-maturity and
available-for-sale portfolios, even if such securities have been lent, sold under agreements
to repurchase that are treated as borrowings, or pledged as collateral for any purpose.
Include interest received at the sale of securities to the extent that such interest had not
already been accrued on the bank's books.
Do not deduct accrued interest included in the purchase price of securities from income on
securities and do not charge to expense. Record such interest in a separate asset account
(to be reported in Schedule RC, item 11, "Other assets") to be offset upon collection of the
next interest payment.
Report income from detached U.S. Government security coupons and ex-coupon
U.S. Government securities not held for trading in Schedule RI, item 1.d.(3), as interest and
dividend income on "All other securities." Refer to the Glossary entry for "coupon stripping,
Treasury receipts, and STRIPS."
Exclude from interest and dividend income on securities:
(1) Realized gains (losses) on held-to-maturity securities and on available-for-sale securities
(report in Schedule RI, items 6.a and 6.b, respectively).
(2) Net unrealized holding gains (losses) on available-for-sale securities (include the amount
of such net unrealized holding gains (losses) in Schedule RC, item 26.b, “Accumulated
other comprehensive income,” and the calendar year-to-date change in such net
unrealized holding gains (losses) in Schedule RI-A, item 10, “Other comprehensive
income”).
(3) Income from advances to, or obligations of, majority-owned subsidiaries not consolidated,
associated companies, and those corporate joint ventures over which the bank exercises
significant influence (report as "Noninterest income" in the appropriate subitem of
Schedule RI, item 5).

1.d.(1)

Interest and dividend income on U.S. Treasury securities and U.S. Government agency
obligations (excluding mortgage-backed securities). Report income from all securities
reportable in Schedule RC-B, item 1, “U.S. Treasury securities,” and item 2,
“U.S. Government agency obligations.” Include accretion of discount on U.S. Treasury bills.

1.d.(2)

Interest and dividend income on mortgage-backed securities. Report income from all
securities reportable in Schedule RC-B, item 4, “Mortgage-backed securities.”

1.d.(3)

Interest and dividend income on all other securities. Report income from all securities
reportable in Schedule RC-B, item 3, “Securities issued by states and political subdivisions
in the U.S.,” item 5, “Asset-backed securities and structured financial products,” item 6,
“Other debt securities,” and item 7, “Investments in mutual funds and other equity securities
with readily determinable fair values.”

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Item No.

Caption and Instructions

1.d.(3)
(cont.)

Exclude from interest and dividend income on all other securities:
(1) Income from equity securities that do not have readily determinable fair values (report
as “Other interest income” in Schedule RI, item 1.g).
(2) The bank’s proportionate share of the net income or loss from its investments in the stock
of unconsolidated subsidiaries, associated companies, and those corporate joint ventures
over which the bank exercises significant influence (report income or loss before
extraordinary items and other adjustments as “Noninterest income” in the appropriate
subitem of Schedule RI, item 5, and report extraordinary items and other adjustments in
Schedule RI, item 11).

1.e

Interest income on trading assets. Report the interest income earned on assets reportable
in Schedule RC, item 5, "Trading assets."
Include accretion of discount on assets held for trading that have been issued on a discount
basis, such as U.S. Treasury bills and commercial paper.
Exclude gains (losses) and fees from trading assets, which should be reported in
Schedule RI, item 5.c, “Trading revenue.” Also exclude revaluation adjustments from the
periodic marking to market of derivative contracts held for trading purposes, which should be
reported as trading revenue in Schedule RI, item 5.c. The effect of the periodic net
settlements on these derivative contracts should be included as part of the revaluation
adjustments from the periodic marking to market of the contracts.

1.f

Interest income on federal funds sold and securities purchased under agreements to
resell. Report the gross revenue from assets reportable in Schedule RC, item 3, "Federal
funds sold and securities purchased under agreements to resell." Include interest income
earned on federal funds sold and securities purchased under agreements to resell that are
reported at fair value under a fair value option.
Report the expense of federal funds purchased and securities sold under agreements to
repurchase in Schedule RI, item 2.b; do not deduct from the gross revenue reported in this
item. However, if amounts recognized as payables under repurchase agreements have
been offset against amounts recognized as receivables under reverse repurchase
agreements and reported as a net amount in Schedule RC, Balance Sheet, in accordance
with ASC Subtopic 210-20, Balance Sheet – Offsetting (formerly FASB Interpretation No. 41,
“Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase
Agreements”), the income and expense from these agreements may be reported on a net
basis in Schedule RI, Income Statement.

1.g

Other interest income. Report interest and dividend income on assets other than those
assets properly reported in Schedule RC, items 1 through 5. Include dividend income on
“Equity securities that do not have readily determinable fair values” that are reportable in
Schedule RC-F, item 4. Also include interest income on interest-only strips receivable (not in
the form of a security) that are reportable in Schedule RC-F, item 3. However, exclude
interest and dividends on venture capital investments (loans and securities), which should be
reported in item 5.e, below.

1.h

Total interest income. On the FFIEC 041, report the sum of items 1.a.(6) through 1.g.
On the FFIEC 031, report the sum of items 1.a.(3) through 1.g.

FFIEC 031 and 041

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Item No.

RI - INCOME STATEMENT

Caption and Instructions

2

Interest expense:

2.a

Interest on deposits. Report in the appropriate subitem all interest expense, including
amortization of the cost of merchandise or property offered in lieu of interest payments, on
deposits reportable in Schedule RC, item 13.a.(2), "Interest-bearing deposits in domestic
offices," and, for banks filing the FFIEC 031 report forms, Schedule RC, item 13.b.(2),
"Interest-bearing deposits in foreign offices, Edge and Agreement subsidiaries, and IBFs."
Exclude the cost of gifts or premiums (whether in the form of merchandise, credit, or cash)
given to depositors at the time of the opening of a new account or an addition to, or renewal
of, an existing account (report in Schedule RI, item 7.d, "Other noninterest expense").
Include as interest expense on the appropriate category of deposits finders' fees and brokers'
fees that represent an adjustment to the interest rate paid on deposits the reporting bank
acquires through brokers. If material, such fees should be capitalized and amortized over the
term of the related deposits. However, exclude fees levied by brokers that are, in substance,
retainer fees or that otherwise do not represent an adjustment to the interest rate paid on
brokered deposits (report in Schedule RI, item 7.d, "Other noninterest expense").
Also include interest expense incurred on deposits that are reported at fair value under a fair
value option. Deposits with demand features (e.g., demand and savings deposits in domestic
offices) are generally not eligible for the fair value option.
Deduct from the gross interest expense of the appropriate category of time deposits penalties
for early withdrawals, or portions of such penalties, that represent the forfeiture of interest
accrued or paid to the date of withdrawal. If material, portions of penalties for early
withdrawals that exceed the interest accrued or paid to the date of withdrawal should not be
treated as a reduction of interest expense but should be included in "Other noninterest
income" in Schedule RI, item 5.l.

FFIEC 041 FFIEC 031
Item No. Item No. Caption and Instructions
-

2.a.(1)

Interest on deposits in domestic offices:

2.a.(1)

2.a.(1)(a)

Interest on transaction accounts. Report interest expense on all
interest-bearing transaction accounts (interest-bearing demand deposits, NOW
accounts, ATS accounts, and telephone and preauthorized transfer accounts)
reportable in Schedule RC-E, (part I,) items 1 through 6, column A, "Total
transaction accounts." Exclude all costs incurred by the bank in connection with
noninterest-bearing demand deposits. See the Glossary entry for "deposits" for
the definitions of “interest-bearing deposit accounts,” “demand deposits,” "NOW
accounts," "ATS accounts," and "telephone or preauthorized transfer accounts."

2.a.(2)

2.a.(1)(b)

Interest on nontransaction accounts. Report in the appropriate subitem
interest expense on all deposits reportable in Schedule RC-E, (part I,) items 1
through 6, column C, "Total nontransaction accounts."

FFIEC 031 and 041

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FFIEC 041 FFIEC 031
Item No. Item No. Caption and Instructions
2.a.(2)(a)

2.a.(2)(b)(1)

Interest on savings deposits. Report interest expense on all deposits
reportable in Schedule RC-E, (part I,) Memorandum item 2.a.(1), "Money market
deposit accounts (MMDAs),” and Memorandum item 2.a.(2), "Other savings
deposits."

2.a.(2)(b)

2.a.(1)(b)(2)

Interest on time deposits of $100,000 or more. Report interest expense
on all deposits reportable in Schedule RC-E, (part I,) Memorandum item 2.c,
"Total time deposits of $100,000 through $250,000," and Memorandum item 2.d,
“Total time deposits of more than $250,000.”

2.a.(2)(c)

2.a.(1)(b)(3)

Interest on time deposits of less than $100,000. Report interest expense
on all deposits reportable in Schedule RC-E, (part I,) Memorandum item 2.b,
"Total time deposits of less than $100,000."

2.a.(2)

Interest on deposits in foreign offices, Edge and Agreement subsidiaries,
and IBFs. Report interest expense on all deposits in foreign offices reportable in
Schedule RC, item 13.b.(2), "Interest-bearing deposits in foreign offices, Edge
and Agreement subsidiaries, and IBFs."

-

FFIEC 031 and 041
Item No. Caption and Instructions
2.b

Expense of federal funds purchased and securities sold under agreements to
repurchase. Report the gross expense of all liabilities reportable in Schedule RC, item 14,
"Federal funds purchased and securities sold under agreements to repurchase." Include
interest expense incurred on federal funds purchased and securities sold under agreements
to repurchase that are reported at fair value under a fair value option.
Report the income of federal funds sold and securities purchased under agreements to resell
in Schedule RI, item 1.f; do not deduct from the gross expense reported in this item. However,
if amounts recognized as payables under repurchase agreements have been offset against
amounts recognized as receivables under reverse repurchase agreements and reported as a
net amount in Schedule RC, Balance Sheet, in accordance with ASC Subtopic 210-20,
Balance Sheet – Offsetting (formerly FASB Interpretation No. 41, “Offsetting of Amounts
Related to Certain Repurchase and Reverse Repurchase Agreements”), the income and
expense from these agreements may be reported on a net basis in Schedule RI, Income
Statement.

2.c

Interest on trading liabilities and other borrowed money. Report the interest expense
on all liabilities reportable in Schedule RC, item 15, "Trading liabilities," and item 16, "Other
borrowed money." Include interest expense incurred on other borrowed money reported at
fair value under a fair value option.

2.d

Interest on subordinated notes and debentures. Report the interest expense on all
liabilities reportable in Schedule RC, item 19, "Subordinated notes and debentures." Include
interest expense incurred on subordinated notes and debentures reported at fair value under
a fair value option.

FFIEC 031 and 041

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RI - INCOME STATEMENT

Item No.

Caption and Instructions

2.d
(cont.)

Include amortization of expenses incurred in the issuance of subordinated notes and
debentures. Capitalize such expenses, if material, and amortize them over the life of the
related notes and debentures (unless the notes and debentures are reported at fair value
under a fair value option, in which case issuance costs should be expensed as incurred).
Exclude dividends declared or paid on limited-life preferred stock (report dividends declared in
Schedule RI-A, item 8).

FFIEC 031 and 041

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Item No.

RI - INCOME STATEMENT

Caption and Instructions

2.e

Total interest expense. Report the sum of Schedule RI, items 2.a through 2.d.

3

Net interest income. Report the difference between Schedule RI, item 2.e, “Total interest
expense,” and Schedule RI, item 1.h, “Total interest income.” If the amount is negative,
report it with a minus (-) sign.

4

Provision for loan and lease losses. Report the amount needed to make the allowance for
loan and lease losses, as reported in Schedule RC, item 4.c, adequate to absorb estimated
credit losses, based upon management's evaluation of the loans and leases that the reporting
bank has the intent and ability to hold for the foreseeable future or until maturity or payoff.
Also include in this item any provision for allocated transfer risk related to loans and leases.
The amount reported in this item must equal Schedule RI-B, part II, item 5, “Provision for loan
and lease losses.” Report negative amounts with a minus (-) sign.
Exclude any provision for credit losses on off-balance sheet credit exposures, which should
be reported in Schedule RI, item 7.d, “Other noninterest expense.”
The amount reported here may differ from the bad debt expense deduction taken for federal
income tax purposes.
Refer to the Glossary entries for "allowance for loan and lease losses" and “loan impairment”
for additional information.

5

Noninterest income:

5.a

Income from fiduciary activities. Report gross income from services rendered by the
bank’s trust department or by any of its consolidated subsidiaries acting in any fiduciary
capacity. Include commissions and fees on sales of annuities by the bank's trust department
(or by a consolidated trust company subsidiary) that are executed in a fiduciary capacity. For
banks required to complete Schedule RC-T, items 14 through 22, this item must equal the
amount reported in Schedule RC-T, item 22.
Exclude commissions and fees received for the accumulation or disbursement of funds
deposited to Individual Retirement Accounts (IRAs) or Keogh Plan accounts when they are
not handled by the bank's trust department (report in Schedule RI, item 5.b, "Service charges
on deposit accounts (in domestic offices)").
Report a zero or the word "none" if the bank has no trust department and no consolidated
subsidiaries that render services in any fiduciary capacity.

5.b

Service charges on deposit accounts (in domestic offices). Report in this item amounts
charged depositors (in domestic offices):
(1) For the maintenance of their deposit accounts with the bank, so-called "maintenance
charges."
(2) For their failure to maintain specified minimum deposit balances.
(3) Based on the number of checks drawn on and deposits made in their deposit accounts.
(4) For checks drawn on so-called "no minimum balance" deposit accounts.
(5) For withdrawals from nontransaction deposit accounts.

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RI - INCOME STATEMENT

Item No.

Caption and Instructions

5.b
(cont.)

(6) For the closing of savings accounts before a specified minimum period of time has
elapsed.
(7) For accounts which have remained inactive for extended periods of time or which have
become dormant.
(8) For deposits to or withdrawals from deposit accounts through the use of automated teller
machines or remote service units.
(9) For the processing of checks drawn against insufficient funds, so-called "NSF check
charges," that the bank assesses regardless of whether it decides to pay, return, or hold
the check. Exclude subsequent charges levied against overdrawn accounts based on the
length of time the account has been overdrawn, the magnitude of the overdrawn balance,
or which are otherwise equivalent to interest (report in the appropriate subitem of
Schedule RI, item 1.a, "Interest and fee income on loans (in domestic offices)").
(10) For issuing stop payment orders.
(11) For certifying checks.
(12) For the accumulation or disbursement of funds deposited to Individual Retirement
Accounts (IRAs) or Keogh Plan accounts when not handled by the bank's trust
department. Report such commissions and fees received for accounts handled by the
bank's trust department in Schedule RI, item 5.a, "Income from fiduciary activities."
Exclude penalties paid by depositors for the early withdrawal of time deposits (report as
"Other noninterest income" in Schedule RI, item 5.l, or deduct from the interest expense of
the related category of time deposits, as appropriate).

5.c

Trading revenue. Report the net gain or loss from trading cash instruments and derivative
contracts (including commodity contracts) that has been recognized during the calendar
year-to-date. For banks required to complete Schedule RI, Memorandum item 8, the amount
reported in this item must equal the sum of Schedule RI, Memorandum items 8.a through 8.e.
Include as trading revenue:
(1) Revaluation adjustments to the carrying value of cash instruments reportable in
Schedule RC, item 5, "Trading assets," and Schedule RC, item 15, "Trading liabilities,"
resulting from the periodic marking to market of such instruments.
(2) Revaluation adjustments from the periodic marking to market of interest rate, foreign
exchange rate, commodity, and equity derivative contracts reportable in Schedule RC-L,
item 13, "Total gross notional amount of derivative contracts held for trading," and credit
derivative contracts reportable in Schedule RC-L, item 7, "Credit derivatives," that are
held for trading purposes. The effect of the periodic net settlements on derivative
contracts held for trading purposes should be included as part of the revaluation
adjustments from the periodic marking to market of these contracts.
(3) Incidental income and expense related to the purchase and sale of cash instruments
reportable in Schedule RC, item 5, "Trading assets," and Schedule RC, item 15, "Trading
liabilities," derivative contracts reportable in Schedule RC-L, item 13, "Total gross notional
amount of derivative contracts held for trading," and credit derivative contracts reportable
in Schedule RC-L, item 7, "Credit derivatives," that are held for trading purposes.
If the amount to be reported in this item is a net loss, report it with a minus (-) sign.

FFIEC 031 and 041

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RI - INCOME STATEMENT

FFIEC 031 and 041

RI - INCOME STATEMENT

Item No.

Caption and Instructions

5.d.(1)

Fees and commissions from securities brokerage. Report fees and commissions from
securities brokerage activities, from the sale and servicing of mutual funds, from the purchase
and sale of securities and money market instruments where the bank is acting as agent for
other banks or customers, and from the lending of securities owned by the bank or by bank
customers (if these fees and commissions are not included in Schedule RI, item 5.a, “Income
from fiduciary activities,” or item 5.c, “Trading revenue”). However, exclude fees and
commissions from the sale of annuities (fixed, variable, and other) to bank customers by the
bank or any securities brokerage subsidiary (report such income in Schedule RI, item 5.d.(3),
“Fees and commissions from annuity sales”).
Also include the bank’s proportionate share of the income or loss before extraordinary items
and other adjustments from its investments in equity method investees that are principally
engaged in securities brokerage activities. Equity method investees include unconsolidated
subsidiaries; associated companies; and corporate joint ventures, unincorporated joint
ventures, general partnerships, and limited partnerships over which the bank exercises
significant influence.

5.d.(2)

Investment banking, advisory, and underwriting fees and commissions. Report fees and
commissions from underwriting (or participating in the underwriting of) securities, private
placements of securities, investment advisory and management services, merger and
acquisition services, and other related consulting fees. Include fees and commissions from the
placement of commercial paper, both for transactions issued in the bank's name and
transactions in which the bank acts as an agent for a third party issuer.
Also include the bank’s proportionate share of the income or loss before extraordinary items
and other adjustments from its investments in equity method investees that are principally
engaged in investment banking, advisory, or securities underwriting activities. Equity method
investees include unconsolidated subsidiaries; associated companies; and corporate joint
ventures, unincorporated joint ventures, general partnerships, and limited partnerships over
which the bank exercises significant influence.

5.d.(3)

Fees and commissions from annuity sales. Report fees and commissions from sales of
annuities (fixed, variable, and other) by the bank and any subsidiary of the bank and fees
earned from customer referrals for annuities to insurance companies and insurance agencies
external to the consolidated bank. Also include management fees earned from annuities.
However, exclude fees and commissions from sales of annuities by the bank's trust
department (or by a consolidated trust company subsidiary) that are executed in a fiduciary
capacity (report in Schedule RI, item 5.a, "Income from fiduciary activities").
Also include the bank’s proportionate share of the income or loss before extraordinary items
and other adjustments from its investments in equity method investees that are principally
engaged in annuity sales. Equity method investees include unconsolidated subsidiaries;
associated companies; and corporate joint ventures, unincorporated joint ventures, general
partnerships, and limited partnerships over which the bank exercises significant influence.

5.d.(4)

Underwriting income from insurance and reinsurance activities. Report the amount of
premiums earned by bank subsidiaries engaged in insurance underwriting or reinsurance
activities. Include earned premiums from (a) life and health insurance and (b) property and
casualty insurance, whether (direct) underwritten business or ceded or assumed (reinsured)
business. Insurance premiums should be reported net of any premiums transferred to other
insurance underwriters/reinsurers in conjunction with reinsurance contracts.

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RI - INCOME STATEMENT

Item No.

Caption and Instructions

5.d.(4)
(cont.)

Also include the bank's proportionate share of the income or loss before extraordinary items
and other adjustments from its investments in equity method investees that are principally
engaged in insurance underwriting or reinsurance activities. Equity method investees include
unconsolidated subsidiaries; associated companies; and corporate joint ventures,
unincorporated joint ventures, general partnerships, and limited partnerships over which the
bank exercises significant influence.
Exclude income from sales and referrals involving insurance products and annuities (see the
instructions for Schedule RI, items 5.d.(5) and 5.d.(3), respectively, for information on reporting
such income).

5.d.(5)

Income from other insurance activities. Report income from insurance product sales and
referrals, including:
(1) Service charges, commissions, and fees earned from insurance sales, including credit, life,
health, property, casualty, and title insurance products.
(2) Fees earned from customer referrals for insurance products to insurance companies and
insurance agencies external to the consolidated bank.
Also include management fees earned from separate accounts and universal life products.
Exclude income from annuity sales and referrals (see the instructions for Schedule RI,
item 5.d.(3), above, for information on reporting such income).
Also include the bank's proportionate share of the income or loss before extraordinary items
and other adjustments from its investments in equity method investees that are principally
engaged in insurance product sales and referrals. Equity method investees include
unconsolidated subsidiaries; associated companies; and corporate joint ventures,
unincorporated joint ventures, general partnerships, and limited partnerships over which the
bank exercises significant influence.

5.e

Venture capital revenue. In general, venture capital activities involve the providing of
funds, whether in the form of loans or equity, and technical and management assistance, when
needed and requested, to start-up or high-risk companies specializing in new technologies,
ideas, products, or processes. The primary objective of these investments is capital growth.
Report as venture capital revenue market value adjustments, interest, dividends, gains, and
losses (including impairment losses) on venture capital investments (loans and securities).
Include any fee income from venture capital activities that is not reported in one of the
preceding items of Schedule RI, Income Statement.
Also include the bank’s proportionate share of the income or loss before extraordinary items
and other adjustments from its investments in equity method investees that are principally
engaged in venture capital activities. Equity method investees include unconsolidated
subsidiaries; associated companies; and corporate joint ventures, unincorporated joint
ventures, general partnerships, and limited partnerships over which the bank exercises
significant influence.

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Item No.

RI - INCOME STATEMENT

Caption and Instructions

5.f

Net servicing fees. Report income from servicing real estate mortgages, credit cards, and
other financial assets held by others. Report any premiums received in lieu of regular
servicing fees on such loans only as earned over the life of the loans. For servicing assets
and liabilities measured under the amortization method, banks should report servicing income
net of the related servicing assets’ amortization expense, include impairments recognized on
servicing assets, and also include increases in servicing liabilities recognized when
subsequent events have increased the fair value of the liability above its carrying amount. For
servicing assets and liabilities remeasured at fair value under the fair value option, include
changes in the fair value of these servicing assets and liabilities. For further information on
servicing, see the Glossary entry for “servicing assets and liabilities.”

5.g

Net securitization income. Report net gains (losses) on assets sold in the bank’s own
securitization transactions, i.e., net of transaction costs. Include unrealized losses (and
recoveries of unrealized losses) on loans and leases held for sale in the bank’s own
securitization transactions. Report fee income from securitizations, securitization conduits,
and structured finance vehicles, including fees for providing administrative support, liquidity
support, interest rate risk management, credit enhancement support, and any additional
support functions as an administrative agent, liquidity agent, hedging agent, or credit
enhancement agent. Include all other fees (other than servicing fees and commercial paper
placement fees) earned from the bank's securitization and structured finance transactions.
Exclude income from servicing securitized assets (report in Schedule RI, item 5.f, above), fee
income from the placement of commercial paper (report in Schedule RI, item 5.d.(2), above),
and income from seller’s interests and residual interests retained by the bank (report in the
appropriate subitem of Schedule RI, item 1, “Interest income"). Also exclude net gains
(losses) on loans sold to – and unrealized losses (and recoveries of unrealized losses) on
loans and leases held for sale to – a government-sponsored agency or another institution that
in turn securitizes the loans (report in Schedule RI, item 5.i, “Net gains (losses) on sales of
loans and leases”).

5.h

Not applicable.

5.i

Net gains (losses) on sales of loans and leases. Report the amount of net gains (losses)
on sales and other disposals of loans and leases (reportable in Schedule RC-C), including
unrealized losses (and subsequent recoveries of such net unrealized losses) on loans and
leases held for sale. Exclude net gains (losses) on loans and leases sold in the bank’s own
securitization transactions and unrealized losses (and recoveries of unrealized losses) on
loans and leases held for sale in the bank’s own securitization transactions (report these
gains (losses) in Schedule RI, item 5.g, “Net securitization income”).

5.j

Net gains (losses) on sales of other real estate owned. Report the amount of net gains
(losses) on sales and other disposals of other real estate owned (reportable in Schedule RC,
item 7), increases and decreases in the valuation allowance for foreclosed real estate, and
write-downs of other real estate owned subsequent to acquisition (or physical possession)
charged to expense. Do not include as a loss on other real estate owned any amount
charged to the allowance for loan and lease losses at the time of foreclosure (actual
or physical possession) for the difference between the carrying value of a loan and the
fair value less cost to sell of the foreclosed real estate.

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(12-09)

RI - INCOME STATEMENT

FFIEC 031 and 041

Item No.

RI - INCOME STATEMENT

Caption and Instructions

5.k

Net gains (losses) on sales of other assets (excluding securities). Report the amount of
net gains (losses) on sales and other disposals of assets not required to be reported
elsewhere in the income statement (Schedule RI). Include net gains (losses) on sales and
other disposals of premises and fixed assets; personal property acquired for debts previously
contracted (such as automobiles, boats, equipment, and appliances); and coins, art, and
other similar assets. Do not include net gains (losses) on sales and other disposals of loans
and leases (either directly or through securitization), other real estate owned, securities, and
trading assets (report these net gains (losses) in the appropriate items of Schedule RI).

5.l

Other noninterest income. Report all operating income of the bank for the calendar year to
date not required to be reported elsewhere in Schedule RI.
Disclose in Schedule RI-E, items 1.a through 1.k, each component of other noninterest
income, and the dollar amount of such component, that is greater than $25,000 and exceeds
3 percent of the other noninterest income reported in this item. If net losses have been
reported in this item for a component of “Other noninterest income,” use the absolute value of
such net losses to determine whether the amount of the net losses is greater than $25,000
and exceeds 3 percent of “Other noninterest income” and should be reported in
Schedule RI-E, item 1. (The absolute value refers to the magnitude of the dollar amount
without regard to whether the amount represents net gains or net losses.)
Preprinted captions have been provided in Schedule RI-E, items 1.a through 1.h, for reporting
the following components of other noninterest income if the component exceeds this
disclosure threshold: income and fees from the printing and sale of checks, earnings
on/increase in value of cash surrender value of life insurance, income and fees from
automated teller machines (ATMs), rent and other income from other real estate owned, safe
deposit box rent, net change in the fair values of financial instruments accounted for under a

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RI-12b
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RI - INCOME STATEMENT

FFIEC 031 and 041

RI - INCOME STATEMENT

Item No.

Caption and Instructions

5.l
(cont.)

fair value option, bank card and credit card interchange fees, and gains on bargain
purchases. For each component of other noninterest income that exceeds this disclosure
threshold for which a preprinted caption has not been provided, describe the component with
a clear but concise caption in Schedule RI-E, items 1.i through 1.k. These descriptions
should not exceed 50 characters in length (including spacing between words).
For disclosure purposes in Schedule RI-E, items 1.a through 1.h, when components of “Other
noninterest income” reflect a single credit for separate “bundled services” provided through
third party vendors, disclose such amounts in the item with the preprinted caption that most
closely describes the predominant type of income earned, and this categorization should be
used consistently over time.
Include as other noninterest income:
(1) Service charges, commissions, and fees for such services as:
(a) The rental of safe deposit boxes.
(b) The safekeeping of securities for other depository institutions (if the income for such
safekeeping services is not included in Schedule RI, item 5.a, “Income from fiduciary
activities”).
(c) The sale of bank drafts, money orders, cashiers' checks, and travelers' checks.
(d) The collection of utility bills, checks, notes, bond coupons, and bills of exchange.
(e) The redemption of U.S. savings bonds.
(f) The handling of food stamps and the U.S. Treasury Tax and Loan Account, including
fees received in connection with the bank's issuance of interest-bearing demand
notes.
(g) The execution of acceptances and the issuance of commercial letters of credit,
standby letters of credit, deferred payment letters of credit, and letters of credit issued
for cash or its equivalent. Exclude income on bankers acceptances and trade
acceptances (report such income in the appropriate subitem of Schedule RI, item 1.a,
"Interest and fee income on loans," or in Schedule RI, item 1.e, "Interest income from
trading assets," as appropriate).
(h) The notarizing of forms and documents.
(i) The negotiation or management of loans from other lenders for customers or
correspondents.
(j) The providing of consulting and advisory services to others. Exclude income from
investment advisory services, which is to be reported in Schedule RI, item 5.d.(2).
(k) The use of the bank's automated teller machines or remote service units by
depositors of other depository institutions.

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RI - INCOME STATEMENT

Item No.

Caption and Instructions

5.l
(cont.)

(2) Income and fees from the sale and printing of checks.
(3) Gross rentals and other income from all real estate reportable in Schedule RC, item 7,
"Other real estate owned."
(4) Earnings on or other increases in the value of the cash surrender value of bank-owned
life insurance policies.
(5) Annual or other periodic fees paid by holders of credit cards issued by the bank. Fees
that are periodically charged to cardholders shall be deferred and recognized on a
straight-line basis over the period the fee entitles the cardholder to use the card.
(6) Charges to merchants for the bank's handling of credit card or charge sales when the
bank does not carry the related loan accounts on its books. Banks may report this
income net of the expenses (except salaries) related to the handling of these credit card
or charge sales.
(7) Interchange fees earned from bank card and credit card transactions.
(8) Gross income received for performing data processing services for others. Do not deduct
the expense of performing such services for others (report in the appropriate items of
noninterest expense).
(9) Loan commitment fees that are recognized during the commitment period (i.e., fees
retrospectively determined and fees for commitments where exercise is remote) or
included in income when the commitment expires and loan syndication fees that are not
required to be deferred. Refer to the Glossary entry for "loan fees" for further information.
(10) On the FFIEC 031 only, service charges on deposit accounts in foreign offices.
(11) Net tellers' overages (shortages), net recoveries (losses) on forged checks, net
recoveries (losses) on payment of checks over stop payment orders, and similar
recurring operating gains (losses) of this type. Banks should consistently report these
gains (losses) either in this item or in Schedule RI, item 7.d.
(12) Net gains (losses) from the sale or other disposal of branches (i.e., where the reporting
bank sells a branch's assets to another depository institution, which assumes the
deposit liabilities of the branch). Banks should consistently report these net gains
(losses) either in this item or in Schedule RI, item 7.d.
(13) Net gains (losses) from all transactions involving foreign currency or foreign exchange
other than trading transactions. Banks should consistently report these net gains
(losses) either in this item or in Schedule RI, item 7.d.
(14) Rental fees applicable to operating leases for furniture and equipment rented to others.
(15) Interest received on tax refunds.
(16) Life insurance proceeds on policies for which the bank is the beneficiary.

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RI - INCOME STATEMENT

Item No.

Caption and Instructions

5.l
(cont.)

(17) Credits resulting from litigation or other claims.
(18) Portions of penalties for early withdrawals of time deposits that exceed the interest
accrued or paid on the deposit to the date of withdrawal, if material. Penalties for
early withdrawals, or portions of such penalties, that represent the forfeiture of interest
accrued or paid to the date of withdrawal are a reduction of interest expense and should
be deducted from the gross interest expense of the appropriate category of
time deposits in Schedule RI, item 2.a, "Interest on deposits."
(19) Interest income from advances to, or obligations of, and the bank's proportionate
share of the income or loss before extraordinary items and other adjustments from
its investments in:
• unconsolidated subsidiaries,
• associated companies,
• corporate joint ventures, unincorporated joint ventures, and general partnerships
over which the bank exercises significant influence, and
• noncontrolling investments in certain limited partnerships and limited liability
companies (described in the Glossary entry for “equity method of accounting”)
other than those that are principally engaged in investment banking, advisory,
brokerage, or securities underwriting activities; venture capital activities; insurance
and reinsurance underwriting activities; or insurance and annuity sales activities
(the income from which should be reported in Schedule RI, items 5.d.(1), 5.d.(2), 5.d.(3),
5.d.(4), 5.d.(5), and 5.e, respectively). Exclude the bank's proportionate share of
material extraordinary items and other adjustments of these entities (report in
Schedule RI, item 11, "Extraordinary items and other adjustments, net of income
taxes").
(20) Net gains (losses) on nonhedging derivative instruments held for purposes other than
trading. Banks should consistently report these net gains (losses) either in this item or
in Schedule RI, item 7.d. For further information, see the Glossary entry for “derivative
contracts.”
(21) Gross income generated by securities contributed to charitable contribution Clifford
Trusts.
(22) Income from ground rents and air rights.
(23) Revaluation adjustments to the carrying value of all assets and liabilities reported in
Schedule RC at fair value under a fair value option (excluding servicing assets and
liabilities reported in Schedule RC, item 10.b, “Other intangible assets,” and
Schedule RC, item 20, “Other liabilities,” respectively, and assets and liabilities reported
in Schedule RC, item 5, "Trading assets," and Schedule RC, item 15, "Trading
liabilities," respectively) resulting from the periodic marking of such assets and liabilities
to fair value. Exclude interest income earned and interest expense incurred on financial
assets and liabilities reported at fair value under a fair value option, which should be
reported in the appropriate interest income or interest expense items on Schedule RI.
(24) Gains on bargain purchases recognized and measured in accordance with
ASC Topic 805, Business Combinations (formerly FASB Statement No. 141(R),
“Business Combinations”).

5.m

Total noninterest income. Report the sum of items 5.a through 5.l.

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FFIEC 031 and 041

Item No.
6.a

RI - INCOME STATEMENT

Caption and Instructions
Realized gains (losses) on held-to-maturity securities. Report the net gain or loss
realized during the calendar year to date from the sale, exchange, redemption, or retirement
of all securities reportable in Schedule RC, item 2.a, "Held-to-maturity securities." The
realized gain or loss on a security is the difference between the sales price (excluding interest
at the coupon rate accrued since the last interest payment date, if any) and its amortized cost.
Also include in this item write-downs of the cost basis of individual held-to-maturity securities
for other than temporary impairments. If the amount to be reported in this item is a net loss,
report it with a minus (-) sign.
Exclude from this item realized gains (losses) on available-for-sale securities (report in
Schedule RI, item 6.b, below) and on trading securities (report in Schedule RI, item 5.c,
“Trading revenue”).

6.b

Realized gains (losses) on available-for-sale securities. Report the net gain or loss
realized during the calendar year to date from the sale, exchange, redemption, or retirement
of all securities reportable in Schedule RC, item 2.b, "Available-for-sale securities." The
realized gain or loss on a security is the difference between the sales price (excluding interest
at the coupon rate accrued since the last interest payment date, if any) and its amortized cost.
Also include in this item write-downs of the cost basis of individual available-for-sale securities
for other than temporary impairments. If the amount to be reported in this item is a net loss,
report it with a minus (-) sign.
Exclude from this item:
(1) The change in net unrealized holding gains (losses) on available-for-sale securities during
the calendar year to date (report in Schedule RI-A, item 10, “Other comprehensive
income”).
(2) Realized gains (losses) on held-to-maturity securities (report in Schedule RI, item 6.a,
above) and on trading securities (report in Schedule RI, item 5.c, “Trading revenue”).

7

Noninterest expense:

7.a

Salaries and employee benefits. Report salaries and benefits of all officers and
employees of the bank and its consolidated subsidiaries including guards and contracted
guards, temporary office help, dining room and cafeteria employees, and building department
officers and employees (including maintenance personnel). Include as employees individuals
who, in form, are employed by an affiliate but who, in substance, do substantially all of their
work for the reporting bank. However, banking organizations should not segregate the
compensation component of other intercompany cost allocations arising from arrangements
other than that described in the preceding sentence for purposes of this item.
Include as salaries and employee benefits:
(1) Gross salaries, wages, overtime, bonuses, incentive compensation, and extra
compensation.
(2) Social security taxes and state and federal unemployment taxes paid by the bank.
(3) Contributions to the bank's retirement plan, pension fund, profit-sharing plan, employee
stock ownership plan, employee stock purchase plan, and employee savings plan.

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FFIEC 031 and 041

RI - INCOME STATEMENT

Item No.

Caption and Instructions

7.a
(cont.)

(4)

Premiums (net of dividends received) on health and accident, hospitalization, dental,
disability, and life insurance policies for which the bank is not the beneficiary.

(5)

Cost of office temporaries whether hired directly by the bank or through an outside
agency.

(6)

Workmen's compensation insurance premiums.

(7)

The net cost to the bank for employee dining rooms, restaurants, and cafeterias.

(8)

Accrued vacation pay earned by employees during the calendar year-to-date.

(9)

The cost of medical or health services, relocation programs and reimbursements of
moving expenses, tuition reimbursement programs, and other so-called fringe benefits
for officers and employees.

(10) Compensation expense (service component and interest component) related to
deferred compensation agreements.
Exclude from salaries and employee benefits (report in Schedule RI, item 7.d, "Other
noninterest expense"):
(1) Amounts paid to attorneys, accountants, management consultants, investment
counselors, and other professionals who are not salaried officers or employees of the
bank (except if these professionals, in form, are employed by an affiliate of the reporting
bank but, in substance, do substantially all of their work for the reporting bank).
(2) Expenses related to the testing and training of officers and employees.
(3) The cost of bank newspapers and magazines prepared for distribution to bank officers
and employees.
(4) Expenses of life insurance policies for which the bank is the beneficiary. (However, when
these expenses relate to bank-owned life insurance policies with cash surrender values,
banks may report the net earnings on or the net increases in the value of these cash
surrender values in Schedule RI, item 5.l, above.)
(5) The cost of athletic activities in which officers and employees participate when the
purpose may be construed to be for marketing or public relations, and employee benefits
are only incidental to the activities.
(6) Dues, fees and other expenses associated with memberships in country clubs, social or
private clubs, civic organizations, and similar clubs and organizations.

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RI - INCOME STATEMENT

FFIEC 031 and 041

Item No.
7.b

RI - INCOME STATEMENT

Caption and Instructions
Expenses of premises and fixed assets. Report all noninterest expenses related to the use
of premises, equipment, furniture, and fixtures reportable in Schedule RC, item 6, "Premises
and fixed assets," net of rental income. If this net amount is a credit balance, report it with a
minus (-) sign.
Deduct rental income from gross premises and fixed asset expense. Rental income includes
all rentals charged for the use of buildings not incident to their use by the reporting bank and
its consolidated subsidiaries, including rentals by regular tenants of the bank's buildings,
income received from short-term rentals of other bank facilities, and income from subleases.
Also deduct income from stocks and bonds issued by nonmajority-owned corporations that
indirectly represent premises, equipment, furniture, or fixtures and are reportable in
Schedule RC, item 6, "Premises and fixed assets."
Include as expenses of premises and fixed assets:
(1)

Normal and recurring depreciation and amortization charges against assets reportable
in Schedule RC, item 6, "Premises and fixed assets," including capital lease assets,
which are applicable to the calendar year-to-date, whether they represent direct
reductions in the carrying value of the assets or additions to accumulated depreciation
or amortization accounts. Any method of depreciation or amortization conforming to
accounting principles that are generally acceptable for financial reporting purposes may
be used. However, depreciation for premises and fixed assets may be based on a
method used for federal income tax purposes if the results would not be materially
different from depreciation based on the asset's estimated useful life.

(2)

All operating lease payments made by the bank on premises (including parking lots),
equipment (including data processing equipment), furniture, and fixtures.

(3)

Cost of ordinary repairs to premises (including leasehold improvements), equipment,
furniture, and fixtures.

(4)

Cost of service or maintenance contracts for equipment, furniture, and fixtures.

(5)

Cost of leasehold improvements, equipment, furniture, and fixtures charged directly to
expense and not placed on the bank's books as assets.

(6)

Insurance expense related to the use of premises, equipment, furniture, and fixtures
including such coverages as fire, multi-peril, boiler, plate glass, flood, and public liability.

(7)

All property tax and other tax expense related to premises (including leasehold
improvements), equipment, furniture, and fixtures, including deficiency payments, net of
all rebates, refunds, or credit.

(8)

Any portion of capital lease payments representing executory costs such as insurance,
maintenance, and taxes.

(9)

Cost of heat, electricity, water, and other utilities connected with the use of premises
and fixed assets.

(10) Cost of janitorial supplies and outside janitorial services.
(11) Fuel, maintenance, and other expenses related to the use of the bank-owned
automobiles, airplanes, and other vehicles for bank business.

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Item No.

Caption and Instructions

7.b
(cont.)

Exclude from expenses of premises and fixed assets:
(1) Salaries and employee benefits (report such expenses for all officers and employees of
the bank and its consolidated subsidiaries in Schedule RI, item 7.a, "Salaries and
employee benefits").
(2) Interest on mortgages, liens, or other encumbrances on premises or equipment owned,
including the portion of capital lease payments representing interest expense (report in
Schedule RI, item 2.c, "Interest on trading liabilities and other borrowed money").
(3) All expenses associated with other real estate owned (report in Schedule RI, item 7.d, "Other
noninterest expense").
(4) Gross rentals from other real estate owned and fees charged for the use of parking lots
properly reported as other real estate owned, as well as safe deposit box rentals and
rental fees applicable to operating leases for furniture and equipment rented to others
(report in Schedule RI, item 5.l).

7.c.(1)

Goodwill impairment losses. Report any impairment losses recognized during the period
on goodwill. Exclude goodwill impairment losses associated with discontinued operations
(report such losses on a net-of-tax basis in Schedule RI, item 11, "Extraordinary items and
other adjustments, net of income taxes").
Goodwill should not be amortized, but must be tested for impairment as described in the
Glossary entry for “goodwill.”

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Item No.

Caption and Instructions

7.c.(2)

Amortization expense and impairment losses for other intangible assets. Report the
amortization expense of and any impairment losses on "Other intangible assets" (as defined
for Schedule RC, item 10.b). Under ASC Topic 350, Intangibles-Goodwill and Other (formerly
FASB Statement No. 142, “Goodwill and Other Intangible Assets”), intangible assets that have
indefinite useful lives should not be amortized, but must be tested at least annually for
impairment. Intangible assets that have finite useful lives must be amortized over their useful
lives and must be reviewed for impairment in accordance with ASC Topic 360, Property,
Plant, and Equipment (formerly FASB Statement No. 144, “Accounting for the Impairment of
Long-Lived Assets”).
Exclude the amortization expense of and any impairment losses on servicing assets, which
should be netted against the servicing income reported in Schedule RI, item 5.f, “Net servicing
fees,” above.

7.d

Other noninterest expense. Report all operating expenses of the bank for the calendar
year-to-date not required to be reported elsewhere in Schedule RI.
Disclose in Schedule RI-E, items 2.a through 2.n, each component of other noninterest
expense, and the dollar amount of such component, that is greater than $25,000 and exceeds
3 percent of the other noninterest expense reported in this item. If net gains have been
reported in this item for a component of “Other noninterest expense,” use the absolute value
of such net gains to determine whether the amount of the net gains is greater than $25,000
and exceeds 3 percent of “Other noninterest expense” and should be reported in
Schedule RI-E, item 2. (The absolute value refers to the magnitude of the dollar amount
without regard to whether the amount represents net gains or net losses.)
Preprinted captions have been provided in Schedule RI-E, items 2.a through 2.k, for reporting
the following components of other noninterest expense if the component exceeds this
disclosure threshold: data processing expenses; advertising and marketing expenses;
directors’ fees; printing, stationery, and supplies; postage; legal fees and expenses; FDIC

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Item No.

Caption and Instructions

7.d
(cont.)

deposit insurance assessments; accounting and auditing expenses; consulting and advisory
expenses; automated teller machine (ATM) and interchange expenses; and
telecommunications expenses. For each component of other noninterest expense that
exceeds this disclosure threshold for which a preprinted caption has not been provided,
describe the component with a clear but concise caption in Schedule RI-E, items 2.l through
2.n. These descriptions should not exceed 50 characters in length (including spacing
between words).
For disclosure purposes in Schedule RI-E, items 2.a through 2.k, when components of “Other
noninterest expense” reflect a single charge for separate “bundled services” provided by third
party vendors, disclose such amounts in the item with the preprinted caption that most closely
describes the predominant type of expense incurred, and this categorization should be used
consistently over time.
Include as other noninterest expense:
(1) Fees paid to directors and advisory directors for attendance at board of directors’ or
committee meetings (including travel and expense allowances).
(2) Cost of data processing services performed for the bank by others.
(3) Advertising, promotional, public relations, marketing, and business development
expenses. Such expenses include the cost of athletic activities in which officers and
employees participate when the purpose may be construed to be for marketing or public
relations, and employee benefits are only incidental to the activities.
(4) Cost of gifts or premiums (whether in the form of merchandise, credit, or cash) given to
depositors at the time of the opening of a new account or an addition to, or renewal of, an
existing account, if not included in advertising and marketing expenses above.
(5) Retainer fees, legal fees, and other fees and expenses paid to attorneys who are not
bank officers or employees and to outside law firms.
(6) Cost of printing, stationery, and office supplies.
(7) Postage and mailing expenses.
(8) Telecommunications expenses, including any expenses associated with telephone,
telegraph, cable, and internet services (including web page maintenance).
(9) Federal deposit insurance assessments and Financing Corporation (FICO) assessments.
(10) Premiums on fidelity insurance (blanket bond, excess employee dishonesty bond),
directors' and officers' liability insurance, and life insurance policies for which the bank is
the beneficiary.
(11) Assessment expense, examination expense, and other fees levied by the Comptroller of
the Currency or a state chartering authority, net of any assessment credits during the
period.

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Item No.

Caption and Instructions

7.d
(cont.)

(12) Legal fees and other direct costs incurred to effect foreclosures on real estate and
subsequent noninterest expenses related to holdings of real estate owned other than
bank premises (including depreciation charges, if appropriate).
(13) Net losses (gains) from the sale or other disposal of branches (i.e., where the reporting
bank sells a branch's assets to another depository institution, which assumes the
deposit liabilities of the branch). Banks should consistently report these net losses
(gains) either in this item or in Schedule RI, item 5.l.
(14) Net losses (gains) from all transactions involving foreign currency or foreign exchange
other than trading transactions. Banks should consistently report these net losses
(gains) either in this item or in Schedule RI, item 5.l.
(15) Management fees assessed by the bank’s parent holding company, whether for specific
services rendered or of a general (prorated) nature.

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Item No.

Caption and Instructions

7.d
(cont.)

(16) Sales taxes, taxes based on the number of shares of bank stock outstanding, taxes
based on the bank's total assets or total deposits, taxes based on the bank's gross
revenues or gross receipts, capital stock taxes, and other taxes not included in other
categories of expense. Exclude any foreign, state, and local taxes based on a net
amount of revenues less expenses (report as applicable income taxes in Schedule RI,
items 9).
(17) Fees levied by deposit brokers that are, in substance, retainer fees or that otherwise do
not represent an adjustment to the interest rate paid on deposits the reporting bank
acquires through brokers. However, report as interest expense on the appropriate
category of deposits those finders' fees and brokers' fees that do represent an
adjustment to the interest rate paid on brokered deposits.
(18) Research and development costs and costs incurred in the internal development of
computer software.
(19) Charges resulting from litigation or other claims.
(20) Charitable contributions including donations by Clifford Trusts.
(21) Fees for accounting, auditing, and attestation services; retainer fees; and other fees and
expenses paid to accountants and auditors who are not bank officers or employees.
(22) Fees for consulting and advisory services, retainer fees, and other fees and expenses
paid to management consultants, investment advisors, and other professionals (other
than attorneys providing legal services and accountants providing accounting, auditing,
and attestation services) who are not bank officers or employees.
(23) Net losses (gains) on nonhedging derivative instruments held for purposes other than
trading. Banks should consistently report these net losses (gains) either in this item or
in Schedule RI, item 5.l. For further information, see the Glossary entry for “derivative
contracts.”
(24) Net tellers' shortages (overages), net losses (recoveries) on forged checks, net losses
(recoveries) on payment of checks over stop payment orders, and similar recurring
operating losses (gains) of this type. Banks should consistently report these losses
(gains) either in this item or in Schedule RI, item 5.l.
(25) [Reserved.]
(26) Losses from robberies, defalcations, and other criminal acts not covered by the bank's
blanket bond.
(27) Travel and entertainment expenses, including costs incurred by bank officers and
employees for attending meetings and conventions.
(28) Dues, fees, and other expenses associated with memberships in country clubs, social or
private clubs, civic organizations, and similar clubs and organizations.
(29) Civil money penalties and fines.

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Item No.

Caption and Instructions

7.d
(cont.)

(30) All service charges, commissions, and fees levied by others for the repossession of
assets and the collection of the bank's loans or other assets, including charged-off loans
or other charged-off assets.
(31) Expenses (except salaries) related to handling credit card or charge sales received from
merchants when the bank does not carry the related loan accounts on its books. Banks
are also permitted to net these expenses against their charges to merchants for the
bank's handling of these sales in Schedule RI, item 5.l.
(32) Expenses related to the testing and training of officers and employees.
(33) The cost of bank newspapers and magazines prepared for distribution to bank officers
and employees or to others.
(34) Depreciation expense of furniture and equipment rented to others under operating
leases.
(35) Cost of checks provided to depositors.
(36) Amortization expense of purchased computer software and of the costs of computer
software to be sold, leased, or otherwise marketed capitalized in accordance with the
provisions of ASC Subtopic 985-20, Software – Costs of Software to Be Sold, Leased or
Marketed (formerly FASB Statement No. 86, “Accounting for the Cost of Computer
Software to Be Sold, Leased, or Otherwise Marketed”).
(37) Provision for credit losses on off-balance sheet credit exposures.
(38) Net losses (gains) from the extinguishment of liabilities (debt), including losses resulting
from the payment of prepayment penalties on borrowings such as Federal Home Loan
Bank advances. However, if a bank's debt extinguishments normally result in net gains
over time, then the bank should consistently report its net gains (losses) in Schedule RI,
item 5.l, "Other noninterest income."
(39) Automated teller machine (ATM) and interchange expenses from bank card and credit
card transactions.
Exclude from other noninterest expense:
(1) Material expenses incurred in the issuance of subordinated notes and debentures
(capitalize such expenses and amortize them over the life of the related notes and
debentures and report the expense in Schedule RI, item 2.d, "Interest on subordinated
notes and debentures").
(2) Expenses incurred in the sale of preferred and common stock (deduct such expenses
from the sale proceeds and credit the net amount to the appropriate stock account.
For perpetual preferred and common stock only, report the net sales proceeds in
Schedule RI-A, item 5, "Sale, conversion, acquisition, or retirement of capital stock, net").
(3) Depreciation and other expenses related to the use of bank-owned automobiles,
airplanes, and other vehicles for bank business (report in Schedule RI, item 7.b,
"Expenses of premises and fixed assets").

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Item No.

Caption and Instructions

7.d
(cont.)

(4) Write-downs of the cost basis of individual held-to-maturity and available-for-sale
securities for other than temporary impairments (report in Schedule RI, item 6.a,
"Realized gains (losses) on held-to-maturity securities," and item 6.b, "Realized gains
(losses) on available-for-sale securities," respectively).
(5) Revaluation adjustments to the carrying value of all assets and liabilities reported in
Schedule RC at fair value under a fair value option. Banks should report these net
decreases (increases) in fair value on trading assets and liabilities in Schedule RI,
item 5.c; on servicing assets and liabilities in Schedule RI, item 5.f; and on other financial
assets and liabilities in Schedule RI, item 5.l. Interest income earned and interest
expense incurred on these financial assets and liabilities should be excluded from the net
decreases (increases) in fair value and reported in the appropriate interest income or
interest expense items on Schedule RI.

7.e

Total noninterest expense. Report the sum of items 7.a through 7.d.

8

Income (loss) before income taxes and extraordinary items and other adjustments.
Report the bank's pretax operating income. This amount will generally be determined by
taking item 3, "Net interest income," minus item 4, "Provision for loan and lease losses," plus
item 5.m, "Total noninterest income," plus or minus item 6.a, "Realized gains (losses) on heldto-maturity securities," plus or minus item 6.b, "Realized gains (losses) on available-for-sale
securities," minus item 7.e, "Total noninterest expense." If the result is negative, report it with
a minus (-) sign.

9

Applicable income taxes on item 8. Report the total estimated federal, state and local, and
foreign income tax expense applicable to item 8, "Income (loss) before income taxes and
extraordinary items and other adjustments." Include both the current and deferred portions of
these income taxes. If the amount is a tax benefit rather than tax expense, report it with a
minus (-) sign.
Include as applicable income taxes all taxes based on a net amount of taxable revenues
less deductible expenses. Exclude from applicable income taxes all taxes based on gross
revenues or gross receipts (report such taxes in Schedule RI, item 7.d, "Other noninterest
expense").
Include income tax effects of changes in tax laws or rates. Also include the effect of changes
in the valuation allowance related to deferred tax assets resulting from a change in estimate
of the realizability of deferred tax assets, excluding the effect of any valuation allowance
changes related to unrealized holding gains (losses) on available-for-sale securities that are
charged or credited directly to the separate component of equity capital for “Accumulated
other comprehensive income" (Schedule RC, item 26.b).
Include the tax benefit of an operating loss carryforward or carryback for which the source of
the income or loss in the current year is reported in Schedule RI, item 8, "Income (loss) before
income taxes and extraordinary items and other adjustments."
Also include the dollar amount of any material adjustments or settlements reached with a
taxing authority (whether negotiated or adjudicated) relating to disputed income taxes of prior
years.
Exclude the estimated federal, state and local, and foreign income taxes applicable to:
(1) Schedule RI, item 11, "Extraordinary items and other adjustments, net of income taxes."

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Item No.

Caption and Instructions

9
(cont.)

(2) Schedule RI-A, item 2, "Cumulative effect of changes in accounting principles and
corrections of material accounting errors."
(3) Schedule RI-A, item 10, "Other comprehensive income.“
Refer to the Glossary entry for "income taxes" for additional information.

10

Income (loss) before extraordinary items and other adjustments. Report the difference
between item 9, "Applicable income taxes (on item 8)," and item 8, "Income (loss) before
income taxes and extraordinary items and other adjustments." If the amount is negative,
report it with a minus (-) sign.

11

Extraordinary items and other adjustments, net of income taxes. Report the total of the
transactions listed below, if any, net of any applicable income tax effect. If the amount
reported in this item is a net loss, report it with a minus (-) sign. State the dollar amount and
provide a description of each transaction included in this item and any applicable income tax
effect of the transaction in Schedule RI-E, item 3.
Include as extraordinary items and other adjustments:
(1) The material effects of any extraordinary items. Extraordinary items are very rare and the
criteria which must be satisfied in order for an event or transaction to be reported as an
extraordinary item are discussed in the Glossary entry for "extraordinary items."
(2) Material aggregate gains on troubled debt restructurings of the reporting bank's own debt,
as determined in accordance with the provisions of ASC Subtopic 470-60, Debt –
Troubled Debt Restructurings by Debtors (formerly FASB Statement No. 15, “Accounting
by Debtors and Creditors for Troubled Debt Restructurings”).
(3) The cumulative effect of all changes in accounting principles except for those required to
be reported in Schedule RI-A, item 2, "Restatements due to corrections of material
accounting errors and changes in accounting principles." Refer to the Glossary entry for
"accounting changes" for further discussion of changes in accounting principles.
(4) The results of discontinued operations as determined in accordance with the provisions of
ASC Topic 360, Property, Plant, and Equipment (formerly FASB Statement No. 144,
“Accounting for the Impairment of Long-Lived Assets”).
Exclude from extraordinary items and other adjustments:
(1) Net gains (losses) from the sale or other disposal of:
(a)
(b)
(c)
(d)

All assets reportable as loans and leases in Schedule RC-C.
Premises and fixed assets.
Other real estate owned.
Personal property acquired for debts previously contracted (such as automobiles,
boats, equipment, and appliances).
(e) Coins, art, and other similar assets.
(f) Branches (i.e., where the reporting bank sells a branch's assets to another depository
institution which assumes the deposit liabilities of the branch).
For the first five categories above, banks should report net gains (losses) in the
appropriate category of “Noninterest income" in Schedule RI, item 5. For the final
category above, banks should consistently report net gains (losses) from branch sales as
"Other noninterest income” in Schedule RI, item 5.l, or as "Other noninterest expense" in
Schedule RI, item 7.d.

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Item No.

Caption and Instructions

11
(cont.)

(2) Write-downs of the cost basis of individual held-to-maturity and available-for-sale
securities for other than temporary impairments (report in Schedule RI, item 6.a,
"Realized gains (losses) on held-to-maturity securities," and item 6.b,
“Realized gains (losses) on available-for-sale securities," respectively).

12

Net income (loss) attributable to bank and noncontrolling (minority) interests.
Report the sum of Schedule RI, items 10 and 11. If this amount is a net loss, report it with a
minus (-) sign.

13

LESS: Net income (loss) attributable to noncontrolling (minority) interests. Report that
portion of consolidated net income reported in Schedule RI, item 12, above, attributable to
noncontrolling interests in consolidated subsidiaries of the bank. A noncontrolling interest,
also called a minority interest, is the portion of equity in a bank’s subsidiary not attributable,
directly or indirectly, to the parent bank. If the amount reported in this item is a net loss, report
it with a minus (-) sign.

14

Net income (loss) attributable to bank. Report Schedule RI, item 12, less item 13. If this
amount is a net loss, report it with a minus (-) sign.

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Memoranda
Item No.
1

Caption and Instructions
Interest expense incurred to carry tax-exempt securities, loans, and leases acquired
after August 7, 1986, that is not deductible for federal income tax purposes. Report the
bank's best estimate of the amount of the year-to-date interest expense included in
Schedule RI, item 2.e, "Total interest expense," that is subject to a 100 percent loss of
deductibility for federal income tax purposes because it is deemed to have been incurred to
carry tax-exempt securities, loans, and leases of states and political subdivisions in the U.S.
acquired after August 7, 1986. Tax-exempt securities, loans, and leases are those securities,
loans, and leases of states and political subdivisions in the U.S. whose interest is excludable
from gross income under the regular tax system for federal income tax purposes, regardless
of whether the income must be included in the bank's alternative minimum taxable income.
Exclude from this item interest expense incurred to carry (1) tax-exempt securities, loans, and
leases of states and political subdivisions in the U.S. acquired after December 31, 1982, but
before August 8, 1986, and (2) so-called "Qualified tax-exempt obligations" acquired after
August 7, 1986, 20 percent of which is not deductible for federal income tax purposes.
The general formula that may be used for computing the amount of interest expense that is
subject to a 100 percent loss of deductibility is as follows:
Tax-exempt securities, loans, and leases of
states and political subdivisions in the U.S.
acquired after August 7, 1986 (excluding
"Qualified tax-exempt obligations")
(Year-to-date average)
Total assets (Year-to-date average)

X

Year-to-date
total interest
expense (Schedule
RI, item 2.e)

For the March 31, June 30, and September 30 Call Reports, the amount reported in
Memorandum item 1 should not be an estimate of the amount of interest expense that will not
be deductible for the entire calendar year.
2

Income from the sale and servicing of mutual funds and annuities (in domestic
offices). Memorandum item 2 is to be completed by banks with $1 billion or more in total
assets.
Report the amount of income earned by the reporting bank during the calendar year-to-date
from the sale and servicing of mutual funds and annuities (in domestic offices).
Include in this item:
(1) Income earned in connection with mutual funds and annuities that are sold on bank
premises or are otherwise sold by the reporting bank, through a bank subsidiary, or by
affiliated or unaffiliated entities from whom the bank receives income. This income may
be in the form of fees or sales commissions at the time of the sale or fees, including a
share of another entity's fees, that are earned over the duration of the account (e.g.,
annual fees, Rule 12b-1 fees or "trailer fees," and redemption fees). Commissions should
be reported as income as earned at the time of the sale (i.e., on an accrual basis), but
may be reported as income when payment is received if the results would not differ
materially from those obtained using an accrual basis.

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Memoranda
Item No.

Caption and Instructions

2
(cont.)

(2) Income from leasing arrangements with affiliated and unaffiliated entities who
lease space in bank offices for use in selling mutual funds and annuities. Income from
leasing arrangements should be reported as income as earned (i.e., on an accrual basis),
but may be reported as income when payment is received if the results would not differ
materially from those obtained using an accrual basis.
(3) Fees for providing investment advisory services for proprietary mutual funds and annuities.
(4) Fees for providing securities custody, transfer agent, and other operational and ancillary
services to mutual funds and annuities that are sold on bank premises or are otherwise sold
by the reporting bank, through a bank subsidiary, or by affiliated or unaffiliated entities from
whom the bank receives income at the time of the sale or over the duration of the account.
Also include income from sales conducted through the reporting bank's trust department that
are not executed in a fiduciary capacity (e.g., trustee, executor, administrator, conservator), but
exclude income from sales conducted by the trust department that are executed in a fiduciary
capacity.
In general, this income will have been included in Schedule RI, item 5.d.(1), “Fees and
commissions from securities brokerage“ (for mutual funds) and item 5.d.(3), “Fees and
commissions from annuity sales.” However, income from leasing arrangements, or the portion
thereof, that is fixed in amount and does not vary based on sales volume may have been
reported as a deduction from Schedule RI, item 7.b, "Expenses of premises and fixed assets."
Thus, the income to be included in this item should be reported gross rather than net of
expenses incurred by the reporting bank or a consolidated subsidiary.
Exclude fees earned for providing securities custody, transfer agent, and other operational
and ancillary services to third party mutual funds and annuities that are not sold on bank
premises and are not otherwise sold by the reporting bank, through a bank subsidiary, or by
affiliated or unaffiliated entities from whom the bank receives income at the time of the sale or
over the duration of the account.

3

Income on tax-exempt loans and leases to states and political subdivisions in the U.S.
Report the bank’s best estimate of the income earned on:
(1) Tax-exempt loans to states and political subdivisions in the U.S. reportable in
Schedule RC-C, part I, item 8. On the FFIEC 041, this income will have been included in
Schedule RI, item 1.a.(5), Interest and fee income on “All other loans” (except that, for
banks with total assets of less than $25 million for report dates during 2001, this income will
have been included in Schedule RI, item 1.a.(6), “Total interest and fee income on loans”).
On the FFIEC 031, this income will have been included in Schedule RI, item 1.a.(1)(f),
Interest and fee income on “All other loans in domestic offices.”
(2) Tax-exempt leases to states and political subdivisions in the U.S. reportable in
Schedule RC-C, part I, item 10. This income will have been included in Schedule RI,
item 1.b, “Income from lease financing receivables,” above.

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Memoranda
Item No.

Caption and Instructions

3
(cont.)

Tax-exempt loans and leases are those loans and leases to states and political subdivisions
in the U.S. whose income is excludable from gross income for federal income tax purposes,
regardless of whether the income from the loan or lease must be included in the bank’s
alternative minimum taxable income and regardless of the federal income tax treatment of the
interest expense incurred to carry the loan or lease.

4

Income on tax-exempt securities issued by states and political subdivisions in the U.S.
Report the bank's best estimate of the income earned on those securities issued by states
and political subdivisions in the U.S. reportable in Schedule RC-B, item 3, the income from
which is excludable from gross income for federal income tax purposes, regardless of
whether the income from the securities must be included in the bank's alternative minimum
taxable income and regardless of the federal income tax treatment of the interest expense
incurred to carry the securities.

5

Number of full-time equivalent employees at end of current period. Report the number
of full-time equivalent employees of the bank and its consolidated subsidiaries as of the report
date (round to the nearest whole number). For purposes of this Memorandum item, a bank
should include as employees individuals who, in form, are employed by an affiliate but who, in
substance, do substantially all of their work for the reporting bank. However, banking
organizations should not segregate the compensation component of other intercompany cost
allocations arising from arrangements other than that described in the preceding sentence nor
calculate the related pro rata number of full-time equivalent employees for purposes of this
Memorandum item.
To convert the number of part-time employees to full-time equivalent employees, add the total
number of hours all part-time and temporary employees worked during the quarter ending on
the report date and divide this amount by the number of hours a full-time employee would have
been expected to work during the quarter. Round the result to the nearest whole number and
add it to the number of full-time employees. (A full-time employee may be expected to work
more or less than 40 hours each week, depending on the policies of the reporting bank.)

NOTE: Memorandum item 6 is applicable only to banks filing the FFIEC 041 report form.
6

Interest and fee income on loans to finance agricultural production and other loans to
farmers.
Memorandum items 6 is to be completed by:
•
•

banks with $300 million or more in total assets, and
banks with less than $300 million in total assets and with loans to finance agricultural
production and other loans to farmers (as reported in Schedule RC-C, part I, item 3,
column B) exceeding five percent of total loans, net of unearned income.

All other banks should report a zero or the word “none” in this item.
Report in this item all interest, fees, and similar charges levied against or associated with all
loans reportable in Schedule RC-C, part I, item 3, column B, "Loans to finance agricultural
production and other loans to farmers."

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Memoranda
Item No.
7

Caption and Instructions
If the reporting bank has restated its balance sheet as a result of applying push down
accounting this calendar year, report the date of the bank's acquisition. If the reporting
bank was acquired during the calendar year-to-date reporting period and applied push down
accounting to its balance sheet in accordance with the "push down accounting" section of the
Glossary entry for "business combinations," report the date (year, month, and day) as of
which the acquisition took place. For example, a bank that was acquired as of the close of
business June 1, 2011, and applied push down accounting to its balance sheet would report
20110601 in this Memorandum item in the Consolidated Reports of Condition and Income for
June 30, September 30, and December 31, 2011.
Push down accounting is the establishment of a new accounting basis for a bank in its
separate financial statements (including its Consolidated Reports of Condition and Income) as
a result of the bank becoming substantially wholly owned by an investor (which may be a
holding company) or a group of investors working collaboratively via a purchase transaction or
a series of purchase transactions. When push down accounting is used to account for the
acquisition of a bank that becomes substantially wholly owned, yet retains its separate
corporate existence, the bank's identifiable assets, liabilities, and any noncontrolling interests
(Schedule RC) are restated to their acquisition-date fair values (with limited exceptions
specified in ASC Topic 805, Business Combinations (formerly FASB Statement No. 141(R),
“Business Combinations”) using the definition of fair value in ASC Topic 820, Fair Value
Measurements and Disclosures (formerly FASB Statement No. 157, “Fair Value
Measurements”)). In the year the bank applies push down accounting, its income statements
(Schedule RI) for periods after the date it became substantially wholly owned should only
include amounts from that date through the end of the calendar year-to-date reporting period.
If the reporting bank has not been acquired during this calendar year or if the reporting bank
has been acquired during this calendar year but push down accounting was not applied, the
bank should report zeros (i.e., 00000000) in the year, month, and day columns of this
Memorandum item.

8

Trading revenue (from cash instruments and derivative instruments).
Memorandum items 8.a through 8.e are to be completed by banks that reported average
trading assets (in Schedule RC-K, item 7) of $2 million or more for any quarter of the
preceding calendar year. Memorandum items 8.f and 8.g are to be completed by banks with
$100 billion or more in total assets that are required to complete Memorandum items 8.a
through 8.e.
Report, in Memorandum items 8.a through 8.e, below, a breakdown of trading revenue that
has been included in the body of the income statement in Schedule RI, item 5.c. For each of
the five types of underlying risk exposure, report the combined revenue (net gains and losses)
from trading cash instruments and derivative instruments. For purposes of Memorandum
item 8, the reporting bank should determine the underlying risk exposure category in which to
report the trading revenue from cash instruments and derivative instruments in the same
manner that the bank makes this determination for other financial reporting purposes. The
sum of Memorandum items 8.a through 8.e must equal Schedule RI, item 5.c.

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Memoranda
Item No.
8.a

Caption and Instructions
Interest rate exposures. Report in this item net gains (losses) from trading cash instruments
and derivative contracts that the reporting bank manages as interest rate exposures. Interest
rate exposures may arise from cash debt instruments (e.g., U.S. Treasury securities) and
interest rate contracts. Interest rate contracts are those contracts related to an interest-bearing
financial instrument or whose cash flows are determined by referencing interest rates or
another interest rate contract (e.g., an option on a futures contract to purchase a Treasury
bill). Interest rate contracts include interest rate futures, single currency interest rate swaps,
basis swaps, forward rate agreements, and interest rate options, including caps, floors, collars,
and corridors.
Exclude trading revenue on contracts involving the exchange of foreign currencies (e.g., crosscurrency swaps and currency options) that the reporting bank manages as foreign exchange
exposures. Report such trading revenue in Memorandum item 8.b.

8.b

Foreign exchange exposures. Report in this item net gains (losses) from trading cash
instruments and derivative contracts that the reporting bank manages as foreign exchange
exposures. Foreign exchange exposures may arise from cash instruments (e.g., debt
securities) denominated in non-U.S. currencies and foreign exchange rate contracts. Foreign
exchange rate contracts are those contracts to purchase foreign (non-U.S.) currencies and
U.S. dollar exchange in the forward market, i.e., on an organized exchange or in an
over-the-counter market. A purchase of U.S. dollar exchange is equivalent to a sale of foreign
currency. Foreign exchange rate contracts include cross-currency interest rate swaps where
there is an exchange of principal, forward and spot foreign exchange contracts, and currency
futures and currency options.

8.c

Equity security and index exposures. Report in this item net gains (losses) from trading
cash instruments and derivative contracts that the reporting bank manages as equity security
or index exposures. Equity security or index exposures may arise from equity securities and
equity security or index (i.e., equity derivative) contracts. Equity derivative contracts are
contracts that have a return, or a portion of their return, linked to the price of a particular
equity or to an index of equity prices, such as the Standard and Poor's 500.

8.d

Commodity and other exposures. Report in this item net gains (losses) from trading cash
instruments and derivative contracts that the reporting bank manages as commodity or other
exposures. Commodity or other exposures may arise from commodities and commodity and
other derivative contracts not reported as interest rate, foreign exchange, equity, or credit
derivative contracts. Commodity and other contracts are contracts that have a return, or a
portion of their return, linked to the price or to an index of precious metals, petroleum, lumber,
agricultural products, etc. Commodity and other contracts also include any other contracts
that are not reportable as interest rate, foreign exchange, equity, or credit derivative contracts.

8.e

Credit exposures. Report in this item net gains (losses) from trading cash instruments and
derivative contracts that the reporting bank manages as credit exposures. Credit exposures
may arise from cash debt instruments (e.g., debt securities) and credit derivative contracts.
In general, credit derivative contracts are arrangements that allow one party (the "beneficiary")
to transfer the credit risk of a "reference asset" or “reference entity” to another party (the
"guarantor"). Credit derivative contracts include credit default swaps, total return swaps,
credit options, and other credit derivatives.

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Memoranda
Item No.

Caption and Instructions

8.f

Impact on trading revenue of changes in the creditworthiness of the bank’s derivatives
counterparties on the bank’s derivative assets (included in Memorandum items 8.a
through 8.e above). Report in this item the amount included in the trading revenue reported
in Schedule RI, Memorandum items 8.a through 8.e, above that resulted from changes during
the calendar year-to-date in the bank’s credit valuation adjustments (CVA). A CVA is the
adjustment to the fair value of derivatives that accounts for possible nonperformance of the
bank’s derivatives counterparties. It is an estimate of the fair value of counterparty credit risk.

8.g

Impact on trading revenue of changes in the creditworthiness of the bank on the
bank’s derivative liabilities (included in Memorandum items 8.a through 8.e above).
Report in this item the amount included in the trading revenue reported in Schedule RI,
Memorandum items 8.a through 8.e, above that resulted from changes during the calendar
year-to-date in the bank’s debit valuation adjustment (DVA). A DVA is the adjustment to the
fair value of derivatives that accounts for possible nonperformance of the bank. It is an
estimate of the fair value of the bank’s own credit risk to its counterparties.

9

Net gains (losses) recognized in earnings on credit derivatives that economically
hedge credit exposures held outside the trading account. Report in the appropriate
subitem the net gains (losses) recognized in earnings on credit derivatives that economically
hedge credit exposures held outside the trading account, regardless of whether the credit
derivative is designated as and qualifies as a hedging instrument under generally accepted
accounting principles. Credit exposures held outside the trading account include, for
example, nontrading assets (such as available-for-sale securities and loans held for
investment) and unused lines of credit.

9.a

Net gains (losses) on credit derivatives held for trading. Report the net gains (losses)
recognized in earnings on credit derivatives held for trading (and reportable as trading assets
or trading liabilities, as appropriate, in Schedule RC, item 5 or item 15, respectively) that
economically hedge credit exposures held outside the trading account. The net gains (losses)
on credit derivatives reported in this item will also have been included as trading revenue in
Schedule RI, Memorandum item 8.e, “Credit exposures.”

9.b

Net gains (losses) on credit derivatives held for purposes other than trading.
Report the net gains (losses) recognized in earnings on credit derivatives held for purposes
other than trading (and reportable as other assets or other liabilities, as appropriate, in
Schedule RC, item 11 or item 20, respectively) that economically hedge credit exposures held
outside the trading account. Net gains (losses) on credit derivatives held for purposes other
than trading should not be reported as trading revenue in Schedule RI, item 5.c.

10

Credit losses on derivatives.
Memorandum item 10 is applicable to all banks filing the FFIEC 031 report forms and to those
banks filing the FFIEC 041 report forms that have $300 million or more in total assets.
Report the bank's year-to-date credit losses incurred on derivative contracts (as defined for
Schedule RC-L, items 7 and 12), net of recoveries (e.g., net charge-offs). The amount
reported in this item should include all credit losses recognized in the bank’s income
statement in any manner, e.g., as a charge against trading revenue.

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Memoranda
Item No.
11

Caption and Instructions
Does the reporting bank have a Subchapter S election in effect for federal income tax
purposes for the current tax year? Indicate in the boxes marked “YES” and “NO” whether
the bank is, for federal income tax purposes, either an "S corporation" or a "qualifying
subchapter S subsidiary," as defined in Internal Revenue Code Section 1361, as of the report
date. In order to be an S corporation, the bank must have filed a valid election with the
Internal Revenue Service and obtained the consent of all of its shareholders. An election for a
bank to be a qualifying subchapter S subsidiary must have been made by a bank's parent
holding company, which must also have made a valid election to be an S corporation. In
addition, the bank (and its parent holding company, if applicable) must meet specific criteria
for federal income tax purposes at all times during which the election remains in effect.
These specific criteria include, for example, having no more than 100 qualifying shareholders
and having only one class of stock outstanding.

NOTE: Memorandum item 12 is to be completed by banks that are required to complete Schedule RC-C,
part I, Memorandum items 8.b and 8.c.
12

Noncash income from negative amortization on closed-end loans secured by 1-4 family
residential properties. Report the amount of noncash income from negative amortization on
closed-end loans secured by 1-4 family residential properties (i.e., interest income accrued
and uncollected that has been added to principal) included in interest and fee income on loans
secured by real estate in domestic offices (Schedule RI, item 1.a.(1)(a) on the FFIEC 031;
item 1.a.(1) on the FFIEC 041).
Negative amortization refers to a method in which a loan is structured so that the borrower’s
minimum monthly (or other periodic) payment is contractually permitted to be less than the full
amount of interest owed to the lender, with the unpaid interest added to the loan’s principal
balance. The contractual terms of the loan provide that if the borrower allows the principal
balance to rise to a pre-specified amount or maximum cap, the loan payments are then recast
to a fully amortizing schedule. Negative amortization features may be applied to either
adjustable rate mortgages or fixed rate mortgages, the latter commonly referred to as
graduated payment mortgages (GPMs).

13

Net gains (losses) recognized in earnings on assets and liabilities that are reported
at fair value under a fair value option. Report in the appropriate subitem the total amount
of pretax gains (losses) from fair value changes included in earnings during the calendar year
to date for all assets and liabilities accounted for at fair value under a fair value option.
If the amount to be reported is a net loss, report it with a minus (-) sign. Disclosure of such
gains (losses) is also required by ASC Subtopic 825-10, Financial Instruments – Overall
(formerly FASB Statement No. 159, “Fair Value Option for Financial Assets and Financial
Liabilities,” paragraphs 19 and C7(b)) and ASC Subtopic 860-50, Transfers and Servicing –
Servicing Assets and Liabilities (formerly FASB Statement No. 156, “Accounting for Servicing
of Financial Assets,” paragraph 4(f)(1)(d)).

13.a

Net gains (losses) on assets. Report the total amount of pretax gains (losses) from fair
value changes included in earnings during the calendar year to date for all assets, including
hybrid financial instruments and servicing assets, accounted for under a fair value option.
This amount will reflect the reported interest included in total interest income in Schedule RI,
item 1.h, and revaluation adjustments included in noninterest income in Schedule RI,
items 5.c, 5.f, and 5.l. Exclude gains and losses for other items measured at fair value, such
as items required to be measured at fair value.

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Memoranda
Item No.

Caption and Instructions

13.a.(1)

Estimated net gains (losses) on loans attributable to changes in instrument-specific
credit risk. For loans reported at fair value under a fair value option, report the estimated
portion of the change in fair value included in earnings attributable to changes in instrumentspecific credit risk. Include all such loans reported in Schedule RC, items 4.a, 4.b, and 5.

13.b

Net gains (losses) on liabilities. Report the total amounts of pretax gains (losses) from fair
value changes included in earnings during the calendar year to date for all liabilities, including
hybrid financial instruments and servicing liabilities, accounted for under a fair value option.
This amount will reflect the reported interest included in total interest expense in Schedule RI,
item 2.e, and revaluation adjustments included in noninterest income in Schedule RI, items
5.c, 5.f, and 5.l. Exclude gains and losses for other items measured at fair value, such as
items required to be measured at fair value.

13.b.(1)

Estimated net gains (losses) on liabilities attributable to changes in instrument-specific
credit risk. For liabilities reported at fair value under a fair value option, report the estimated
portion of the change in fair value included in earnings attributable to changes in instrumentspecific credit risk.

14

Other-than-temporary impairment losses on held-to-maturity and available-for-sale
debt securities. When the fair value of an individual held-to-maturity or available-for-sale
debt security is less than its amortized cost basis, the security is impaired and the impairment
is either temporary or other-than-temporary. To determine whether the impairment is otherthan-temporary, a bank must apply the relevant guidance in ASC Topic 320, InvestmentsDebt and Equity Securities (formerly FASB Statement No. 115, “Accounting for Certain
Investments in Debt and Equity Securities,” as amended by FASB Staff Position (FSP)
FAS 115-1 and FAS 124-1, “The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments,” and FSP FAS 115-2 and FAS 124-2, “Recognition and
Presentation of Other-Than-Temporary Impairments”) and ASC Subtopic 325-40,
Investments-Other – Beneficial Interests in Securitized Financial Assets (formerly Emerging
Issues Task Force (EITF) Issue No. 99-20, “Recognition of Interest Income and Impairment
on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a
Transferor in Securitized Financial Assets,” as amended by FSP EITF 99-20-1, “Amendments
to the Impairment Guidance of EITF Issue No. 99-20”), as appropriate.
Report in the appropriate subitem the specified information on other-than-temporary
impairment losses on held-to-maturity and available-for-sale debt securities that have
occurred during the calendar year to date. The amounts to be reported in Memorandum
item 14 should be determined as of the date each other-than-temporary impairment loss is
initially recognized on an individual debt security during the current calendar year, i.e., based
on the fair value and amortized cost of the other-than-temporarily impaired debt security as of
that measurement date, and these amounts should be adjusted only to reflect any additional
impairment loss on the debt security that is recognized in earnings during the same calendar
year. The amounts reported in Memorandum items 14.a and 14.b should not be adjusted to
reflect any recoveries in the fair value of the other-than-temporarily impaired debt security that
occur after the date when the other-than-temporary impairment (OTTI) loss was initially
recognized in earnings during the current calendar year. In contrast, the amounts reported in
Memorandum items 14.a, 14.b, and 14.c should be adjusted to reflect a further decline in the
fair value of the other-than-temporarily impaired debt security during the current calendar year

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Memoranda
Item No.

Caption and Instructions

14
(cont.)

that is accompanied by an additional impairment loss on the debt security that increases the
1
previously reported impairment loss recognized in earnings during the current calendar year.
Consider the following examples:

2

Example 1:
First Quarter 2013:
• Debt security with a $1,000 amortized cost basis and fair value of $900.
• Impairment is determined to be other-than-temporary.
• Total OTTI loss of $100 is comprised of a $10 credit loss recognized in earnings and
a $90 loss related to factors other than credit recognized in other comprehensive
income.
• The new amortized cost basis of the debt security after the recognition of the credit
loss is $990.
Second Quarter 2013:
• Debt security has increased in fair value to $920.
• The credit loss has increased by $20, which is recognized in earnings.
• This additional other-than-temporary impairment loss recognized in earnings results
in a new amortized cost basis of $970 for the debt security.
Third Quarter 2013:
• Debt security has increased in fair value to $950
• The credit loss is unchanged from the second quarter of 2013, so the amortized cost
basis remains $970.
The events listed above would be reported in Memorandum items 14.a, 14.b, and 14.c,
as follows:

14.a
14.b
14.c

March 31, 2013
$100
90
$10

June 30, 2013
$100
70
$30

September 30, 2013
$100
70
$30

Note that Memorandum items 14.b and 14.c are adjusted as of June 30, 2013, to reflect
the increase in the other-than-temporary impairment loss recognized in earnings (the
increased credit loss) that occurred in the second quarter of 2013; however,
Memorandum items 14.a and 14.b are not adjusted as of June 30 and September 30,
2013, to reflect the increases in the fair value of the debt security that occurred in the
second and third quarters of 2013 because these recoveries in fair value do not result in a
reduction in the amount of the other-than-temporary impairment loss initially recognized in
earnings in the first quarter of 2013.
1

This reporting treatment should be applied to other-than-temporary impairment losses recognized on or after
January 1, 2013.
2
In these examples, references to the amortized cost of the debt security in periods after the recognition of an
other-than-temporary impairment loss ignore the effect of the accretion of the difference between the new amortized
cost basis and the cash flows expected to be collected.

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Memoranda
Item No.

Caption and Instructions

14
(cont.)

Example 2:
First Quarter 2013:
• Same facts as in Example 1.
Second Quarter 2013:
• Debt security has declined in fair value to $870.
• The credit loss has increased by $20, which is recognized in earnings.
• This additional other-than-temporary impairment loss recognized in earnings results
in a new amortized cost basis of $970 for the debt security.
Third Quarter 2013:
• Debt security has increased in fair value to $920
• The credit loss is unchanged from the second quarter of 2013, so the amortized cost
basis remains $970.
The events listed above would be reported in Memorandum items 14.a, 14.b, and 14.c,
as follows:

14.a
14.b
14.c

March 31, 2013
$100
90
$10

June 30, 2013
$130
100
$30

September 30, 2013
$130
100
$30

Note that Memorandum items 14.a, 14.b, and 14.c are adjusted as of June 30, 2013, to
reflect the additional decline in fair value of the other-than-temporarily impaired debt
security that accompanied the increase in the other-than-temporary impairment loss
recognized in earnings (the increased credit loss) in the second quarter of 2013; however,
Memorandum items 14.a and 14.b are not adjusted as of September 30, 2013, to reflect
the increase in the fair value of the debt security that occurred in the third quarter of 2013
because this recovery in fair value did not result in a reduction in the amount of otherthan-temporary impairment losses initially and subsequently recognized in earnings in the
first and second quarters, respectively, of 2013.
14.a

Total other-than-temporary impairment losses. When an other-than-temporary
impairment loss has occurred on an individual debt security, the total amount of the loss is the
entire difference between the amortized cost of the debt security and its fair value on the
measurement date of the other-than-temporary impairment. Report the total other-thantemporary impairment losses on held-to-maturity and available-for-sale debt securities
recognized in earnings and other comprehensive income during the calendar year to date in
the manner specified in the instructions for Schedule RI, Memorandum item 14, above.
Because this item should not reflect recoveries in the fair value of an other-than-temporarily
impaired debt security in periods subsequent to the date when the other-than-temporary
impairment loss was initially recognized during the current calendar year, negative entries are
not appropriate in this item.

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Memoranda
Item No.

Caption and Instructions

14.b

Portion of losses recognized in other comprehensive income (before income taxes).
When an other-than-temporary impairment loss has occurred on an individual debt security,
if the bank does not intend to sell the security and it is not more likely than not that the bank
will be required to sell the security before recovery of its amortized cost basis less any
current-period credit loss, the other-than-temporary impairment loss must be separated into
(a) the amount representing the credit loss, which must be recognized in earnings, and
(b) the amount related to all other factors, which must be recognized in other comprehensive
income. Report the portion of other-than-temporary impairment losses included in
Memorandum item 14.a above related to factors other than credit that has been recognized in
other comprehensive income (before income taxes) during the calendar year to date in the
manner specified in the instructions for Schedule RI, Memorandum item 14, above.
Exclude other-than-temporary impairment losses on debt securities that the bank intends to
sell and on debt securities that it is more likely than not that the bank will be required to sell
before recovery of its amortized cost basis less any current-period credit loss, the entire
amount of which must be recognized in earnings.
Because this item should not reflect recoveries in the fair value of an other-than-temporarily
impaired debt security in periods subsequent to the date when the other-than-temporary
impairment loss was initially recognized during the current calendar year, negative entries are
not appropriate in this item.

14.c

Net impairment losses recognized in earnings. Report Schedule RI, Memorandum
item 14.a, less Memorandum item 14.b, which represents the amount of other-than-temporary
impairment losses on held-to-maturity and available-for-sale debt securities that has been
recognized in earnings during the calendar year to date. This amount is included in the
realized gains (losses) on held-to-maturity and available-for-sale securities reported in
Schedule RI, items 6.a and 6.b.

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RI-A - EQUITY CAPITAL

SCHEDULE RI-A – CHANGES IN BANK EQUITY CAPITAL
General Instructions
This schedule is to be completed quarterly by all banks.
Total bank equity capital includes perpetual preferred stock, common stock, surplus, retained earnings,
and accumulated other comprehensive income. All amounts in Schedule RI-A, other than those reported
in items 1, 3, and 12, should represent net aggregate changes for the calendar year-to-date. Report all
net decreases and losses (net reductions in bank equity capital) with a minus (-) sign.
Item No.
1

Caption and Instructions
Total bank equity capital most recently reported for the December 31, 20xx, Reports
of Condition and Income. Report the bank's total equity capital balance as reported in the
Reports of Condition and Income for the previous calendar year-end after the effect of all
corrections and adjustments to total bank equity capital that were made in any amended
report(s) for the previous calendar year-end.
For banks opened since January 1 of the current calendar year, report a zero in this item.
Report the bank's opening (original) total equity capital in Schedule RI-A, item 5, "Sale,
conversion, acquisition, or retirement of capital stock, net."

2

Cumulative effect of changes in accounting principles and corrections of material
accounting errors. Report the sum of the cumulative effect, net of applicable income taxes,
of all changes in accounting principles adopted during the calendar year-to-date reporting
period that were applied retroactively and for which prior years' financial statements were
restated and all corrections resulting from material accounting errors that were made in prior
years' Reports of Condition and Income and not corrected by the filing of an amended report
for the period in which the error was made.
Include only those corrections that result from:
(1) Mathematical mistakes.
(2) Mistakes in applying accounting principles.
(3) Improper use of information which existed when the prior Reports of Condition and
Income were prepared.
(4) A change from an accounting principle that is neither accepted nor sanctioned by bank
supervisors to one that is acceptable to supervisors.
The effect of accounting errors differs from the effect of changes in accounting estimates.
Changes in accounting estimates are an inherent part of the accrual accounting process.
Report the effect of any changes in accounting estimates in the appropriate line items of
Schedule RI, Income Statement.
The cumulative effect of a change in accounting principle is the difference between (1) the
balance in the retained earnings account at the beginning of the year in which the change is
made and (2) the balance in the retained earnings account that would have been reported

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Item No.

Caption and Instructions

2
(cont.)

at the beginning of the year had the newly adopted accounting principle been applied in all
prior periods.
The cumulative effect, if any, of all other changes in accounting principles adopted during the
calendar year-to-date reporting period must be reported in Schedule RI, item 11,
"Extraordinary items and other adjustments, net of income taxes."
State the dollar amount of and describe the cumulative effect of each accounting principle
change and accounting error correction included in this item in Schedule RI-E, item 4.
Refer to the Glossary entry for "accounting changes" for additional information on how to
report the effects of changes in accounting principles, corrections of errors, and changes in
estimates.

3

Balance end of previous calendar year as restated. Report the sum of items 1 and 2.

4

Net income (loss) attributable to bank. Report the net income (loss) attributable to the
bank for the calendar year-to-date as reported in Schedule RI, item 14, "Net income (loss)
attributable to bank."

5

Sale, conversion, acquisition, or retirement of capital stock, net (excluding treasury
stock transactions). Report the changes in the bank's total equity capital resulting from:
(1) Sale of the bank's perpetual preferred stock or common stock. Limited-life preferred
stock is not included in equity capital; any proceeds from the sale of limited-life preferred
stock during the calendar year-to-date is not to be reported in this schedule.
(2) Exercise of stock options, including:
(a) Any income tax benefits to the bank resulting from the sale of the bank's own stock
acquired under a qualified stock option within three years of its purchase by the
employee who had been granted the option.
(b) Any tax benefits to the bank resulting from the exercise (or granting) of nonqualified
stock options (on the bank's stock) based on the difference between the option price
and the fair market value of the stock at the date of exercise (or grant).

(3) Conversion of convertible debt, limited-life preferred stock, or perpetual preferred stock
into perpetual preferred or common stock.
(4) Redemption of perpetual preferred stock or common stock.
(5) Retirement of perpetual preferred stock or common stock.
(6) Capital-related transactions involving the bank's Employee Stock Ownership Plan.
(7) The awarding of share-based employee compensation classified as equity. Under
ASC Topic 718, Compensation-Stock Compensation (formerly FASB Statement
No. 123(R), “Share-Based Payment”), the compensation cost for such an award must be
recognized over the requisite service period with a corresponding credit to equity. This
reporting treatment applies regardless of whether the shares awarded to an employee
are shares of bank stock or shares of stock in the bank's parent holding company.

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Item No.

Caption and Instructions

5
(cont.)

Include in this item:

RI-A - EQUITY CAPITAL

(1) The net decrease in equity capital that occurs when cash is distributed in lieu of fractional
shares in a stock dividend.
(2) The net increase in equity capital when a stockholder who receives a fractional share
from a stock dividend purchases the additional fraction necessary to make a whole
share.
Exclude treasury stock transactions from this item (report such transactions in
Schedule RI-A, item 6, below).
For banks opened since January 1 of the year-to-date reporting period, report opening
(original) equity capital in this item. Pre-opening income earned and expenses incurred from
the bank's inception until the date the bank commenced operations should be reported in the
Report of Income using one of the two following methods, consistent with the manner in
which the bank reports pre-opening income and expenses for other financial reporting
purposes:
(1) Pre-opening income and expenses for the entire period from the bank's inception until
the date the bank commenced operations should be reported in the appropriate items of
Schedule RI, Income Statement, each quarter during the calendar year in which
operations commenced; or
(2) Pre-opening income and expenses for the period from the bank's inception until the
beginning of the calendar year in which the bank commenced operations should be
included, along with the bank's opening (original) equity capital, in this item. The net
amount of these pre-opening income and expenses should be identified and described in
Schedule RI-E, item 7. Pre-opening income earned and expenses incurred during the
calendar year in which the bank commenced operations should be reported in the
appropriate items of Schedule RI, Income Statement, each quarter during the calendar
year in which operations commenced.
6

Treasury stock transactions, net. Report the change in the bank’s total equity capital
during the calendar year to date from the acquisition (without retirement) and resale or other
disposal of the bank's own perpetual preferred stock or common stock, i.e., treasury stock
transactions (see the Glossary entry for "treasury stock").

7

Changes incident to business combinations, net. If the bank purchased another bank or
business during the year-to-date reporting period, report the fair value of any perpetual
preferred or common shares issued (less the direct cost of issuing the shares). Exclude the
fair value of limited-life preferred stock issued in connection with purchase acquisitions.
Refer to the Glossary entry for "business combinations" for further information on purchase
acquisitions.
If the bank has been acquired in a transaction accounted for using push down accounting,
report in this item the initial increase or decrease in equity capital that results from the
application of push down accounting, i.e., the difference between the bank's total equity
capital as of the end of the previous calendar year and its restated equity capital after the
push down adjusting entries have been recorded as of the acquisition date. For further
information on push down accounting, refer to the Glossary entry for "business
combinations."

FFIEC 031 and 041

RI-A-3
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RI-A - EQUITY CAPITAL

FFIEC 031 and 041

RI-A - EQUITY CAPITAL

Item No.

Caption and Instructions

7
(cont.)

If the bank entered into a reorganization that became effective during the year-to-date
reporting period and has been accounted at historical cost in a manner similar to a pooling of
interests, report in this item the historical equity capital balances as of the end of the previous
calendar year of the bank or other business that was combined in the reorganization. For
further information on reorganizations, refer to the Glossary entry for "business
combinations."

8

LESS: Cash dividends declared on preferred stock. Report all cash dividends declared
on limited-life preferred and perpetual preferred stock during the calendar year-to-date,
including dividends not payable until after the report date.
Do not include dividends declared during the previous calendar year but paid in the current
period.
Refer to the Glossary entry for "dividends" for further information on cash dividends.

9

LESS: Cash dividends declared on common stock. Report all cash dividends declared
on common stock during the calendar year-to-date, including dividends not payable until after
the report date.
Do not include dividends declared during the previous calendar year but paid in the current
period.
For further information on cash dividends, see the Glossary entry for "dividends."

10

Other comprehensive income. Report the institution’s other comprehensive income,
including reclassification adjustments, for the calendar year-to-date, net of applicable income
taxes, if any. Reclassification adjustments are adjustments made to avoid double counting of
items in comprehensive income that are presented as part of net income for the calendar
year-to-date reporting period that also had been presented as part of other comprehensive
income in that reporting period or earlier reporting periods. If the amount to be reported in
this item represents a reduction in the institution’s equity capital, report the amount with a
minus (-) sign.
Items of other comprehensive income include:
(1) The change in net unrealized holding gains (losses) on the institution’s available-for-sale
securities.
(2) Unrealized holding gains (losses) that result from a debt security being transferred into
the available-for-sale category from the held-to-maturity category.
(3) For a debt security transferred into the held-to-maturity category from the available-forsale category, amortization of the unrealized holding gain (loss) on the security at the
date of transfer. Consistent with ASC Subtopic 320, Investments-Debt and Equity
Securities (formerly FASB Statement No. 115, “Accounting for Certain Investments in
Debt and Equity Securities,” as amended), this unrealized holding gain (loss) should be
amortized over the remaining life of the security as an adjustment of yield.
(4) The portion of other-than-temporary impairment losses on available-for-sale and
held-to-maturity debt securities that was not recognized in earnings in accordance with
ASC Topic 320, Investments-Debt and Equity Securities, subsequent decreases (if not

FFIEC 031 and 041

RI-A-4
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FFIEC 031 and 041

Item No.

RI-A - EQUITY CAPITAL

Caption and Instructions

10
(cont.)

other-than-temporary impairment losses) or increases in the fair value of available-forsale debt securities previously written down as other-than-temporarily impaired, and
subsequent accretion (based on the amount and timing of future estimated cash flows) of
the portion of other-than-temporary impairment losses on held-to-maturity debt securities
not recognized in earnings.
(5) The change in the institution’s accumulated net gains (losses) (effective portion) on
derivative instruments that are designated and qualify as cash flow hedges.
(6) On the FFIEC 031 only, the change in the institution’s cumulative foreign currency
translation adjustments and gains (losses) on certain foreign currency transactions.
Refer to the Glossary entry for "foreign currency transactions and translation" for further
information on accounting for foreign currency translation.
(7) Gains (losses) and transition assets or obligations associated with single-employer
defined benefit pension and other postretirement plans not recognized immediately as a
component of net periodic benefit cost and prior service costs or credits associated with
such plans, which are accounted for in accordance with ASC Subtopic 715-20,
Compensation-Retirement Benefits – Defined Benefit Plans-General (formerly FASB
Statement No. 87, “Employers’ Accounting for Pensions”; FASB Statement No. 106,
“Employers’ Accounting for Postretirement Benefits Other Than Pension”; and FASB
Statement No. 158, “Employers’ Accounting for Defined Benefit Pension and Other
Postretirement Plans”).
For further guidance on reporting other comprehensive income, see ASC Topic 220,
Comprehensive Income (formerly FASB Statement No. 52, “Foreign Currency Translation”;
FASB Statement No. 115, “Accounting for Certain Investments in Debt and Equity
Securities,” as amended; FASB Statement No. 133, “Accounting for Derivative Instruments
and Hedging Activities”; and FASB Statement No. 158, “Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans”).

11

Other transactions with parent holding company. Report the net aggregate amount of
transactions with the bank's parent holding company which affect equity capital directly, other
than those reported in Schedule RI-A, items 5, 6, 8, and 9, above, such as:
(1) Capital contributions other than those for which stock has been issued to the parent
holding company (report issuances of perpetual preferred and common stock and sales
of treasury stock in Schedule RI-A, items 5 and 6, respectively; issuances of limited-life
preferred stock are not reported in this schedule).
(2) Dividends to the holding company in the form of property rather than cash (report cash
dividends in Schedule RI-A, items 8 or 9, as appropriate). Record such property
dividends at the fair value of the transferred asset. Include any gain or loss recognized
on the disposition of the asset in the determination of net income for the calendar
year-to-date in Schedule RI, Income Statement. Refer to the Glossary entry for
"dividends" for additional information on property dividends.
State the dollar amount of and describe each transaction included in this item in
Schedule RI-E, item 5.

12

Total bank equity capital end of current period. Report the sum of items 3 through 12.
This item must equal Schedule RC, item 27.a, "Total bank equity capital."

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FFIEC 031 and 041

RI-B - ALLOWANCE

SCHEDULE RI-B -- CHARGE-OFFS AND RECOVERIES ON LOANS
AND LEASES AND CHANGES IN ALLOWANCE FOR LOAN AND
LEASE LOSSES
Part I. Charge-offs and Recoveries on Loans and Leases
General Instructions
This part has two columns. In column A report loans and leases charged off against the allowance for
loan and lease losses during the current calendar year-to-date. Also include in column A write-downs to
fair value on loans (and leases) transferred to the held-for-sale account during the calendar year-to-date
that occurred when (1) the reporting bank decided to sell loans that were not originated or otherwise
acquired with the intent to sell and (2) the fair value of those loans had declined for any reason other than
a change in the general market level of interest or foreign exchange rates. In column B report amounts
recovered through the allowance for loan and lease losses during the calendar year-to-date on loans and
leases previously charged off.
For those banks required to establish and maintain an allocated transfer risk reserve as specified in
Section 905(a) of the International Lending Supervision Act of 1983, include in column A loans and
leases charged off against the allocated transfer risk reserve during the current calendar year-to-date.
Include in column B amounts recovered through the allocated transfer risk reserve during the calendar
year-to-date on loans and leases previously charged off against this reserve.
These instructions should be read in conjunction with the Glossary entries for "allowance for loan and
lease losses" and "domicile."

Item Instructions
Item No.

Caption and Instructions

1

Loans secured by real estate. Report in the appropriate subitem and column loans
secured by real estate (as defined for Schedule RC-C, part I, item 1) charged off and
recovered.

1.a

Construction, land development, and other land loans (in domestic offices). Report in
the appropriate subitem and column construction, land development, and other land loans
(as defined for Schedule RC-C, part I, item 1.a, column B) charged off and recovered.

1.a.(1)

1-4 family residential construction loans. Report in columns A and B, as appropriate,
1-4 family residential construction loans (as defined for Schedule RC-C, part I, item 1.a.(1),
column B) charged off and recovered.

1.a.(2)

Other construction loans and all land development and other land loans. Report in
columns A and B, as appropriate, other construction loans and all land development and
other land loans (as defined for Schedule RC-C, part I, item 1.a.(2), column B) charged off
and recovered.

1.b

Secured by farmland (in domestic offices). Report in columns A and B, as appropriate,
loans secured by farmland (as defined for Schedule RC-C, part I, item 1.b, column B)
charged off and recovered.

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RI-B - ALLOWANCE

Part I. (cont.)
Item No.
1.c

Caption and Instructions
Secured by 1-4 family residential properties (in domestic offices). Report in the
appropriate subitem and column loans secured by 1-4 family residential properties
(as defined for Schedule RC-C, part I, item 1.c, column B) charged off and recovered.

1.c.(1)

Revolving, open-end loans secured 1-4 family residential properties and extended
under lines of credit. Report in columns A and B, as appropriate, loans secured by
revolving, open-end loans secured by 1-4 family residential properties and extended under
line of credit (as defined for Schedule RC-C, part I, item 1.c.(1), column B) charged-off and
recovered.

1.c.(2)

Closed-end loans secured by 1-4 family residential properties. Report in the appropriate
subitem and column closed-end loans secured by 1-4 family residential properties (as
defined for Schedule RC-C, part I, item 1.c.(2), column B) charged-off and recovered.

1.c.(2)(a)

Secured by first liens. Report in columns A and B, as appropriate, closed-end loans
secured by first liens on 1-4 family residential properties (as defined for Schedule RC-C,
part I, item 1.c.(2)(a), column B) charged-off and recovered.

1.c.(2)(b)

Secured by junior liens. Report in columns A and B, as appropriate, closed-end loans
secured by junior liens on 1-4 family residential properties (as defined for Schedule RC-C,
part I, item 1.c.(2)(b), column B) charged-off and recovered. Include loans secured by
junior liens in this item even if the bank also holds a loan secured by a first lien on the same
1-4 family residential property and there are no intervening junior liens.

1.d

Secured by multifamily (5 or more) residential properties (in domestic offices). Report
in columns A and B, as appropriate, loans secured by multifamily (5 or more) residential
properties (as defined for Schedule RC-C, part I, item 1.d, column B) charged-off and
recovered.

1.e

Secured by nonfarm nonresidential properties (in domestic offices). Report in the
appropriate subitem and column loans secured by nonfarm nonresidential properties
(as defined for Schedule RC-C, part I, item 1.e, column B) charged off and recovered.

1.e.(1)

Loans secured by owner-occupied nonfarm nonresidential properties. Report in
columns A and B, as appropriate, loans secured by owner-occupied nonfarm nonresidential
properties (as defined for Schedule RC-C, part I, item 1.e.(1), column B) charged off and
recovered.

1.e.(2)

Loans secured by other nonfarm nonresidential properties. Report in columns A and B,
as appropriate, loans secured by other nonfarm nonresidential properties (as defined for
Schedule RC-C, part I, item 1.e.(2), column B) charged off and recovered.

NOTE: Item 1.f is applicable only to banks filing the FFIEC 031 report form.
1.f

In foreign offices. Report in columns A and B, as appropriate, loans secured by real estate
(as defined for Schedule RC-C, part I, item 1) in foreign offices charged-off and recovered.

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FFIEC 031 and 041

RI-B - ALLOWANCE

Part I. (cont.)
Item No.
2

Caption and Instructions
Loans to depository institutions and acceptances of other banks. Report in columns A
and B, as appropriate, loans to depository institutions and acceptances of other banks (as
defined for Schedule RC-C, part I, item 2) charged-off and recovered.

NOTE: Items 2.a, 2.b, and 3 are applicable only to banks filing the FFIEC 031 report form.
2.a

To U.S. banks and other U.S. depository institutions. Report in columns A and B, as
appropriate, loans to and acceptances of U.S. banks and other U.S. depository institutions
(as defined for Schedule RC-C, part 1, items 2.a.(2), 2.b, and 2.c.(1), column A) charged-off
and recovered.

2.b

To foreign banks. Report in columns A and B, as appropriate, loans to and acceptances of
foreign banks (as defined for Schedule RC-C, part I, items 2.a.(1) and 2.c.(2), column A)
charged-off and recovered.

3

Loans to finance agricultural production and other loans to farmers. Report in
columns A and B, as appropriate, loans to finance agricultural production and other loans to
farmers (as defined for Schedule RC-C, part I, item 3, column A) charged-off and recovered.

4

Commercial and industrial loans. Report in columns A and B, as appropriate, commercial
and industrial loans (as defined for Schedule RC-C, part I, item 4) charged-off and recovered.

NOTE: Items 4.a and 4.b are applicable only to banks filing the FFIEC 031 report form.
4.a

To U.S. addressees (domicile). Report in columns A and B, as appropriate, commercial
and industrial loans to U.S. addressees (as defined for Schedule RC-C, part I, item 4.a,
column A) charged-off and recovered.

4.b

To non-U.S. addressees. Report in columns A and B, as appropriate, commercial and
industrial loans to non-U.S. addressees (as defined for Schedule RC-C, part I, item 4.b,
column A) charged-off and recovered.

5

Loans to individuals for household, family, and other personal expenditures. Report in
the appropriate subitem and column loans to individuals for household, family, and other
personal expenditures (as defined for Schedule RC-C, part I, item 6) charged-off and
recovered.

5.a

Credit cards. Report in columns A and B, as appropriate, all extensions of credit under
credit cards (as defined for Schedule RC-C, part I, items 6.a) charged-off and recovered.

5.b

Automobile loans. Report in columns A and B, as appropriate, all loans arising from retail
sales of passenger cars and other vehicles such as minivans, vans, sport-utility vehicles,
pickup trucks, and similar light trucks for personal use (as defined for Schedule RC-C, part I,
item 6.c) charged-off and recovered.

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FFIEC 031 and 041

RI-B - ALLOWANCE

Part I. (cont.)
Item No.

Caption and Instructions

5.c

Other (includes revolving credit plans other than credit cards and other consumer
loans). Report in columns A and B, as appropriate, all other extensions of credit to
individuals for household, family, and other personal expenditures (as defined for
Schedule RC-C, part I, items 6.b and 6.d) charged-off and recovered.

6

Loans to foreign governments and official institutions. Report in columns A and B,
as appropriate, loans to foreign governments and official institutions (as defined for
Schedule RC-C, part I, item 7) charged-off and recovered.

7

All other loans. On the FFIEC 041, report in columns A and B, as appropriate, loans to
finance agricultural production and other loans to farmers, obligations (other than securities
and leases) of states and political subdivisions in the U.S., and loans to nondepository
financial institutions and other loans (as defined for Schedule RC-C, part I, items 3, 8, and 9)
charged-off and recovered. On the FFIEC 031, report in columns A and B, as appropriate,
obligations (other than securities and leases) of states and political subdivisions in the U.S.
and loans to nondepository financial institutions and other loans (as defined for
Schedule RC-C, part I, items 8 and 9) charged-off and recovered.

8

Lease financing receivables. Report in columns A and B, as appropriate, all lease
financing receivables (as defined for Schedule RC-C, part I, item 10) charged-off and
recovered.

NOTE: Items 8.a and 8.b are applicable only to banks filing the FFIEC 031 report form.
8.a

Leases to individuals for household, family, and other personal expenditures.
Report in columns A and B, as appropriate, all leases to individuals for household, family,
and other personal expenditures (as defined for Schedule RC-C, part I, item 10.a, column A)
charged-off and recovered.

8.b

All other leases. Report in columns A and B, as appropriate, all other leases (as defined for
Schedule RC-C, part I, item 10.b, column A) charged-off and recovered.

9

Total. Report in columns A and B the sum of item 1 through 8. The amount reported in
column A must equal Schedule RI-B, part II, item 3, “Charge-offs,” below. The amount
reported in column B must equal Schedule RI-B, part II, item 2, “Recoveries,” below.

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RI-B - ALLOWANCE

Part I. (cont.)
Memoranda
Item No.
1

Caption and Instructions
Loans to finance commercial real estate, construction, and land development activities
(not secured by real estate) included in Schedule RI-B, part I, items 4 and 7, above.
Report in columns A and B, as appropriate, loans to finance commercial real estate,
construction, and land development activities not secured by real estate (as defined for
Schedule RC-C, part I, Memorandum item 3) charged off and recovered. Such loans will
have been included in items 4 and 7 of Schedule RI-B, part I, above. Exclude from this item
all loans secured by real estate included in item 1 of Schedule RI-B, part I, above.

FFIEC 031 FFIEC 041
Item No. Item No. Caption and Instructions
NOTE: On the FFIEC 041, Memorandum item 2.a is to be completed by banks that have $300 million or
more in total assets.
2

2.a

Loans secured by real estate to non-U.S. addressees (domicile). Report in
columns A and B, as appropriate, loans secured by real estate to non-U.S.
addressees (as defined for Schedule RC-C, part 1, Memorandum item 5)
charged off and recovered. Such loans will have been included in
Schedule RI-B, part I, item 1, above.

FFIEC 041
Item No. Caption and Instructions
NOTE: On the FFIEC 041, Memorandum items 2.b through 2.d are to be completed by banks that have
$300 million or more in total assets.
2.b

Loans to and acceptances of foreign banks. Report in columns A and B, as appropriate,
loans to and acceptances of foreign banks (as defined for Schedule RC-C, part I,
items 2.a.(1) and 2.c.(2), column A) charged off and recovered. Such loans and acceptances
will have been included in Schedule RI-B, part I, item 2, above.

2.c

Commercial and industrial loans to non-U.S. addressees (domicile). Report in
columns A and B, as appropriate, commercial and industrial loans to non-U.S. addressees
(as defined for Schedule RC-C, part I, item 4.b, column A) charged off and recovered. Such
loans will have been included in Schedule RI-B, part I, item 4, above.

2.d

Leases to individuals for household, family, and other personal expenditures.
Report in columns A and B, as appropriate, leases to individuals for household, family, and
other personal expenditures (as defined for Schedule RC-C, part I, item 10.a, column A)
charged off and recovered. Such leases will have been included in Schedule RI-B, part I,
item 8, above.

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Part I. (cont.)
Memoranda
FFIEC 041
Item No. Caption and Instructions
3

Loans to finance agricultural production and other loans to farmers.
Memorandum item 3 is to be completed by:
 banks with $300 million or more in total assets, and
 banks with less than $300 million in total assets and with loans to finance agricultural
production and other loans to farmers (as reported in Schedule RC-C, part I, item 3,
column B) exceeding five percent of total loans, net of unearned income.
Report in columns A and B, as appropriate, loans to finance agricultural production and other
loans to farmers (as defined for Schedule RC-C, part I, item 3, column B) charged off and
recovered. Such loans will have been included in Schedule RI-B, part I, item 7, above.

NOTE: Memorandum item 4 is to be completed only by those banks that:
(1) either individually or on a combined basis with their affiliated depository institutions, report
outstanding credit card receivables that exceed, in the aggregate, $500 million as of the
report date. Outstanding credit card receivables are the sum of:
(a) Schedule RC-C, part I, item 6.a (column B on the FFIEC 041, column A on the
FFIEC 031);
(b) Schedule RC-S, item 1, column C; and
(c) Schedule RC-S, item 6.a, column C.
(Include comparable data on managed credit card receivables for any affiliated savings
association.)
OR
(2) are credit card specialty banks as defined for purposes of the Uniform Bank Performance
Report (UBPR). According to the UBPR Users Guide, credit card specialty banks are
currently defined as those banks that exceed 50% for the following two criteria:
(a) Credit Cards plus Securitized and Sold Credit Cards divided by Total Loans plus
Securitized and Sold Credit Cards.
(b) Total Loans plus Securitized and Sold Credit Cards divided by Total Assets plus
Securitized and Sold Credit Cards.
FFIEC 031 and 041
Item No. Caption and Instructions
4

Uncollectible retail credit card fees and finance charges reversed against income
(i.e., not included in charge-offs against the allowance for loan and lease losses).
Report the amount of fees and finance charges on credit cards (as defined for
Schedule RC-C, part I, item 6.a) that the bank reversed against either interest and fee
income or a separate contra-asset account during the calendar year-to-date. Report the
amount of fees and finance charges that have been reversed on a gross basis, i.e., do not
reduce the amount of reversed fees and finance charges by recoveries of these reversed
fees and finance charges. Exclude from this item credit card fees and finance charges
reported as charge-offs against the allowance for loan and lease losses in Schedule RI-B,
part I, item 5.a, column A.

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Part II. Changes In Allowance for Loan and Lease Losses
General Instructions
Report the reconcilement of the allowance for loan and lease losses on a calendar year-to-date basis.
For those banks required to establish and maintain an allocated transfer risk reserve as specified in
Section 905(a) of the International Lending Supervision Act of 1983, the reconcilement should include the
activity in the allocated transfer risk reserve during the calendar year-to-date that relates to loans and
leases.
Exclude the balances of the allowance for credit losses on off-balance sheet credit exposures reported
in Schedule RC-G, item 3, and any capital reserves included in Schedule RC, item 26.a, "Retained
earnings," and the effects of any transactions therein.
Refer to the Glossary entry for "allowance for loan and lease losses" for further information.
Business Combinations, Push Down Accounting Transactions, and Reorganizations – If the bank
purchased another bank or business during the reporting period, include the recoveries, charge-offs,
and provisions of the acquired bank or other business only after its acquisition. Under ASC Topic 805,
Business Combinations (formerly FASB Statement No. 141(R), “Business Combinations”), the acquired
loans and leases must be measured at their acquisition-date fair values. Therefore, the bank may not
carry over the allowance for loan and lease losses of the acquired bank or other business as of the
acquisition date of the business combination.
Similarly, if the bank was acquired in a transaction that became effective during the reporting period and
push down accounting was used to account for the acquisition, include only the recoveries, charge-offs,
and provisions from the effective date of the bank's acquisition through the end of the year-to-date
reporting period. The bank’s loans must be restated to their acquisition-date fair values and the bank
may not carry over its allowance for loan and lease losses as of the acquisition date. As a consequence,
the amount reported in Schedule RI-B, part II, item 1, for the balance of the allowance for loan and lease
losses most recently reported for the end of the previous calendar year must also be reported in item 6,
"Adjustments."
If the bank entered into a reorganization that became effective during the year-to-date reporting period
and has been accounted for at historical cost in a manner similar to a pooling of interests, report the
recoveries, charge-offs, and provisions of the combined entities for the entire calendar year-to-date as
though they had combined at the beginning of the year. Report the balance as of the end of the previous
calendar year of the allowance for loan and lease losses of the bank or other business that was
combined in the reorganization in Schedule RI-B, part II, item 6, "Adjustments."
For further information on business combinations, push down accounting, and reorganizations, see the
Glossary entry for "business combinations."
Item Instructions
Item No.

Caption and Instructions

1

Balance most recently reported in the December 31, 20xx, Reports of Condition and
Income. Report the balance of the bank's allowance for loan and lease losses as reported in
the Reports of Condition and Income for the previous calendar year-end after the effect of all
corrections and adjustments to the allowance for loan and lease losses that were made in
any amended report(s) for the previous calendar year-end.

2

Recoveries. Report the amount credited to the allowance for loan and lease losses for
recoveries during the calendar year-to-date on amounts previously charged against the

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Part II. (cont.)
Item No.

Caption and Instructions

2
(cont.)

allowance for loan and lease losses. The amount reported in this item must equal
Schedule RI-B, part I, item 9, column B.

3

LESS: Charge-offs. Report the amount of all loans and leases charged against the
allowance for loan and lease losses during the calendar year-to-date. The amount reported
in this item must equal Schedule RI-B, part I, item 9, column A, "Total" charge-offs, less
Schedule RI-B, part II, item 4, “LESS: Write-downs arising from transfers of loans to a heldfor-sale account.”

4

LESS: Write-downs arising from transfers of loans to a held-for-sale account. Report
the amount of write-downs to fair value charged against the allowance for loan and lease
losses resulting from transfers of loans and leases to a held-for-sale account during the
calendar year-to-date that occurred when:



the reporting bank decided to sell loans and leases that were not originated or otherwise
acquired with the intent to sell, and
the fair value of those loans and leases had declined for any reason other than a change
in the general market level of interest or foreign exchange rates.

5

Provision for loan and lease losses. Report the amount expensed as the provision for loan
and losses during the calendar year-to-date. The provision for loan and lease losses
represents the amount needed to make the allowance for loan and lease losses adequate to
absorb estimated loan and lease losses, based upon management's evaluation of the bank's
current loan and lease exposures. The amount reported in this item must equal Schedule RI,
item 4. If the amount reported in this item is negative, report it with a minus (-) sign.

6

Adjustments. If the bank was acquired in a transaction that became effective during the
reporting period and push down accounting was used to account for the acquisition, report in
this item the balance of the allowance for loan and lease losses most recently reported for
the end of the previous calendar year, as reported in Schedule RI-B, part II, item 1, above.
If the bank entered into a reorganization that became effective during the year-to-date
reporting period and has been accounted for at historical cost in a manner similar to a pooling
of interests, report in this item the balance as of the end of the previous calendar year of the
allowance for loan and lease losses of the bank or other business that was combined in the
reorganization.
For banks with foreign offices that file the FFIEC 031 report forms, report any increases or
decreases resulting from the translation into dollars of any portions of the allowance for loan
and lease losses which are denominated in a foreign currency.
If the amount reported in this item is negative, report it with a minus (-) sign.
State the dollar amount of and describe each transaction included in this item in
Schedule RI-E, Explanations, item 6.

7

Balance end of current period. Report the sum of items 1, 2, 5, and 6, less items 3 and 4.
The amount reported in this item must equal Schedule RC, item 4.c, "Allowance for loan and
lease losses.”

FFIEC 031 and 041

RI-B-7
(6-12)

RI-B - ALLOWANCE

FFIEC 031 and 041

RI-B - ALLOWANCE

Part II. (cont.)
Memoranda
Item No.
1

Caption and Instructions
Allocated transfer risk reserve included in Schedule RI-B, part II, item 7, above. Report
the amount of any allocated transfer risk reserve related to loans and leases held for
investment that the reporting bank is required to establish and maintain that the bank has
included in the end-of-period balance of the allowance for loan and lease losses reported in
Schedule RI-B, part II, item 7, above, and in Schedule RC, item 4.c.

NOTE: Memorandum items 2 and 3 are to be completed only by those banks that:
(1) either individually or on a combined basis with their affiliated depository institutions, report
outstanding credit card receivables that exceed, in the aggregate, $500 million as of the
report date. Outstanding credit card receivables are the sum of:
(a) Schedule RC-C, part I, item 6.a (column B on the FFIEC 041, column A on the
FFIEC 031);
(b) Schedule RC-S, item 1, column C; and
(c) Schedule RC-S, item 6.a, column C.
(Include comparable data on managed credit card receivables for any affiliated savings
association.)
OR
(2) are credit card specialty banks as defined for purposes of the Uniform Bank Performance
Report (UBPR). According to the UBPR Users Guide, credit card specialty banks are
currently defined as those banks that exceed 50% for the following two criteria:
(a) Credit Cards plus Securitized and Sold Credit Cards divided by Total Loans plus
Securitized and Sold Credit Cards.
(b) Total Loans plus Securitized and Sold Credit Cards divided by Total Assets plus
Securitized and Sold Credit Cards.
2

Separate valuation allowance for uncollectible retail credit card fees and finance
charges. Report the amount of any valuation allowance or contra-asset account that the
bank maintains separate from the allowance for loan and lease losses to account for
uncollectible fees and finance charges on credit cards (as defined for Schedule RC-C, part I,
item 6.a). This Memorandum item is only applicable to those banks that maintain an
allowance or contra-asset account separate from the allowance for loan and lease losses.
Do not include in this item the amount of any valuation allowance established for impairment
in retained interests in accrued interest receivable related to securitized credit cards.

3

Amount of allowance for loan and lease losses attributable to retail credit card fees
and finance charges. Report in this item the amount of the allowance for loan and lease
losses that is attributable to outstanding fees and finance charges on credit cards (as defined
for Schedule RC-C, part I, item 6.a). This amount is a component of the amount reported in
Schedule RC, item 4.c, and Schedule RI-B, part II, item 7. Do not include in this item the
amount of any valuation allowance established for impairment in retained interests in accrued
interest receivable related to securitized credit cards.

FFIEC 031 and 041

RI-B-8
(6-12)

RI-B - ALLOWANCE

FFIEC 031 and 041

RI-B - ALLOWANCE

Part II. (cont.)
Memoranda
Item No.

Caption and Instructions

NOTE: Memorandum item 4 is to be completed by all banks.
4

Amount of allowance for post-acquisition credit losses on purchased credit-impaired
loans accounted for in accordance with FASB ASC 310-30 (former AICPA Statement of
Position 03-3). Report in this item the amount of any valuation allowances established after
acquisition for decreases in cash flows expected to be collected on purchased creditimpaired loans and pools of purchased credit-impaired loans reported as held for investment
in Schedule RC, item 4.b, and accounted for in accordance with ASC Subtopic 310-30,
Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality (formerly
AICPA Statement of Position 03-3, “Accounting for Certain Loans or Debt Securities Acquired
in a Transfer”). These post-acquisition allowances should be included in the bank's
allowance for loan and lease losses as reported in Schedule RC, item 4.c, and
Schedule RI-B, part II, item 7. Under ASC Subtopic 310-30, for a purchased credit-impaired
loan accounted for individually (and not accounted for as a debt security), if, upon evaluation
subsequent to acquisition, it is probable based on current information and events that an
institution will be unable to collect all cash flows expected at acquisition (plus additional cash
flows expected to be collected arising from changes in estimate after acquisition), the
purchased credit-impaired loan should be considered impaired for purposes of establishing
an allowance pursuant to ASC Subtopic 450-20, Contingencies – Loss Contingencies
(formerly FASB Statement No. 5, “Accounting for Contingencies”) or ASC Topic 310,
Receivables (formerly FASB Statement No. 114, “Accounting by Creditors for Impairment of
a Loan”), as appropriate. For purchased credit-impaired loans with common risk
characteristics that are aggregated and accounted for as a pool, this impairment analysis
should be performed subsequent to acquisition at the pool level as a whole and not at the
individual loan level.

FFIEC 031 and 041

RI-B-9
(6-12)

RI-B - ALLOWANCE

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FFIEC 031 and 041

RI-C – DISAGGREGATED ALLOWANCE DATA

SCHEDULE RI-C – DISAGGREGATED DATA ON THE ALLOWANCE
FOR LOAN AND LEASE LOSSES
General Instructions
Schedule RI-C is to be completed by institutions with $1 billion or more in total assets.
This schedule has six columns for the disclosure by portfolio category of the balance in the allowance for
loan and lease losses at the end of each quarter disaggregated on the basis of the reporting institution’s
impairment method and the related recorded investment in loans (and, as applicable, leases) held for
investment (excluding loans held for investment that the institution has elected to report at fair value
under a fair value option) disaggregated in the same manner: two columns for information on loans
individually evaluated for impairment, two columns for information on loans and leases collectively
evaluated for impairment, and two columns for purchased credit-impaired loans. For further information
on loan impairment methods, see the Glossary entries for “loan impairment” and “purchased creditimpaired loans and debt securities.”
Loans and leases held for investment are loans and leases that the institution has the intent and ability to
hold for the foreseeable future or until maturity or payoff.
The loan and lease portfolio categories for which allowance and related recorded investment amounts are
to be reported in Schedule RI-C represent general categories rather than the standardized loan
categories defined in Schedule RC-C, part I, Loans and Leases. Based on the manner in which it
segments its portfolio for purposes of applying its allowance methodology, each institution should report
each component of the overall allowance reported in Schedule RC, item 4.c, and the recorded investment
in the related loans and leases in the Schedule RI-C general loan category that best corresponds to the
1
characteristics of the related loans and leases. The sum of the recorded investment amounts reported in
Schedule RI-C (plus the fair value of loans held for investment for which the fair value option has been
elected) must equal the balance sheet amount of held-for-investment loans and leases reported in
Schedule RC, item 4.b, “Loans and leases, net of unearned income.”
Column Instructions
Columns A and B: For each of the specified general categories of loans held for investment, report
in column A the recorded investment in individually evaluated loans that have been determined to be
impaired as defined in ASC Subtopic 310-10, Receivables – Overall (formerly FASB Statement
No. 114, “Accounting by Creditors for Impairment of a Loan,” as amended), including all loans
restructured in troubled debt restructurings, and report in column B the balance of the allowance for loan
and lease losses attributable to these individually impaired loans measured in accordance with ASC
Subtopic 310-10.
Columns C and D: For each of the specified general categories of loans and leases held for investment,
report in column C the recorded investment in loans and leases that have been collectively evaluated for
impairment in accordance with ASC Subtopic 450-20, Contingencies – Loss Contingencies (formerly

1

For example, based on its allowance methodology, one institution’s allowance components for credit cards might
relate to both consumer and business credit card receivables, but another institution’s allowance components for
credit cards might relate only to consumer credit card receivables.
As another example, based on its allowance methodology, one institution might include its loans secured by
farmland in its allowance components for commercial real estate loans, but another institution might include its loans
secured by farmland in its allowance components for commercial loans.

FFIEC 031 and 041

RI-C-1
(3-13)

RI-C – DISAGGREGATED ALLOWANCE DATA

FFIEC 031 and 041

RI-C – DISAGGREGATED ALLOWANCE DATA

Column Instructions (cont.)
FASB Statement No. 5, “Accounting for Contingencies”) and report in column D the balance in the
allowance for loan and lease losses attributable to these collectively evaluated loans and leases
measured in accordance with ASC Subtopic 450-20. Also report in column D any unallocated portion of
the allowance for loan and lease losses for loans collectively evaluated for impairment.
Columns E and F: For each of the specified general categories of loans held for investment, report
in column E the recorded investment in purchased credit-impaired loans as defined in ASC
Subtopic 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality
(formerly AICPA Statement of Position 03-3, “Accounting for Certain Loans or Debt Securities Acquired
in a Transfer”) and report in column F the balance in the allowance for loan and lease losses attributable
to these purchased credit-impaired loans measured in accordance with ASC Subtopic 310-30.
Item Instructions
Item No.

Caption and Instructions

1

Real estate loans:

1.a

Construction loans. Report in the appropriate column, disaggregated on the basis of
impairment method, the recorded investment in held-for-investment construction loans and
the related balance in the allowance for loan and lease losses for such loans. Exclude loans
that the institution has elected to report at fair value under a fair value option.

1.b

Commercial real estate loans. Report in the appropriate subitem and column,
disaggregated on the basis of impairment method, the recorded investment in held-forinvestment commercial real estate loans and the related balance in the allowance for loan
and lease losses for such loans. Exclude loans that the institution has elected to report at fair
value under a fair value option.

1.c

Residential real estate loans. Report in the appropriate column, disaggregated on the
basis of impairment method, the recorded investment in residential real estate loans and the
related balance in the allowance for loan and lease losses for such loans. Exclude loans that
the institution has elected to report at fair value under a fair value option.

2

Commercial loans. Report in the appropriate column, disaggregated on the basis of
impairment method, the recorded investment in all held-for-investment commercial loans and
the related balance in the allowance for loan and lease losses for such loans. For purposes
of this item, commercial loans include all loans and leases not reported as real estate loans,
credit cards, or other consumer loans in the other items of this Schedule RI-C. Exclude loans
that the institution has elected to report at fair value under a fair value option.

3

Credit cards. Report in the appropriate column, disaggregated on the basis of impairment
method, the recorded investment in all held-for-investment extensions of credit arising from
credit cards and the related balance in the allowance for loan and lease losses for such
extensions of credit. Exclude loans that the institution has elected to report at fair value
under a fair value option.

4

Other consumer loans. Report in the appropriate column, disaggregated on the basis of
impairment method, the recorded investment in all held-for-investment consumer loans other
than credit cards and the related balance in the allowance for loan and lease losses for such
loans. Exclude loans that the institution has elected to report at fair value under a fair value
option.

FFIEC 031 and 041

RI-C-2
(3-13)

RI-C – DISAGGREGATED ALLOWANCE DATA

FFIEC 031 and 041

Item No.

RI-C – DISAGGREGATED ALLOWANCE DATA

Caption and Instructions

5

Unallocated, if any. Report in column D the amount of any unallocated portion of the
allowance for loan and lease losses for loans collectively evaluated for impairment. An
institution is not required to have an unallocated portion of the allowance.

6

Total. For each column in Schedule RI-C, report the sum of items 1 through 5.
The sum of the amounts reported in Schedule RI-C, item 6, columns B, D, and F must equal
Schedule RC, item 4.c, “Allowance for loan and lease losses.”
The amount reported in Schedule RI-C, item 6, column E, must equal Schedule RC-C,
part I, Memorandum item 7.b, “Carrying amount included in Schedule RC-C, part I, items 1
through 9.”
The amount reported in Schedule RI-C, item 6, column F, must equal Schedule RI-B, part II,
Memorandum item 4, “Amount of allowance for post-acquisition credit losses on purchased
credit-impaired loans accounted for in accordance with FASB ASC 310-30.”
The sum of the amounts reported in Schedule RI-C, item 6, columns A, C, and E, plus the
amount reported in Schedule RC-Q, item 4, column A, “Total fair value reported on
Schedule RC” for loans and leases held for investment, must equal Schedule RC, item 4.b,
“Loans and leases, net of unearned income.”

FFIEC 031 and 041

RI-C-3
(3-13)

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FFIEC 031

RI-D – FOREIGN OFFICE INCOME

SCHEDULE RI-D – INCOME FROM FOREIGN OFFICES
General Instructions
Schedule RI-D is applicable only to certain banks that file the FFIEC 031 report forms.
Banks with foreign offices are required to complete this schedule if their foreign office assets, revenues,
or net income account for more than 10 percent of the bank’s consolidated total assets, total revenues, or
net income; otherwise, banks need not complete this schedule. Banks should use foreign office and
consolidated total revenues (net interest income plus noninterest income) and net income from the
preceding calendar year and foreign office and consolidated total assets as of the preceding calendar
year end when determining whether they exceed the 10 percent threshold for completing this schedule
each quarter during the next calendar year.
For purposes of these reports, a foreign office of the reporting bank is a branch or consolidated
subsidiary located in a foreign country; an Edge or Agreement subsidiary, including both its U.S. and
its foreign offices; or an IBF. In addition, if the reporting bank is chartered and headquartered in the
50 states of the United States and the District of Columbia, a branch or consolidated subsidiary located in
Puerto Rico or a U.S. territory or possession is a foreign office. Branches on U.S. military facilities
wherever located are treated as domestic offices, not foreign offices.
Banks that are required to complete Schedule RI-D should report all income and expense in foreign
offices and related amounts for the calendar year-to-date. Amounts should be reported in this schedule
(except items 7, 11, and 12) on a foreign office consolidated basis, i.e., before eliminating the effects of
transactions with domestic offices, but after eliminating the effects of transactions between foreign offices.
For the most part, the income and expense items in Schedule RI-D mirror categories of income and
expense reported in Schedule RI. Therefore, where appropriate, banks should refer to the instructions for
Schedule RI for the definitions of the income and expense items in this schedule.
Item Instructions
Item No.

Caption and Instructions

1

Total interest income in foreign offices. Report total interest income (as defined for
Schedule RI, item 1.h) in foreign offices, including fees and similar charges associated with
foreign office assets.

2

Total interest expense in foreign offices. Report total interest expense (as defined for
Schedule RI, item 2.e) on deposits, borrowings, and other liabilities in foreign offices.

3

Provision for loan and lease losses in foreign offices. Report the provision for loan and
lease losses (as defined for Schedule RI, item 4) in foreign offices. If the amount to be
reported in this item is negative, report it with a minus (-) sign.

4

Noninterest income in foreign offices:

4.a

Trading revenue. Report trading revenue (as defined for Schedule RI, item 5.c) in foreign
offices, including the net gain or loss from trading cash instruments and derivative contracts
(including commodity contracts), related revaluation adjustments, and incidental income that
has been recognized in foreign offices. If the amount to be reported in this item is a net loss,
report it with a minus (-) sign.

FFIEC 031

RI-D-1
(6-12)

RI-D – FOREIGN OFFICE INCOME

FFIEC 031

Item No.

RI-D – FOREIGN OFFICE INCOME

Caption and Instructions

4.b

Investment banking, advisory, brokerage, and underwriting fees and commissions.
Report investment banking, advisory, brokerage and underwriting fees and commissions
(as defined for Schedule RI, items 5.d.(1) and 5.d.(2)) in foreign offices.

4.c

Net securitization income. Report net securitization income (as defined for Schedule RI,
item 5.g) in foreign offices. If the amount to be reported in this item is a net loss, report it with
a minus (-) sign.

4.d

Other noninterest income. Report all other noninterest income (as defined for Schedule RI,
items 5.a, 5.b, 5.d.(3), 5.d.(4), 5.d.(5), 5.e, 5.f, and 5.i through 5.l) in foreign offices. If the
amount to be reported in this item is negative, report it with a minus (-) sign.

5

Realized gains (losses) on held-to-maturity and available-for-sale securities in foreign
offices. Report realized gains (losses) on held-to-maturity and available-for-sale securities
(as defined for Schedule RI, items 6.a and 6.b) in foreign offices. If the amount to be
reported in this item is a net loss, report it with a minus (-) sign.

6

Total noninterest expense in foreign offices. Report total noninterest expense (as defined
for Schedule RI, item 7.e) in foreign offices.

7

Adjustments to pretax income in foreign offices for internal allocations to foreign
offices to reflect the effects of equity capital on overall bank funding costs. Report any
amounts credited to estimated pretax income in foreign offices that reflects management’s
estimate of the effect of equity capital allocable to foreign office operations. Equity capital,
which is interest-free, helps to reduce a bank’s overall funding costs and increase net interest
income.

8

Applicable income taxes (on items 1 through 7). Report the total estimated income tax
expense (as defined for Schedule RI, item 9) applicable to pretax income in foreign offices. If
the amount is a net benefit rather than tax expense, report it with a minus (-) sign.

9

Extraordinary items and other adjustments, net of income taxes, in foreign offices.
Report the amount of extraordinary items and other adjustments, net of income taxes (as
defined for Schedule RI, item 11), in foreign offices. If the amount to be reported in this item
is a net loss, report it with a minus (-) sign.

10

Net income attributable to foreign offices before eliminations arising from
consolidation. The amount to be reported in this item generally will be determined by taking
Schedule RI-D, item 1, minus items 2 and 3, plus items 4.a through 4.d, plus item 5, minus
item 6, plus item 7, minus item 8, plus item 9.

11

Not applicable.

12

Eliminations arising from the consolidation of foreign offices with domestic offices.
Report the net effect of eliminating transactions between foreign and domestic offices of the
reporting bank on net income attributable to foreign offices. If the amount to be reported in
this item is a net reduction in net income attributable to foreign offices, report it with a minus
(-) sign.

13

Consolidated net income attributable to foreign offices. Report the sum of
Schedule RI-D, items 10 and 12.

FFIEC 031

RI-D-2
(6-12)

RI-D – FOREIGN OFFICE INCOME

FFIEC 031 and 041

RI-E - EXPLANATIONS

SCHEDULE RI-E – EXPLANATIONS
General Instructions
Schedule RI-E is to be completed each quarter on a calendar year-to-date basis. On those lines for
which your bank must provide a description of the amount being reported, the description should not
exceed 50 characters (including punctuation and spacing between words). If additional space is needed
to complete a description, item 7 of this schedule may be used. Any amounts reported in Schedule RI-E,
item 2.g, “FDIC deposit insurance assessments,” for report dates beginning June 30, 2009, will not be
made available to the public on an individual institution basis.

Item Instructions
Item No.
1

Caption and Instructions
Other noninterest income. Disclose in items 1.a through 1.k each component of
Schedule RI, item 5.l, “Other noninterest income,” and the dollar amount of such component,
that is greater than $25,000 and exceeds 3 percent of the “Other noninterest income.” If net
losses have been reported in Schedule RI, item 5.l, for a component of “Other noninterest
income,” use the absolute value of such net losses to determine whether the amount of the
net losses is greater than $25,000 and exceeds 3 percent of “Other noninterest income” and
should be reported in this item. (The absolute value refers to the magnitude of the dollar
amount without regard to whether the amount represents net gains or net losses.) If net
losses are reported in this item, report with a minus (-) sign.
Preprinted captions have been provided for the following categories of “Other noninterest
income”:









Item 1.a, “Income and fees from the printing and sale of checks,”
Item 1.b, “Earnings on/increase in value of cash surrender value of life insurance,”
Item 1.c, “Income and fees from automated teller machines (ATMs),”
Item 1.d, “Rent and other income from other real estate owned,”
Item 1.e, “Safe deposit box rent,”
Item 1.f, “Net change in the fair values of financial instruments accounted for under a fair
value option,”
Item 1.g, “Bank card and credit card interchange fees,” and
Item 1.h, “Gains on bargain purchases.”

For other components of “Other noninterest income” that exceed the disclosure threshold, list
and briefly describe these components in items 1.i through 1.k and, if necessary, in
Schedule RI-E, item 7, below.
For components of “Other noninterest income” that reflect a single credit for separate
“bundled services” provided through third party vendors, disclose such amounts in the item
that most closely describes the predominant type of income earned, and this categorization
should be used consistently over time.
2

Other noninterest expense. Disclose in items 2.a through 2.n each component of
Schedule RI, item 7.d, “Other noninterest expense,” and the dollar amount of such
component, that is greater than $25,000 and exceeds 3 percent of the ”Other noninterest
expense.” If net gains have been reported in Schedule RI, item 7.d, for a component of
“Other noninterest expense,” use the absolute value of such net gains to determine whether
the amount of the net gains is greater than $25,000 and exceeds 3 percent of “Other

FFIEC 031 and 041

RI-E-1
(6-12)

RI-E - EXPLANATIONS

FFIEC 031 and 041

RI-E - EXPLANATIONS

Item No.

Caption and Instructions

2
(cont.)

noninterest expense” and should be reported in this item. (The absolute value refers to the
magnitude of the dollar amount without regard to whether the amount represents net gains or
net losses.) If net gains are reported in this item, report with a minus (-) sign.
Preprinted captions have been provided for the following categories of “Other noninterest
expense”:












Item 2.a, “Data processing expenses,”
Item 2.b, “Advertising and marketing expenses,”
Item 2.c, “Directors’ fees,”
Item 2.d, “Printing, stationery, and supplies,”
Item 2.e, “Postage,”
Item 2.f, “Legal fees and expenses,”
Item 2.g, “FDIC deposit insurance assessments,”
Item 2.h, “Accounting and auditing expenses,”
Item 2.i, “Consulting and advisory expenses,”
Item 2.j, “Automated teller machine (ATM) and interchange expenses,” and
Item 2.k, “Telecommunications expenses.”

Include in “Telecommunications expenses” any expenses associated with telephone,
telegraph, cable, and internet services (including web page maintenance).
For other components of “Other noninterest expense” that exceed the disclosure threshold,
list and briefly describe these components in items 2.l through 2.n and, if necessary, in
Schedule RI-E, item 7, below.
For components of “Other noninterest expense” that reflect a single charge for separate
“bundled services” provided by third party vendors, disclose such amounts in the item that
most closely describes the predominant type of expense incurred, and this categorization
should be used consistently over time.
3

Extraordinary items and other adjustments and applicable income tax effect. List and
briefly describe in items 3.a, 3.b, and 3.c the gross dollar amount of each item included in
Schedule RI, item 11, "Extraordinary items and other adjustments, net of income taxes," and
its related income tax effect, if any. If Schedule RI, item 11, includes more than three items,
report the additional items and their related tax effects in Schedule RI-E, item 7, below.
If an extraordinary item or other adjustment is a loss or otherwise reduces the bank's income,
report the dollar amount with a minus (-) sign. If an applicable income tax effect is a tax
benefit (rather than a tax expense), report the dollar amount with a minus (-) sign.

4

Cumulative effect of changes in accounting principles and corrections of material
accounting errors. List and briefly describe in items 4.a and 4.b the dollar amount of the
cumulative effect of each change in accounting principle and correction of a material
accounting error, net of applicable income taxes, that is included in Schedule RI-A, item 2. If
Schedule RI-A, item 2, includes more than two accounting principle changes and accounting
error corrections, report the cumulative effect of each additional accounting principle change
and error correction in Schedule RI-E, item 7, below.
If the cumulative effect of an accounting principle change or an accounting error correction
represents a reduction of the bank's equity capital, report the dollar amount with a minus (-)
sign.

FFIEC 031 and 041

RI-E-2
(6-12)

RI-E - EXPLANATIONS

FFIEC 031 and 041

Item No.
5

RI-E - EXPLANATIONS

Caption and Instructions
Other transactions with parent holding company. List and briefly describe in items 5.a
and 5.b the dollar amount of each type of other transaction with the bank's parent holding
company that is included in Schedule RI-A, item 11. If Schedule RI-A, item 11, includes
more than two types of other transactions, report the additional types of other transactions in
Schedule RI-E, item 7, below.
If the effect of a type of other transaction with the bank's parent holding company is to reduce
the bank's equity capital, report the dollar amount with a minus (-) sign.

6

Adjustments to allowance for loan and lease losses. List and briefly describe in items 6.a
and 6.b the dollar amount of each type of adjustment to the allowance for loan and lease
losses that is included in Schedule RI-B, part II, item 6. If Schedule RI-B, part II, item 6,
includes more than two types of adjustments, report the additional adjustments in
Schedule RI-E, item 7, below.
If the effect of an adjustment is to reduce the bank's allowance for loan and lease losses,
report the dollar amount with a minus (-) sign.

7

Other explanations. In the space provided on the report form, the bank may, at its option,
list and briefly describe any other significant items relating to the Report of Income. The
bank's other explanations must not exceed 750 characters, including punctuation and
standard spacing between words and sentences.

FFIEC 031 and 041

RI-E-3
(6-12)

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FFIEC 031 and 041

RC - BALANCE SHEET

LINE ITEM INSTRUCTIONS FOR THE CONSOLIDATED REPORT OF
CONDITION
The line item instructions should be read in conjunction with the Glossary and other sections of these
instructions. See the discussion of the Organization of the Instruction Books in the General Instructions.
For purposes of these Consolidated Report of Condition instructions, the FASB Accounting Standards
Codification is referred to as “ASC.”

SCHEDULE RC – BALANCE SHEET
ASSETS
Item No.
1

Caption and Instructions
Cash and balances due from depository institutions. On the FFIEC 031, the sum of
Schedule RC, items 1.a and 1.b, must equal Schedule RC-A, item 5, column A, "Total."
On the FFIEC 041, Schedule RC-A is not applicable to banks with less than $300 million in
total assets; for banks with $300 million or more in total assets, the sum of Schedule RC,
items 1.a and 1.b, must equal Schedule RC-A, item 5, “Total.”
Treatment of reciprocal balances with depository institutions – Reciprocal balances arise
when two depository institutions maintain deposit accounts with each other, i.e., when a
reporting bank has both a "due from" and a "due to" balance with another depository
institution. Reciprocal balances between the reporting bank and other depository institutions
may be reported on a net basis when a right of setoff exists. Net "due from" balances should
be reported in items 1.a and 1.b below, as appropriate. Net "due to" balances should be
reported as deposit liabilities in Schedule RC, item 13 below. See the Glossary entry for
"offsetting" for the conditions that must be met for a right of setoff to exist. See also the
Glossary entry for "reciprocal balances."

1.a

Noninterest-bearing balances and currency and coin. Report the total of all
noninterest-bearing balances due from depository institutions, currency and coin, cash items
in process of collection, and unposted debits. On the FFIEC 031, the components of this item
will also be included in the appropriate items of Schedule RC-A, column A. On the
FFIEC 041, for banks with $300 million or more in total assets, the components of this item
will also be included in the appropriate items of Schedule RC-A.
For purposes of these reports, deposit accounts "due from" other depository institutions that
are overdrawn are to be reported as borrowings in Schedule RC, item 16, and in
Schedule RC-M, item 5.b, except overdrawn "due from" accounts arising in connection with
checks or drafts drawn by the reporting bank and drawn on, or payable at or through, another
depository institution either on a zero-balance account or on an account that is not routinely
maintained with sufficient balances to cover checks or drafts drawn in the normal course of
business during the period until the amount of the checks or drafts is remitted to the other
depository institution (in which case, report the funds received or held in connection with such
checks or drafts as deposits in Schedule RC-E until the funds are remitted). For further
information, refer to the Glossary entry for "overdraft."

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FFIEC 031 and 041

RC - BALANCE SHEET

Item No.

Caption and Instructions

1.a
(cont.)

Cash items in process of collection include:
(1) Checks or drafts in process of collection that are drawn on another depository institution
(or on a Federal Reserve Bank) and that are payable immediately upon presentation in
the United States. This includes:
(a) Checks or drafts drawn on other institutions that have already been forwarded for
collection but for which the reporting bank has not yet been given credit ("cash
letters").
(b) Checks or drafts on hand that will be presented for payment or forwarded for
collection on the following business day.
(c) Checks or drafts that have been deposited with the reporting bank's correspondent
and for which the reporting bank has already been given credit, but for which the
amount credited is not subject to immediate withdrawal ("ledger credit" items).
However, if the reporting bank has been given immediate credit by its correspondent for
checks or drafts presented for payment or forwarded for collection and if the funds on
deposit are subject to immediate withdrawal, the amount of such checks or drafts is
considered part of the reporting bank's balances due from depository institutions.
(2) Government checks drawn on the Treasurer of the United States or any other
government agency that are payable immediately upon presentation and that are in
process of collection.
(3) Such other items in process of collection that are payable immediately upon presentation
and that are customarily cleared or collected as cash items by depository institutions in
the United States, such as:
(a) Redeemed United States savings bonds and food stamps.
(b) Amounts associated with automated payment arrangements in connection with
payroll deposits, federal recurring payments, and other items that are credited to a
depositor's account prior to the payment date to ensure that the funds are available
on the payment date.
(c) Federal Reserve deferred account balances until credit has been received in
accordance with the appropriate time schedules established by the Federal Reserve
Banks. At that time, such balances are considered part of the reporting bank's
balances due from depository institutions.
(d) Checks or drafts drawn on another depository institution that have been deposited in
one office of the reporting bank and forwarded for collection to another office of the
reporting bank.
(e) Brokers' security drafts and commodity or bill-of-lading rafts payable immediately
upon presentation in the U.S. (See the Glossary entries for "broker's security draft"
and "commodity or bill-of-lading draft" for the definitions of these terms.)

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FFIEC 031 and 041

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Item No.

Caption and Instructions

1.a
(cont.)

Exclude from cash items in process of collection:
(1) Cash items for which the reporting bank has already received credit, provided that the
funds on deposit are subject to immediate withdrawal. The amount of such cash items is
considered part of the reporting bank's balances due from depository institutions.
(2) Credit or debit card sales slips in process of collection (report as noncash items in
Schedule RC-F, item 6, "All other assets”). However, when the reporting bank has been
notified that it has been given credit, the amount of such sales slips is considered part of
the reporting bank's balances due from depository institutions.
(3) Cash items not conforming to the definition of in process of collection, whether or not
cleared through Federal Reserve Banks (report in Schedule RC-F, item 6, "All other
assets”).
(4) Commodity or bill-of-lading drafts (including arrival drafts) not yet payable (because the
merchandise against which the draft was drawn has not yet arrived), whether or not
deposit credit has been given. (If deposit credit has been given, report as loans in the
appropriate item of Schedule RC-C, part I; if the drafts were received on a collection
basis, they should be excluded entirely from the bank's balance sheet, Schedule RC, until
the funds have actually been collected.)
Unposted debits are cash items in the bank's possession, drawn on itself, that are
immediately chargeable, but that have not been charged to the general ledger deposit control
account at the close of business on the report date. All banks including an amount for
unposted debits in this item should also see Schedule RC-O, item 1.a or 1.b, "Unposted
debits."
Currency and coin include both U.S. and foreign currency and coin owned and held in all
offices of the reporting bank, currency and coin in transit to a Federal Reserve Bank or to any
other depository institution for which the reporting bank has not yet received credit, and
currency and coin in transit from a Federal Reserve Bank or from any other depository
institution for which the reporting bank's account has already been charged. Foreign currency
and coin should be converted into U.S. dollar equivalents as of the report date.
Noninterest-bearing balances due from depository institutions include balances due from
commercial banks in the U.S., other depository institutions in the U.S. (e.g., credit unions,
mutual and stock savings banks, savings or building and loan associations, and cooperative
banks), Federal Home Loan Banks, banks in foreign countries, and foreign central banks.
Noninterest-bearing balances include those noninterest-bearing funds on deposit at other
depository institutions for which the reporting bank has already received credit and which are
subject to immediate withdrawal. Balances for which the bank has not yet received credit
and balances representing checks or drafts for which immediate credit has been given but
which are not subject to immediate withdrawal are considered "cash items in process of
collection."

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FFIEC 031 and 041

RC - BALANCE SHEET

Item No.

Caption and Instructions

1.a
(cont.)

Include as noninterest-bearing balances due from depository institutions:
(1) Noninterest-bearing balances due from the reporting bank's correspondents, including
amounts that its correspondent is to pass through or already has passed through to a
Federal Reserve Bank on behalf of the reporting bank (see the Glossary entry for
"pass-through reserve balances" for further discussion).
(2) Noninterest-bearing balances that reflect deposit credit received by the reporting bank
because of credit or debit card sales slips that had been forwarded for collection. (Until
credit has been received, report as noncash items in process of collection in
Schedule RC-F, item 6, "All other assets.”)
(3) Amounts that the reporting bank has actually passed through to a Federal Reserve Bank
on behalf of its respondent depository institutions (see the Glossary entry for
"pass-through reserve balances" for further discussion).
Exclude from noninterest-bearing balances due from depository institutions:
(1) Balances due from Federal Reserve Banks (report as interest-bearing balances due from
depository institutions in Schedule RC, item 1.b).
(2) Deposit accounts "due to" other depository institutions that are overdrawn (report in
Schedule RC-C, part I, item 2, "Loans to depository institutions and acceptances of other
banks").
(3) All noninterest-bearing balances that the reporting bank's trust department maintains with
other depository institutions.

1.b

Interest-bearing balances. Report all interest-bearing balances due from depository
institutions whether in the form of demand, savings, or time balances, including certificates of
deposit (CDs), even if the CDs are negotiable or have CUSIP numbers, but excluding
certificates of deposit held for trading. Include balances due from Federal Reserve Banks
(including balances maintained to satisfy reserve balance requirements, excess balances,
and term deposits), commercial banks in the U.S., other depository institutions in the U.S.,
Federal Home Loan Banks, banks in foreign countries, and foreign central banks. Include the
fair value of interest-bearing balances due from depository institutions that are accounted for
at fair value under a fair value option.
On the FFIEC 031, the components of this item will also be included in the appropriate items
of Schedule RC-A, column A. On the FFIEC 041, for banks with $300 million or more in total
assets, the components of this item will also be included in the appropriate items of
Schedule RC-A.
Exclude from interest-bearing balances:
(1) Loans to depository institutions and acceptances of other banks (report in
Schedule RC-C, part I, item 2).
(2) All interest-bearing balances that the reporting bank's trust department maintains with
other depository institutions.
(3) Certificates of deposit held for trading (report in Schedule RC, item 5).

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FFIEC 031 and 041

Item No.

RC - BALANCE SHEET

Caption and Instructions

2

Securities:

2.a

Held-to-maturity securities. Report the amount from Schedule RC-B, item 8, column A,
"Total amortized cost."

2.b

Available-for-sale securities. Report the amount from Schedule RC-B, item 8, column D,
"Total fair value."

3

Federal funds sold and securities purchased under agreements to resell:

3.a

Federal funds sold (in domestic offices). Report the outstanding amount of federal funds
sold, i.e., immediately available funds lent (in domestic offices) under agreements or contracts
that have an original maturity of one business day or roll over under a continuing contract,
excluding such funds lent in the form of securities purchased under agreements to resell
(which should be reported in Schedule RC, item 3.b) and overnight lending for commercial
and industrial purposes (which generally should be reported in Schedule RC, item 4.b).
Transactions that are to be reported as federal funds sold may be secured or unsecured or
may involve an agreement to resell loans or other instruments that are not securities.
Immediately available funds are funds that the purchasing bank can either use or dispose of
on the same business day that the transaction giving rise to the receipt or disposal of the
funds is executed. A continuing contract, regardless of the terminology used, is an agreement
that remains in effect for more than one business day, but has no specified maturity and does
not require advance notice of the lender or the borrower to terminate.
Report federal funds sold on a gross basis; i.e., do not net them against federal funds
purchased, except to the extent permitted under ASC Subtopic 210-20, Balance Sheet –
Offsetting (formerly FASB Interpretation No. 39, “Offsetting of Amounts Related to Certain
Contracts”). Include the fair value of federal funds sold that are accounted for at fair value
under a fair value option.
Also exclude from federal funds sold:
(1) Sales of so-called "term federal funds" (as defined in the Glossary entry for "federal funds
transactions") (report in Schedule RC, item 4.b, "Loans and leases, net of unearned
income").
(2) Securities resale agreements that have an original maturity of one business day or roll
over under a continuing contract, if the agreement requires the bank to resell the identical
security purchased or a security that meets the definition of substantially the same in the
case of a dollar roll (report in Schedule RC, item 3.b, "Securities purchased under
agreements to resell").
(3) Deposit balances due from a Federal Home Loan Bank (report as balances due from
depository institutions in Schedule RC, item 1.a or 1.b, as appropriate).
(4) Lending transactions in foreign offices involving immediately available funds with an
original maturity of one business day or under a continuing contract that are not securities
resale agreements (report in Schedule RC, item 4.b, "Loans and leases, net of unearned
income").
For further information, see the Glossary entry for "federal funds transactions."

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FFIEC 031 and 041

Item No.
3.b

RC - BALANCE SHEET

Caption and Instructions
Securities purchased under agreements to resell. Report the outstanding amount of:
(1) Securities resale agreements, regardless of maturity, if the agreement requires the bank
to resell the identical security purchased or a security that meets the definition of
substantially the same in the case of a dollar roll.
(2) Purchases of participations in pools of securities, regardless of maturity.
Report securities purchased under agreements to resell on a gross basis, i.e., do not net
them against securities sold under agreements to repurchase, except to the extent permitted
under ASC Subtopic 210-20, Balance Sheet – Offsetting (formerly FASB Interpretation
No. 41, “Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase
Agreements”). Include the fair value of securities purchased under agreements to resell that
are accounted for at fair value under a fair value option.
Exclude from this item:
(1) Resale agreements involving assets other than securities (report in Schedule RC,
item 3.a, "Federal funds sold," or item 4.b, "Loans and leases, net of unearned income,"
as appropriate, depending on the maturity and office location of the transaction).
(2) Due bills representing purchases of securities or other assets by the reporting bank that
have not yet been delivered and similar instruments, whether collateralized or
uncollateralized (report in Schedule RC, item 4.b). See the Glossary entry for "due bills."
(3) So-called yield maintenance dollar repurchase agreements (see the Glossary entry for
"repurchase/resale agreements").
For further information, see the Glossary entry for "repurchase/resale agreements."

4

Loans and lease financing receivables. Report in the appropriate subitem loans and
leases held for sale and loans and leases that the reporting bank has the intent and ability to
hold for the foreseeable future or until maturity or payoff, i.e., held for investment. The sum of
Schedule RC, items 4.a and 4.b, must equal Schedule RC-C, part I, item 12, (column A on
the FFIEC 031).

4.a

Loans and leases held for sale. Report the amount of loans and leases held for sale.
Loans and leases held for sale should be reported at the lower of cost or fair value except for
those loans held for sale that the bank has elected to account for at fair value under a fair
value option, which should be reported in this item at fair value. For loan and leases held for
sale that are reported at the lower of cost or fair value, the amount by which cost exceeds fair
value, if any, shall be accounted for as a valuation allowance within this item. No allowance
for loan and lease losses should be included in Schedule RC, item 4.c, for loans and leases
held for sale. All loans and leases reported in this item must also be reported by loan
category in Schedule RC-C, part I.

4.b

Loans and leases, net of unearned income. Report the amount of loans and leases that
the reporting bank has the intent and ability to hold for the foreseeable future or until maturity
or payoff, i.e., loans held for investment. Include loans held for investment that the bank has
elected to account for at fair value under a fair value option, which should be reported in this
item at fair value. All loans and leases reported in this item must also be reported by loan
category in Schedule RC-C, part I.

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FFIEC 031 and 041

Item No.

RC - BALANCE SHEET

Caption and Instructions

4.c

Less: Allowance for loan and lease losses. Report the allowance for loan and lease
losses as determined in accordance with the instructions in the Glossary entry for "allowance
for loan and lease losses." Also include in this item any allocated transfer risk reserve related
to loans and leases held for investment that the reporting bank is required to establish and
maintain as specified in Section 905(a) of the International Lending Supervision Act of 1983,
in the agency regulations implementing the Act (Subpart D of Federal Reserve Regulation K,
Part 347 of the FDIC’s Rules and Regulations, and Part 20 of the Comptroller of the
Currency’s Regulations), and in any guidelines, letters, or instructions issued by the agencies.
This item must equal Report of Income Schedule RI-B, part II, item 7, "Balance end of current
period.”

4.d

Loans and leases, net of unearned income and allowance. Report the amount derived by
subtracting Schedule RC, item 4.c, from Schedule RC, item 4.b.

5

Trading assets. Trading activities typically include (a) regularly underwriting or dealing in
securities; interest rate, foreign exchange rate, commodity, equity, and credit derivative
contracts; other financial instruments; and other assets for resale; (b) acquiring or taking
positions in such items principally for the purpose of selling in the near term or otherwise with
the intent to resell in order to profit from short-term price movements; or (c) acquiring or
taking positions in such items as an accommodation to customers or for other trading
purposes. Assets and other financial instruments held for trading shall be consistently valued
at fair value.
Pursuant to ASC Topic 825, Financial Instruments (formerly FASB Statement No. 159,
“The Fair Value Option for Financial Assets and Financial Liabilities”), all securities within the
scope of ASC Topic 320, Investments-Debt and Equity Securities (formerly FASB Statement
No. 115, “Accounting for Certain Investments in Debt and Equity Securities”), that a bank has
elected to report at fair value under a fair value option with changes in fair value reported in
current earnings should be classified as trading securities. In addition, for purposes of these
reports, banks may classify assets (other than securities within the scope of ASC Topic 320
for which a fair value option is elected) as trading if the bank applies fair value accounting,
with changes in fair value reported in current earnings, and manages these assets as trading
positions, subject to the controls and applicable regulatory guidance related to trading
activities. For example, a bank would generally not classify a loan to which it has applied the
fair value option as a trading asset unless the bank holds the loan, which it manages as a
trading position, for one of the following purposes: (1) for market making activities, including
such activities as accumulating loans for sale or securitization; (2) to benefit from actual or
expected price movements; or (3) to lock in arbitrage profits.
Do not include in this item the carrying value of any available-for-sale securities, any loans
that are held for sale (and are not classified as trading in accordance with the preceding
instruction), and any leases that are held for sale. Available-for-sale securities are reported in
Schedule RC, item 2.b, and in Schedule RC-B, columns C and D. Loans (not classified as
trading) and leases held for sale should be reported in Schedule RC, item 4.a, "Loans and
leases held for sale," and in Schedule RC-C.
Trading assets also include derivatives with a positive fair value resulting from the "marking to
market" of interest rate, foreign exchange rate, commodity, equity, and credit derivative
contracts held for trading purposes as of the report date. Derivative contracts with the same
counterparty that have positive fair values and negative fair values and meet the criteria for a
valid right of setoff contained in ASC Subtopic 210-20, Balance Sheet – Offsetting (formerly
FASB Interpretation No. 39, “Offsetting of Amounts Related to Certain Contracts”) (e.g.,

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FFIEC 031 and 041

RC - BALANCE SHEET

Item No.

Caption and Instructions

5
(cont.)

those contracts subject to a qualifying master netting agreement) may be reported on a net
basis using this item and Schedule RC, item 15, "Trading liabilities," as appropriate. (See the
Glossary entry for "offsetting.")
For those banks that must complete Schedule RC-D, this item must equal Schedule RC-D,
item 12, "Total trading assets," and Schedule RC-Q, sum of items 5.a and 5.b, column A.

6

Premises and fixed assets. Report the book value, less accumulated depreciation or
amortization, of all premises, equipment, furniture and fixtures purchased directly or acquired
by means of a capital lease. Any method of depreciation or amortization conforming to
accounting principles that are generally acceptable for financial reporting purposes may be
used. However, depreciation for premises and fixed assets may be based on a method used
for federal income tax purposes if the results would not be materially different from
depreciation based on the asset's estimated useful life.
Do not deduct mortgages or other liens on such property (report in Schedule RC, item 16,
"Other borrowed money").
Include as premises and fixed assets:
(1) Premises that are actually owned and occupied (or to be occupied, if under construction)
by the bank, its branches, or its consolidated subsidiaries.
(2) Leasehold improvements, vaults, and fixed machinery and equipment.
(3) Remodeling costs to existing premises.
(4) Real estate acquired and intended to be used for future expansion.
(5) Parking lots that are used by customers or employees of the bank, its branches, and its
consolidated subsidiaries.
(6) Furniture, fixtures, and movable equipment of the bank, its branches, and its consolidated
subsidiaries.
(7) Automobiles, airplanes, and other vehicles owned by the bank and used in the conduct of
its business.
(8) The amount of capital lease property (with the bank as lessee): premises, furniture,
fixtures, and equipment. See the discussion of accounting with bank as lessee in the
Glossary entry for "lease accounting."
(9) Stocks and bonds issued by nonmajority-owned corporations whose principal activity is
the ownership of land, buildings, equipment, furniture, or fixtures occupied or used (or to
be occupied or used) by the bank, its branches, or its consolidated subsidiaries.

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RC - BALANCE SHEET

Item No.

Caption and Instructions

6
(cont.)

Exclude from premises and fixed assets:
(1) Original paintings, antiques, and similar valuable objects (report in Schedule RC-F,
item 6, "All other assets”).
(2) Favorable leasehold rights (report in Schedule RC, item 10.b, "Other intangible assets").
Property formerly but no longer used for banking may be reported either in this item as
"Premises and fixed assets" or in Schedule RC-M, item 3, as "Other real estate owned."

7

Other real estate owned. Report the total amount of other real estate owned from
Schedule RC-M, item 3.h on the FFIEC 031 and item 3.g on the FFIEC 041. For further
information on other real estate owned, see the instruction to Schedule RC-M, item 3, and the
Glossary entry for "foreclosed assets."

8

Investments in unconsolidated subsidiaries and associated companies. Report the
amount of the bank's investments in subsidiaries that have not been consolidated; associated
companies; corporate joint ventures, unincorporated joint ventures, and general partnerships
over which the bank exercises significant influence; and noncontrolling investments in certain
limited partnerships and limited liability companies (described in the Glossary entry for “equity
method of accounting”), excluding those that represent direct and indirect investments in real
estate ventures (which are to be reported in Schedule RC, item 9). The entities in which these
investments have been made are collectively referred to as “investees.” Include loans and
advances to investees and holdings of their bonds, notes, and debentures.
Investments in investees shall be reported using the equity method of accounting. Under the
equity method, the carrying value of the bank's investment in an investee is originally recorded
at cost but is adjusted periodically to record as income the bank's proportionate share of the
investee's earnings or losses and decreased by the amount of any cash dividends or similar
distributions received from the investee. For purposes of these reports, the date through
which the carrying value of the bank's investment in an investee has been adjusted should, to
the extent practicable, match the report date of the Report of Condition, but in no case differ
by more than 93 days from the report date.
Unconsolidated subsidiaries include those majority-owned subsidiaries that do not meet the
significance standards for required consolidation that the bank chooses not to consolidate
under the optional consolidation provisions. Refer to the General Instructions section of this
book for a detailed discussion of consolidation. See also the Glossary entry for "subsidiaries."

9

Direct and indirect investments in real estate ventures. Report the amount of the bank’s
direct and indirect investments in real estate ventures. Exclude real estate acquired in any
manner for debts previously contracted, including, but not limited to, real estate acquired
through foreclosure or acquired by deed in lieu of foreclosure, and equity holdings that
indirectly represent such real estate (report in Schedule RC-M, item 3, “Other real estate
owned”).
NOTE: 12 USC 29 limits the authority of national banks to hold real estate. State member
banks are not authorized to invest in real estate except with the prior approval of the Board of
Governors of the Federal Reserve System under Federal Reserve Regulation H (12 CFR
Part 208). In certain states, nonmember banks may invest in real estate.

FFIEC 031 and 041

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FFIEC 031 and 041

RC - BALANCE SHEET

Item No.

Caption and Instructions

9
(cont.)

Include as direct and indirect investments in real estate ventures:
(1) Any real estate originally acquired, directly or indirectly, by the bank or a consolidated
subsidiary and held for development, resale, or other investment purposes.
(2) Real estate acquisition, development, or construction (ADC) arrangements which are
accounted for as direct investments in real estate or real estate joint ventures in
accordance with ASC Subtopic 310-10, Receivables – Overall (formerly AICPA Practice
Bulletin 1, Appendix, Exhibit I, “ADC Arrangements”).
(3) Real estate originally acquired and held for investment by the bank or a consolidated
subsidiary that has been sold under contract and accounted for under the deposit method
of accounting in accordance with ASC Subtopic 360-20, Property, Plant, and Equipment –
Real Estate Sales (formerly FASB Statement No. 66, “Accounting for Sales of Real
Estate”). Under this method, the seller does not record notes receivable, but continues to
report the real estate and any related existing debt on its balance sheet. The deposit
method is used when a sale has not been consummated and is commonly used when
recovery of the carrying value of the property is not reasonably assured. If the full
accrual, installment, cost recovery, reduced profit, or percentage-of-completion method of
accounting under ASC Subtopic 360-20 is being used to account for the sale, the
receivable resulting from the sale of the real estate should be reported as a loan in
Schedule RC-C and any gain on the sale should be recognized in accordance with
ASC Subtopic 360-20.
(4) Any other loans secured by real estate and advanced for real estate acquisition,
development, or investment purposes if the reporting bank in substance has virtually the
same risks and potential rewards as an investor in the borrower's real estate venture.
(5) Investments in subsidiaries that have not been consolidated; associated companies;
corporate joint ventures, unincorporated joint ventures, and general partnerships over
which the bank exercises significant influence; and noncontrolling investments in certain
limited partnerships and limited liability companies (described in the Glossary entry for
“equity method of accounting”) that are primarily engaged in the holding of real estate for
development, resale, or other investment purposes. The entities in which these
investments have been made are collectively referred to as “investees.” Investments by
the bank in these investees may be in the form of common or preferred stock, partnership
interests, loans or other advances, bonds, notes, or debentures. Such investments shall
be reported using the equity method of accounting. For further information on the equity
method, see the instruction to Schedule RC, item 8, above.
(6) Investments in corporate joint ventures, unincorporated joint ventures, and general
partnerships over which the bank does not exercise significant influence and investments
in limited partnerships and limited liability companies that are so minor that the bank has
virtually no influence over the partnership or company, where the entity in which the
investment has been made is primarily engaged in the holding of real estate for
development, resale, or other investment purposes.

10

Intangible assets:

10.a

Goodwill. Report the carrying amount of goodwill as adjusted for any impairment losses.
See "acquisition method" in the Glossary entry for "business combinations" for guidance on
the recognition and initial measurement of goodwill acquired in a business combination.
Goodwill should not be amortized, but must be tested for impairment as described in the
Glossary entry for “goodwill.”

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RC-10
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RC - BALANCE SHEET

Item No.

Caption and Instructions

10.b

Other intangible assets. Report the total amount of intangible assets other than goodwill
from Schedule RC-M, item 2.d. For further information on intangible assets, see the
instruction to Schedule RC-M, item 2.

11

Other assets. Report the amount from Schedule RC-F, item 7, "Total."

12

Total assets. Report the sum of items 1 through 11. This item must equal Schedule RC,
item 29, "Total liabilities and equity capital."

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RC-10a
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RC - BALANCE SHEET

LIABILITIES
Item No.

Caption and Instructions

13

Deposits. (For a discussion of noninterest-bearing and interest-bearing deposits, see the
Glossary entry for "deposits.")

13.a

In domestic offices. Report the total of all deposits in domestic offices of the reporting bank.
This item must equal the sum of Schedule RC-E, (part I), item 7, columns A and C.
This item must also equal the sum of items 13.a.(1) and 13.a.(2) below.

13.a.(1)

Noninterest-bearing. On the FFIEC, 041, report the total of all noninterest-bearing deposits
included in Schedule RC-E, Deposit Liabilities. On the FFIEC 031, report the total of all
noninterest-bearing deposits in domestic offices included in Schedule RC-E, part I, Deposits
in Domestic Offices. Noninterest-bearing deposits include noninterest-bearing demand, time,
and savings deposits.

13.a.(2)

Interest-bearing. On the FFIEC 041, report the total of all interest-bearing deposits included
in Schedule RC-E, Deposit Liabilities. On the FFIEC 031, report the total of all
interest-bearing deposits in domestic offices included in Schedule RC-E, part I, Deposits in
Domestic Offices. Include interest-bearing demand deposits.

NOTE: Items 13.b, 13.b.(1), and 13.b.(2) are applicable only to banks filing the FFIEC 031 report form.
13.b

In foreign offices, Edge and Agreement subsidiaries, and IBFs. Report the total of all
deposits in foreign offices, Edge and Agreement subsidiaries, and IBFs. This item must equal
the amount reported in Schedule RC-E, part II, item 6, "Total."
This item must also equal the sum of items 13.b.(1) and 13.b.(2) below.

13.b.(1)

Noninterest-bearing. Report the total of all noninterest-bearing deposits in foreign offices
reported in Schedule RC-E, part II, Deposits in Foreign Offices.

13.b.(2)

Interest-bearing. Report the total of all interest-bearing deposits in foreign offices reported in
Schedule RC-E, part II, Deposits in Foreign Offices.

14

Federal funds purchased and securities sold under agreements to repurchase:

14.a

Federal funds purchased (in domestic offices). Report the outstanding amount of federal
funds purchased, i.e., immediately available funds borrowed (in domestic offices) under
agreements or contracts that have an original maturity of one business day or roll over under
a continuing contract, excluding such funds borrowed in the form of securities sold under
agreements to repurchase (which should be reported in Schedule RC, item 14.b) and Federal
Home Loan Bank advances (which should be reported in Schedule RC, item 16).
Transactions that are to be reported as federal funds purchased may be secured or
unsecured or may involve an agreement to repurchase loans or other instruments that are not
securities.

FFIEC 031 and 041

RC-10b
(9-11)

RC - BALANCE SHEET

FFIEC 031 and 041

RC - BALANCE SHEET

Item No.

Caption and Instructions

14.a
(cont.)

Immediately available funds are funds that the purchasing bank can either use or dispose of
on the same business day that the transaction giving rise to the receipt or disposal of the
funds is executed. A continuing contract, regardless of the terminology used, is an agreement
that remains in effect for more than one business day, but has no specified maturity and does
not require advance notice of the lender or the borrower to terminate.
Report federal funds purchased on a gross basis; i.e., do not net them against federal funds
sold, except to the extent permitted under ASC Subtopic 210-20, Balance Sheet – Offsetting
(formerly FASB Interpretation No. 39, “Offsetting of Amounts Related to Certain Contracts”).
Include the fair value of federal funds purchased that are accounted for at fair value under a
fair value option.
Also exclude from federal funds purchased:
(1) Purchases of so-called "term federal funds" (as defined in the Glossary entry for "federal
funds transactions") (report in Schedule RC, item 16, "Other borrowed money").
(2) Security repurchase agreements that have an original maturity of one business day or roll
over under a continuing contract, if the agreement requires the bank to repurchase the
identical security sold or a security that meets the definition of substantially the same in
the case of a dollar roll (report in Schedule RC, item 14.b, "Securities sold under
agreements to repurchase").
(3) Borrowings from a Federal Home Loan Bank in the form of advances (report in
Schedule RC, item 16) and securities repurchase agreements (report in Schedule RC,
item 14.b).
(4) Borrowings from a Federal Reserve Bank in the form of securities repurchase
agreements (report in Schedule RC, item 14.b) and other borrowings (report in
Schedule RC, item 16).
(5) Borrowing transactions in foreign offices involving immediately available funds with an
original maturity of one business day or under a continuing contract that are not securities
repurchase agreements (report in Schedule RC, item 16).
For further information, see the Glossary entry for "federal funds transactions."

14.b

Securities sold under agreements to repurchase. Report the outstanding amount of:
(1) Securities repurchase agreements, regardless of maturity, if the agreement requires the
bank to repurchase the identical security sold or a security that meets the definition of
substantially the same in the case of a dollar roll.
(2) Sales of participations in pools of securities, regardless of maturity.
Report securities sold under agreements to repurchase on a gross basis, i.e., do not net them
against securities purchased under agreements to resell, except to the extent permitted under
ASC Subtopic 210-20, Balance Sheet – Offsetting (formerly FASB Interpretation No. 41,
“Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase
Agreements”). Include the fair value of securities sold under agreements to repurchase that
are accounted for at fair value under a fair value option.

FFIEC 031 and 041

RC-10c
(3-11)

RC - BALANCE SHEET

FFIEC 031 and 041

Item No.

Caption and Instructions

14.b
(cont.)

Exclude from this item:

RC - BALANCE SHEET

(1) Repurchase agreements involving assets other than securities (report in Schedule RC,
item 14.a, "Federal funds purchased," or item 16, "Other borrowed money," as
appropriate, depending on the maturity and office location of the transaction).
(2) Borrowings from a Federal Home Loan Bank other than in the form of securities
repurchase agreements (report federal funds purchased in Schedule RC, item 14.a, and
advances in Schedule RC, item 16).
(3) Borrowings from a Federal Reserve Bank other than in the form of securities repurchase
agreements (report in Schedule RC, item 16).
(4) Obligations under due bills that resulted when the bank sold securities or other assets and
received payment, but has not yet delivered the assets, and similar obligations, whether
collateralized or uncollateralized (report in Schedule RC, item 16). See the Glossary
entry for "due bills."
(5) So-called yield maintenance dollar repurchase agreements (see the Glossary entry for
"repurchase/resale agreements").
For further information, see the Glossary entry for "repurchase/resale agreements."
15

Trading liabilities. Report the amount of liabilities from the reporting bank's trading activities.
Include liabilities resulting from sales of assets that the reporting bank does not own (see the
Glossary entry for "short position") and revaluation losses from the "marking to market" of
interest rate, foreign exchange rate, equity, and commodity and other derivative contracts into
which the reporting bank has entered for trading, dealer, customer accommodation, and
similar purposes. In addition, for purposes of these reports, banks may classify liabilities as
trading if the bank applies fair value accounting, with changes in fair value reported in current
earnings, and manages these assets as trading positions, subject to the controls and
applicable regulatory guidance related to trading activities.
For those banks that must complete Schedule RC-D, Trading Assets and Liabilities, the
amount reported in this item must equal Schedule RC-D, item 15, and Schedule RC-Q,
sum of items 10.a and 10.b, column A.

16

Other borrowed money. Report the amount from Schedule RC-M, item 5.c.

17

Not applicable.

18

Not applicable.

19

Subordinated notes and debentures. Report the amount of subordinated notes and
debentures (including mandatory convertible debt). Include the fair value of subordinated
notes and debentures that are accounted for at fair value under a fair value option. (See the
Glossary entry for "subordinated notes and debentures" for the definition of this term.) Also
include the amount of outstanding limited-life preferred stock including any amounts received
in excess of its par or stated value. (See the Glossary entry for "preferred stock" for the
definition of limited-life preferred stock.)

FFIEC 031 and 041

RC-10d
(3-11)

RC - BALANCE SHEET

FFIEC 031 and 041

Item No.

RC - BALANCE SHEET

Caption and Instructions

20

Other liabilities. Report the amount from Schedule RC-G, item 5, "Total."

21

Total liabilities. Report the sum of items 13 through 20.

22

Not applicable.

FFIEC 031 and 041

RC-11
(3-09)

RC - BALANCE SHEET

FFIEC 031 and 041

RC - BALANCE SHEET

EQUITY CAPITAL
Item No.

Caption and Instructions

23

Perpetual preferred stock and related surplus. Report the amount of perpetual preferred
stock issued, including any amounts received in excess of its par or stated value. (See the
Glossary entry for "preferred stock" for the definition of perpetual preferred stock.)

24

Common stock. Report the aggregate par or stated value of common stock issued.

25

Surplus. Report the net amount formally transferred to the surplus account, including capital
contributions, adjustments arising from treasury stock transactions, and any amount received
for common stock in excess of its par or stated value on or before the report date.
Do not include any portion of the proceeds received from the sale of preferred stock in excess
of its par or stated value (report in Schedule RC, item 19 or 23, as appropriate).

26.a

Retained earnings. Report the amount of retained earnings (undivided profits) and capital
reserves. The amount of the retained earnings and capital reserves should reflect transfers of
net income, declarations of dividends, transfers to surplus, and any other appropriate entries.
Adjustments of accruals and other accounting estimates made shortly after the report date
which relate to the income and expenses of the year-to-date period ended as of the report
date must be reported in the appropriate items of Schedule RI, Income Statement, for that
year-to-date period.
Capital reserves are segregations of retained earnings and are not to be reported as liability
accounts or as reductions of asset balances. Capital reserves may be established for such
purposes as:
(1) Reserve for undeclared stock dividends – includes amounts set aside to provide for stock
dividends (not cash dividends) not yet declared.
(2) Reserve for undeclared cash dividends – includes amounts set aside for cash dividends
on common and preferred stock not yet declared. (Cash dividends declared but not yet
payable should be included in Schedule RC-G, item 5, "Other" liabilities.)
(3) Retirement account (for limited-life preferred stock or subordinated notes and
debentures) – includes amounts allocated under the plan for retirement of limited-life
preferred stock or subordinated notes and debentures contained in the bank's articles of
association or in the agreement under which such stock or notes and debentures were
issued.
(4) Reserve for contingencies – includes amounts set aside for possible unforeseen or
indeterminate liabilities not otherwise reflected on the bank's books and not covered by
insurance. This reserve may include, for example, reserves set up to provide for possible
losses which the bank may sustain because of lawsuits, the deductible amount under the
bank's blanket bond, defaults on obligations for which the bank is contingently liable, or
other claims against the bank. A reserve for contingencies represents a segregation of
retained earnings. It should not include any element of known losses or of any probable
incurred losses the amount of which can be estimated with reasonable accuracy (see the
Glossary entry for "loss contingencies" for additional information).

FFIEC 031 and 041

RC-12
(3-09)

RC - BALANCE SHEET

FFIEC 031 and 041

Item No.

Caption and Instructions

26.a
(cont.)

Exclude from retained earnings:

RC - BALANCE SHEET

(1) Any portion of the proceeds received from the sale of common stock in excess of its par
or stated value (report in Schedule RC, item 25).
(2) Any portion of the proceeds received from the sale of preferred stock in excess of its par
or stated value (report in Schedule RC, item 19 or 23, as appropriate).
(3) "Reserves" that reduce the related asset balances such as valuation allowances (e.g., the
allowance for loan and lease losses), reserves for depreciation, and reserves for bond
premiums.
26.b

Accumulated other comprehensive income. Report the accumulated balance of other
comprehensive income as of the report date in accordance with ASC Subtopic 220-10,
Comprehensive Income – Overall (formerly FASB Statement No. 130, “Reporting
Comprehensive Income”), net of applicable income taxes, if any. “Other comprehensive
income” refers to revenues, expenses, gains, and losses that under generally accepted
accounting principles are included in comprehensive income but excluded from net income.
Items of accumulated other comprehensive income include:
(1) Net unrealized holding gains (losses) on available-for-sale securities (including debt
securities transferred into the available-for-sale category from the held-to-maturity
category), i.e., the difference between the amortized cost and the fair value of the
reporting bank's available-for-sale securities (excluding any available-for-sale securities
1
previously written down as other-than-temporarily impaired). For most institutions, all
"securities," as that term is defined in ASC Topic 320, Investments-Debt and Equity
Securities (formerly FASB Statement No. 115, “Accounting for Certain Investments in
Debt and Equity Securities”), that are designated as "available-for-sale" will be reported
as "Available-for-sale securities" in Schedule RC, item 2.b, and in Schedule RC-B,
columns C and D. However, an institution may have certain assets that fall within the
definition of "securities" in ASC Topic 320 (e.g., nonrated industrial development
obligations) that it has designated as "available-for-sale" and reports in a
balance sheet category other than "Securities" (e.g., "Loans and lease financing
receivables") for purposes of the Report of Condition. These "available-for-sale" assets
must be carried on the Report of Condition balance sheet at fair value rather than
amortized cost and the difference between these two amounts, net of tax effects, also
must be included in this item.
(2) The unamortized balance of the unrealized holding gain (loss) that existed at the date of
transfer of a debt security transferred into the held-to-maturity category from the
available-for-sale category. Consistent with ASC Topic 320, when a debt security is

1

For example, if the fair value of the reporting institution's available-for-sale securities exceeds the amortized cost of
its available-for-sale securities by $100,000 (and the institution has had no other transactions affecting the "net
unrealized holding gains (losses)" account), the amount to be included in Schedule RC, item 26.b, must be reduced
by the estimated amount of taxes using the institution's applicable tax rate (federal, state and local). (See the
Glossary entry for "income taxes" for a discussion of "applicable tax rate.") If the institution's applicable tax rate
(federal, state and local) is 40% and the tax basis of its available-for-sale securities approximates their amortized
cost, the institution would include "net unrealized holding gains" of $60,000 [$100,000 - (40% x $100,000)] in
Schedule RC, item 26.b. The institution would also have a deferred tax liability of $40,000 that would enter into the
determination of the amount of net deferred tax assets or liabilities to be reported in Schedule RC-F, item 2, or
Schedule RC-G, item 2.

FFIEC 031 and 041

RC-13
(3-13)

RC - BALANCE SHEET

FFIEC 031 and 041

Item No.

RC - BALANCE SHEET

Caption and Instructions

26.b
(cont.)

transferred from the available-for-sale category into the held-to-maturity category, the
unrealized holding gain (loss) at the date of transfer continues to be reported in the
accumulated other comprehensive income account, but must be amortized over the
remaining life of the security as an adjustment of yield in a manner consistent with the
amortization of any premium or discount.
(3) The unaccreted portion of other-than-temporary impairment losses on available-for-sale
and held-to-maturity debt securities that was not recognized in earnings in accordance
with ASC Topic 320, plus the accumulated amount of subsequent decreases (if not otherthan-temporary impairment losses) or increases in the fair value of available-for-sale debt
securities previously written down as other-than-temporarily impaired.
(4) Accumulated net gains (losses) on derivative instruments that are designated and qualify
2
3
as cash flow hedges, i.e., the effective portion of the accumulated change in fair value
(gain or loss) on derivative instruments designated and qualifying as cash flow hedges in
accordance with ASC Topic 815, Derivatives and Hedging (formerly FASB Statement
No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended).
Under ASC Topic 815, an institution that elects to apply hedge accounting must exclude
from net income the effective portion of the change in fair value of a derivative designated
and qualifying as a cash flow hedge and record it on the balance sheet in the
accumulated other comprehensive income component of equity capital. The ineffective
portion of the change in fair value of the derivative designated and qualifying as a cash
flow hedge must be reported in earnings. The component of accumulated other
comprehensive income associated with a transaction hedged in a cash flow hedge should
be adjusted each reporting period to a balance that reflects the lesser (in absolute
amounts) of:
(a) The cumulative gain (loss) on the derivative from inception of the hedge, less
(i) amounts excluded consistent with the institution's defined risk management
strategy and (ii) the derivative's gains (losses) previously reclassified from
accumulated other comprehensive income into earnings to offset the hedged
transaction, or
(b) The portion of the cumulative gain (loss) on the derivative necessary to offset the
cumulative change in expected future cash flows on the hedged transaction from
inception of the hedge less the derivative's gains (losses) previously reclassified
from accumulated other comprehensive income into earnings.

2

Generally, the objective of a cash flow hedge is to link a derivative to an existing recognized asset or liability or a
forecasted transaction with exposure to variability in expected future cash flows, e.g., the future interest payments
(receipts) on a variable-rate liability (asset) or a forecasted purchase (sale). The changes in cash flows of the
derivative are expected to offset changes in cash flows of the hedged item or transaction. To achieve the matching
of cash flows, ASC Topic 815 requires that the effective portion of changes in the fair value of derivatives designated
and qualifying as cash flow hedges initially be reported in the accumulated other comprehensive income component
of equity capital and subsequently be reclassified into earnings in the same future period or periods that the hedged
transaction affects earnings .
3

The effective portion of a cash flow hedge can be described as the change in fair value of the derivative that
offsets the change in expected future cash flows being hedged. Refer to ASC Topic 815, for further information.

FFIEC 031 and 041

RC-14
(3-13)

RC - BALANCE SHEET

FFIEC 031 and 041

Item No.

RC - BALANCE SHEET

Caption and Instructions

26.b
(cont.)

Accordingly, the amount reported in this item should reflect the sum of the adjusted
balance (as described above) of the cumulative gain (loss) for each derivative
designated and qualifying as a cash flow hedge. These amounts will be reclassified into
earnings in the same period or periods during which the hedged transaction affects
earnings (for example, when a hedged variable-rate interest receipt on a loan is accrued
or when a forecasted sale occurs).
(5) Foreign currency translation adjustments and gains (losses) on certain foreign currency
transactions accumulated in accordance with ASC Topic 830, Foreign Currency Matters
(formerly FASB Statement No. 52, “Foreign Currency Translation”). See the Glossary
entry for "foreign currency transactions and translation" for further information.
(6) The accumulated amounts of gains (losses), transition assets or obligations, and prior
service costs or credits associated with single-employer defined benefit pension and other
postretirement plans that have not yet been recognized as components of net periodic
benefit cost in accordance with ASC Subtopic 715-20, Compensation-Retirement Benefits
– Defined Benefit Plans-General (formerly FASB Statement No. 87, “Employers’
Accounting for Pensions”; FASB Statement No. 106, “Employers’ Accounting for
Postretirement Benefits Other Than Pensions”; and FASB Statement No. 158,
“Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans”).

26.c

Other equity capital components. Report the carrying value of any treasury stock and of
any unearned Employee Stock Ownership Plan (ESOP) shares, which under generally
accepted accounting principles are reported in a contra-equity account on the balance sheet.
For further information, see the Glossary entry for “treasury stock” and ASC Subtopic 718-40,
Compensation-Stock Compensation – Employee Stock Ownership Plans (formerly AICPA
Statement of Position 93-6, “Employers’ Accounting for Employee Stock Ownership Plans”).

27.a

Total bank equity capital. Report the sum of items 23 through 26.c. This item must equal
Report of Income Schedule RI-A, item 12, “Total bank equity capital end of current period.”

27.b

Noncontrolling (minority) interests in consolidated subsidiaries. Report the portion of
the equity capital accounts of all consolidated subsidiaries of the reporting bank held by
parties other than the parent bank. A noncontrolling interest, sometimes called a minority
interest, is the portion of equity in a bank’s subsidiary not attributable, directly or indirectly, to
the parent bank.

28

Total equity capital. Report the sum of items 27.a and 27.b.

29

Total liabilities and equity capital. Report the sum of items 21 and 28. This item must
equal Schedule RC, item 12, “Total assets.”

FFIEC 031 and 041

RC-15
(3-13)

RC - BALANCE SHEET

FFIEC 031 and 041

RC - BALANCE SHEET

Memorandum
Item No.
1

Caption and Instructions
Indicate in the box at the right the number of the statement below that best describes
the most comprehensive level of auditing work performed for the bank by independent
external auditors as of any date during the preceding calendar year. (To be reported
only with the March Report of Condition.) Report the number of the statement listed on the
report form that, in the bank's judgment, best describes the most comprehensive level of
auditing work performed by any independent external auditors during the preceding calendar
year.
The term "any date during the preceding calendar year" refers to the date of the balance
sheet and income statement reported on by the auditor (or the date as of which certain
agreed-upon procedures were applied to selected records and transactions by the auditor)
regardless of the actual date of the commencement of the auditing work (audit, internal
control attestation, directors' examination, review, compilation, or specific procedures) and
regardless of the date of the report submitted by the auditor.
Exclude from "auditing work performed" any tax or consulting work regardless of whether it
was performed by an independent certified public accounting firm or others.
The list of possible external auditing work is structured with the "most comprehensive level,"
an audit of the bank, as number 1 and the other levels of auditing work in descending order so
that "no external audit work" is number 9.
Banks may be assisted in determining the level of auditing work performed by reviewing the
type of report received from the auditor:
(a) If the bank or parent holding company has external auditing work performed by a
certified public accounting firm and the report of the auditor:
Begins

"We have examined . . ." or
"We have audited . . ."
and

The final paragraph begins

"In our opinion, the financial statements referred
to above . . ." or
In our opinion, the balance sheet referred to
above . . ."

the bank would respond to this item with a "1" if the first sentence of the first paragraph
of the report describes the financial statements or the balance sheet of the bank or with
a "2" if the first sentence of the first paragraph of the report describes the financial
statements or the balance sheet of the parent holding company.

FFIEC 031 and 041

RC-16
(3-13)

RC - BALANCE SHEET

FFIEC 031 and 041

RC - BALANCE SHEET

Memorandum
Item No.

Caption and Instructions

1
(cont.)

(b) If the report submitted by the auditor:
Begins

"We have examined management's assertion . . .
maintained effective internal control over financial
reporting . . .,"
and

The final paragraph states

"In our opinion . . ."

the bank would respond to this item with a "3."
(c) If the report submitted by the auditor:
Begins

"We have applied certain procedures to selected
records and transactions . . .,"

The second paragraph includes "We do not express an opinion, . . ."
and
The next to last paragraph states

"Had we performed additional procedures . . .
other matters may have come to our attention . . ."

the bank would respond with:
(i) a "4" if this auditing work was performed by a certified public accounting firm for the
Board of Directors as a directors' examination;
(ii) a "5" if this auditing work was performed by any other firm (e.g., a consulting firm,
another banking organization) for the Board of Directors as a directors' examination; or
(iii) an "8" if management otherwise engaged the auditor to perform specified auditing work
(excluding tax or consulting work) but this auditing work did not constitute a directors'
examination.
(d) If the report submitted by the auditor:
Begins

"We have reviewed . . . ,"

The second paragraph states

"A review consists principally of inquiries . . . ,"

and
The final paragraph begins

"Based on our review . . ."

the bank would respond to this item with a "6."

FFIEC 031 and 041

RC-17
(3-09)

RC - BALANCE SHEET

FFIEC 031 and 041

RC - BALANCE SHEET

Memorandum
Item No.

Caption and Instructions

1
(cont.)

(e) If the report submitted by the auditor:
Begins

"We have compiled . . ."
and

The second paragraph begins

"A compilation is limited to presenting . . . "

the bank would respond to this item with a "7."

An "independent external auditor" is an auditor who at no time during the year:
(1) was an employee of the bank;
(2) performed the bank's bookkeeping or maintained the bank's accounting records;
(3) was dependent on the bank for his livelihood nor was the bank such a significant client
that the loss of that client would jeopardize his livelihood; nor
(4) held the bank's securities or was indebted to the bank beyond those types of loans
permitted under applicable professional standards.
2

Bank’s fiscal year-end date. (To be reported only with the March Report of Condition.)
Report the bank’s fiscal year-end date (month and day) for financial reporting purposes. For
example, a bank whose fiscal year ends on June 30 would report 0630 in this Memorandum
item.

FFIEC 031 and 041

RC-18
(3-09)

RC - BALANCE SHEET

FFIEC 031 and 041

RC-A - CASH AND DUE FROM

SCHEDULE RC-A – CASH AND BALANCES DUE FROM DEPOSITORY
INSTITUTIONS
General Instructions
Schedule RC-A is to be completed by banks with foreign offices or with $300 million or more in total
assets.
On the FFIEC 031, this schedule has two columns for banks with foreign offices to report detail on "Cash
and balances due from depository institutions." In column A report amounts for the fully consolidated
bank, and in column B report amounts for domestic offices only. See the Glossary entry for "domestic
office" for the definition of this term. Refer to the General Instructions section of this book for a detailed
discussion of consolidation.
On the FFIEC 041, this schedule has a single column for banks with $300 million or more in total assets to
report detail on "Cash and balances due from depository institutions."
For banks that elect to report balances due from depository institutions at fair value under a fair value
option, report the fair value of those balances in the same items and columns as similar balances to which
a fair value option has not been applied.
For purposes of these reports, deposit accounts "due from" other depository institutions that are
overdrawn are to be reported as other borrowings with a remaining maturity of one year or less in
Schedule RC-M, item 5.b.(1), except overdrawn "due from" accounts arising in connection with checks or
drafts drawn by the reporting bank and drawn on, or payable at or through, another depository institution
either on a zero-balance account or on an account that is not routinely maintained with sufficient balances
to cover checks or drafts drawn in the normal course of business during the period until the amount of the
checks or drafts is remitted to the other depository institution (in which case, report the funds received or
held in connection with such checks or drafts as deposits in Schedule RC-E until the funds are remitted).
For further information, refer to the Glossary entry for "overdraft."
Treatment of reciprocal balances with depository institutions -- Reciprocal balances arise when two
depository institutions maintain deposit accounts with each other, i.e., when a reporting bank has both a
"due from" and a "due to" balance with another depository institution. Reciprocal balances between the
reporting bank and other depository institutions may be reported on a net basis when a right of setoff
exists. Net "due from" balances should be reported in this schedule. Net "due to" balances should be
reported as deposit liabilities in Schedule RC-E. See the Glossary entry for "offsetting" for the conditions
that must be met for a right of setoff to exist. See also the Glossary entry for "reciprocal balances."
Exclude from this schedule:
(1) All intrabank transactions, i.e., all transactions between any offices of the consolidated bank.
(2) Claims on banks or other depository institutions that the reporting bank holds for trading purposes
(report in Schedule RC, item 5, "Trading assets").
(3) Deposit accounts "due to" other depository institutions that are overdrawn (report in Schedule RC-C,
part I, item 2, "Loans to depository institutions and acceptances of other banks").
(4) Loans to depository institutions (report in Schedule RC-C, part I, item 2).

FFIEC 031 and 041

RC-A-1
(3-07)

RC-A - CASH AND DUE FROM

FFIEC 031 and 041

RC-A - CASH AND DUE FROM

Item Instructions
Item No.
1

Caption and Instructions
Cash items in process of collection, unposted debits, and currency and coin. On the
FFIEC 031, report this item as a single total for the fully consolidated bank in column A, but
with a breakdown between cash items in process of collection and unposted debits
(Schedule RC-A, item 1.a) and currency and coin (Schedule RC-A, item 1.b) for domestic
offices of the bank in column B. On the FFIEC 041, report cash items in process of
collection and unposted debits in Schedule RC-A, item 1.a, and currency and coin in
Schedule RC-A, item 1.b.
Cash items in process of collection include:
(1) Checks or drafts in process of collection that are drawn on another depository institution
(or on a Federal Reserve Bank) and that are payable immediately upon presentation in
the United States (or, for purposes of the FFIEC 031, in the country where the reporting
bank's office which is clearing or collecting the check or draft is located). This includes:
(a) Checks or drafts drawn on other institutions that have already been forwarded for
collection but for which the reporting bank has not yet been given credit ("cash
letters").
(b) Checks or drafts on hand that will be presented for payment or forwarded for
collection on the following business day.
(c) Checks or drafts that have been deposited with the reporting bank's correspondent
and for which the reporting bank has already been given credit, but for which the
amount credited is not subject to immediate withdrawal ("ledger credit" items).
However, if the reporting bank has been given immediate credit by its correspondent for
checks or drafts presented for payment or forwarded for collection and if the funds on
deposit are subject to immediate withdrawal, report the amount of such checks or drafts
in Schedule RC-A, item 2, "Balances due from depository institutions in the U.S.," or
item 3, "Balances due from banks in foreign countries and foreign central banks."
(2) Government checks drawn on the Treasurer of the United States or any other
government agency that are payable immediately upon presentation and that are in
process of collection.
(3) Such other items in process of collection that are payable immediately upon presentation
and that are customarily cleared or collected as cash items by depository institutions in
the United States or in such other country where the reporting bank's office which is
clearing or collecting the item is located, such as:
(a) Redeemed United States savings bonds and food stamps.
(b) Amounts associated with automated payment arrangements in connection with
payroll deposits, federal recurring payments, and other items that are credited to a
depositor's account prior to the payment date to ensure that the funds are available
on the payment date.

FFIEC 031 and 041

RC-A-2
(3-07)

RC-A - CASH AND DUE FROM

FFIEC 031 and 041

Item No.

RC-A - CASH AND DUE FROM

Caption and Instructions

1
(cont.)

(c) Federal Reserve deferred account balances until credit has been received in
accordance with the appropriate time schedules established by the Federal Reserve
Banks. At that time, such balances should be reported in Schedule RC-A, item 4,
"Balances due from Federal Reserve Banks."
(d) Checks or drafts drawn on another depository institution that have been deposited in
one office of the reporting bank and forwarded for collection to another office of the
reporting bank.
(e) Brokers' security drafts and commodity or bill-of-lading drafts payable immediately
upon presentation in the U.S. (See the Glossary entries for "broker's security draft"
and "commodity or bill-of-lading draft" for the definitions of these terms.)
Exclude from cash items in process of collection:
(1) Cash items for which the reporting bank has already received credit, provided that the
funds on deposit are subject to immediate withdrawal (report in Schedule RC-A, item 2, 3,
or 4, below, as appropriate).
(2) Credit or debit card sales slips in process of collection (report as noncash items in
Schedule RC-F, item 6, "All other assets”). However, when the reporting bank has been
notified that it has been given credit, the amount of such sales slips should be reported in
Schedule RC-A, item 2, "Balances due from depository institutions in the U.S.," or item 3,
"Balances due from banks in foreign countries and foreign central banks," as appropriate.
(3) Cash items not conforming to the definition of in process of collection, whether or not
cleared through Federal Reserve Banks (report in Schedule RC-F, item 6, "All other
assets”).
(4) Commodity or bill-of-lading drafts (including arrival drafts) not yet payable (because the
merchandise against which the draft was drawn has not yet arrived), whether or not
deposit credit has been given. (If deposit credit has been given, report as loans in the
appropriate item of Schedule RC-C, part I; if the drafts were received on a collection
basis, they should be excluded entirely from the bank's balance sheet, Schedule RC, until
the funds have actually been collected.)
Unposted debits are cash items in the bank's possession, drawn on itself, that are
immediately chargeable, but that have not been charged to the general ledger deposit
control account at the close of business on the report date.
Currency and coin include both U.S. and foreign currency and coin owned and held in all
offices of the reporting bank, currency and coin in transit to a Federal Reserve Bank or to
any other depository institution for which the reporting bank has not yet received credit, and
currency and coin in transit from a Federal Reserve Bank or from any other depository
institution for which the reporting bank's account has already been charged. Foreign
currency and coin should be converted into U.S. dollar equivalents as of the report date.

FFIEC 031 and 041

RC-A-3
(3-13)

RC-A - CASH AND DUE FROM

FFIEC 031 and 041

Item No.

RC-A - CASH AND DUE FROM

Caption and Instructions

1.a

Cash items in process of collection and unposted debits. Report (on the FFIEC 031,
in column B) the total amount outstanding (at domestic offices) of cash items in process of
collection and unposted debits that are immediately payable upon presentation in the
United States.

1.b

Currency and coin. Report (on the FFIEC 031, in column B) all currency and coin owned
and held (in domestic offices) by the reporting bank.

2

Balances due from depository institutions in the U.S. On the FFIEC 031, report this
item as a single total for the domestic offices of the bank in column B, but with a
breakdown between balances due from U.S. branches and agencies of foreign banks,
including their IBFs, (Schedule RC-A, item 2.a) and balances due from other commercial
banks in the U.S. and other depository institutions in the U.S., including their IBFs,
(Schedule RC-A, item 2.b) for the fully consolidated bank in column A. On the FFIEC 041,
report balances due from U.S. branches and agencies of foreign banks in Schedule RC-A,
item 2.a, and balances due from other commercial banks in the U.S. and other depository
institutions in the U.S. in Schedule RC-A, item 2.b.
Depository institutions in the U.S. cover:
(1) U.S. branches and agencies of foreign banks (refer to the Glossary entry for "banks, U.S.
and foreign" for the definition of this term); and
(2) All other depository institutions in the U.S., i.e.,
(a) U.S. branches of U.S. banks (refer to the Glossary entry for "banks, U.S.
and foreign");
(b) savings or building and loan associations, homestead associations, and
cooperative banks;
(c) mutual and stock savings banks; and
(d) credit unions.
For purposes of this schedule, also include Federal Home Loan Banks in "all other
depository institutions in the U.S."
Balances due from such institutions cover all interest-bearing and noninterest-bearing
balances whether in the form of demand, savings, or time balances, including certificates of
deposit (CDs), even if the CDs are negotiable or have CUSIP numbers, but excluding
certificates of deposit held for trading. Balances, as reported in these items, should reflect
funds on deposit at other depository institutions in the U.S. for which the reporting bank has
already received credit and which are subject to immediate withdrawal. Balances for which the
bank has not yet received credit and balances representing checks or drafts for which
immediate credit has been given but which are not subject to immediate withdrawal are to be
reported as "cash items in process of collection."
Included in the amounts to be reported as balances due from depository institutions in the
U.S. are:
(1) Balances due from the reporting bank's correspondents, including amounts that its
correspondent is to pass through or already has passed through to a Federal Reserve
Bank on behalf of the reporting bank (see the Glossary entry for "pass-through reserve
balances" for further discussion).

FFIEC 031 and 041

RC-A-4
(3-13)

RC-A - CASH AND DUE FROM

FFIEC 031 and 041

RC-A - CASH AND DUE FROM

Item No.

Caption and Instructions

2
(cont.)

(2) Balances that reflect deposit credit received by the reporting bank because of credit or
debit card sales slips that had been forwarded for collection. (Until credit has been
received, report as noncash items in process of collection in Schedule RC-F, item 6, "All
other assets.”)
Exclude from Schedule RC-A, items 2, 2.a, and 2.b:
(1) Cash items in process of collection (including cash letters and "ledger credit" items) and
unposted debits (report in Schedule RC-A, item 1, above).
(2) All balances that the reporting bank's trust department maintains with other depository
institutions.
(3) Loans to depository institutions (report in Schedule RC-C, part I, item 2).
(4) Certificates of deposit held for trading (report in Schedule RC, item 5).

2.a

U.S. branches and agencies of foreign banks (including their IBFs). Report (on the
FFIEC 031, in column A) all balances due from U.S. branches and agencies of foreign banks
(including their IBFs).

2.b

Other depository institutions in the U.S. (including their IBFs). Report (on the
FFIEC 031, in column A) all balances due from depository institutions in the U.S., other than
U.S. branches and agencies of foreign banks.

3

Balances due from banks in foreign countries and foreign central banks. On the
FFIEC 031, report this item as a single total for the domestic offices of the bank in column B,
but with a breakdown between balances due from foreign branches of other U.S. banks
(Schedule RC-A, item 3.a) and balances due from other banks in foreign countries and
foreign central banks (Schedule RC-A, item 3.b) for the fully consolidated bank in column A.
On the FFIEC 041, report balances due from foreign branches of other U.S. banks in
Schedule RC-A, item 3.a, and balances due from other banks in foreign countries and foreign
central banks in Schedule RC-A, item 3.b.
Banks in foreign countries cover:
(1) foreign-domiciled branches of other U.S. banks; and
(2) foreign-domiciled branches of foreign banks.
See the Glossary entry for "banks, U.S. and foreign" for a description of banks in foreign
countries.
For purposes of this item, foreign central banks cover:
(1) Central banks in foreign countries;
(2) Departments of foreign central governments that have, as an important part of their
functions, activities similar to those of a central bank;

FFIEC 031 and 041

RC-A-5
(9-12)

RC-A - CASH AND DUE FROM

FFIEC 031 and 041

RC-A - CASH AND DUE FROM

Item No.

Caption and Instructions

3
(cont.)

(3) Nationalized banks and banking institutions owned by central governments that have,
as an important part of their functions, activities similar to those of a central bank; and
(4) The Bank for International Settlements (BIS).
Balances due from banks in foreign countries and foreign central banks cover all
interest-bearing and noninterest-bearing balances excluding any balances that the reporting
bank holds for trading. Balances, as reported in this item, should reflect funds on deposit at
other banks in foreign countries and at foreign central banks for which the reporting bank has
already received credit. Balances with foreign central banks should include all balances with
such entities, including reserve, operating, and investment balances. On the FFIEC 031,
balances reported in column A should include "placements and redeposits" between foreign
offices of the reporting bank and foreign offices of other banks.
Exclude from Schedule RC-A, items 3, 3.a, and 3.b:
(1) Balances with U.S. branches and agencies of foreign banks (report in Schedule RC-A,
item 2 above).
(2) Loans to foreign central banks (report in Schedule RC-C, part I, item 7).
(3) Loans to banks in foreign countries (report in Schedule RC-C, part I, item 2.c).
(4) Cash items in process of collection and unposted debits (report in Schedule RC-A, item 1
above).
(5) Any balances held for trading (report in Schedule RC, item 5).

3.a

Foreign branches of other U.S. banks. Report (on the FFIEC 031, in column A) all
balances due from foreign-domiciled branches of other U.S. banks.

3.b

Other banks in foreign countries and foreign central banks. Report (on the FFIEC 031,
in column A) all balances due from banks in foreign countries, other than foreign-domiciled
branches of other U.S. banks, and foreign central banks.

4

Balances due from Federal Reserve Banks. Report (on the FFIEC 031, in columns A
and B, as appropriate) the total balances due from Federal Reserve Banks as shown by the
reporting bank's books. This amount includes balances maintained to satisfy reserve balance
requirements, excess balances, and term deposits. Include the amount of balances
maintained to satisfy reserve balance requirements actually passed through to a Federal
Reserve Bank by the reporting bank on behalf of its respondent depository institutions. If the
reporting bank is an agent for an excess balance account at a Federal Reserve Bank, the
balances in the excess balance account should not be reflected as an asset or a liability on
the reporting bank’s balance sheet and should not be reported in this item. (See the Glossary
entries for “excess balance account” and “pass-through reserve balances.”)
On the FFIEC 031, include in column A balances of the bank's Edge and Agreement
subsidiaries with a Federal Reserve Bank.

5

Total. On the FFIEC 041, report the sum of items 1 through 4. On the FFIEC 031, report the
sum of items 1 through 4 in column A for the fully consolidated bank and in column B for its
domestic offices. On the FFIEC 041, this item must equal Schedule RC, sum of items 1.a
and 1.b. On the FFIEC 031, the total of column A must equal Schedule RC, sum of items 1.a
and 1.b.

FFIEC 031 and 041

RC-A-6
(9-12)

RC-A - CASH AND DUE FROM

FFIEC 031 and 041

RC-B - SECURITIES

SCHEDULE RC-B – SECURITIES
General Instructions
This schedule has four columns for information on securities: two columns for held-to-maturity securities
1
and two columns for available-for-sale securities. Report the amortized cost and fair value of held-tomaturity securities in columns A and B, respectively. Report the amortized cost and fair value of availablefor-sale debt securities in columns C and D, respectively. Information on equity securities with readily
determinable fair values is reported in the columns for available-for-sale securities only (columns C
and D). For these equity securities, historical cost (not amortized cost) is reported in column C and
fair value is reported in column D.
Exclude from this schedule all securities held for trading and securities the bank has elected to report at
fair value under a fair value option even if bank management did not acquire the securities principally for
the purpose of selling them in the near term. Securities held for trading and securities reported under a
fair value option are to be reported in Schedule RC, item 5, "Trading assets," and, for certain banks, in
Schedule RC-D – Trading Assets and Liabilities. Trading assets and securities reported under a fair value
option are also reported in Schedule RC-Q – Financial Assets and Liabilities Measured at Fair Value.
In general, amortized cost is the purchase price of a debt security adjusted for amortization of premium or
accretion of discount if the debt security was purchased at other than par or face value. (See the Glossary
entry for "premiums and discounts.") As defined in ASC Topic 820, Fair Value Measurements and
Disclosures (formerly FASB Statement No. 157, “Fair Value Measurements”), fair value is “the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.” For further information, see the Glossary entry for “fair value.”
The preferred method for reporting purchases and sales of securities is as of trade date. However,
settlement date accounting is acceptable if the reported amounts would not be materially different.
(See the Glossary entry for "trade date and settlement date accounting.")
For purposes of this schedule, the following events and transactions involving securities should be
reported in the manner indicated below:
(1) Purchases of securities under agreements to resell and sales of securities under agreements to
repurchase – These transactions are not to be treated as purchases or sales of securities but as
lending or borrowing (i.e., financing) transactions collateralized by these securities if the agreements
meet the criteria for a borrowing set forth in ASC Topic 860, Transfers and Servicing (formerly FASB
Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities," as amended). For further information, see the Glossary entries for "transfers of financial
assets" and "repurchase/resale agreements."

1

Available-for-sale securities are generally reported in Schedule RC-B, columns C and D. However, a bank may
have certain assets that fall within the definition of "securities" in ASC Topic 320, Investments-Debt and Equity
Securities (formerly FASB Statement No. 115, “Accounting for Certain Investments in Debt and Equity Securities”),
(e.g., certain industrial development obligations) that the bank has designated as "available-for-sale" which are
reported for purposes of the Report of Condition in a balance sheet category other than "Securities" (e.g., "Loans
and lease financing receivables").

FFIEC 031 and 041

RC-B-1
(3-11)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

General Instructions (cont.)
(2) Purchases and sales of participations in pools of securities – Similarly, these transactions are not to
be treated as purchases or sales of the securities in the pool but as lending or borrowing
(i.e., financing) transactions collateralized by the pooled securities if the participation agreements
meet the criteria for a borrowing set forth in ASC Topic 860. For further information, see the Glossary
entries for "transfers of financial assets" and "repurchase/resale agreements."
(3) Pledged securities – Pledged securities that have not been transferred to the secured party should
continue to be included in the pledging bank's holdings of securities that are reported in
Schedule RC-B. If the bank has transferred pledged securities to the secured party, the bank should
account for the pledged securities in accordance with ASC Topic 860.
(4) Securities borrowed and lent – Securities borrowed and lent shall be reported on the balance sheet of
either the borrowing or lending bank in accordance with ASC Topic 860. For further information, see
the Glossary entries for "transfers of financial assets" and "securities borrowing/lending transactions."
(5) Short sales of securities – Such transactions are to be reported as described in the Glossary entry for
"short position."
(6) Futures, forward, and option contracts – Such open contracts to buy or sell securities in the future are
to be reported as derivatives in Schedule RC-L, item 12.

Item Instructions
Item No.
1

Caption and Instructions
U.S. Treasury securities. Report in the appropriate columns the amortized cost and fair
value of all U.S. Treasury securities not held in trading accounts. Include all bills, certificates
of indebtedness, notes, and bonds, including those issued under the Separate Trading of
Registered Interest and Principal of Securities (STRIPS) program and those that are
"inflation-indexed."
Exclude all obligations of U.S. Government agencies. Also exclude detached Treasury
security coupons and ex-coupon Treasury securities held as the result of either their purchase
or the bank's stripping of such securities and Treasury receipts such as CATS, TIGRs,
COUGARs, LIONs, and ETRs (report in Schedule RC-B, item 6.a below). Refer to the
Glossary entry for "coupon stripping, Treasury receipts, and STRIPS" for additional
information.

.

FFIEC 031 and 041

RC-B-2
(3-11)

RC-B - SECURITIES

FFIEC 031 and 041

Item No.
2

RC-B - SECURITIES

Caption and Instructions
U.S. Government agency obligations. Report in the appropriate columns of the appropriate
subitems the amortized cost and fair value of all U.S. Government agency obligations
(excluding mortgage-backed securities) not held for trading.
Exclude from U.S. Government agency obligations:
(1) Loans to the Export-Import Bank and to federally-sponsored lending agencies (report in
"Other loans," Schedule RC-C, part I, item 9). Refer to the Glossary entry for "federallysponsored lending agency" for the definition of this term.
(2) All holdings of U.S. Government-issued or -guaranteed mortgage pass-through securities
(report in Schedule RC-B, item 4.a, below).
(3) Collateralized mortgage obligations (CMOs), real estate mortgage investments conduits
(REMICs), CMO and REMIC residuals, and stripped mortgage-backed securities (such as
interest-only strips (IOs), principal-only strips (POs), and similar instruments) issued by
U.S. Government agencies and corporations (report in Schedule RC-B, item 4.b, below).
(4) Participations in pools of Federal Housing Administration (FHA) Title I loans, which
generally consist of junior lien home improvement loans (report as loans in
Schedule RC-C, generally in item 1.c.(2)(b), Loans "secured by junior liens" on
1-to-4 family residential properties).

FFIEC 031 and 041

RC-B-2a
(3-07)

RC-B - SECURITIES

This page intentionally left blank.

FFIEC 031 and 041

Item No.
2.a

RC-B - SECURITIES

Caption and Instructions
Issued by U.S. Government agencies. Report in the appropriate columns the amortized
cost and fair value of all obligations (excluding mortgage-backed securities) not held for
trading that have been issued by U.S. Government agencies. For purposes of these reports,
a U.S. Government agency is defined as an instrumentality of the U.S. Government whose
debt obligations are fully and explicitly guaranteed as to the timely payment of principal and
interest by the full faith and credit of the U.S. Government.
Include, among others, debt securities (but not mortgage-backed securities) of the following
U.S. Government agencies:
(1)
(2)
(3)
(4)
(5)

Export-Import Bank (Ex-Im Bank)
Federal Housing Administration (FHA)
Government National Mortgage Association (GNMA)
Maritime Administration
Small Business Administration (SBA)

Include such obligations as:
(1) Small Business Administration (SBA) "Guaranteed Loan Pool Certificates," which
represent an undivided interest in a pool of SBA-guaranteed portions of loans for which
the SBA has further guaranteed the timely payment of scheduled principal and interest
payments.
(2) Participation certificates issued by the Export-Import Bank and the General Services
Administration.
2.b

Issued by U.S. Government-sponsored agencies. Report in the appropriate columns the
amortized cost and fair value of all obligations (excluding mortgage-backed securities) not held
for trading that have been issued by U.S. Government-sponsored agencies. For purposes of
these reports, U.S. Government-sponsored agencies are defined as agencies originally
established or chartered by the U.S. Government to serve public purposes specified by the
U.S. Congress but whose debt obligations are not explicitly guaranteed by the full faith and
credit of the U.S. Government.
Include, among others, debt securities and mortgage-backed bonds (i.e., bonds that are
collateralized by mortgages) of the following government-sponsored agencies:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)

Federal Agricultural Mortgage Corporation (Farmer Mac)
Federal Farm Credit Banks
Federal Home Loan Banks (FHLBs)
Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac)
Federal Land Banks (FLBs)
Federal National Mortgage Association (FNMA or Fannie Mae)
Financing Corporation (FICO)
Resolution Funding Corporation (REFCORP)
Student Loan Marketing Association (SLMA or Sallie Mae)
Tennessee Valley Authority (TVA)
U.S. Postal Service

Exclude debt securities issued by SLM Corporation, the private-sector corporation that is the
successor to the Student Loan Marketing Association (report in Schedule RC-B, item 6.a,
“Other domestic debt securities,” below), and securitized student loans issued by
SLM Corporation (or its affiliates) (report in Schedule RC-B, item 5, “Asset-backed securities,”
below).

FFIEC 031 and 041

RC-B-3
(3-11)

RC-B - SECURITIES

FFIEC 031 and 041

Item No.
3

RC-B - SECURITIES

Caption and Instructions
Securities issued by states and political subdivisions in the U.S. Report in the
appropriate columns the amortized cost and fair value of all securities issued by states and
political subdivisions in the United States not held for trading.
States and political subdivisions in the U.S., for purposes of this report, include:
(1) the fifty States of the United States and the District of Columbia and their counties,
municipalities, school districts, irrigation districts, and drainage and sewer districts; and
(2) the governments of Puerto Rico and of the U.S. territories and possessions and their
political subdivisions.
Securities issued by states and political subdivisions in the U.S. include:
(1) General obligations, which are securities whose principal and interest will be paid from
the general tax receipts of the state or political subdivision.
(2) Revenue obligations, which are securities whose debt service is paid solely from the
revenues of the projects financed by the securities rather than from general tax funds.
(3) Industrial development and similar obligations, which are discussed below.
Treatment of industrial development bonds (IDBs) and similar obligations. Industrial
development bonds (IDBs), sometimes referred to as "industrial revenue bonds," and similar
obligations are issued under the auspices of states or political subdivisions for the benefit of a
private party or enterprise where that party or enterprise, rather than the government entity,
is obligated to pay the principal and interest on the obligation. For purposes of these reports,
all IDBs and similar obligations should be reported as securities in this item (Schedule RC-B,
item 3) or as loans in Schedule RC-C, part I, item 8, consistent with the asset category in
which the bank reports IDBs and similar obligations on its balance sheet for other financial
reporting purposes. Regardless of whether they are reported as securities in Schedule RC-B
or as loans in Schedule RC-C, part I, all IDBs and similar obligations that meet the definition
of a "security" in ASC Topic 320, Investments-Debt and Equity Securities (formerly FASB
Statement No. 115, “Accounting for Certain Investments in Debt and Equity Securities”) must
be measured in accordance with ASC Topic 320.
Treatment of other obligations of states and political subdivisions in the U.S. In addition to
those IDBs and similar obligations that are reported as securities in accordance with the
preceding paragraph, also include in this item as securities issued by states and political
subdivisions in the U.S. all obligations other than IDBs that meet any of the following criteria:
(1) Nonrated obligations of states and political subdivisions in the U.S., other than those
specifically excluded below, that the bank considers securities for other financial reporting
purposes.
(2) Notes, bonds, and debentures (including tax warrants and tax-anticipation notes) that are
rated by a nationally-recognized rating service.
(3) Obligations of state and local governments that are guaranteed by the United States
Government (excluding mortgage-backed securities).

FFIEC 031 and 041

RC-B-4
(3-11)

RC-B - SECURITIES

FFIEC 031 and 041

Item No.

Caption and Instructions

3
(cont.)

Exclude from item 3:

RC-B - SECURITIES

(1) All overdrafts of states and political subdivisions in the U.S. (report as loans in
Schedule RC-C, part I, item 8).
(2) All lease financing receivables of states and political subdivisions in the U.S. (report as
leases in Schedule RC-C, part I, item 10).
(3) All IDBs that are reported as loans in accordance with the reporting treatment described
above (report as loans in Schedule RC-C, part I, item 8).
(4) All other nonrated obligations of states and political subdivisions in the U.S. that the bank
considers loans for other financial reporting purposes (report as loans in Schedule RC-C,
part I, item 8).
(5) All mortgage-backed securities issued by state and local housing authorities in the U.S.
(report in Schedule RC-B, item 4, below).
(6) Collateralized mortgage obligations (CMOs), real estate mortgage investments conduits
(REMICs), CMO and REMIC residuals, and stripped mortgage-backed securities (such as
interest-only strips (IOs), principal-only strips (POs), and similar instruments) issued by
state and local housing authorities in the U.S. (report in Schedule RC-B, item 4.b, below).
(7) All obligations of states and political subdivisions in the U.S. held by the reporting bank for
trading (report in Schedule RC, item 5).
4

Mortgage-backed securities. Report in the appropriate columns of the appropriate subitems
the amortized cost and fair value of all residential and commercial mortgage-backed
securities, including mortgage pass-through securities, collateralized mortgage obligations
(CMOs), real estate mortgage investment conduits (REMICs), CMO and REMIC residuals,
stripped mortgage-backed securities (such as interest-only strips (IOs), principal-only strips
(POs), and similar instruments), and mortgage-backed commercial paper not held for trading.
Exclude from mortgage-backed securities:
(1) Securities backed by loans extended under home equity lines, i.e., revolving open-end
lines of credit secured by 1-4 family residential properties (report as asset-backed
securities in Schedule RC-B, item 5.a, and, if applicable, in Schedule RC-B,
Memorandum item 5.b, “Home equity lines”).
(2) Bonds issued by the Federal National Mortgage Association (FNMA) and the
Federal Home Loan Mortgage Corporation (FHLMC) that are collateralized by mortgages,
i.e., mortgage-backed bonds, (report in Schedule RC-B, item 2.b, Obligations "Issued by
U.S. Government-sponsored agencies") and mortgage-backed bonds issued by non-U.S.
Government issuers (report in Schedule RC-B, item 6, "Other debt securities," below).
(3) Participation certificates issued by the Export-Import Bank and the General Services
Administration (report in Schedule RC-B, item 2.a, Obligations "Issued by U.S.
Government agencies").

FFIEC 031 and 041

RC-B-5
(6-09)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

Item No.

Caption and Instructions

4
(cont.)

(4) Participation certificates issued by a Federal Intermediate Credit Bank (report in
Schedule RC-F, item 4, "Equity securities that do not have readily determinable fair
values").

4.a

Residential mortgage pass-through securities. Report in the appropriate columns of the
appropriate subitems the amortized cost and fair value of all holdings of residential mortgage
pass-through securities. In general, a residential mortgage pass-through security represents
an undivided interest in a pool of loans secured by 1-4 family residential properties that
provides the holder with a pro rata share of all principal and interest payments on the
residential mortgages in the pool, and includes certificates of participation in pools of
residential mortgages.
Include certificates of participation in pools of 1-4 family residential mortgages even though
the reporting bank was the original holder of the mortgages underlying the pool and holds the
instruments covering that pool, as may be the case with GNMA certificates issued by the bank
and swaps with FNMA and FHLMC. Also include U.S. Government-issued participation
certificates (PCs) that represent a pro rata share of all principal and interest payments on a
pool of resecuritized participation certificates that, in turn, are backed by 1-4 family residential
mortgages, e.g., FHLMC Giant PCs.
Exclude all holdings of commercial mortgage pass-through securities, including pass-through
securities backed by loans secured by multifamily (5 or more) residential properties (report in
Schedule RC-B, item 4.c.(1), below). Also exclude all collateralized mortgage obligations
(CMOs), real estate mortgage investment conduits (REMICs), CMO and REMIC residuals,
stripped mortgage-backed securities (such as interest-only strips (IOs), principal-only strips
(POs), and similar instruments), and mortgage-backed commercial paper (report in
Schedule RC-B, item 4.b or 4.c.(2), below, as appropriate).

4.a.(1)

Guaranteed by GNMA. Report in the appropriate columns the amortized cost and fair value
of all holdings of 1-4 family residential mortgage pass-through securities guaranteed by the
Government National Mortgage Association (GNMA) that are not held for trading. Exclude 14 family residential mortgage pass-through securities issued by FNMA and FHLMC (report in
Schedule RC-B, item 4.a.(2), below).

4.a.(2)

Issued by FNMA and FHLMC. Report in the appropriate columns the amortized cost and
fair value of all holdings of 1-4 family residential mortgage pass-through securities issued by
the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage
Corporation (FHLMC) that are not held for trading. Exclude 1-4 family residential mortgage
pass-through securities that are guaranteed by the Government National Mortgage
Association (GNMA) (report in Schedule RC-B, item 4.a.(1), above).

4.a.(3)

Other pass-through securities. Report in the appropriate columns the amortized cost and
fair value of all holdings of 1-4 family residential mortgage pass-through securities issued by
others (e.g., other depository institutions, insurance companies, state and local housing
authorities in the U.S.) that are not guaranteed by the U.S. Government and are not held for
trading.
If the bank has issued pass-through securities backed by a pool of its own 1-4 family
residential mortgages and the certificates are not guaranteed by the U.S. Government, any
holdings of these pass-through securities (not held for trading) are to be reported in this item.

FFIEC 031 and 041

RC-B-6
(6-09)

RC-B - SECURITIES

FFIEC 031 and 041

Item No.
4.b

RC-B - SECURITIES

Caption and Instructions
Other residential mortgage-backed securities. Report in the appropriate columns of the
appropriate subitems the amortized cost and fair value of all 1-4 family residential
mortgage-backed securities other than pass-through securities that are not held for trading.
Other residential mortgage-backed securities include:
(1) All classes of collateralized mortgage obligations (CMOs) and real estate mortgage
investments conduits (REMICs) backed by loans secured by 1-4 family residential
properties.
(2) CMO and REMIC residuals and similar interests backed by loans secured by 1-4 family
residential properties.
(3) Stripped 1-4 family residential mortgage-backed securities (such as interest-only strips
(IOs), principal-only strips (POs), and similar instruments).
(4) Commercial paper backed by loans secured by 1-4 family residential properties.

4.b.(1)

Issued or guaranteed by U.S. Government agencies or sponsored agencies. Report in
the appropriate columns the amortized cost and fair value of all classes of CMOs and
REMICs, CMO and REMIC residuals, and stripped mortgage-backed securities issued or
guaranteed by U.S. Government agencies or U.S. Government-sponsored agencies that are
backed by loans secured by 1-4 family residential properties. For purposes of these reports,
include REMICs issued by the U.S. Department of Veterans Affairs (VA) that are backed by
1-4 family residential mortgages in this item.
U.S. Government agencies include, but are not limited to, such agencies as the Government
National Mortgage Association (GNMA), the Federal Deposit Insurance Corporation (FDIC),
and the National Credit Union Administration (NCUA). U.S. Government-sponsored agencies
include, but are not limited to, such agencies as the Federal Home Loan Mortgage
Corporation (FHLMC) and the Federal National Mortgage Association (FNMA).

4.b.(2)

Collateralized by MBS issued or guaranteed by U.S. Government agencies or
sponsored agencies. Report in the appropriate columns the amortized cost and fair value of
all classes of CMOs, REMICs, CMO and REMIC residuals, and stripped mortgage-backed
securities issued by non-U.S. Government issuers (e.g., other depository institutions,
insurance companies, state and local housing authorities in the U.S.) for which the collateral
consists of GNMA (Ginnie Mae) residential pass-through securities, FNMA (Fannie Mae)
residential pass-through securities, FHLMC (Freddie Mac) residential participation certificates,
or other residential mortgage-backed securities (i.e., classes of CMOs or REMICs, CMO or
REMIC residuals, and stripped mortgage-backed securities) issued or guaranteed by U.S.
Government agencies or U.S. Government-sponsored agencies.

4.b.(3)

All other residential MBS. Report in the appropriate columns the amortized cost and fair
value of all CMOs, REMICs, CMO and REMIC residuals, stripped mortgage-backed
securities, and commercial paper backed by loans secured by 1-4 family residential properties
(or by securities collateralized by such loans) that have been issued by non-U.S. Government
issuers (e.g., other depository institutions, insurance companies, state and local housing
authorities in the U.S.) for which the collateral does not consist of GNMA (Ginnie Mae)
residential pass-through securities, FNMA (Fannie Mae) residential pass-through securities,
FHLMC (Freddie Mac) residential participation certificates, or other residential mortgagebacked securities (i.e., classes of CMOs or REMICs, CMO or REMIC residuals, and stripped
mortgage-backed securities) issued or guaranteed by U.S. Government agencies or U.S.
Government-sponsored agencies.

FFIEC 031 and 041

RC-B-7
(9-11)

RC-B - SECURITIES

FFIEC 031 and 041

Item No.

RC-B - SECURITIES

Caption and Instructions

4.c

Commercial MBS. Report in the appropriate columns of the appropriate subitems the
amortized cost and fair value of all holdings of commercial mortgage-backed securities issued
by U.S. Government-sponsored agencies or by others that are not held for trading.
In general, a commercial mortgage-backed security represents an interest in a pool of loans
secured by properties other than 1-4 family residential properties.

4.c.(1)

Commercial mortgage pass-through securities. Report in the appropriate columns of the
appropriate subitems the amortized cost and fair value of all holdings of commercial mortgage
pass-through securities. In general, a commercial mortgage pass-through security represents
an undivided interest in a pool of loans secured by properties other than 1-4 family residential
properties that provides the holder with a pro rata share of all principal and interest payments
on the mortgages in the pool.

4.c.(1)(a)

Issued or guaranteed by FNMA, FHLMC, or GNMA. Report in the appropriate columns the
amortized cost and fair value of all holdings of commercial mortgage pass-through securities
issued by the Federal National Mortgage Association (FNMA) or the Federal Home Loan
Mortgage Corporation (FHLMC) or guaranteed by the Government National Mortgage
Association (GNMA). Also include commercial mortgage pass-through securities guaranteed
by the Small Business Administration.

4.c.(1)(b)

Other pass-through securities. Report in the appropriate columns the amortized cost and
fair value of all holdings of commercial mortgage pass-through securities issued or
guaranteed by non-U.S. Government issuers.

4.c.(2)

Other commercial mortgage-backed securities. Report in the appropriate columns of the
appropriate subitems the amortized cost and fair value of all CMOs, REMICs, CMO and
REMIC residuals, stripped mortgage-backed securities, and commercial paper backed by
loans secured by properties other than 1-4 family residential properties. Exclude commercial
mortgage pass-through securities (report in Schedule RC-B, item 4.c.(1), above).

4.c.(2)(a)

Issued or guaranteed by U.S. Government agencies or sponsored agencies. Report in
the appropriate columns the amortized cost and fair value of all CMOs, REMICs, CMO and
REMIC residuals, stripped mortgage-backed securities, and commercial paper backed by
loans secured by properties other than 1-4 family residential properties that have been issued
by U.S. Government agencies or U.S. Government-sponsored agencies.
U.S. Government agencies include, but are not limited to, such agencies as the Government
National Mortgage Association (GNMA), the Federal Deposit Insurance Corporation (FDIC),
and the National Credit Union Administration (NCUA). U.S. Government-sponsored agencies
include, but are not limited to, such agencies as the Federal Home Loan Mortgage
Corporation (FHLMC) and the Federal National Mortgage Association (FNMA).

4.c.(2)(b)

All other commercial MBS. Report in the appropriate columns the amortized cost and fair
value of all CMOs, REMICs, CMO and REMIC residuals, stripped mortgage-backed
securities, and commercial paper backed by loans secured by properties other than 1-4 family
residential properties that have been issued or guaranteed by non-U.S. Government issuers.

5

Asset-backed securities and structured financial products:

5.a

Asset-backed securities. Report in the appropriate columns the amortized cost and
fair value of all asset-backed securities (other than mortgage-backed securities), including
asset-backed commercial paper, not held for trading. For banks with $1 billion or more
in total assets, this item must equal Schedule RC-B, sum of Memorandum items 5.a
through 5.f.

FFIEC 031 and 041

RC-B-8
(9-11)

RC-B - SECURITIES

FFIEC 031 and 041

Item No.
5.b

RC-B - SECURITIES

Caption and Instructions
Structured financial products. Report in the appropriate columns of the appropriate
subitems the amortized cost and fair value of all structured financial products not held for
trading according to whether the product is a cash, synthetic, or hybrid instrument. Structured
financial products generally convert a pool of assets (such as whole loans, securitized assets,
and bonds) and other exposures (such as derivatives) into products that are tradable capital
market debt instruments. Some of the more complex financial product structures mix asset
classes in order to create investment products that diversify risk. One of the more common
structured financial products is referred to as a collateralized debt obligation (CDO). Other
products include synthetic structured financial products (such as synthetic CDOs) that use
credit derivatives and a reference pool of assets, hybrid structured products that mix cash and
synthetic instruments, collateralized bond obligations (CBOs), resecuritizations such as CDOs
squared or cubed (which are CDOs backed primarily by the tranches of other CDOs), and
other similar structured financial products. For each column, the sum of items 5.b.(1) through
5.b.(3) must equal the sum of Memorandum items 6.a through 6.g.
Exclude from structured financial products:
(1) Mortgage-backed pass-through securities (report in Schedule RC-B, item 4, above).
(2) Collateralized mortgage obligations (CMOs), real estate mortgage investment conduits
(REMICs), CMO and REMIC residuals, stripped mortgage-backed securities, and
mortgage-backed commercial paper (report in Schedule RC-B, item 4, above).
(3) Asset-backed commercial paper not held for trading (report in Schedule RC-B, item 5.a,
above).
(4) Asset-backed securities that are primarily secured by one type of asset (report in
Schedule RC-B, item 5.a, above).
(5) Securities backed by loans that are commonly regarded as asset-backed securities rather
than collateralized loan obligations in the marketplace (report in Schedule RC-B, item 5.a,
above).

5.b.(1)

Cash instruments. Report in the appropriate columns the amortized cost and fair value of
structured financial products (as defined in Schedule RC-B, item 5.b, above) that are cash
instruments. A cash instrument means that the instrument represents a claim against a
reference pool of assets. For example, include investments in collateralized debt obligations
for which the underlying collateral is a pool of trust preferred securities issued by U.S.
business trusts organized by financial institutions or real estate investment trusts. However,
exclude investments in trust preferred securities issued by a single U.S. business trust (report
in Schedule RC-B, item 6.a, “Other domestic debt securities”).

5.b.(2)

Synthetic instruments. Report in the appropriate columns the amortized cost and fair value
of structured financial products (as defined in Schedule RC-B, item 5.b, above) that are
synthetic instruments. A synthetic instrument means that the investors do not have a claim
against a reference pool of assets; rather, the originating bank merely transfers the inherent
credit risk of the reference pool of assets by such means as a credit default swap, a total
return swap, or another arrangement in which the counterparty agrees upon specific
contractual covenants to cover a predetermined amount of losses in the loan pool.

FFIEC 031 and 041

RC-B-8a
(3-13)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

Item No.

Caption and Instructions

5.b.(3)

Hybrid instruments. Report in the appropriate columns the amortized cost and fair value of
structured financial products (as defined in Schedule RC-B, item 5.b, above) that are hybrid
instruments. A hybrid instrument means that the instrument is a mix of both cash and
synthetic instruments.

6

Other debt securities. Report in the appropriate columns of the appropriate subitems the
amortized cost and fair value of all debt securities not held for trading that cannot properly be
reported in Schedule RC-B, items 1 through 5, above.
Exclude from other debt securities:
(1) All holdings of certificates of participation in pools of residential mortgages, collateralized
mortgage obligations (CMOs), real estate mortgage investment conduits (REMICs),
CMO and REMIC residuals, and stripped mortgage-backed securities (such as
interest-only strips (IOs), principal-only strips (POs), and similar instruments) (report in
Schedule RC-B, item 4, above).
(2) Holdings of bankers acceptances and certificates of deposit (CDs), even if the CDs are
negotiable or have CUSIP numbers. (Report holdings of bankers acceptances as loans
in Schedule RC, item 4.a, if held for sale; item 4.b, if held for investment; and item 5, if
held for trading. Report holdings of CDs in Schedule RC, item 1.b, if not held for trading;
and item 5, if held for trading.)
(3) All securities that meet the definition of an “equity security” in ASC Topic 320,
Investments-Debt and Equity Securities (formerly FASB Statement No. 115, “Accounting
for Certain Investments in Debt and Equity Securities”), for example, common and
perpetual preferred stock. (See also the instructions to Schedule RC-B, item 7, and
Schedule RC-F, item 4.)

6.a

Other domestic debt securities. Report in the appropriate columns the amortized cost and
fair value of all other domestic debt securities not held for trading.
Other domestic debt securities include:
(1) Bonds, notes, debentures, equipment trust certificates, and commercial paper (except
asset-backed commercial paper) issued by U.S.-chartered corporations and other
U.S. issuers and not reportable elsewhere in Schedule RC-B.
(2) Preferred stock of U.S.-chartered corporations and business trusts that by its terms either
must be redeemed by the issuing corporation or trust or is redeemable at the option of the
investor (i.e., redeemable or limited-life preferred stock), including trust preferred
securities issued by a single U.S. business trust that are subject to mandatory
redemption.
(3) Detached U.S. Government security coupons and ex-coupon U.S. Government securities
held as the result of either their purchase or the bank's stripping of such securities
and Treasury receipts such as CATS, TIGRs, COUGARs, LIONs, and ETRs. Refer to the
Glossary entry for "coupon stripping, Treasury receipts, and STRIPS" for additional
information.
Exclude from other domestic debt securities investments in collateralized debt obligations for
which the underlying collateral is a pool of trust preferred securities issued by U.S. business
trusts (report as structured financial products in Schedule RC-B, item 5.b.(1), “Cash
instruments”).

FFIEC 031 and 041

RC-B-8b
(3-13)

RC-B - SECURITIES

FFIEC 031 and 041

Item No.
6.b

RC-B - SECURITIES

Caption and Instructions
Foreign debt securities. Report in the appropriate columns the amortized cost and fair
value of all foreign debt securities not held for trading.
Foreign debt securities include:
(1) Bonds, notes, debentures, equipment trust certificates, and commercial paper (except
asset-backed commercial paper) issued by non-U.S.-chartered corporations.
(2) Debt securities issued by foreign governmental units.
(3) Debt securities issued by international organizations such as the International Bank for
Reconstruction and Development (World Bank), Inter-American Development Bank, and
Asian Development Bank.
(4) Preferred stock of non-U.S.-chartered corporations that by its terms either must be
redeemed by the issuing enterprise or is redeemable at the option of the investor
(i.e., redeemable or limited-life preferred stock).

7

Investments in mutual funds and other equity securities with readily determinable fair
values. Report in columns C and D the historical cost and fair value, respectively, of all
investments in mutual funds and other equity securities (as defined in ASC Topic 320,
Investments-Debt and Equity Securities (formerly FASB Statement No. 115, “Accounting for
Certain Investments in Debt and Equity Securities”)) with readily determinable fair values.
Such securities include, but are not limited to, money market mutual funds, mutual funds that
invest solely in U.S. Government securities, common stock, and perpetual preferred stock.
Perpetual preferred stock does not have a stated maturity date and cannot be redeemed at
the option of the investor, although it may be redeemable at the option of the issuer.
According to ASC Topic 320, the fair value of an equity security is readily determinable if sales
prices or bid-and-asked quotations are currently available on a securities exchange registered
with the Securities and Exchange Commission (SEC) or in the over-the-counter market,
provided that those prices or quotations for the over-the-counter market are publicly reported
by the National Association of Securities Dealers Automated Quotations systems or by
Pink Sheets LLC. (“Restricted stock” meets that definition if the restriction terminates within
one year.) The fair value of an equity security traded only in a foreign market is readily
determinable if that foreign market is of a breadth and scope comparable to one of the U.S.
markets referred to above. The fair value of an investment in a mutual fund is readily
determinable if the fair value per share (unit) is determined and published and is the basis for
current transactions.
Investments in mutual funds and other equity securities with readily determinable fair values
may have been purchased by the reporting bank or acquired for debts previously contracted.
Include in this item common stock and perpetual preferred stock of the Federal National
Mortgage Association (Fannie Mae), common stock and perpetual preferred stock of the
Federal Home Loan Mortgage Corporation (Freddie Mac), Class A voting and Class C
non-voting common stock of the Federal Agricultural Mortgage Corporation (Farmer Mac),
and common and preferred stock of SLM Corporation (the private-sector successor to the
Student Loan Marketing Association).

FFIEC 031 and 041

RC-B-9
(3-11)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

Item No.

Caption and Instructions

7
(cont.)

Exclude from investments in mutual funds and other equity securities with readily
determinable fair values:
(1) Paid-in stock of a Federal Reserve Bank (report as an equity security that does not have
a readily determinable fair value in Schedule RC-F, item 4).
(2) Stock of a Federal Home Loan Bank (report as an equity security that does not have a
readily determinable fair value in Schedule RC-F, item 4).
(3) Common and preferred stocks that do not have readily determinable fair values, such as
stock of bankers' banks and Class B voting common stock of the Federal Agricultural
Mortgage Corporation (Farmer Mac) (report in Schedule RC-F, item 4).
(4) Preferred stock that by its terms either must be redeemed by the issuing enterprise or is
redeemable at the option of the investor (i.e., redeemable or limited-life preferred stock),
including trust preferred securities subject to mandatory redemption (report such
preferred stock as an other debt security in Schedule RC-B, item 6, above).
(5) "Restricted stock," i.e., equity securities for which sale is restricted by governmental or
contractual requirement (other than in connection with being pledged as collateral),
except if that requirement terminates within one year or if the holder has the power by
contract or otherwise to cause the requirement to be met within one year (if the restriction
does not terminate within one year, report "restricted stock" as an equity security that
does not have a readily determinable fair value in Schedule RC-F, item 4).
(6) Participation certificates issued by a Federal Intermediate Credit Bank, which represent
nonvoting stock in the bank (report as an equity security that does not have a readily
determinable fair value in Schedule RC-F, item 4).
(7) Minority interests held by the reporting bank in any companies not meeting the definition
of associated company (report as equity securities that do not have a readily determinable
fair value in Schedule RC-F, item 4), except minority holdings that indirectly represent
bank premises (report in Schedule RC, item 6) or other real estate owned (report in
Schedule RC, item 7), provided that the fair value of any capital stock representing the
minority interest is not readily determinable. (See the Glossary entry for "subsidiaries" for
the definition of associated company.)
(8) Equity holdings in those corporate joint ventures over which the reporting bank does not
exercise significant influence (report as equity securities that do not have a readily
determinable fair value in Schedule RC-F, item 4), except equity holdings that indirectly
represent bank premises (report in Schedule RC, item 6) or other real estate owned
(report in Schedule RC, item 7). (See the Glossary entry for "subsidiaries" for the
definition of corporate joint venture.)
(9) Holdings of capital stock of and investments in unconsolidated subsidiaries, associated
companies, and those corporate joint ventures over which the reporting bank exercises
significant influence (report in Schedule RC, item 8, "Investments in unconsolidated
subsidiaries and associated companies").

8

Total. Report the sum of items 1 through 7. The total of column A for this item must equal
Schedule RC, item 2.a, "Held-to-maturity securities." The total of column D for this item must
equal Schedule RC, item 2.b, "Available-for-sale securities."

FFIEC 031 and 041

RC-B-10
(3-11)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

Memoranda
Item No.
1

Caption and Instructions
Pledged securities. Report the amortized cost of all held-to-maturity securities and the
fair value of all available-for-sale securities included in Schedule RC-B above that are pledged
to secure deposits, repurchase transactions, or other borrowings (regardless of the balance of
the deposits or other liabilities against which the securities are pledged); as performance
bonds under futures or forward contracts; or for any other purpose. Include as pledged
securities:
(1) Held-to-maturity and available-for-sale securities that have been "loaned" in securities
borrowing/lending transactions that do not qualify as sales under ASC Topic 860,
Transfers and Servicing (formerly FASB Statement No. 140, “Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities," as amended).
(2) Held-to-maturity and available-for-sale securities held by consolidated variable interest
entities (VIEs) that can be used only to settle obligations of the same consolidated VIEs
(the amounts of which are also reported in Schedule RC-V, items 1.b and 1.c).
(3) Held-to-maturity and available-for-sale securities owned by consolidated insurance
subsidiaries and held in custodial trusts that are pledged to insurance companies external
to the consolidated bank.

2

Maturity and repricing data for debt securities. Report in the appropriate subitem maturity
and repricing data for the bank's holdings of debt securities (reported in Schedule RC-B,
items 1 through 6 above). Report the amortized cost of held-to-maturity debt securities and
the fair value of available-for-sale debt securities in the appropriate maturity and repricing
subitems. Exclude from Memorandum item 2 the bank's holdings of equity securities with
readily determinable fair values (reported in Schedule RC-B, item 7, above) (e.g., investments
in mutual funds, common stock, preferred stock). Also exclude those debt securities that are
reported as "nonaccrual" in Schedule RC-N, item 9, column C.
The sum of Memorandum items 2.a.(1) through 2.c.(2) plus the amount of any nonaccrual
debt securities included in Schedule RC-N, item 9, column C, must equal Schedule RC-B,
sum of items 1 through 6, columns A and D.
On the FFIEC 031, banks that have more than one office in foreign countries (including
offices of consolidated foreign subsidiaries but excluding "shell" branches, offices in Puerto
Rico or U.S. territories and possessions, and IBFs) have the option of excluding the smallest
of such non-U.S. offices from Memorandum item 2. Such banks may omit the smallest of
their offices in foreign countries (other than "shell" branches) when arrayed by total assets
provided that the assets of the excluded offices do not exceed 50 percent of the total assets
of the bank's offices (excluding "shells") in foreign countries and do not exceed 10 percent of
the total consolidated assets of the reporting bank as of the report date. (Note: In
determining the total assets of offices in foreign countries eligible for exclusion from these
memorandum items, banks should exclude not only "shell" branches but also offices in Puerto
Rico and U.S. territories and possessions, domestic offices of Edge and Agreement
subsidiaries, and IBFs even though these are sometimes referred to as "foreign" offices.
Also, the asset totals for all offices in foreign countries should be the component of the total
consolidated assets, i.e., should exclude all intrabank transactions.)
For purposes of this memorandum item, the following definitions apply:
A fixed interest rate is a rate that is specified at the origination of the transaction, is fixed and
invariable during the term of the debt security, and is known to both the borrower and the

FFIEC 031 and 041

RC-B-11
(9-11)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

Memoranda
Item No.

Caption and Instructions

2
(cont.)

lender. Also treated as a fixed interest rate is a predetermined interest rate which is a rate
that changes during the term of the debt security on a predetermined basis, with the exact
rate of interest over the life of the debt security known with certainty to both the borrower and
the lender when the debt security is acquired.
A floating rate is a rate that varies, or can vary, in relation to an index, to some other interest
rate such as the rate on certain U.S. Government securities or the "prime rate," or to some other
variable criterion the exact value of which cannot be known in advance. Therefore, the exact rate
the debt security carries at any subsequent time cannot be known at the time of origination.
When the rate on a debt security with a floating rate has reached a contractual floor or ceiling
level, the debt security is to be treated as "fixed rate" rather than as "floating rate" until the
rate is again free to float.
Remaining maturity is the amount of time remaining from the report date until the final contractual
maturity of a debt security without regard to the security's repayment schedule, if any.
Next repricing date is the date the interest rate on a floating rate debt security can next
change in accordance with the terms of the contract (without regard to the security’s
repayment schedule, if any, or expected prepayments) or the contractual maturity date of the
security, whichever is earlier.
Banks whose records or information systems provide data on the final contractual maturities,
next repricing dates, and expected average lives of their debt securities for time periods that
closely approximate the maturity and repricing periods specified in Memorandum items 2.a
through 2.d (e.g., 89 or 90 days rather than three months, 359 or 360 days rather than
12 months) may use these date to complete Memorandum items 2.a through 2.d.
For debt securities with scheduled contractual payments, banks whose records or information
systems provide repricing data that take into account these scheduled contractual payments,
with or without the effect of anticipated prepayments, may adjust these data in an appropriate
manner to derive reasonable estimates for the final contractual maturities of fixed rate debt
securities (and floating rate debt securities for purposes of Memorandum item 2.c) and the
next repricing dates of floating rate debt securities.
Callable fixed rate debt securities should be reported in Memorandum items 2.a, 2.b, and 2.d
without regard to their next call date unless the security has actually been called. When fixed
rate debt securities have been called, they should be reported on the basis of the time
remaining until the call date. Callable floating rate debt securities should be reported in
Memorandum items 2.a and 2.b on the basis of their next repricing date without regard to their
next call date if the security has not been called. Those that have been called should be
reported based on the earlier of their next repricing date or their actual call date.
Fixed rate mortgage pass-through securities (such as those guaranteed by the Government
National Mortgage Association (GNMA) or issued by the Federal Home Loan Mortgage
Corporation (FHLMC), the Federal National Mortgage Association (FNMA), and certain banks,
savings associations, and securities dealers) and fixed rate Small Business Administration
(SBA) "Guaranteed Loan Pool Certificates" should be reported on the basis of the time
remaining until their final contractual maturity without regard to either expected prepayments
or scheduled contractual payments. Floating rate mortgage pass-through securities and SBA
"Guaranteed Loan Pool Certificates" should be reported in Memorandum items 2.a and 2.b on
the basis of their next repricing date.

FFIEC 031 and 041

RC-B-12
(9-11)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

Memoranda
Item No.

Caption and Instructions

2
(cont.)

Fixed rate debt securities that provide the reporting bank with the option to redeem them
at one or more specified dates prior to their contractual maturity date, so-called "put bonds,"
should be reported on the basis of the time remaining until the next "put" date. Floating rate
"put bonds" should be reported in Memorandum items 2.a and 2.b on the basis of their next
repricing date without regard to "put" dates if the bank has not exercised the put. If a "put"
has been exercised but the security has not yet been repaid, the "put" bond should be
reported based on the earlier of its next repricing date or its scheduled repayment date.
Zero coupon debt securities, including U.S. Treasury bills, should be treated as fixed rate debt
securities for purposes of this Memorandum item.

2.a

Securities issued by the U.S. Treasury, U.S. Government agencies, and states and
political subdivisions in the U.S.; other non-mortgage debt securities; and mortgage
pass-through securities other than those backed by closed-end first lien 1-4 family
residential mortgages with a remaining maturity or next repricing date of. Report the
bank's holdings of fixed rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages -- in the appropriate subitems
according to the amount of time remaining to their final contractual maturities (without regard to
repayment schedules, if any). Report the bank's holdings of floating rate debt securities -other than mortgage pass-through securities backed by closed-end first lien 1-4 family
residential mortgages -- in the appropriate subitems according to the amount of time remaining
until their next repricing date. Exclude debt securities that are in nonaccrual status.
For held-to-maturity debt securities, report amortized cost. For available-for-sale debt
securities, report fair value.

2.a.(1)

2.a.(2)

Three months or less. Report the amount of:
•

the bank's fixed rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages -- with remaining
maturities of three months or less, and

•

the bank's floating rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages – with next repricing dates
occurring in three months or less.

Over three months through 12 months. Report the amount of:
•

the bank's fixed rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages -- with remaining
maturities (without regard to repayment schedules, if any) of over three months through
12 months, and

•

the bank's floating rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages – with next repricing dates
occurring in over three months through 12 months.

FFIEC 031 and 041

RC-B-13
(3-01)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

Memoranda
Item No.

Caption and Instructions

2.a.(3)

Over one year through three years. Report the amount of:

2.a.(4)

2.a.(5)

2.a.(6)

2.b

•

the bank's fixed rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages -- with remaining
maturities (without regard to repayment schedules, if any) of over one year through three
years, and

•

the bank's floating rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages – with next repricing dates
occurring in over one year through three years.

Over three years through five years. Report the amount of:
•

the bank's fixed rate debt securities -- other than mortgage pass-through securities backed
by closed-end first lien 1-4 family residential mortgages -- with remaining maturities
(without regard to repayment schedules, if any) of over three years through five years, and

•

the bank's floating rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages – with next repricing dates
occurring in over three years through five years.

Over five years through 15 years. Report the amount of:
•

the bank's fixed rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages -- with remaining
maturities (without regard to repayment schedules, if any) of over five years through 15
years, and

•

the bank's floating rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages – with next repricing dates
occurring in over five years through 15 years.

Over 15 years. Report the amount of:
•

the bank's fixed rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages -- with remaining
maturities (without regard to repayment schedules, if any) of over 15 years, and

•

the bank's floating rate debt securities -- other than mortgage pass-through securities
backed by closed-end first lien 1-4 family residential mortgages – with next repricing dates
occurring in over 15 years.

Mortgage pass-through securities backed by closed-end first lien 1-4 family residential
mortgages with a remaining maturity or next repricing date of. Report the bank's holdings
of fixed rate mortgage pass-through securities backed by closed-end first lien 1-4 family
residential mortgages in the appropriate subitems according to the amount of time remaining to
their final contractual maturities (without regard to repayment schedules, if any). Report the
bank's holdings of floating rate mortgage pass-through securities backed by

FFIEC 031 and 041

RC-B-14
(3-01)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

Memoranda
Item No.

Caption and Instructions

2.b
(cont.)

closed-end first lien 1-4 family residential mortgages in the appropriate subitems according to
the amount of time remaining until their next repricing date. Exclude mortgage pass-through
securities that are in nonaccrual status.
For held-to-maturity mortgage pass-through securities, report amortized cost. For availablefor-sale mortgage pass-through securities, report fair value.

2.b.(1)

2.b.(2)

2.b.(3)

2.b.(4)

Three months or less. Report the amount of:
•

the bank's fixed rate mortgage pass-through securities backed by closed-end first lien 1-4
family residential mortgages with remaining maturities of three months or less, and

•

the bank's floating rate mortgage pass-through securities backed by closed-end first lien
1-4 family residential mortgages with next repricing dates occurring in three months or
less.

Over three months through 12 months. Report the amount of:
•

the bank's fixed rate mortgage pass-through securities backed by closed-end first lien 1-4
family residential mortgages with remaining maturities (without regard to repayment
schedules, if any) of over three months through 12 months, and

•

the bank's floating rate mortgage pass-through securities backed by closed-end first lien
1-4 family residential mortgages with next repricing dates occurring in over three months
through 12 months.

Over one year through three years. Report the amount of:
•

the bank's fixed rate mortgage pass-through securities backed by closed-end first lien 1-4
family residential mortgages with remaining maturities (without regard to repayment
schedules, if any) of over one year through three years, and

•

the bank's floating rate mortgage pass-through securities backed by closed-end first lien
1-4 family residential mortgages with next repricing dates occurring in over one year
through three years.

Over three years through five years. Report the amount of:
•

the bank's fixed rate mortgage pass-through securities backed by closed-end first lien 1-4
family residential mortgages with remaining maturities (without regard to repayment
schedules, if any) of over three years through five years, and

•

the bank's floating rate mortgage pass-through securities backed by closed-end first lien
1-4 family residential mortgages with next repricing dates occurring in over three years
through five years.

FFIEC 031 and 041

RC-B-15
(3-01)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

Memoranda
Item No.

Caption and Instructions

2.b.(5)

Over five years through 15 years. Report the amount of:

2.b.(6)

2.c

•

the bank's fixed rate mortgage pass-through securities backed by closed-end first lien 1-4
family residential mortgages with remaining maturities (without regard to repayment
schedules, if any) of over five years through 15 years, and

•

the bank's floating rate mortgage pass-through securities backed by closed-end first lien
1-4 family residential mortgages with next repricing dates occurring in over five years
through 15 years.

Over 15 years. Report the amount of:
•

the bank's fixed rate mortgage pass-through securities backed by closed-end first lien 1-4
family residential mortgages with remaining maturities (without regard to repayment
schedules, if any) of over 15 years, and

•

the bank's floating rate mortgage pass-through securities backed by closed-end first lien
1-4 family residential mortgages with next repricing dates occurring in over fifteen years.

Other mortgage-backed securities (include CMOs, REMICs, and stripped MBS) with an
expected average life of. Report the bank's holdings of other mortgage-backed securities
(including collateralized mortgage obligations (CMOs), real estate mortgage investment
conduits (REMICs), and stripped mortgage-backed securities (MBS)) in the appropriate
subitems by their expected weighted average life as of the report date. Include both fixed rate
and floating rate securities. For held-to-maturity securities, report amortized cost. For
available-for-sale securities, report fair value. Exclude all mortgage pass-through securities.
Also exclude securities that are in nonaccrual status.
Banks should report based on the most recent average life information obtained within the
twelve months preceding the report date. Weighted average life is the dollar-weighted average
time in which principal is repaid. For a mortgage-backed security, weighted average life should
be based on the prepayment assumptions associated with the pool of loans underlying the
security as well as scheduled repayments. Weighted average life is computed by (a)
multiplying the amount of each principal reduction by the number of years or months from the
date of issuance or the testing date to the date of the principal reduction, (b) summing the
results, and (c) dividing the sum by the remaining principal balance as of the date of issuance
or the testing date. Because weighted average life should consider expected prepayments, it
is not equivalent to contractual maturity. Because it is dollar- and time-weighted, it also is not
equivalent to expected final maturity.

2.c.(1)

Three years or less. Report the bank's holdings of other mortgage-backed securities with
an expected weighted average life of three years or less as of the report date. Include both
fixed rate and floating rate securities.

2.c.(2)

Over three years. Report the bank's holdings of other mortgage-backed securities with an
expected weighted average life of over three years as of the report date. Include both fixed
rate and floating rate securities.

FFIEC 031 and 041

RC-B-16
(3-01)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

Memoranda
Item No.
2.d

Caption and Instructions
Debt securities with a remaining maturity of one year or less. Report all debt securities
with a remaining maturity of one year or less. Include both fixed rate and floating rate debt
securities. Exclude debt securities that are in nonaccrual status.
For held-to-maturity debt securities, report amortized cost. For available-for-sale debt
securities, report fair value.
The fixed rate debt securities (excluding "Other mortgage-backed securities") that should be
included in this item will also have been reported by remaining maturity in Schedule RC-B,
Memorandum items 2.a.(1), 2.a.(2), 2.b.(1), and 2.b.(2), above. The floating rate debt
securities (excluding "Other mortgage-backed securities") that should be included in this item
will have been reported by next repricing date in Memorandum items 2.a.(1), 2.a.(2), 2.b.(1),
and 2.b.(2), above. However, these four Memorandum items may include floating rate debt
securities with a remaining maturity of more than one year, but on which the interest rate can
next change in one year or less; those debt securities should not be included in this
Memorandum item 2.d. The "Other mortgage-backed securities" included in this item will
have been reported by expected weighted average life in Memorandum items 2.c.(1) and
2.c.(2) above.

3

Amortized cost of held-to-maturity securities sold or transferred to available-for-sale or
trading securities during the calendar year-to-date. If the reporting bank has sold any
held-to-maturity debt securities or has transferred any held-to-maturity debt securities to the
available-for-sale or to trading securities during the calendar year-to-date, report the total
amortized cost of these held-to-maturity debt securities as of their date of sale or transfer.
Exclude the amortized cost of any held-to-maturity debt security that has been sold near
enough to (e.g., within three months of) its maturity date (or call date if exercise of the call is
probable) that interest rate risk is substantially eliminated as a pricing factor. Also exclude the
amortized cost of any held-to-maturity debt security that has been sold after the collection of a
substantial portion (i.e., at least 85 percent) of the principal outstanding at acquisition due to
prepayments on the debt security or, if the debt security is a fixed rate security, due to
scheduled payments payable in equal installments (both principal and interest) over its term.

4

Structured notes. Report in this item all structured notes included in the held-to-maturity and
available-for-sale accounts and reported in Schedule RC-B, items 2, 3, 5, and 6. In general,
structured notes are debt securities whose cash flow characteristics (coupon rate, redemption
amount, or stated maturity) depend upon one or more indices and/or that have embedded
forwards or options or are otherwise commonly known as "structured notes." Include as
structured notes any asset-backed securities (other than mortgage-backed securities) which
possess the aforementioned characteristics.
Structured notes include, but are not limited to, the following common structures:
(1) Floating rate debt securities whose payment of interest is based upon:
(a) a single index of a Constant Maturity Treasury (CMT) rate or a Cost of Funds Index
(COFI), or
(b) changes in the Consumer Price Index (CPI). However, exclude from structured
notes all U.S. Treasury Inflation-Protected Securities (TIPS).

FFIEC 031 and 041

RC-B-17
(9-06)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

Memoranda
Item No.

Caption and Instructions

4
(cont.)

(2) Step-up Bonds. Step-up securities initially pay the investor an above-market yield for a
short noncall period and then, if not called, "step up" to a higher coupon rate (which will be
below current market rates). The investor initially receives a higher yield because of
having implicitly sold one or more call options. A step-up bond may continue to contain
call options even after the bond has stepped up to the higher coupon rate. A multistep
bond has a series of fixed and successively higher coupons over its life. At each call
date, if the bond is not called, the coupon rate increases.
(3) Index Amortizing Notes (IANs). IANs repay principal according to a predetermined
amortization schedule that is linked to the level of a specific index (usually the London
Interbank Offered Rate - LIBOR - or a specified prepayment rate). As market interest
rates increase (or prepayment rates decrease), the maturity of an IAN extends, similar to
that of a collateralized mortgage obligation. When the principal payments on these notes
are indexed to the prepayment performance of a reference pool of mortgages or a
reference mortgage-backed security, but the notes themselves are not collateralized by
the mortgages or the mortgage-backed security, the notes are sometimes marketed as
Prepayment-Linked Notes.
(4) Dual Index Notes. These bonds have coupon rates that are determined by the
difference between two market indices, typically the CMT rate and LIBOR. These bonds
often have a fixed coupon rate for a brief period, followed by a longer period of variable
rates, e.g., 8 percent fixed for two years, then the 10-year CMT rate plus 300 basis points
minus three-month LIBOR.
(5) De-leveraged Bonds. These bonds pay investors according to a formula that is based
upon a fraction of the increase or decrease in a specified index, such as the CMT rate or
the prime rate. For example, the coupon might be the 10-year CMT rate multiplied by 0.5,
plus 150 basis points. The de-leveraging multiplier (0.5) causes the coupon to lag overall
movements in market yields. A leveraged bond would involve a multiplier greater than 1.
(6) Range Bonds. Range bonds (or accrual bonds) pay the investor an above-market
coupon rate as long as the reference rate is between levels established at issue. For
each day that the reference rate is outside this range, the bonds earn no interest. For
example, if LIBOR is the reference rate, a bond might pay LIBOR plus 75 basis points for
each day that LIBOR is between 3.5 and 5.0 percent. When LIBOR is less than 3.5
percent or more than 5 percent, the bond would accrue no interest.
(7) Inverse Floaters. These bonds have coupons that increase as rates decline and
decrease as rates rise. The coupon is based upon a formula, such as 12 percent minus
three-month LIBOR.
Exclude from structured notes floating rate debt securities denominated in U.S. dollars whose
payment of interest is based upon a single index of a Treasury bill rate, the prime rate, or
LIBOR and which do not contain adjusting caps, adjusting floors, leverage, or variable
principal redemption. Furthermore, debt securities that do not possess the aforementioned
characteristics of a structured note need not be reported as structured notes solely because
they are callable as of a specified date at a specified price. In addition, debt securities that in
the past possessed the characteristics of a structured note, but which have "fallen through"
their structures (e.g., all of the issuer's call options have expired and there are no more
adjustments to the interest rate on the security), need not be reported as structured notes.

FFIEC 031 and 041

RC-B-18
(9-06)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

Memoranda
Item No.

Caption and Instructions

4
(cont.)

Generally, municipal and corporate securities that have periodic call options should not be
reported as structured notes. Although many of these securities have features similar to
those found in some structured notes (e.g., step-ups, which generally remain callable after a
step-up date), they are not commonly known as structured notes. Examples of such
callable securities that should not be reported as structured notes include:
(1) Callable municipal and corporate bonds which have single (or multiple) explicit call dates
and then can be called on any interest payment date after the last explicit call date
(i.e., they are continuously callable).
(2) Callable federal agency securities that have continuous call features after an explicit call
date, except step-up bonds (which are structured notes).
The mere existence of simple caps and floors does not necessarily make a security a
structured note. Securities with adjusting caps or floors (i.e., caps or floors that change over
time), however, are structured notes. Therefore, the following types of securities should not
be reported as structured notes:
(1) Variable rate securities, including Small Business Administration "Guaranteed Loan Pool
Certificates," unless they have features of securities which are commonly known as
structured notes (i.e., they are inverse, range, or de-leveraged floaters, index amortizing
notes, dual index or variable principal redemption or step-up bonds), or have adjusting
caps or floors.
(2) Mortgage-backed securities.

4.a

Amortized cost (of structured notes). Report the amortized cost of all structured notes
included in the held-to-maturity and available-for-sale accounts. The amortized cost of these
securities will have been reported in columns A and C of the body of Schedule RC-B.

4.b

Fair value (of structured notes). Report the fair (market) value of structured notes reported
in Memorandum item 4.a above. The fair value of these securities will have been reported in
columns B and D of the body of Schedule RC-B. Do not combine or otherwise net the fair
value of any structured note with the fair or book value of any related asset, liability, or
off-balance sheet derivative instrument.

5

Asset-backed securities. Memorandum items 5.a through 5.f are to be completed by banks
with $1 billion or more in total assets.
Report in the appropriate columns of the appropriate subitems the amortized cost and fair
value of all asset-backed securities (other than mortgage-backed securities), including assetbacked commercial paper, not held for trading. For each column, the sum of Memorandum
items 5.a through 5.f must equal Schedule RC-B, item 5.
For purposes of categorizing asset-backed securities in Schedule RC-B, Memorandum
items 5.a through 5.f, below, each individual asset-backed security should be included in the
item that most closely describes the predominant type of asset that collateralizes the security

FFIEC 031 and 041

RC-B-19
(3-11)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

Memoranda
Item No.

Caption and Instructions

5
(cont.)

and this categorization should be used consistently over time. For example, an
asset-backed security may be collateralized by automobile loans to both individuals and
business enterprises. If the prospectus for this asset-backed security or other available
information indicates that these automobile loans are predominantly loans to individuals, the
security should be reported in Schedule RC-B, Memorandum item 5.c, as being collateralized
by automobile loans.

5.a

Credit card receivables. Report in the appropriate columns the amortized cost and fair
value of all asset-backed securities collateralized by credit card receivables, i.e., extensions of
credit to individuals for household, family, and other personal expenditures arising from credit
cards as defined for Schedule RC-C, part I, item 6.a.

5.b

Home equity lines. Report in the appropriate columns the amortized cost and fair value of all
asset-backed securities collateralized by home equity lines of credit, i.e., revolving, open-end
lines of credit secured by 1-to-4 family residential properties as defined for Schedule RC-C,
part I, item 1.c.(1).

5.c

Automobile loans. Report in the appropriate columns the amortized cost and fair value of
all asset-backed securities collateralized by automobile loans, i.e., loans to individuals for the
purpose of purchasing private passenger vehicles, including minivans, vans, sport-utility
vehicles, pickup trucks, and similar light trucks for personal use, as defined for
Schedule RC-C, part I, item 6.c.

5.d

Other consumer loans. Report in the appropriate columns the amortized cost and fair value
of all asset-backed securities collateralized by other consumer loans, i.e., loans to individuals
for household, family, and other personal expenditures as defined for Schedule RC-C, part I,
items 6.b and 6.d.

5.e

Commercial and industrial loans. Report in the appropriate columns the amortized cost
and fair value of all asset-backed securities collateralized by commercial and industrial loans,
i.e., loans for commercial and industrial purposes to sole proprietorships, partnerships,
corporations, and other business enterprises, whether secured (other than by real estate) or
unsecured, single-payment or installment, as defined for Schedule RC-C, part I, item 4.

5.f

Other. Report in the appropriate columns the amortized cost and fair value of all
asset-backed securities collateralized by non-mortgage loans other than those described in
Schedule RC-B, Memorandum items 5.a through 5.e, above, i.e., loans as defined for
Schedule RC-C, part I, items 2, 3, and 7 through 9; lease financing receivables as defined for
Schedule RC-C, part I, item 10; and all other assets.

FFIEC 031 and 041

RC-B-20
(3-11)

RC-B - SECURITIES

FFIEC 031 and 041

RC-B - SECURITIES

Memoranda
Item No.

Caption and Instructions

6

Structured financial products by underlying collateral or reference assets. Report in the
appropriate columns of the appropriate subitems the amortized cost and fair value of all
structured financial products (as defined in Schedule RC-B, item 5.b, above) not held for
trading by the predominant type of collateral or reference assets supporting the product. For
each column, the sum of Memorandum items 6.a through 6.g must equal the sum of
Schedule RC-B, items 5.b.(1) through 5.b.(3).

6.a

Trust preferred securities issued by financial institutions. Report in the appropriate
columns the amortized cost and fair value of structured financial products supported
predominantly by trust preferred securities issued by financial institutions.

6.b

Trust preferred securities issued by real estate investment trusts. Report in the
appropriate columns the amortized cost and fair value of structured financial products
supported predominantly by trust preferred securities issued by real estate investment trusts.

6.c

Corporate and similar loans. Report in the appropriate columns the amortized cost and fair
value of structured financial products supported predominantly by corporate and similar loans.
Exclude securities backed by loans that are commonly regarded as asset-backed securities
rather than collateralized loan obligations in the marketplace (report in Schedule RC-B,
item 5.a).

6.d

1-4 family residential MBS issued or guaranteed by U.S. government-sponsored
enterprises (GSEs). Report in the appropriate columns the amortized cost and fair value of
structured financial products supported predominantly by 1-4 family residential mortgagebacked securities issued or guaranteed by U.S. government-sponsored enterprises.

6.e

1-4 family residential MBS not issued or guaranteed by GSEs. Report in the appropriate
columns the amortized cost and fair value of structured financial products supported
predominantly by 1-4 family residential mortgage-backed securities not issued or guaranteed
by U.S. government-sponsored enterprises.

6.f

Diversified (mixed) pools of structured financial products. Report in the appropriate
columns the amortized cost and fair value of structured financial products supported
predominantly by diversified (mixed) pools of structured financial products. Include such
products as CDOs squared and cubed (also known as “pools of pools”).

6.g

Other collateral or reference assets. Report in the appropriate columns the amortized cost
and fair value of structured financial products supported predominantly by other types of
collateral or reference assets not identified above.

FFIEC 031 and 041

RC-B-21
(6-09)

RC-B - SECURITIES

This page intentionally left blank.

FFIEC 031 and 041

RC-C - LOANS AND LEASES

SCHEDULE RC-C – LOANS AND LEASE FINANCING RECEIVABLES
Part I. Loans and Leases
General Instructions for Part I
Loans and lease financing receivables are extensions of credit resulting from either direct negotiation
between the bank and its customers or the purchase of such assets from others. See the Glossary
entries for "loan" and for "lease accounting" for further information.
Report all loans and leases that the bank has the intent and ability to hold for the foreseeable future or
until maturity or payoff, i.e., loans and leases held for investment, in Schedule RC-C, part I. Also report in
Schedule RC-C, part I, all loans and leases held for sale as part of the consolidated bank’s mortgage
banking activities or activities of a similar nature involving other types of loans. Include the fair value of all
loans held for investment and all loans held for sale that the bank has elected to report at fair value under
a fair value option. Loans reported at fair value in Schedule RC-C, part I, should include only the fair value
of the funded portion of the loan. If the unfunded portion of the loan, if any, is reported at fair value, this
fair value should be reported as an “Other asset” or an “Other liability,” as appropriate, in Schedule RC,
item 11 or item 20, respectively.
Exclude from Schedule RC-C, part I, all loans and leases classified as trading (report in Schedule RC,
item 5, "Trading assets," and, in the appropriate items of Schedule RC-D, Trading Assets and Liabilities,
and Schedule RC-Q, Financial Assets and Liabilities Measured at Fair Value, if applicable).
When a loan is acquired (through origination or purchase) with the intent or expectation that it may or will
be sold at some indefinite date in the future, the loan should be reported as held for sale or held for
investment, based on facts and circumstances, in accordance with generally accepted accounting
principles and related supervisory guidance. In addition, a loan acquired and held for securitization
purposes should be reported as a loan held for sale, provided the securitization transaction will be
accounted for as a sale under ASC Topic 860, Transfers and Servicing (formerly FASB Statement
No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,"
as amended). Notwithstanding the above, banks may classify loans as trading if the bank applies fair
value accounting, with changes in fair value reported in current earnings, and manages these assets and
liabilities as trading positions, subject to the controls and applicable regulatory guidance related to trading
activities. For example, a bank would generally not classify a loan that meets these criteria as a trading
asset unless the bank holds the loan for one of the following purposes: (a) for market making activities,
including such activities as accumulating loans for sale or securitization; (b) to benefit from actual or
expected price movements; or (c) to lock in arbitrage profits.
Loans held for sale (not classified as trading in accordance with the preceding instruction) shall be
reported in Schedule RC-C, part I, at the lower of cost or fair value as of the report date, except for those
that the bank has elected to account for at fair value under a fair value option. For loans held for sale that
are reported at the lower of cost or fair value, the amount by which cost exceeds fair value, if any, shall be
accounted for as a valuation allowance. For further information, see ASC Subtopic 948-310, Financial
Services-Mortgage Banking – Receivables (formerly FASB Statement No. 65, “Accounting for Certain
Mortgage Banking Activities,” as amended), ASC Subtopic 310-10, Receivables – Overall (formerly AICPA
Statement of Position 01-6, "Accounting by Certain Entities (Including Entities With Trade Receivables)
That Lend to or Finance the Activities of Others"), and the March 26, 2001, Interagency Guidance on
Certain Loans Held for Sale.
On the FFIEC 041, Schedule RC-C, part I, has two columns for information on loans and leases:
column B is to be completed by all banks and column A is to be completed by banks with $300 million or

FFIEC 031 and 041

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General Instructions for Part I (cont.)
more in total assets. On the FFIEC 031, this schedule has two columns: column A provides loan and
lease detail for the fully consolidated bank and column B provides detail on loans and leases held by the
domestic offices of the reporting bank. (See the Glossary entry for "domestic office" for the definition of
this term.)
Report loans and leases held for investment in this schedule without any deduction for loss allowances for
loans and leases or allocated transfer risk reserves related to loans and leases, which are to be reported
in Schedule RC, item 4.c, "Allowance for loan and lease losses." Each item in this schedule should be
reported net of (1) unearned income (to the extent possible) and (2) deposits accumulated for the
payment of personal loans (hypothecated deposits). Net unamortized loan fees represent an adjustment
of the loan yield, and shall be reported in this schedule in the same manner as unearned income on loans,
i.e., deducted from the related loan balances (to the extent possible) or deducted from total loans in
Schedule RC-C, part I, item 11, "LESS: Any unearned income on loans reflected in items 1-9 above." Net
unamortized direct loan origination costs shall be added to the related loan balances in each item in this
schedule. (See the Glossary entry for "loan fees" for further information.)
"Purchased credit-impaired loans" are loans accounted for in accordance with ASC Subtopic 310-30,
Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality (formerly AICPA
Statement of Position 03-3, "Accounting for Certain Loans or Debt Securities Acquired in a Transfer"), that
a bank has purchased, including those acquired in a purchase business combination, where there is
evidence of deterioration of credit quality since the origination of the loan and it is probable, at the
purchase date, that the bank will be unable to collect all contractually required payments receivable.
Neither the accretable yield nor the nonaccretable difference associated with purchased credit-impaired
loans should be reported as unearned income in Schedule RC-C, part I, item 11. In addition, the
nonaccretable difference must not be recognized as an adjustment of yield, loss accrual, or valuation
allowance.
If, as a result of a change in circumstances, the bank regains control of a loan previously accounted
for appropriately as having been sold because one or more of the conditions for sale accounting in
ASC Topic 860 are no longer met, such a change should be accounted for in the same manner as a
purchase of the loan from the former transferee (purchaser) in exchange for liabilities assumed. The
rebooked loan must be reported as a loan asset in Schedule RC-C, part I, either as a loan held for sale or
a loan held for investment, based on facts and circumstances, in accordance with generally accepted
accounting principles. This accounting and reporting treatment applies, for example, to U.S. Governmentguaranteed or -insured residential mortgage loans backing Government National Mortgage Association
(GNMA) mortgage-backed securities that a bank services after it has securitized the loans in a transfer
accounted for as a sale. If and when individual loans later meet delinquency criteria specified by GNMA,
the loans are eligible for repurchase, the bank is deemed to have regained effective control over these
loans, and the delinquent loans must be brought back onto the bank's books as loan assets.
All loans should be categorized in Schedule RC-C, part I, according to security, borrower, or purpose.
Loans covering two or more categories are sometimes difficult to categorize. In such instances,
categorize the entire loan according to the major criterion.
Report in Schedule RC-C, part I, all loans and leases on the books of the reporting bank even if on the
report date they are past due and collection is doubtful. Exclude any loans or leases the bank has sold or
charged off. Also exclude assets received in full or partial satisfaction of a loan or lease (unless the asset
received is itself reportable as a loan or lease) and any loans for which the bank has obtained physical
possession of the underlying collateral, regardless of whether formal foreclosure or repossession
proceedings have been instituted against the borrower. Refer to the Glossary entries for "troubled debt
restructurings" and "foreclosed assets" for further discussion of these topics.

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General Instructions for Part I (cont.)
When a bank acquires either (1) a portion of an entire loan that does not meet the definition of a
participating interest (i.e., a nonqualifying loan participation) or (2) a qualifying participating interest in a
transfer that does not does not meet all of the conditions for sale accounting, it should normally report the
loan participation or participating interest in Schedule RC, item 4.b, “Loans and leases, net of unearned
income.” The bank also should report the loan participation or participating interest in Schedule RC-C,
part I, in the loan category appropriate to the underlying loan, e.g., as a “commercial and industrial loan” in
item 4 or as a “loan secured by real estate” in item 1. See the Glossary entry for “transfers of financial
assets” for further information.
Exclude, for purposes of this schedule, the following:
(1) Federal funds sold (in domestic offices), i.e., all loans of immediately available funds (in domestic
offices) that mature in one business day or roll over under a continuing contract, excluding funds lent
in the form of securities purchased under agreements to resell. Report federal funds sold (in
domestic offices) in Schedule RC, item 3.a. However, report overnight lending for commercial and
industrial purposes as loans in this schedule. On the FFIEC 031, also report lending transactions in
foreign offices involving immediately available funds with an original maturity of one business day or
under a continuing contract that are not securities resale agreements as loans in this schedule.
(2) Lending transactions in the form of securities purchased under agreements to resell (report in
Schedule RC, item 3.b, "Securities purchased under agreements to resell").
(3) All holdings of commercial paper (report in Schedule RC, item 5, if held for trading; report in
Schedule RC-B, item 4.b, “Other mortgage-backed securities,” item 5, "Asset-backed securities," or
item 6, "Other debt securities," as appropriate, if held for purposes other than trading).
(4) Contracts of sale or other loans indirectly representing other real estate (report in Schedule RC,
item 7, "Other real estate owned").
(5) Undisbursed loan funds, sometimes referred to as incomplete loans or loans in process, unless the
borrower is liable for and pays the interest thereon. If interest is being paid by the borrower on the
undisbursed proceeds, the amount of such undisbursed funds should be included in both loans and
deposits. (Do not include loan commitments that have not yet been taken down, even if fees have
been paid; see Schedule RC-L, item 1.)
Item Instructions for Part I
Item No.
1

Caption and Instructions
Loans secured by real estate. Report all loans that meet the definition of a “loan secured by
real estate.” See the Glossary entry for "loan secured by real estate" for the definition of this
term. On the FFIEC 041, all banks should report in the appropriate subitems of column B a
breakdown of these loans into nine categories. On the FFIEC 031, all banks should report the
total amount of these loans for the fully consolidated bank in column A, but with a breakdown
of these loans into nine categories for domestic offices in column B.
Include all loans (other than those to states and political subdivisions in the U.S.), regardless
of purpose and regardless of whether originated by the bank or purchased from others, that
are secured by real estate at origination as evidenced by mortgages, deeds of trust, land
contracts, or other instruments, whether first or junior liens (e.g., equity loans, second
mortgages) on real estate.

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Part I. (cont.)
Item No.

Caption and Instructions

1
(cont.)

Include as loans secured by real estate:
(1) Loans secured by residential properties that are guaranteed by the Farmers Home
Administration (FmHA) and extended, collected, and serviced by a party other than the
FmHA.
(2) Loans secured by properties and guaranteed by governmental entities in foreign
countries.
(3) Participations in pools of Federal Housing Administration (FHA) Title I home improvement
loans that are secured by liens (generally, junior liens) on residential properties.
Exclude from loans secured by real estate:
(1) Obligations (other than securities and leases) of states and political subdivisions in the
U.S. that are secured by real estate (report in Schedule RC-C, part I, item 8).
(2) All loans and sales contracts indirectly representing other real estate (report in
Schedule RC, item 7, "Other real estate owned").
(3) Loans to real estate companies, real estate investment trusts, mortgage lenders, and
foreign non-governmental entities that specialize in mortgage loan originations and that
service mortgages for other lending institutions when the real estate mortgages or similar
liens on real estate are not sold to the bank but are merely pledged as collateral (report in
Schedule RC-C, part I, item 2, "Loans to depository institutions and acceptances of other
banks," or item 9.a, “Loans to nondepository financial institutions,” as appropriate).
(4) Bonds issued by the Federal National Mortgage Association or by the Federal Home Loan
Mortgage Corporation that are collateralized by residential mortgages (report in
Schedule RC-B, item 2.b, Securities "Issued by U.S. Government-sponsored agencies").
(5) Pooled residential mortgages for which participation certificates have been issued or
guaranteed by the Government National Mortgage Association, the Federal National
Mortgage Association, or the Federal Home Loan Mortgage Corporation (report in
Schedule RC-B, item 4.a). However, if the reporting bank is the seller-servicer of the
residential mortgages backing such securities and, as a result of a change in
circumstances, it must rebook any of these mortgages because one or more of the
conditions for sale accounting in ASC Topic 860, Transfers and Servicing (formerly
FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities,” as amended by FASB Statement No. 166,
“Accounting for Transfers of Financial Assets”), are no longer met, the rebooked
mortgages should be included in Schedule RC-C, part I, as loans secured by real estate.

1.a

Construction, land development, and other land loans. Report in the appropriate subitem
of column B loans secured by real estate made to finance (a) land development (i.e., the
process of improving land – laying sewers, water pipes, etc.) preparatory to erecting new
structures or (b) the on-site construction of industrial, commercial, residential, or farm
buildings. For purposes of this item, "construction" includes not only construction of new
structures, but also additions or alterations to existing structures and the demolition of existing
structures to make way for new structures.

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Part I. (cont.)
Item No.

Caption and Instructions

1.a
(cont.)

Also include in this item:
(1) Loans secured by vacant land, except land known to be used or usable for agricultural
purposes, such as crop and livestock production (which should be reported in
Schedule RC-C, part I, item 1.b, below, as loans secured by farmland).
(2) Loans secured by real estate the proceeds of which are to be used to acquire and
improve developed and undeveloped property.
(3) Loans made under Title I or Title X of the National Housing Act that conform to the
definition of construction stated above and that are secured by real estate.
Loans written as combination construction-permanent loans secured by real estate should be
reported in this item until construction is completed or principal amortization payments begin,
whichever comes first. When the first of these events occurs, the loans should begin to be
reported in the real estate loan category in Schedule RC-C, part I, item 1, appropriate to the
real estate collateral. For purposes of these reports, a combination construction-permanent
loan arises when the lender enters into a contractual agreement with the original borrower at
the time the construction loan is originated to also provide the original borrower with
permanent financing that amortizes principal after construction is completed and a certificate
of occupancy is obtained (if applicable). This construction-permanent loan structure is
intended to apply to situations where, at the time the construction loan is originated, the
original borrower:
•

•

Is expected to be the owner-occupant of the property upon completion of construction and
receipt of a certificate of occupancy (if applicable), for example, where the financing is
being provided to the original borrower for the construction and permanent financing of
the borrower’s residence or place of business, or
Is not expected to be the owner-occupant of the property, but repayment of the
permanent loan will be derived from rental income associated with the property being
constructed after receipt of a certificate of occupancy (if applicable) rather than from the
sale of the property being constructed.

All construction loans secured by real estate, other than combination construction-permanent
loans as described above, should continue to be reported in this item after construction is
completed unless and until (1) the loan is refinanced into a new permanent loan by the
reporting bank or is otherwise repaid, (2) the bank acquires or otherwise obtains physical
possession of the underlying collateral in full satisfaction of the debt, or (3) the loan is charged
off. For purposes of these reports, a construction loan is deemed to be refinanced into a new
permanent loan only if the bank originates:
•
•

FFIEC 031 and 041

An amortizing permanent loan to a new borrower (unrelated to the original borrower) who
has purchased the real property, or
A prudently underwritten new amortizing permanent loan at market terms to the original
borrower – including an appropriate interest rate, maturity, and loan-to-value ratio – that is
no longer dependent on the sale of the property for repayment. The loan should have a
clearly identified ongoing source of repayment sufficient to service the required principal
and interest payments over a reasonable and customary period relative to the type of

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Part I. (cont.)
Item No.

Caption and Instructions

1.a
(cont.)

property securing the new loan. A new loan to the original borrower not meeting these
criteria (including a new loan on interest-only terms or a new loan with a short-term
balloon maturity that is inconsistent with the ongoing source of repayment criterion)
should continue to be reported as a “Construction, land development, and other land loan”
in the appropriate subitem of Schedule RC-C, part I, item 1.a.
Exclude loans to finance construction and land development that are not secured by real
estate (report in other items of Schedule RC-C, part I, as appropriate).

1.a.(1)

1-4 family residential construction loans. Report in column B the amount outstanding of
1-4 family residential construction loans, i.e., loans for the purpose of constructing 1-4 family
residential properties, which will secure the loan. The term “1-4 family residential properties”
is defined in Schedule RC-C, part I, item 1.c, below. “1-4 family residential construction
loans” include:
•
•
•
•
•
•
•

•

Construction loans to developers secured by tracts of land on which 1-4 family residential
properties, including townhouses, are being constructed.
Construction loans secured by individual parcels of land on which single 1-4 family
residential properties are being constructed.
Construction loans secured by single-family dwelling units in detached or semidetached
structures, including manufactured housing.
Construction loans secured by duplex units and townhouses, excluding garden apartment
projects where the total number of units that will secure the permanent mortgage is
greater than four.
Combination land and construction loans on 1-4 family residential properties, regardless
of the current stage of construction or development.
Combination construction-permanent loans on 1-4 family residential properties until
construction is completed or principal amortization payments begin, whichever comes
first.
Loans secured by apartment buildings undergoing conversion to condominiums,
regardless of the extent of planned construction or renovation, where repayment will
come from sales of individual condominium dwelling units, which are 1-4 family residential
properties.
Bridge loans to developers on 1-4 family residential properties where the buyer will not
assume the same loan, even if construction is completed or principal amortization
payments have begun.

1.a.(2)

Other construction loans and all land development and other land loans. Report in
column B the amount outstanding of all construction loans for purposes other than
constructing 1-4 family residential properties, all land development loans, and all other land
loans. Include loans for the development of building lots and loans secured by vacant land,
unless the same loan finances the construction of 1-4 family residential properties on the
property.

1.b

Secured by farmland. Report in column B loans secured by farmland and improvements
thereon, as evidenced by mortgages or other liens. Farmland includes all land known to be
used or usable for agricultural purposes, such as crop and livestock production. Farmland
includes grazing or pasture land, whether tillable or not and whether wooded or not.

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RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.

Caption and Instructions

1.b
(cont.)

Include loans secured by farmland that are guaranteed by the Farmers Home Administration
(FmHA) or by the Small Business Administration (SBA) and that are extended, serviced, and
collected by any party other than FmHA or SBA.
Exclude loans for farm property construction and land development purposes (report in
Schedule RC-C, part I, item 1.a).

1.c

Secured by 1-4 family residential properties. Report in the appropriate subitem of
column B open-end and closed-end loans secured by real estate as evidenced by mortgages
(FHA, FmHA, VA, or conventional) or other liens on:
(1) Nonfarm property containing 1-to-4 dwelling units (including vacation homes) or more
than four dwelling units if each is separated from other units by dividing walls that extend
from ground to roof (e.g., row houses, townhouses, or the like).
(2) Mobile homes where (a) state laws define the purchase or holding of a mobile home as
the purchase or holding of real property and where (b) the loan to purchase the mobile
home is secured by that mobile home as evidenced by a mortgage or other instrument on
real property.
(3) Individual condominium dwelling units and loans secured by an interest in individual
cooperative housing units, even if in a building with five or more dwelling units.
(4) Housekeeping dwellings with commercial units combined where use is primarily
residential and where only 1-to-4 family dwelling units are involved.
Reverse 1-4 family residential mortgages should be reported in the appropriate subitem
based on whether they are closed-end or open-end mortgages. A reverse mortgage is an
arrangement in which a homeowner borrows against the equity in his/her home and receives
cash either in a lump sum or through periodic payments. However, unlike a traditional
mortgage loan, no payment is required until the borrower no longer uses the home as his or
her principal residence. Cash payments to the borrower after closing, if any, and accrued
interest are added to the principal balance. These loans may have caps on their maximum
principal balance or they may have clauses that permit the cap on the maximum principal
balance to be increased under certain circumstances. Homeowners generally have one of
the following options for receiving tax free loan proceeds from a reverse mortgage: (1) one
lump sum payment; (2) a line of credit; (3) fixed monthly payments to homeowner either for a
specified term or for as long as the homeowner lives in the home; or (4) a combination of the
above.
Reverse mortgages that provide for a lump sum payment to the borrower at closing, with no
ability for the borrower to receive additional funds under the mortgage at a later date, should
be reported as closed-end loans in Schedule RC-C, part I, item 1.c.(2). Normally, closed-end
reverse mortgages are first liens and would be reported in Schedule RC-C, part I,
item 1.c.(2)(a). Reverse mortgages that are structured like home equity lines of credit in

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Part I. (cont.)
Item No.

Caption and Instructions

1.c
(cont.)

that they provide the borrower with additional funds after closing (either as fixed monthly
payments, under a line of credit, or both) should be reported as open-end loans in
Schedule RC-C, part I, item 1.c.(1). Open-end reverse mortgages also are normally first
liens. Where there is a combination of both a lump sum payment to the borrower at closing
and payments after the closing of the loan, the reverse mortgage should be reported as an
open-end loan in Schedule RC-C, part I, item 1.c.(1).
Exclude loans for 1-to-4 family residential property construction and land development
purposes (report in Schedule RC-C, part I, item 1.a). Also exclude loans secured by vacant
lots in established single-family residential sections or in areas set aside primarily for 1-to-4
family homes (report in Schedule RC-C, part I, item 1.a).

1.c.(1)

Revolving, open-end loans secured by 1-4 family residential properties and extended
under lines of credit. Report in column B the amount outstanding under revolving, open-end
lines of credit secured by 1-to-4 family residential properties. These lines of credit, commonly
known as home equity lines, are typically secured by a junior lien and are usually accessible
by check or credit card.

1.c.(2)

Closed-end loans secured by 1-4 family residential properties. Report in the appropriate
subitem of column B the amount of all closed-end loans secured by 1-to-4 family residential
properties (i.e., closed-end first mortgages and junior liens).

1.c.(2)(a)

Secured by first liens. Report in column B the amount of all closed-end loans secured by
first liens on 1-to-4 family residential properties.

1.c.(2)(b)

Secured by junior liens. Report in column B the amount of all closed-end loans secured by
junior (i.e., other than first) liens on 1-to-4 family residential properties. Include loans secured
by junior liens in this item even if the bank also holds a loan secured by a first lien on the
same 1-to-4 family residential property and there are no intervening junior liens.

1.d

Secured by multifamily (5 or more) residential properties. Report in column B all other
nonfarm residential loans secured by real estate as evidenced by mortgages (FHA and
conventional) or other liens that are not reportable in Schedule RC-C, part I, item 1.c.
Specifically, include loans on:
(1) Nonfarm properties with 5 or more dwelling units in structures (including apartment
buildings and apartment hotels) used primarily to accommodate households on a more or
less permanent basis.
(2) 5 or more unit housekeeping dwellings with commercial units combined where use is
primarily residential.
(3) Cooperative-type apartment buildings containing 5 or more dwelling units.
Exclude loans for multifamily residential property construction and land development
purposes (report in Schedule RC-C, part I, item 1.a). Also exclude loans secured by nonfarm
nonresidential properties (report in Schedule RC-C, part I, item 1.e).

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Part I. (cont.)
Item No.
1.e

Caption and Instructions
Secured by nonfarm nonresidential properties. Report in the appropriate subitem of
column B loans secured by real estate as evidenced by mortgages or other liens on nonfarm
nonresidential properties, including business and industrial properties, hotels, motels,
churches, hospitals, educational and charitable institutions, dormitories, clubs, lodges,
association buildings, "homes" for aged persons and orphans, golf courses, recreational
facilities, and similar properties.
Exclude loans for nonfarm nonresidential property construction and land development
purposes (report in Schedule RC-C, part I, item 1.a).
For purposes of reporting loans in Schedule RC-C, part I, items 1.e.(1) and 1.e.(2), below,
the determination as to whether a nonfarm nonresidential property is considered “owneroccupied” should be made upon acquisition (origination or purchase) of the loan. However,
for purposes of determining whether existing nonfarm nonresidential real estate loans should
be reported as “owner-occupied” when a bank must first begin reporting such loans as of
1
March 31, 2007 (or March 31, 2008), the bank may consider the source of repayment either
when the loan was acquired or based on the most recent available information. Once a bank
determines whether a loan should be reported as “owner-occupied” or not, this determination
need not be reviewed thereafter.

1.e.(1)

Loans secured by owner-occupied nonfarm nonresidential properties. Report in
column B the amount of loans secured by owner-occupied nonfarm nonresidential properties.
“Loans secured by owner-occupied nonfarm nonresidential properties” are those nonfarm
nonresidential property loans for which the primary source of repayment is the cash flow from
the ongoing operations and activities conducted by the party, or an affiliate of the party, who
owns the property. Thus, for loans secured by owner-occupied nonfarm nonresidential
properties, the primary source of repayment is not derived from third party, nonaffiliated,
rental income associated with the property (i.e., any such rental income is less than
50 percent of the source of repayment) or the proceeds of the sale, refinancing, or permanent
financing of the property. Include loans secured by hospitals, golf courses, recreational
facilities, and car washes unless the property is owned by an investor who leases the property
to the operator who, in turn, is not related to or affiliated with the investor (in which case, the
loan should be reported in Schedule RC-C, part I, item 1.e.(2), below). Also include loans
secured by churches unless the property is owned by an investor who leases the property to
the congregation (in which case, the loan should be reported in Schedule RC-C, part I,
item 1.e.(2), below).

1

Reporting nonfarm nonresidential real estate loans as loans secured by “owner-occupied” properties or by other
properties, as appropriate, takes effect:
• March 31, 2007, for (1) all banks with $300 million or more in total assets as of December 31, 2005, or with
foreign offices, and (2) banks with less than $300 million in total assets as of December 31, 2005, and domestic
offices only whose total construction, multifamily, and nonfarm nonresidential real estate loans (Schedule RC-C,
part I, sum of items 1.a, 1.d, and 1.e) as of December 31, 2005, was greater than 150 percent of total equity
capital (Schedule RC, item 28) as of December 31, 2005; and
• March 31, 2008, for banks with less than $300 million in total assets as of December 31, 2005, and domestic
offices only that do not meet this percentage test.

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Part I. (cont.)
Item No.

Caption and Instructions

1.e.(2)

Loans secured by other nonfarm nonresidential properties. Report in column B the
amount of nonfarm nonresidential real estate loans that are not secured by owner-occupied
nonfarm nonresidential properties.
“Loans secured by other nonfarm nonresidential properties” are those nonfarm nonresidential
property loans where the primary source of repayment is derived from rental income
associated with the property (i.e., loans for which 50 percent or more of the source of
repayment comes from third party, nonaffiliated, rental income) or the proceeds of the sale,
refinancing, or permanent financing of the property. Include loans secured by hotels, motels,
dormitories, nursing homes, assisted-living facilities, mini-storage warehouse facilities, and
similar properties in this item as loans secured by other nonfarm nonresidential properties.

2

Loans to depository institutions and acceptances of other banks. Report all loans (other
than those that meet the definition of a “loan secured by real estate”), including overdrafts, to
banks, other depository institutions, and other associations, companies, and financial
intermediaries whose primary business is to accept deposits and to extend credit for business
or for personal expenditure purposes and the bank’s holdings of all bankers acceptances
accepted by other banks that are not held for trading. Acceptances accepted by other banks
may be purchased in the open market or discounted by the reporting bank. For further
information, see the Glossary entry for “bankers acceptances.”
On the FFIEC 041, all banks should report the total amount of these loans and acceptances in
column B, and banks with $300 million or more in total assets should also report in the
appropriate subitems of column A a breakdown of these loans among five categories of
depository institutions. On the FFIEC 031, all banks should report a breakdown of loans to
depository institutions and acceptances of other banks among five categories of depository
institutions for the fully consolidated bank in column A and a breakdown of these loans and
acceptances among three categories of depository institutions for domestic offices in
column B.
Depository institutions cover:
(1) commercial banks in the U.S., including:
(a) U.S. branches and agencies of foreign banks, U.S. branches and agencies of foreign
official banking institutions, and investment companies that are chartered under
Article XII of the New York State banking law and are majority-owned by one or more
foreign banks; and
(b) all other commercial banks in the U.S., i.e., U.S. branches of U.S. banks;
(2) depository institutions in the U.S., other than commercial banks, including:
(a)
(b)
(c)
(d)
(e)

FFIEC 031 and 041

credit unions;
mutual or stock savings banks;
savings or building and loan associations;
cooperative banks; and
other similar depository institutions; and

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Part I. (cont.)
Item No.

Caption and Instructions

2
(cont.)

(3) banks in foreign countries, including:
(a) foreign-domiciled branches of other U.S. banks; and
(b) foreign-domiciled branches of foreign banks.
See the Glossary entry for "banks, U.S. and foreign" and "depository institutions in the U.S."
for further discussion of these terms.
Include as loans to depository institutions and acceptances of other banks:
(1) Loans to depository institutions for the purpose of purchasing or carrying securities.
(2) Loans to depository institutions for which the collateral is a mortgage instrument and not
the underlying real property. Report loans to depository institutions where the collateral is
the real estate itself, as evidenced by mortgages or similar liens, in Schedule RC-C, part I,
item 1.
(3) Purchases of mortgages and other loans under agreements to resell that do not involve
the lending of immediately available funds or that mature in more than one business day,
if acquired from depository institutions.
(4) The reporting bank's own acceptances discounted and held in its portfolio when the
account party is another depository institution.

FFIEC 031 and 041

RC-C-6b
(9-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.

Caption and Instructions

2
(cont.)

Exclude from loans to depository institutions:
(1)

All transactions reportable in Schedule RC, item 3, "Federal funds sold and securities
purchased under agreements to resell."

(2)

Loans that meet the definition of a “loan secured by real estate,” even if extended to
depository institutions (report in Schedule RC-C, part I, item 1).

(3)

Loans to holding companies of depository institutions (report in Schedule RC-C, part I,
item 9.a, “Loans to nondepository financial institutions”).

(4)

Loans to real estate investment trusts and to mortgage companies that specialize in
mortgage loan originations and warehousing or in mortgage loan servicing (report in
Schedule RC-C, part I, item 9.a, “Loans to nondepository financial institutions”).

(5)

Loans to finance companies and insurance companies (report in Schedule RC-C, part I,
item 9.a, “Loans to nondepository financial institutions”).

(6)

Loans to brokers and dealers in securities, investment companies, and mutual funds
(report as loans for purchasing or carrying securities in Schedule RC-C, part I, item 9.b).

(7)

Loans to Small Business Investment Companies (report in Schedule RC-C, part I,
item 9.a, “Loans to nondepository financial institutions”).

(8)

Loans to lenders other than brokers, dealers, and banks whose principal business is to
extend credit for the purpose of purchasing or carrying securities (as described in
Federal Reserve Regulation U) and loans to "plan lenders" (as defined in Federal
Reserve Regulation G) (report as loans for purchasing or carrying securities in
Schedule RC-C, part I, item 9.b).

(9)

Loans to federally-sponsored lending agencies (report in Schedule RC-C, part I,
item 9.a, “Loans to nondepository financial institutions”). Refer to the Glossary entry for
"federally-sponsored lending agency" for the definition of this term.

(10) Dollar exchange acceptances created by foreign governments and official institutions
(report in Schedule RC-C, part I, item 7).
(11) Loans to foreign governments and official institutions, including foreign central banks
(report in Schedule RC-C, part I, item 7). See the Glossary entry for "foreign
governments and official institutions" for the definition of this term.
(12) Acceptances accepted by the reporting bank, discounted, and held in its portfolio, when
the account party is not another depository institution. Report such acceptances are
reported in other items of Schedule RC-C, part I, according to the account party.

FFIEC 031 and 041

RC-C-7
(3-10)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.

Caption and Instructions

NOTE: Items 2.a through 2.c are not applicable to banks filing the FFIEC 041 report forms that have less
than $300 million in total assets.
2.a

To commercial banks in the U.S. Report all loans to and acceptances of other commercial
banks in the U.S. On the FFIEC 041, banks with $300 million or more in total assets should
report in the appropriate subitems of column A a breakdown of these loans and acceptances
between those to U.S. branches and agencies of foreign banks and those to other
commercial banks in the U.S. On the FFIEC 031, all banks should report the total amount of
these loans and acceptances in domestic offices in column B, and a breakdown of these
loans and acceptances for the fully consolidated bank between those to U.S. branches and
agencies of foreign banks and those to other commercial banks in the U.S. in the appropriate
subitems of column A.
Refer to the instruction to Schedule RC-C, part I, item 2, above, and to the Glossary entry for
"banks, U.S. and foreign" for further discussion of the term "commercial banks in the U.S."
Exclude from Schedule RC-C, part I, items 2.a, 2.a.(1), and 2.a.(2), loans to other domestic
depository institutions such as savings banks, savings and loan associations, and credit
unions (report in Schedule RC-C, part I, item 2.b, below).

2.a.(1)

To U.S. branches and agencies of foreign banks. Report in column A all loans to and
acceptances of U.S. branches and agencies of foreign banks.
Exclude loans to U.S. offices of U.S.-chartered banks that are owned by foreign banks or by
foreign official banking institutions (report in Schedule RC-C, part I, item 2.a.(2), below).

2.a.(2)

To other commercial banks in the U.S. Report in column A all loans to and acceptances of
commercial banks in the U.S., other than U.S. branches and agencies of foreign banks.

2.b

To other depository institutions in the U.S. Report (on the FFIEC 041, in column A; on the
FFIEC 031, in columns A and B, as appropriate) loans to and acceptances of depository
institutions, other than commercial banks, domiciled in the U.S. Refer to the instruction to
Schedule RC-C, part I, item 2, above, and to the Glossary entry for "depository institutions in
the U.S." for further discussion of the term "depository institutions in the U.S."
Exclude loans to and acceptances of commercial banks in the U.S. (report in Schedule RC-C,
part I, item 2.a, above).

2.c

To banks in foreign countries. Report all loans to and acceptances of banks and their
branches domiciled outside the U.S. On the FFIEC 041, banks with $300 million or more in
total assets should report in the appropriate subitems of column A a breakdown of these
loans and acceptances between those to foreign branches of other U.S. banks and those to
other banks in foreign countries. On the FFIEC 031, all banks should report the total amount
of these loans and acceptances in domestic offices in column B and a breakdown of these
loans and acceptances for the fully consolidated bank between those to foreign branches of
other U.S. banks and those to other banks in foreign countries in the appropriate subitems of
column A.

FFIEC 031 and 041

RC-C-8
(3-10)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.

Caption and Instructions

NOTE: Items 2.c, 2.c.(1), and 2.c.(2) are not applicable to banks filing the FFIEC 041 report forms that
have less than $300 million in total assets.
2.c
(cont.)

See the instruction to Schedule RC-C, part I, item 2, above, and to the Glossary entry for
"banks, U.S. and foreign" for further discussion of the term "banks in foreign countries."
Exclude loans to U.S. branches and agencies of foreign banks (report in Schedule RC-C,
part I, item 2.a, above).

2.c.(1)

To foreign branches of other U.S. banks. Report in column A all loans to and acceptances
of foreign branches of other U.S. banks.

2.c.(2)

To other banks in foreign countries. Report in column A all loans to and acceptances of
banks in foreign countries, other than foreign-domiciled branches of other U.S. banks.

3

Loans to finance agricultural production and other loans to farmers. On the FFIEC 041,
report in column B and, on the FFIEC 031, report in columns A and B, as appropriate, loans
for the purpose of financing agricultural production. Include such loans whether secured
(other than those that meet the definition of a “loan secured by real estate”) or unsecured and
whether made to farm and ranch owners and operators (including tenants) or to nonfarmers.
All other loans to farmers, other than those excluded below, should also be reported in this
item.
Include as loans to finance agricultural production and other loans to farmers:
(1) Loans and advances made for the purpose of financing agricultural production, including
the growing and storing of crops, the marketing or carrying of agricultural products by the
growers thereof, and the breeding, raising, fattening, or marketing of livestock.
(2) Loans and advances made for the purpose of financing fisheries and forestries, including
loans to commercial fishermen.
(3) Agricultural notes and other notes of farmers that the bank has discounted for, or
purchased from, merchants and dealers, either with or without recourse to the seller.
(4) Loans to farmers that are guaranteed by the Farmers Home Administration (FmHA) or
by the Small Business Administration (SBA) and that are extended, serviced, and
collected by a party other than the FmHA or SBA.
(5) Loans and advances to farmers for purchases of farm machinery, equipment, and
implements.
(6) Loans and advances to farmers for all other purposes associated with the maintenance or
operations of the farm, including purchases of private passenger automobiles and other
retail consumer goods and provisions for the living expenses of farmers or ranchers and
their families.
Loans to farmers for household, family, and other personal expenditures (including credit
cards) that are not readily identifiable as being made to farmers need not be broken out of
Schedule RC-C, part I, item 6, for inclusion in this item.

FFIEC 031 and 041

RC-C-9
(3-10)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.

Caption and Instructions

3
(cont.)

Exclude from loans to finance agricultural production and other loans to farmers:
(1) Loans that meet the definition of a “loan secured by real estate” (report in Schedule RC-C,
part I, item 1).
(2) Loans to farmers for commercial and industrial purposes, e.g., when a farmer is operating
a business enterprise as well as a farm (report in Schedule RC-C, part I, item 4).
(3) Loans to farmers for the purpose of purchasing or carrying securities (report in
Schedule RC-C, part I, item 9.b).
(4) Loans to farmers secured by oil or mining production payments (report in Schedule RC-C,
part I, item 4).

4

Commercial and industrial loans. Report loans for commercial and industrial purposes to
sole proprietorships, partnerships, corporations, and other business enterprises, whether
secured (other than those that meet the definition of a “loan secured by real estate”) or
unsecured, single-payment or installment. On the FFIEC 041, all banks should report the
total of these loans in column B, and banks with $300 million or more in total assets should
also report in the appropriate subitems of column A a breakdown of these loans between
those loans to U.S. and non-U.S. addressees. On the FFIEC 031, all banks should report a
breakdown of these loans between those to U.S. and non-U.S. addressees for the fully
consolidated bank in the appropriate subitems of column A and for domestic offices in the
appropriate subitems of column B.
Commercial and industrial loans may take the form of direct or purchased loans. Include
loans to individuals for commercial, industrial, and professional purposes but not for
investment or personal expenditure purposes. Also include the reporting bank's own
acceptances that it holds in its portfolio when the account party is a commercial or industrial
enterprise. Exclude all commercial and industrial loans held for trading.
Include loans of the types listed below as commercial and industrial loans. These
descriptions may overlap and are not all inclusive.
(1)

Loans for commercial, industrial, and professional purposes to:
(a) mining, oil- and gas-producing, and quarrying companies;
(b) manufacturing companies of all kinds, including those which process agricultural
commodities;
(c) construction companies;
(d) transportation and communications companies and public utilities;
(e) wholesale and retail trade enterprises and other dealers in commodities;
(f) cooperative associations including farmers' cooperatives;
(g) service enterprises such as hotels, motels, laundries, automotive service stations,
and nursing homes and hospitals operated for profit;
(h) insurance agents; and
(i) practitioners of law, medicine, and public accounting.

(2)

Loans for the purpose of financing capital expenditures and current operations.

(3)

Loans to business enterprises guaranteed by the Small Business Administration.

FFIEC 031 and 041

RC-C-10
(3-10)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.

Caption and Instructions

4
(cont.)

(4)

Loans to farmers for commercial and industrial purposes (when farmers operate a
business enterprise as well as a farm).

(5)

Loans supported by letters of commitment from the Agency for International
Development.

(6)

Loans made to finance construction that do not meet the definition of a “loan secured by
real estate.”

(7)

Loans to merchants or dealers on their own promissory notes secured by the pledge of
their own installment paper.

(8)

Loans extended under credit cards and related plans that are readily identifiable as
being issued in the name of a commercial or industrial enterprise.

(9)

Dealer flooring or floor-plan loans.

(10) Loans collateralized by production payments (e.g., oil or mining production payments).
Treat as a loan to the original seller of the production payment rather than to the holder
of the production payment. For example, report in this item, as a loan to an oil
company, a loan made to a nonprofit organization collateralized by an oil production
payment; do not include in Schedule RC-C, part I, item 9, as a loan to the nonprofit
organization.
(11) Loans and participations in loans secured by conditional sales contracts made to
finance the purchase of commercial transportation equipment.
(12) Commercial and industrial loans guaranteed by foreign governmental institutions.
(13) Overnight lending for commercial and industrial purposes.
Exclude from commercial and industrial loans:
(1)

Loans that meet the definition of a “loan secured by real estate,” even if for commercial
and industrial purposes (report in Schedule RC-C, part I, item 1).

(2)

Loans to depository institutions (report in Schedule RC-C, part I, item 2).

(3)

Loans to nondepository financial institutions such as real estate investment trusts,
mortgage companies, and insurance companies (report in Schedule RC-C, part I,
item 9.a).

(4)

Loans for the purpose of purchasing or carrying securities (report in Schedule RC-C,
part I, item 9.b).

(5)

Loans for the purpose of financing agricultural production, whether made to farmers or
to nonagricultural businesses (report in Schedule RC-C, part I, item 3).

(6)

Loans to nonprofit organizations, such as hospitals or educational institutions (report as
all other loans in Schedule RC-C, part I, item 9), except those for which oil or mining
production payments serve as collateral which are to be reported in this item.

FFIEC 031 and 041

RC-C-11
(3-10)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.

Caption and Instructions

4
(cont.)

(7)

Holdings of acceptances accepted by other banks (report in Schedule RC-C, part I,
item 2).

(8)

Holdings of the bank’s own acceptances when the account party is another bank (report
in Schedule RC-C, part I, item 2) or a foreign government or official institution (report
in Schedule RC-C, part I, item 7).

(9)

Equipment trust certificates (report in Schedule RC-B, item 6, "Other debt securities").

(10) Any commercial or industrial loans held by the reporting bank for trading purposes
(report in Schedule RC, item 5, "Trading assets").
(11) Commercial paper (report in Schedule RC-B, item 5, "Asset-backed securities," or
item 6, "Other debt securities," or in Schedule RC, item 5, "Trading assets," as
appropriate).
NOTE: Items 4.a and 4.b are not applicable to banks filing the FFIEC 041 report forms that have less
than $300 million in total assets.
4.a

To U.S. addressees (domicile). Report (on the FFIEC 041, in column A; on the FFIEC 031,
in columns A and B, as appropriate) all commercial and industrial loans to U.S. addressees.
For a detailed discussion of U.S. and non-U.S. addressees, see the Glossary entry for
"domicile."

4.b

To non-U.S. addressees (domicile). Report (on the FFIEC 041, in column A; on the
FFIEC 031, in columns A and B, as appropriate) all commercial and industrial loans to
non-U.S. addressees. For a detailed discussion of U.S. and non-U.S. addressees, see the
Glossary entry for "domicile."

5

Not applicable.

6

Loans to individuals for household, family, and other personal expenditures. Report in
the appropriate subitem all credit extended to individuals for household, family, and other
personal expenditures that does not meet the definition of a “loan secured by real estate,”
whether direct loans or purchased paper. Exclude loans to individuals for the purpose of
purchasing or carrying securities (report in Schedule RC-C, part I, item 9.b).
Deposits accumulated by borrowers for the payment of personal loans (i.e., hypothecated
deposits) should be netted against the related loans.

6.a

Credit cards. Report (on the FFIEC 041, in column B; on the FFIEC 031, in columns A
and B, as appropriate) all extensions of credit to individuals for household, family, and other
personal expenditures arising from credit cards. Report the total amount outstanding of all
funds advanced under these credit cards regardless of whether there is a period before
interest charges are made. Report only amounts carried on the books of the reporting bank
as loans that are outstanding on the report date, even if the plan is shared with other banks or
organizations and even if accounting and billing are done by a correspondent bank or the
accounting center of a plan administered by others.

FFIEC 031 and 041

RC-C-12
(3-10)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.

Caption and Instructions

6.a
(cont.)

If the reporting bank has securitized credit cards and has retained a seller's interest that is
not in the form of a security, the carrying value of the seller's interest should be reported as
credit card loans in this item. For purposes of these reports, the term "seller's interest" means
the reporting bank's ownership interest in loans that have been securitized, except an interest
that is a form of recourse or other seller-provided credit enhancement. Seller's interests differ
from the securities issued to investors by the securitization structure. The principal amount of
a seller's interest is generally equal to the total principal amount of the pool of assets included
in the securitization structure less the principal amount of those assets attributable to
investors, i.e., in the form of securities issued to investors.
Do not net credit balances resulting from overpayments of account balances on credit card
accounts against the debit balances of other credit card accounts. Report credit balances
(in domestic offices) in Schedule RC-E, (part I,) item 1, column A, and item 7, column B. On
the FFIEC 031, report credit balances in foreign offices in Schedule RC-E, part II, item 1.
Exclude from credit cards:
(1) Credit extended under credit card plans to business enterprises (report in
Schedule RC-C, part I, item 4, "Commercial and industrial loans").
(2) All credit extended to individuals through credit cards that meets the definition of a “loan
secured by real estate” (report in Schedule RC-C, part I, item 1).
(3) All credit extended to individuals for household, family, and other personal expenditures
under prearranged overdraft plans (report in Schedule RC-C, part I, item 6.b).
If the bank acts only as agent or correspondent for other banks or nonbank corporations and
carries no credit card plan assets on its books, enter a "zero" or the word "none." Banks that
do not participate in any credit card plan should also enter a zero or the word "none."

6.b

Other revolving credit plans. Report (on the FFIEC 041, in column B; on the FFIEC 031, in
columns A and B, as appropriate) all extensions of credit to individuals for household, family,
and other personal expenditures arising from prearranged overdraft plans and other revolving
credit plans not accessed by credit cards. Report the total amount outstanding of all funds
advanced under these revolving credit plans regardless of whether there is a period before
interest charges are made.
Do not net credit balances resulting from overpayments of account balances on other
revolving credit plan accounts against the debit balances of other revolving credit plan
accounts. Report credit balances (in domestic offices) in Schedule RC-E, (part I,) item 1,
column A, and item 7, column B. On the FFIEC 031, report credit balances in foreign offices
in Schedule RC-E, part II, item 1.
Exclude from other revolving credit plans:
(1) All ordinary (unplanned) overdrafts on transaction accounts not associated with revolving
credit plans (report in other items of Schedule RC-C, part I, as appropriate).
(2) Credit extended to individuals for household, family, and other personal expenditures
arising from credit cards (report in Schedule RC-C, part I, item 6.a).

FFIEC 031 and 041

RC-C-13
(9-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.
6.c

Caption and Instructions
Automobile loans. Report (on the FFIEC 041, in column B; on the FFIEC 031, in columns A
and B, as appropriate) all consumer loans extended for the purpose of purchasing new and
used passenger cars and other vehicles such as minivans, vans, sport-utility vehicles, pickup
trucks, and similar light trucks for personal use. Include both direct and indirect consumer
automobile loans as well as retail installment sales paper purchased by the bank from
automobile dealers.
Exclude from automobile loans:
(1) Loans that meet the definition of a “loan secured by real estate,” even if extended for the
purpose of purchasing an automobile (report in Schedule RC-C, part I, item 1).
(2) Consumer loans for purchases of, or otherwise secured by, motorcycles, recreational
vehicles, golf carts, boats, and airplanes (report in Schedule RC-C, part I, item 6.d).
(3) Personal cash loans secured by automobiles already paid for (report in Schedule RC-C,
part I, item 6.d).
(4) Vehicle flooring or floor-plan loans (report in Schedule RC-C, part I, item 4).
(5) Loans to finance purchases of passenger cars and other vehicles for commercial,
industrial, state or local government, or other nonpersonal nonagricultural use (report in
Schedule RC-C, part I, item 4, item 8, or item 9, as appropriate).
(6) Loans to finance vehicle fleet sales (report in Schedule RC-C, part I, item 4).
(7) Loans to farmers for purchases of passenger cars and other vehicles used in association
with the maintenance or operations of the farm, and loans for purchases of farm
equipment (report in Schedule RC-C, part I, item 3).
(8) Consumer automobile lease financing receivables (report in Schedule RC-C, part I,
item 10.a).
All loans to individuals for household, family, and other personal expenditures (i.e., consumer
loans) originated or purchased before April 1, 2011, that are collateralized by automobiles,
regardless of the purpose of the loan, may be classified as automobile loans for purposes of
this schedule and other schedules in which information on automobile loans is to be reported.
For consumer loans originated or purchased on or after April 1, 2011, banks should exclude
from automobile loans any personal cash loans secured by automobiles already paid for and
consumer loans where the purchase of an automobile is not the primary purpose of the loan
(report in Schedule RC-C, part I, item 6.d).

6.d

Other consumer loans. Report (on the FFIEC 041, in column B; on the FFIEC 031, in
columns A and B, as appropriate) all other loans to individuals for household, family, and
other personal expenditures (other than those that meet the definition of a “loan secured by
real estate” and other than those for purchasing or carrying securities). Include loans for such
purposes as:

FFIEC 031 and 041

RC-C-14
(9-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.

Caption and Instructions

6.d
(cont.)

(1) purchases of household appliances, furniture, trailers, and boats;
(2) repairs or improvements to the borrower's residence (that do not meet the definition of a
“loan secured by real estate”);
(3) educational expenses, including student loans;
(4) medical expenses;
(5) personal taxes;
(6) vacations;
(7) consolidation of personal (nonbusiness) debts;
(8) purchases of real estate or mobile homes to be used as a residence by the borrower's
family (that do not meet the definition of a “loan secured by real estate”); and
(9) other personal expenditures.
Other consumer loans may take the form of:
(1) Installment loans, demand loans, single payment time loans, and hire purchase contracts
(for purposes other than retail sales of passenger cars and other vehicles such as
minivans, vans, sport-utility vehicles, pickup trucks, and similar light trucks for personal
use), and should be reported as loans to individuals for household, family, and other
personal expenditures regardless of size or maturity and regardless of whether the loans
are made by the consumer loan department or by any other department of the bank.
(2) Retail installment sales paper purchased by the bank from merchants or dealers (other
than dealers of passenger cars and other vehicles such as minivans, vans, sport-utility
vehicles, pickup trucks, and similar light trucks), finance companies, and others.
Exclude from other consumer loans:
(1) All direct and purchased loans, regardless of purpose, that meet the definition of a loan
secured by real estate” as evidenced by mortgages, deeds of trust, land contracts, or
other instruments, whether first or junior liens (e.g., equity loans, second mortgages), on
real estate (report in Schedule RC-C, part I, item 1).
(2) Loans to individuals that do not meet the definition of a “loan secured by real estate” for
the purpose of investing in real estate when the real estate is not to be used as a
residence or vacation home by the borrower or by members of the borrower's family
(report as all other loans in Schedule RC-C, part I, item 9.b).
(3) Loans to individuals for commercial, industrial, and professional purposes and for
"floor plan" or other wholesale financing (report in Schedule RC-C, part I, item 4).
(4) Loans to individuals for the purpose of purchasing or carrying securities (report
in Schedule RC-C, part I, item 9.b).
(5) Loans to individuals for investment (as distinct from commercial, industrial, or
professional) purposes other than those for purchasing or carrying securities (report as all
other loans in Schedule RC-C, part I, item 9.b).

FFIEC 031 and 041

RC-C-14a
(9-11)

RC-C - LOANS AND LEASES

This page intentionally left blank.

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.

Caption and Instructions

6.d
(cont.)

(6) Loans to merchants, automobile dealers, and finance companies on their own
promissory notes, secured by the pledge of installment paper or similar instruments
(report in Schedule RC-C, part I, item 4, or as loans to nondepository financial institutions
in Schedule RC-C, part I, item 9.a, as appropriate).
(7) Loans to farmers, regardless of purpose, to the extent that can be readily identified as
such loans (report in Schedule RC-C, part I, item 3).
(8) All credit extended to individuals for household, family, and other personal expenditures
arising from:
(a) Credit cards (report in Schedule RC-C, part I, item 6.a);
(b) Prearranged overdraft plans (report in Schedule RC-C, part I, item 6.b); and
(c) Retail sales of passenger cars and other vehicles such as minivans, vans, sport-utility
vehicles, pickup trucks, and similar light trucks for personal use (report in
Schedule RC-C, part I, item 6.c).

7

Loans to foreign governments and official institutions. Report (on the FFIEC 041, in
column B; on the FFIEC 031, in columns A and B, as appropriate) all loans (other than those
that meet the definition of a “loan secured by real estate”), including planned and unplanned
overdrafts, to governments in foreign countries, to their official institutions, and to international
and regional institutions. See the Glossary entry for "foreign governments and official
institutions" for the definition of this term.
Include:
(1) Bankers acceptances accepted by the reporting bank and held in its portfolio when the
account party is a foreign government or official institution, including such acceptances for
the purpose of financing dollar exchange. Exclude acceptances that are held for trading.
(2) Loans to foreign governments, their official institutions, and international and regional
institutions (other than those that meet the definition of a “loan secured by real estate”),
including planned and unplanned overdrafts.
Exclude from loans to foreign governments and official institutions:
(1) Loans to nationalized banks and other banking institutions owned by foreign governments
and not functioning as central banks, banks of issue, or development banks (report in
Schedule RC-C, part I, item 2, "Loans to depository institutions and acceptances of other
banks").
(2) Loans to U.S. branches and agencies of foreign official banking institutions (report in
Schedule RC-C, part I, item 2).
(3) Loans to foreign-government-owned nonbank corporations and enterprises (report in
Schedule RC-C, part I, item 4 or 9, as appropriate).

FFIEC 031 and 041

RC-C-15
(3-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.
8

Caption and Instructions
Obligations (other than securities and leases) of states and political subdivisions in
the U.S. Report (on the FFIEC 041, in column B; on the FFIEC 031, in columns A and B,
as appropriate) all obligations of states and political subdivisions in the United States
(including overdrafts and obligations secured by real estate), other than leases and
obligations reported as securities. (Report leases to states and political subdivisions in
the U.S. in Schedule RC-C, part I, item 10, and securities issued by such entities in
Schedule RC-B, item 3, "Securities issued by states and political subdivisions in the U.S.,"
or item 4, "Mortgage-backed securities," as appropriate.) Exclude all such obligations held
for trading.
States and political subdivisions in the U.S. include:
(1) the fifty States of the United States and the District of Columbia and their counties,
municipalities, school districts, irrigation districts, and drainage and sewer districts;
(2) the governments of Puerto Rico and of the U.S. territories and possessions and their
political subdivisions; and
(3) Indian tribes in the U.S.
Treatment of industrial development bonds (IDBs). Industrial development bonds (IDBs),
sometimes referred to as "industrial revenue bonds," are issued under the auspices of states
or political subdivisions for the benefit of a private party or enterprise where that party or
enterprise, rather than the government entity, is obligated to pay the principal and interest on
the obligation. For purposes of these reports, all IDBs should be reported as securities in
Schedule RC-B, item 3, or as loans in this item (Schedule RC-C, part I, item 8), consistent
with the asset category in which the bank reports IDBs on its balance sheet for other financial
reporting purposes. Regardless of whether they are reported as securities in Schedule RC-B
or as loans in Schedule RC-C, part I, all IDBs that meet the definition of a "security" in
ASC Topic 320, Investments-Debt and Equity Securities (formerly FASB Statement No. 115,
“Accounting for Certain Investments in Debt and Equity Securities”) must be measured in
accordance with ASC Topic 320.
Treatment of other obligations of states and political subdivisions in the U.S. In addition to
those IDBs that are reported in this item in accordance with the preceding paragraph, also
include in this item all obligations (other than securities) of states and political subdivisions in
the U.S. except those that meet any of the following criteria:
(1) Industrial development bonds (IDBs) that are reported as securities in accordance with
the reporting treatment described above (report as securities in Schedule RC, item 2, and
Schedule RC-B, item 3).
(2) Notes, bonds, and debentures (including tax warrants and tax-anticipation notes) which
are rated by a nationally-recognized rating service (report as securities in Schedule RC,
item 2, and Schedule RC-B, item 3).
(3) Mortgage-backed securities issued by state and local housing authorities (report as
securities in Schedule RC, item 2, and Schedule RC-B, item 4).
(4) Obligations of state and local governments that are guaranteed by the United States
Government (report as securities in Schedule RC, item 2, and Schedule RC-B, item 3).

FFIEC 031 and 041

RC-C-16
(3-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.

Caption and Instructions

8
(cont.)

(5) Nonrated obligations of states and political subdivisions in the U.S. that the bank
considers securities for other financial reporting purposes (report as securities in
Schedule RC, item 2, and Schedule RC-B, item 3).
(6) Lease financing receivables of states and political subdivisions in the U.S. (report as
leases in Schedule RC-C, part I, item 10).
(7) Obligations of states and political subdivisions in the U.S. held by the reporting bank for
trading purposes (report in Schedule RC, item 5).

9

Loans to nondepository financial institutions and other loans. Report loans to
nondepository financial institutions, loans for purchasing or carrying securities, and all
other loans that cannot properly be reported in one of the preceding items in this schedule.
On the FFIEC 041, all banks should report in the appropriate subitem of column B loans to
nondepository financial institutions (item 9.a) and other loans (item 9.b); banks with
$300 million or more in total assets should also report in the appropriate subitem of column A
loans for purchasing or carrying securities (item 9.b.(1)) and all other loans (item 9.b.(2)). On
the FFIEC 031, all banks should report the total amount of these loans for the fully
consolidated bank in column A, but with a breakdown between loans to nondepository
financial institutions (item 9.a), loans for purchasing or carrying securities (item 9.b.(1)), and
all other loans (item 9.b.(2)) for domestic offices in column B.
Loans to nondepository financial institutions include:
(1) Loans (other than those that meet the definition of a “loan secured by real estate”) to real
estate investment trusts and to mortgage companies that specialize in mortgage loan
originations and warehousing or in mortgage loan servicing. (Exclude outright purchases
of mortgages or similar instruments by the bank from such companies, which – unless
held for trading – are to be reported in Schedule RC-C, part I, item 1.)
(2) Loans to holding companies of other depository institutions.
(3) Loans to insurance companies.
(4) Loans to finance companies, mortgage finance companies, factors and other financial
intermediaries, short-term business credit institutions that extend credit to finance
inventories or carry accounts receivable, and institutions whose functions are
predominantly to finance personal expenditures (exclude loans to financial corporations
whose sole function is to borrow money and relend it to its affiliated companies or a
corporate joint venture in which an affiliated company is a joint venturer).
(5) Loans to federally-sponsored lending agencies (see the Glossary entry for
“federally-sponsored lending agency" for the definition of this term).
(6) Loans to investment banks.
(7) Loans and advances made to the bank's own trust department.
(8) Loans to other domestic and foreign financial intermediaries whose functions are
predominantly the extending of credit for business purposes, such as investment
companies that hold stock of operating companies for management or development
purposes.

FFIEC 031 and 041

RC-C-17
(6-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.

Caption and Instructions

9
(cont.)

(9) Loans to Small Business Investment Companies.
Other loans include (1) loans for purchasing or carrying securities and (2) all other loans, as
described below.
Loans for purchasing or carrying securities include:
(1) All loans to brokers and dealers in securities (other than those that meet the definition of a
“loan secured by real estate” and those to depository institutions).
(2) All loans, whether secured (other than those that meet the definition of a “loan secured by
real estate”) or unsecured, to any other borrower for the purpose of purchasing or carrying
securities, such as:
(a)
(b)
(c)
(d)

Loans made to provide funds to pay for the purchase of securities at settlement date.
Loans made to provide funds to repay indebtedness incurred in purchasing securities.
Loans that represent the renewal of loans to purchase or carry securities.
Loans to investment companies and mutual funds, but excluding loans to Small
Business Investment Companies.
(e) Loans to "plan lenders" as defined in Section 221.4(a) of Federal Reserve
Regulation U.
(f) Loans to Employee Stock Ownership Plans (ESOPs).
For purposes of the Report of Condition, the purpose of a loan collateralized by "stock" is
determined as follows:
(1) For loans that are collateralized in whole or in part by "margin stock," as defined by
Federal Reserve Regulation U, the purpose of the loan is determined by the latest
Statement of Purpose (Form FR U-1) on file.
(2) For loans that are collateralized by "stock" other than "margin stock," the bank may
determine the purpose of the loan according to the most current information available.
Exclude from loans for purchasing or carrying securities:
(1) Loans to banks in foreign countries that act as brokers and dealers in securities (report in
Schedule RC-C, part I, item 2).
(2) Loans to depository institutions for the purpose of purchasing or carrying securities (report
Schedule RC-C, part I, item 2).
(3) Transactions reportable in Schedule RC, item 3, "Federal funds sold and securities
purchased under agreements to resell."
(4) Loans that meet the definition of a “loan secured by real estate” (report in Schedule RC-C,
part I, item 1).

FFIEC 031 and 041

RC-C-18
(6-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.

Caption and Instructions

9
(cont.)

All other loans include all loans and discounts (other than loans to nondepository financial
institutions and loans for purchasing or carrying securities) that cannot properly be reported in
one of the preceding items in Schedule RC-C, part I, such as:
(1)

Unplanned overdrafts to deposit accounts (except overdrafts of depository institutions,
which are to be reported in Schedule RC-C, part I, item 2; overdrafts of foreign
governments and official institutions, which are to be reported in Schedule RC-C, part I,
item 7; and overdrafts of states and political subdivisions in the U.S., which are to be
reported in Schedule RC-C, part I, item 8).

(2)

Loans (other than those that meet the definition of a “loan secured by real estate”) to
nonprofit organizations (e.g., churches, hospitals, educational and charitable institutions,
clubs, and similar associations) except those collateralized by production payments
where the proceeds ultimately go to a commercial or industrial organization (which are
to be reported in Schedule RC-C, part I, item 4).

(3)

Loans to individuals for investment purposes (as distinct from commercial, industrial, or
professional purposes), other than those that meet the definition of a “loan secured by
real estate.”

Exclude from all other loans extensions of credit initially made in the form of planned or
"advance agreement" overdrafts other than those made to borrowers of the types whose
obligations are specifically reportable in this item (report such planned overdrafts in other
items of Schedule RC-C, part I, as appropriate). For example, report advances to banks in
foreign countries in the form of "advance agreement" overdrafts as loans to depository
institutions in Schedule RC-C, part I, item 2, and overdrafts under consumer check-credit
plans as “Other revolving credit plans” to individuals in Schedule RC-C, part I, item 6.b.
Report both planned and unplanned overdrafts on "due to" deposit accounts of depository
institutions in Schedule RC-C, part I, item 2.
9.a

Loans to nondepository financial institutions. Report in column B all loans to
nondepository financial institutions (on the FFIEC 031, in domestic offices) as described
above.

NOTE: Item 9.b is not applicable to banks filing the FFIEC 031 report forms.
9.b

Other loans. On the FFIEC 041, report in column B other loans as described above.

NOTE: Items 9.b.(1) and 9.b.(2) are not applicable to banks filing the FFIEC 041 report forms that have
less than $300 million in total assets.
9.b.(1)

Loans for purchasing or carrying securities. Report (on the FFIEC 041, in column A;
on the FFIEC 031, in column B) all loans for purchasing or carrying securities (on the
FFIEC 031, in domestic offices) as described above.

9.b.(2)

All other loans. Report (on the FFIEC 041, in column A; on the FFIEC 031, in column B) all
other loans (on the FFIEC 031, in domestic offices) as described above.

FFIEC 031 and 041

RC-C-19
(3-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Item No.
10

Caption and Instructions
Lease financing receivables (net of unearned income). Report all outstanding balances
relating to direct financing and leveraged leases on property acquired by the bank for leasing
purposes. On the FFIEC 041, all banks should report the total amount of these leases in
column B, and banks with $300 million or more in total assets should also report in the
appropriate subitems of column A a breakdown of these leases between leases to individuals
for household, family, and other personal expenditures and all other leases. On the
FFIEC 031, all banks should report the total amount of these leases in domestic offices in
column B and a breakdown of these leases for the fully consolidated bank between leases to
individuals for household, family, and other personal expenditures and all other leases. These
balances should include the estimated residual value of leased property and must be net of
unearned income. For further discussion of leases where the bank is the lessor, refer to the
Glossary entry for "lease accounting."
Include all leases to states and political subdivisions in the U.S. in this item.

NOTE: Items 10.a and 10.b are not applicable to banks filing the FFIEC 041 report forms that have less
than $300 million total assets.
10.a

Leases to individuals for household, family, and other personal expenditures. Report in
column A all outstanding balances relating to direct financing and leveraged leases on
property acquired by the fully consolidated bank for leasing to individuals for household,
family, and other personal expenditures (i.e., consumer leases). For further information on
extending credit to individuals for consumer purposes, refer to the instructions for
Schedule RC-C, part I, item 6.d, “Other consumer loans.”

10.b

All other leases. Report in column A all outstanding balances relating to all other direct
financing and leveraged leases on property acquired by the fully consolidated bank for leasing
to lessees other than for household, family, and other personal expenditure purposes.

11

LESS: Any unearned income on loans reflected in items 1-9 above. To the extent
possible, the preferred treatment is to report the specific loan categories net of unearned
income. A reporting bank should enter (on the FFIEC 041, in column B; on the FFIEC 031, in
columns A and B, as appropriate) unearned income only to the extent that it is included in
(i.e., not deducted from) the various loan items of this schedule (Schedule RC-C, part I,
items 1 through 9). If a bank reports each loan item of this schedule net of unearned income,
enter a zero or the word "none" in this item.
Do not include unearned income on lease financing receivables in this item. Leases should
be reported net of unearned income in Schedule RC-C, part I, item 10.

12

Total loans and leases, net of unearned income. Report (on the FFIEC 041, in column B;
on the FFIEC 031, in columns A and B, as appropriate) the sum of items 1 through 10 less
the amount reported in item 11. The amount reported for this item (on the FFIEC 041, in
column B; on the FFIEC 031, in column A) must equal Schedule RC, item 4.a plus item 4.b.

FFIEC 031 and 041

RC-C-20
(3-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.
1

Caption and Instructions
Loans restructured in troubled debt restructurings that are in compliance with their
modified terms. Report in the appropriate subitem loans that have been restructured in
troubled debt restructurings and are in compliance with their modified terms. As set forth in
ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors (formerly
FASB Statement No. 15, "Accounting by Debtors and Creditors for Troubled Debt
Restructurings," as amended by FASB Statement No. 114, "Accounting by Creditors for
Impairment of a Loan"), a troubled debt restructuring is a restructuring of a loan in which a
bank, for economic or legal reasons related to a borrower's financial difficulties, grants a
concession to the borrower that it would not otherwise consider. For purposes of this
Memorandum item, the concession consists of a modification of terms, such as a reduction of
the loan’s stated interest rate, principal, or accrued interest or an extension of the loan’s
maturity date at a stated interest rate lower than the current market rate for new debt with
similar risk, regardless of whether the loan is secured or unsecured and regardless of whether
the loan is guaranteed by the government or by others.
Once an obligation has been restructured in a troubled debt restructuring, it continues to be
considered a troubled debt restructuring until paid in full or otherwise settled, sold, or charged
off. However, if a restructured obligation is in compliance with its modified terms and the
restructuring agreement specifies an interest rate that at the time of the restructuring is
greater than or equal to the rate that the bank was willing to accept for a new extension of
credit with comparable risk, the loan need not continue to be reported as a troubled debt
restructuring in this Memorandum item in calendar years after the year in which the
restructuring took place. A loan extended or renewed at a stated interest rate equal to the
current interest rate for new debt with similar risk is not considered a troubled debt
restructuring. Also, a loan to a third party purchaser of "other real estate owned" by the
reporting bank for the purpose of facilitating the disposal of such real estate is not considered
a troubled debt restructuring. For further information, see the Glossary entry for "troubled
debt restructurings."
Include in the appropriate subitem all loans restructured in troubled debt restructurings as
defined above that are in compliance with their modified terms, that is, restructured loans
(1) on which all contractual payments of principal or interest scheduled that are due under the
modified repayment terms have been paid or (2) on which contractual payments of both
principal and interest scheduled under the modified repayment terms are less than 30 days
past due.
Exclude from this item (1) those loans restructured in troubled debt restructurings on which
under their modified repayment terms either principal or interest is 30 days or more past due
and (2) those loans restructured in troubled debt restructurings that are in nonaccrual status
under their modified repayment terms. Report such loans restructured in troubled debt
restructurings in the category and column appropriate to the loan in Schedule RC-N, items 1
through 7, column A, B, or C, and in Schedule RC-N, Memoranda items 1.a through 1.f,
column A, B, or C.
Loan amounts should be reported net of unearned income to the extent that they are reported
net of unearned income in Schedule RC-C, part I.

FFIEC 031 and 041

RC-C-21
(3-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.
1.a

Caption and Instructions
Construction, land development, and other land loans (in domestic offices):

1.a.(1)

1-4 family construction loans. Report all loans secured by real estate for the purpose
of constructing 1-4 family residential properties (as defined for Schedule RC-C, part I,
item 1.a.(1), column B) that have been restructured in troubled debt restructurings and are in
compliance with their modified terms. Exclude from this item 1-4 family construction loans
restructured in troubled debt restructurings that, under their modified repayment terms, are
past due 30 days or more or are in nonaccrual status (report in Schedule RC-N, item 1.a.(1)
and Memorandum item 1.a.(1)).

1.a.(2)

Other construction loans and all land development and other land loans. Report all
construction loans for purposes other than constructing 1-4 family residential properties, all
land development loans, and all other land loans (as defined for Schedule RC-C, part I,
item 1.a.(2), column B) that have been restructured in troubled debt restructurings and are in
compliance with their modified terms. Exclude from this item other construction loans and all
land development and other land loans restructured in troubled debt restructurings that, under
their modified repayment terms, are past due 30 days or more or are in nonaccrual status
(report in Schedule RC-N, item 1.a.(2) and Memorandum item 1.a.(2)).

1.b

Loans secured by 1-4 family residential properties (in domestic offices). Report all
loans secured by 1-4 family residential properties (in domestic offices) (as defined for
Schedule RC-C, part I, item 1.c, column B) that have been restructured in troubled debt
restructurings and are in compliance with their modified terms. Exclude from this item loans
secured by 1-4 family residential properties restructured in troubled debt restructurings that,
under their modified repayment terms, are past due 30 days or more or are in nonaccrual
status (report in Schedule RC-N, item 1.c and Memorandum item 1.b). Also exclude from this
item all 1-4 family construction loans that have been restructured in troubled debt
restructurings and are in compliance with their modified terms (report in Schedule RC-C,
part I, Memorandum item 1.a.(1), above).

1.c

Loans secured by multifamily (5 or more) residential properties (in domestic offices).
Report all loans secured by multifamily (5 or more) residential properties (in domestic offices)
(as defined for Schedule RC-C, part I, item 1.d, column B) that have been restructured in
troubled debt restructurings and are in compliance with their modified terms. Exclude from
this item loans secured by multifamily residential properties restructured in troubled debt
restructurings that, under their modified repayment terms, are past due 30 days or more or
are in nonaccrual status (report in Schedule RC-N, item 1.d and Memorandum item 1.c).

1.d

Secured by nonfarm nonresidential properties (in domestic offices):

1.d.(1)

Loans secured by owner-occupied nonfarm nonresidential properties. Report all loans
secured by owner-occupied nonfarm nonresidential properties (as defined for Schedule RC-C,
part I, item 1.e.(1), column B) that have been restructured in troubled debt restructurings and
are in compliance with their modified terms. Exclude from this item loans secured by owneroccupied nonfarm nonresidential properties restructured in troubled debt restructurings that,
under their modified repayment terms, are past due 30 days or more or are in nonaccrual status
(report in Schedule RC-N, item 1.e.(1) and Memorandum item 1.d.(1)).

FFIEC 031 and 041

RC-C-22
(3-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

1.d.(2)

Loans secured by other nonfarm nonresidential properties. Report all loans secured by
other nonfarm nonresidential properties (as defined for Schedule RC-C, part I, item 1.e.(2),
column B) that have been restructured in troubled debt restructurings and are in compliance
with their modified terms. Exclude from this item loans secured by other nonfarm
nonresidential properties restructured in troubled debt restructurings that, under their modified
repayment terms, are past due 30 days or more or are in nonaccrual status (report in
Schedule RC-N, item 1.e.(2) and Memorandum item 1.d.(2)).

1.e

Commercial and industrial loans. Report all commercial and industrial loans (as defined for
Schedule RC-C, part I, item 4) that have been restructured in troubled debt restructurings and
are in compliance with their modified terms. On the FFIEC 041, all banks should report the
total of these restructured loans in Memorandum item 1.e, and banks with $300 million
or more in total assets should also report in Memorandum items 1.e.(1) and (2) a breakdown
of these restructured loans between those loans to U.S. and non-U.S. addressees. On the
FFIEC 031, all banks should report a breakdown of these restructured loans between those to
U.S. and non-U.S. addressees for the fully consolidated bank in Memorandum items 1.e.(1)
and (2). Exclude commercial and industrial loans restructured in troubled debt restructurings
that, under their modified repayment terms, are past due 30 days or more or are in nonaccrual
status (report in Schedule RC-N, item 4 and Memorandum item 1.e).

NOTE: Memorandum items 1.e.(1) and 1.e.(2) are not applicable to banks filing the FFIEC 041 report
forms that have less than $300 million in total assets.
1.e.(1)

To U.S. addressees (domicile). Report all commercial and industrial loans to U.S.
addressees (as defined for Schedule RC-C, part I, item 4.a) that have been restructured in
troubled debt restructurings and are in compliance with their modified terms. Exclude from
this item commercial and industrial loans to U.S. addressees restructured in troubled debt
restructurings that, under their modified repayment terms, are past due 30 days or more or
are in nonaccrual status (on the FFIEC 041, report in Schedule RC-N, item 4 and
Memorandum items 1.e and 1.e.(1); on the FFIEC 031, report in Schedule RC-N, item 4.a
and Memorandum item 1.e.(1)).

1.e.(2)

To non-U.S. addressees (domicile). Report all commercial and industrial loans to non-U.S.
addressees (as defined for Schedule RC-C, part I, item 4.b) that have been restructured in
troubled debt restructurings and are in compliance with their modified terms. Exclude from
this item commercial and industrial loans to non-U.S. addressees restructured in troubled
debt restructurings that, under their modified repayment terms, are past due 30 days or more
or are in nonaccrual status (on the FFIEC 041, report in Schedule RC-N, item 4 and
Memorandum items 1.e.(2) and 3.c)).

1.f

All other loans. Report all other loans that cannot properly be reported in Memorandum
items 1.a through 1.e above that have been restructured in troubled debt restructurings and
are in compliance with their modified terms. Exclude from this item all other loans
restructured in troubled debt restructurings that, under their modified repayment terms, are
past due 30 days or more or are in nonaccrual status (report in Schedule RC-N).

FFIEC 031 and 041

RC-C-22a
(3-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

1.f
(cont.)

Include in this item loans in the following categories that have been restructured in troubled
debt restructurings and are in compliance with their modified terms:
(1) Loans secured by farmland (in domestic offices) (as defined for Schedule RC-C, part I,
item 1.b, column B);
(2) Loans to depository institutions and acceptances of other banks (as defined for
Schedule RC-C, part I, item 2);
(3) Loans to finance agricultural production and other loans to farmers (as defined for
Schedule RC-C, part I, item 3);
(4) Loans to individuals for household, family, and other personal expenditures (as defined
for Schedule RC-C part I, item 6);
(5) Loans to foreign governments and official institutions (as defined for Schedule RC-C,
part I, item 7);
(6) Obligations (other than securities and leases) of states and political subdivisions in the
U.S. (as defined for Schedule RC-C, part I, item 8);
(7) Loans to nondepository financial institutions and other loans (as defined for
Schedule RC-C, part I, item 9); and
(8) On the FFIEC 031, loans secured by real estate in foreign offices (as defined for
Schedule RC-C, part I, item 1, column A).
Report in Schedule RC-C, part I, Memorandum items 1.f.(1) through 1.f.(6) on the FFIEC 041
(Memorandum items 1.f.(1) through 1.f.(7) on the FFIEC 031), each category of loans within
“All other loans” that have been restructured in troubled debt restructurings and are in
compliance with their modified terms, and the dollar amount of loans in such category, that
exceeds 10 percent of total loans restructured in troubled debt restructurings that are in
compliance with their modified terms (i.e., 10 percent of the sum of Schedule RC-C, part I,
Memorandum items 1.a through 1.e plus Memorandum item 1.f). Preprinted captions have
been provided in Memorandum items 1.f.(1) through 1.f.(6) on the FFIEC 041 (Memorandum
items 1.f.(1) through 1.f.(7) on the FFIEC 031) for reporting the amount of such restructured
loans for the following loan categories if the amount for a loan category exceeds the 10
percent reporting threshold: Loans secured by farmland (in domestic offices); Loans to
depository institutions and acceptances of other banks; Loans to finance agricultural
production and other loans to farmers (on the FFIEC 031); (Consumer) Credit cards;
(Consumer) Automobile loans; Other consumer loans; Loans to foreign governments and
official institutions; and Other loans (i.e., Obligations (other than securities and leases) of
states and political subdivisions in the U.S., Loans to nondepository financial institutions and
other loans, and, on the FFIEC 041, Loans to finance agricultural production and other loans
to farmers); and Loans secured by real estate in foreign offices (on the FFIEC 031).
On the FFIEC 041, for:
•
•

FFIEC 031 and 041

Banks with $300 million or more in total assets and
Banks with less than $300 million in total assets that have loans to finance agricultural
production and other loans to farmers (Schedule RC-C, part I, item 3) exceeding five
percent of total loans,

RC-C-22b
(3-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

1.f
(cont.)

a preprinted caption has been provided in Memorandum item 1.f.(6)(a) for reporting the
amount of “Loans to finance agricultural production and other loans to farmers” that have
been restructured in troubled debt restructurings and are in compliance with their modified
terms if the amount of such loans included in Schedule RC-C, part I, Memorandum
item 1.f.(6), “Other loans,” exceeds 10 percent of total loans restructured in troubled debt
restructurings that are in compliance with their modified terms (i.e., 10 percent of the sum of
Schedule RC-C, part I, Memorandum items 1.a through 1.e plus Memorandum item 1.f).

2

Maturity and repricing data for loans and leases (excluding those in nonaccrual
status). Report in the appropriate subitem maturity and repricing data for the bank's loans
and leases. Loans and leases are to be reported in this Memorandum item regardless of
whether they are current or are reported as "past due and still accruing" in Schedule RC-N,
columns A and B. However, exclude those loans and leases that are reported as
"nonaccrual" in Schedule RC-N, column C.
The sum of Memorandum items 2.a.(1) through 2.b.(6) plus total nonaccrual loans and leases
from Schedule RC-N, sum of items 1 through 8, column C, must equal Schedule RC-C, sum
of items 1 through 10.
On the FFIEC 031, banks that have more than one office in foreign countries (including
offices of consolidated foreign subsidiaries but excluding "shell" branches, excluding offices in
Puerto Rico or U.S. territories and possessions, and excluding IBFs) have the option of
excluding the smallest of such non-U.S. offices from Memorandum item 2. Such banks may
omit the smallest of their offices in foreign countries (other than "shell" branches) when
arrayed by total assets provided that the assets of the excluded offices do not exceed
50 percent of the total assets of the bank's offices (excluding "shells") in foreign countries and
do not exceed 10 percent of the total consolidated assets of the reporting bank as of the
report date. (Note: In determining the total assets of offices in foreign countries eligible for
exclusion from these memorandum items, banks should exclude not only "shell" branches but
also offices in Puerto Rico and U.S. territories and possessions, domestic offices of Edge and
Agreement subsidiaries, and IBFs even though these are sometimes referred to as "foreign"
offices. Also, the asset totals for all offices in foreign countries should be the component of
the total consolidated assets, i.e., should exclude all intrabank transactions.)
For purposes of this memorandum item, the following definitions apply:
A fixed interest rate is a rate that is specified at the origination of the transaction, is fixed and
invariable during the term of the loan or lease, and is known to both the borrower and the
lender. Also treated as a fixed interest rate is a predetermined interest rate which is a rate
that changes during the term of the loan on a predetermined basis, with the exact rate of
interest over the life of the loan known with certainty to both the borrower and the lender when
the loan is acquired. Examples of predetermined-rate transactions are: (1) Loans that carry a
specified interest rate, for, say, six months and thereafter carry a rate equal to a specific
percentage over the initial rate. (2) Loans that carry a specified interest rate while the loan
amount is below a certain threshold amount but carry a different specified rate above that

FFIEC 031 and 041

RC-C-22c
(3-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.
2

Caption and Instructions
threshold (e.g., a line of credit where the interest rate is 10% when the unpaid balance of
amounts advanced is $100,000 or less, and 8% when the unpaid balance is more than
$100,000).
A floating rate is a rate that varies, or can vary, in relation to an index, to some other interest
rate such as the rate on certain U.S. Government securities or the bank's "prime rate," or to
some other variable criterion the exact value of which cannot be known in advance.
Therefore, the exact rate the loan carries at any subsequent time cannot be known at the time
of origination.

FFIEC 031 and 041

RC-C-22d
(3-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

2
(cont.)

When the rate on a loan with a floating rate has reached a contractual floor or ceiling
level, the loan is to be treated as "fixed rate" rather than as "floating rate" until the rate is again
free to float.
Remaining maturity is the amount of time remaining from the report date until the final
contractual maturity of a loan or lease without regard to the loan's or lease's repayment
schedule, if any.
Next repricing date is the date the interest the rate on a floating rate loan can next change in
accordance with the terms of the contract (without regard to the loan’s repayment schedule, if
any, or expected prepayments) or the contractual maturity date of the loan, whichever is
earlier.
Banks whose records or information systems provide data on the final contractual maturities
and next repricing dates of their loans and leases for time periods that closely approximate
the maturity and repricing periods specified in Memorandum items 2.a through 2.c (e.g., 89 or
90 days rather than three months, 359 or 360 days rather than 12 months) may use these
data to complete Memorandum items 2.a through 2.c.
For loans and leases with scheduled contractual payments, banks whose records or
information systems provide repricing data that take into account these scheduled contractual
payments, with or without the effect of anticipated prepayments, may adjust these data in an
appropriate manner to derive reasonable estimates for the final contractual maturities of fixed
rate loans and leases (and floating rate loans for purposes of Memorandum item 2.c) and the
next repricing dates of floating rate loans.
Loan amounts should be reported net of unearned income to the extent that they have been
reported net of unearned income in Schedule RC-C, part I, items 1 through 9. Leases must
be reported net of unearned income.
Fixed rate loans and leases that are past due (with respect to principal or interest) and still
accruing should be reported according to the time remaining to final contractual maturity
without regard to delinquency status. Floating rate loans that are past due (with respect to
principal or interest) and still accruing should be reported according to their next repricing date
without regard to delinquency status.
Report all unplanned overdrafts as fixed rate loans with a remaining maturity of three months
or less in Memorandum item 2.b.(1).
Report all leases, net of unearned income, as fixed rate instruments in Memorandum item 2.b
according to the amount of time remaining to final contractual maturity without regard to
repayment schedules.
Report fixed rate and floating rate loans made solely on a demand basis (i.e., without an
alternate maturity date or without repayment terms) as having a remaining maturity or next
repricing date of three months or less in Memorandum items 2.a.(1) and 2.b.(1),

FFIEC 031 and 041

RC-C-23
(3-13)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

2
(cont.)

as appropriate. In addition, report all fixed rate and floating rate loans made solely on a
demand basis as having a remaining maturity of one year or less in Memorandum item 2.c.
Fixed rate demand loans that have an alternate maturity date or repayment terms are to be
reported in this Memorandum item according to the amount of time remaining to the alternate
maturity date or final payment due date. Floating rate demand loans that have an alternate
maturity date or repayment terms are to be reported according to their next repricing date in
Memorandum items 2.a and 2.b, as appropriate. In addition, fixed rate and floating rate
demand loans for which the amount of time remaining to the alternate maturity date or final
payment due date is one year or less are to be reported in Memorandum item 2.c.
Fixed rate “Credit cards” and “Other revolving credit plans" are considered to have a
remaining maturity of over one year through three years and should be reported in
Memorandum item 2.b.(3), regardless of the actual maturity experience or expectation.
Floating rate "Credit cards” and “Other revolving credit plans" (e.g., where the rate varies, or
can be varied, periodically) are to be reported in Memorandum item 2.b according to their next
repricing date. Where the bank in its contract with the borrower simply reserves the right to
change the interest rate on the "Credit card” or “Other revolving credit," the plan should be
considered to have a fixed rate.
Student loans whose interest rate is adjusted periodically by the U.S. Government by means
of interest payments that include an amount of "additional interest" should be treated as
floating rate loans and should be reported in Memorandum item 2.b according to their next
repricing date.
Fixed rate loans that are held by the bank for sale and delivery in the secondary market under
the terms of a binding commitment should be reported in Memorandum item 2.a or 2.b, as
appropriate, on the basis of the time remaining until the delivery date specified in the
commitment. Floating rate loans that are held by the bank for sale and delivery in the
secondary market under the terms of a binding commitment should be reported in
Memorandum item 2.a or 2.b, as appropriate, based on the date the interest rates on the
loans can next change or the delivery date specified in the commitment, whichever is earlier.
Loans and leases that are held by the bank for sale and delivery in the secondary market
under the terms of a binding commitment should be included in Memorandum item 2.c only if
they have a remaining maturity of one year or less, i.e., without regard to the delivery date
specified in the commitment.

2.a

Closed-end loans secured by first liens on 1-4 family residential properties (in
domestic offices) with a remaining maturity or next repricing date of. Report the dollar
amount of the bank's fixed rate closed-end loans secured by first liens on 1-4 family
residential properties (in domestic offices) in the appropriate subitems according to the
amount of time remaining to their final contractual maturities (without regard to repayment
schedules, if any). Report the dollar amount of the bank's floating rate closed-end loans
secured by first liens on 1-4 family residential properties (in domestic offices) in the
appropriate subitems according to their next repricing date. Exclude loans that are in
nonaccrual status.

FFIEC 031 and 041

RC-C-24
(3-13)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

2.a.(1)

Three months or less. Report the amount of:

2.a.(2)

2.a.(3)

2.a.(4)

2.a.(5)

•

the bank's fixed rate closed-end loans secured by first liens on 1-4 family residential
properties (in domestic offices) with remaining maturities of three months or less, and

•

the bank's floating rate closed-end loans secured by first liens on 1-4 family residential
properties (in domestic offices) with next repricing dates occurring in three months or
less.

Over three months through 12 months. Report the amount of:
•

the bank's fixed rate closed-end loans secured by first liens on 1-4 family residential
properties (in domestic offices) with remaining maturities (without regard to repayment
schedules, if any) of over three months through 12 months, and

•

the bank's floating rate closed-end loans secured by first liens on 1-4 family residential
properties (in domestic offices) with next repricing dates occurring in over three months
through 12 months.

Over one year through three years. Report the amount of:
•

the bank's fixed rate closed-end loans secured by first liens on 1-4 family residential
properties (in domestic offices) with remaining maturities (without regard to repayment
schedules, if any) of over one year through three years, and

•

the bank's floating rate closed-end loans secured by first liens on 1-4 family residential
properties (in domestic offices) with next repricing dates occurring in over one year
through three years.

Over three years through five years. Report the amount of:
•

the bank's fixed rate closed-end loans secured by first liens on 1-4 family residential
properties (in domestic offices) with remaining maturities (without regard to repayment
schedules, if any) of over three years through five years, and

•

the bank's floating rate closed-end loans secured by first liens on 1-4 family residential
properties (in domestic offices) with next repricing dates occurring in over three years
through five years.

Over five years through 15 years. Report the amount of:
•

the bank's fixed rate closed-end loans secured by first liens on 1-4 family residential
properties (in domestic offices) with remaining maturities (without regard to repayment
schedules, if any) of over five years through 15 years, and

•

the bank's floating rate closed-end loans secured by first liens on 1-4 family residential
properties (in domestic offices) with next repricing dates occurring in over five years
through 15 years.

FFIEC 031 and 041

RC-C-25
(3-13)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

2.a.(6)

Over 15 years. Report the amount of:

2.b

2.b.(1)

2.b.(2)

•

the bank's fixed rate closed-end loans secured by first liens on 1-4 family residential
properties (in domestic offices) with remaining maturities (without regard to repayment
schedules, if any) of over 15 years, and

•

the bank's floating rate closed-end loans secured by first liens on 1-4 family residential
properties (in domestic offices) with next repricing dates occurring in over 15 years.

All loans and leases other than closed-end loans secured by first liens on 1-4 family
residential properties (in domestic offices) with a remaining maturity or next repricing
date of. Report the dollar amount of the bank's fixed rate loans and leases – other than
closed-end loans secured by first liens on 1-4 family residential properties (in domestic
offices) -- in the appropriate subitems according to the amount of time remaining to their final
contractual maturities (without regard to repayment schedules, if any). Report the dollar
amount of the bank's floating rate loans -- other than closed-end loans secured by first liens
on 1-4 family residential properties (in domestic offices) -- in the appropriate subitems
according to their next repricing date. Exclude loans that are in nonaccrual status.
Three months or less. Report the amount of:
•

the bank's fixed rate loans and leases -- other than closed-end loans secured by first liens
on 1-4 family residential properties (in domestic offices) -- with remaining maturities of
three months or less, and

•

the bank's floating rate loans -- other than closed-end loans secured by first liens on 1-4
family residential properties (in domestic offices) – with next repricing dates occurring in
three months or less.

Over three months through 12 months. Report the amount of:
•

the bank's fixed rate loans and leases -- other than closed-end loans secured by first liens
on 1-4 family residential properties (in domestic offices) -- with remaining maturities
(without regard to repayment schedules, if any) of over three months through 12 months,
and

•

the bank's floating rate loans -- other than closed-end loans secured by first liens on 1-4
family residential properties (in domestic offices) – with next repricing dates occurring in
over three months through 12 months.

FFIEC 031 and 041

RC-C-26
(3-13)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

2.b.(3)

Over one year through three years. Report the amount of:

2.b.(4)

2.b.(5)

2.b.(6)

2.c

•

the bank's fixed rate loans and leases -- other than closed-end loans secured by first liens
on 1-4 family residential properties (in domestic offices) -- with remaining maturities
(without regard to repayment schedules, if any) of over one year through three years, and

•

the bank's floating rate loans -- other than closed-end loans secured by first liens on 1-4
family residential properties (in domestic offices) – with next repricing dates occurring in
over one year through three years.

Over three years through five years. Report the amount of:
•

the bank's fixed rate loans and leases -- other than closed-end loans secured by first liens
on 1-4 family residential properties (in domestic offices) -- with remaining maturities
(without regard to repayment schedules, if any) of over three years through five years,
and

•

the bank's floating rate loans -- other than closed-end loans secured by first liens on 1-4
family residential properties (in domestic offices) – with next repricing dates occurring in
over three years through five years.

Over five years through 15 years. Report the amount of:
•

the bank's fixed rate loans and leases -- other than closed-end loans secured by first liens
on 1-4 family residential properties (in domestic offices) -- with remaining maturities
(without regard to repayment schedules, if any) of over five years through 15 years, and

•

the bank's floating rate loans -- other than closed-end loans secured by first liens on 1-4
family residential properties (in domestic offices) – with next repricing dates occurring in
over five years through 15 years.

Over 15 years. Report the amount of:
•

the bank's fixed rate loans and leases -- other than closed-end loans secured by first liens
on 1-4 family residential properties (in domestic offices) -- with remaining maturities
(without regard to repayment schedules, if any) of over 15 years, and

•

the bank's floating rate loans -- other than closed-end loans secured by first liens on 1-4
family residential properties (in domestic offices) – with next repricing dates occurring in
over 15 years.

Loans and leases with a remaining maturity of one year or less. Report all loans and
leases with a remaining maturity of one year or less. Include both fixed rate and floating rate
loans and leases. Loans and leases that are held by the bank for sale and delivery in the
secondary market under the terms of a binding commitment should be included in

FFIEC 031 and 041

RC-C-27
(3-13)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

2.c
(cont.)

Memorandum item 2.c only if they have a remaining maturity of one year or less, i.e., without
regard to the delivery date specified in the commitment.
The fixed rate loans and leases that should be included in this item will also have been
reported by remaining maturity in Schedule RC-C, part I, Memorandum items 2.a.(1), 2.a.(2),
2.b.(1), and 2.b.(2), above. The floating rate loans that should be included in this item will
have been reported by next repricing date in Memorandum items 2.a.(1), 2.a.(2), 2.b.(1), and
2.b.(2), above. However, these four Memorandum items may include floating rate loans with
a remaining maturity of more than one year, but on which the interest rate can next change in
one year or less; those loans should not be included in this Memorandum item 2.c.

3

Loans to finance commercial real estate, construction, and land development activities
(not secured by real estate) included in Schedule RC-C, part I, items 4 and 9. Report in
this item loans to finance commercial and residential real estate activities, e.g., acquiring,
developing, and renovating commercial and residential real estate, that are reported in
Schedule RC-C, part I, items 4, "Commercial and industrial loans," and 9, "Other loans"
(column B on the FFIEC 041; column A on the FFIEC 031).
Such loans generally may include:
(1) loans made for the express purpose of financing real estate ventures as evidenced by
loan documentation or other circumstances connected with the loan; or
(2) loans made to organizations or individuals 80 percent of whose revenue or assets are
derived from or consist of real estate ventures or holdings.
Exclude from this item all loans secured by real estate that are reported in Schedule RC-C,
part I, item 1. Also exclude loans to commercial and industrial firms where the sole purpose
for the loan is to construct a factory or office building to house the company's operations or
employees.

4

Adjustable rate closed-end loans secured by first liens on 1-4 family residential
properties. Report the amount of closed-end loans secured by first liens on 1-4 family
residential properties (in domestic offices) included in Schedule RC-C, part I, item 1.c.(2)(a),
column B, that have a floating or adjustable interest rate.
A floating or adjustable rate is a rate that varies, or can vary, in relation to an index, to some
other interest rate such as the rate on certain U.S. Government securities, or to some other
variable criterion the exact value of which cannot be known in advance. Therefore, the exact
rate the loan carries at any subsequent time cannot be known at the time of origination. For
purposes of this item, even if the rate on a loan with a floating or adjustable rate can no
longer float because it has reached a floor or ceiling level, the loan is to be reported in this
item as an adjustable rate loan.
Also include in this item amortizing fixed rate loans secured by first liens on 1-4 family
residential properties that have original maturities of one year or less and require a balloon
payment at maturity.

FFIEC 031 and 041

RC-C-28
(3-13)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

NOTE: Memorandum item 5 is not applicable to banks filing the FFIEC 041 report forms that have less
than $300 million in total assets.
5

Loans secured by real estate to non-U.S. addressees (domicile). Report the amount of
loans secured by real estate to non-U.S. addressees that are included in Schedule RC-C,
part I, items 1.a through 1.e, column B, on the FFIEC 041; item 1, column A, on the
FFIEC 031. For a detailed discussion of U.S. and non-U.S. addressees, see the Glossary
entry for “domicile.”

NOTE: Memorandum item 6 is to be completed only by those banks that:
(1) either individually or on a combined basis with their affiliated depository institutions, report
outstanding credit card receivables that exceed, in the aggregate, $500 million as of the report
date. Outstanding credit card receivables are the sum of:
(a) Schedule RC-C, part I, item 6.a (column B on the FFIEC 041, column A on the FFIEC 031);
(b) Schedule RC-S, item 1, column C; and
(c) Schedule RC-S, item 6.a, column C.
(Include comparable data on managed credit card receivables for any affiliated savings
association.)
OR
(2) are credit card specialty banks as defined for purposes of the Uniform Bank Performance Report
(UBPR). According to the UBPR Users Guide, credit card specialty banks are currently defined
as those banks that exceed 50% for the following two criteria:
(a) Credit Cards plus Securitized and Sold Credit Cards divided by Total Loans plus Securitized
and Sold Credit Cards.
(b) Total Loans plus Securitized and Sold Credit Cards divided by Total Assets plus Securitized
and Sold Credit Cards.
6

Outstanding credit card fees and finance charges. Report the amount of fees and finance
charges included in the amount of credit card receivables reported in Schedule RC-C, part I,
item 6.a (column A on the FFIEC 031; column B on the FFIEC 041).

NOTE: Memorandum items 7.a and 7.b are to be completed by all banks.
7

Purchased credit-impaired loans held for investment accounted for in accordance with
FASB ASC Subtopic 310-30. Report in the appropriate subitem the outstanding balance and
carrying amount of "purchased credit-impaired loans" reported as held for investment in
Schedule RC-C, part I, items 1 through 9, and accounted for in accordance with
ASC Subtopic 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated
Credit Quality (formerly AICPA Statement of Position 03-3, “Accounting for Certain Loans or
Debt Securities Acquired in a Transfer”). Purchased credit-impaired loans are loans that a
bank has purchased, including those acquired in a purchase business combination, where
there is evidence of deterioration of credit quality since the origination of the loan and it is
probable, at the purchase date, that the bank will be unable to collect all contractually required
payments receivable. Loans held for investment are those that the bank has the intent and
ability to hold for the foreseeable future or until maturity or payoff.

FFIEC 031 and 041

RC-C-29
(6-12)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

7.a

Outstanding balance. Report the outstanding balance of all purchased credit-impaired loans
reported as held for investment in Schedule RC-C, part I, items 1 through 9. The outstanding
balance is the undiscounted sum of all amounts, including amounts deemed principal,
interest, fees, penalties, and other under the loan, owed to the bank at the report date,
whether or not currently due and whether or not any such amounts have been charged off by
the bank. However, the outstanding balance does not include amounts that would be accrued
under the contract as interest, fees, penalties, and other after the report date.

7.b

Carrying amount included in Schedule RC-C, part I, items 1 through 9. Report the
carrying amount (before any allowances established after acquisition for decreases in cash
flows expected to be collected) of, i.e., the recorded investment in, all purchased creditimpaired loans reported as held for investment. The recorded investment in these loans will
have been included in Schedule RC-C, part I, items 1 through 9.

8

Closed-end loans with negative amortization features secured by 1-4 family residential
properties in domestic offices. Report in the appropriate subitem the carrying amount of
closed-end loans with negative amortization features secured by 1-4 family residential
properties and, if certain criteria are met, the maximum remaining amount of negative
amortization contractually permitted on these loans and the total amount of negative
amortization included in the carrying amount of these loans. Negative amortization refers to a
method in which a loan is structured so that the borrower’s minimum monthly (or other
periodic) payment is contractually permitted to be less than the full amount of interest owed to
the lender, with the unpaid interest added to the loan’s principal balance. The contractual
terms of the loan provide that if the borrower allows the principal balance to rise to a prespecified amount or maximum cap, the loan payments are then recast to a fully amortizing
schedule. Negative amortization features may be applied to either adjustable rate mortgages
or fixed rate mortgages, the latter commonly referred to as graduated payment mortgages
(GPMs).
Exclude reverse 1-4 family residential mortgage loans as described in the instructions for
Schedule RC-C, part I, item 1.c.

NOTE: Memorandum item 8.a is to be completed by all banks.
8.a

Total carrying amount of closed-end loans with negative amortization features secured
by 1-4 family residential properties (included in Schedule RC-C, part I, items 1.c.(2)(a)
and (b)). Report the total carrying amount (before any loan loss allowances) of, i.e., the
recorded investment in, closed-end loans secured by 1-4 family residential properties whose
terms allow for negative amortization. The carrying amounts included in this item will also
have been reported in Schedule RC-C, part I, items 1.c.(2)(a) and (b).

FFIEC 031 and 041

RC-C-30
(6-12)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

NOTE: Memorandum items 8.b and 8.c are to be completed by banks that had closed-end loans
with negative amortization features secured by 1-4 family residential properties (as reported in
Schedule RC-C, part I, Memorandum item 8.a) as of the previous December 31 report date that exceeded
the lesser of $100 million or 5 percent of total loans and leases, net of unearned income, in domestic
offices (as reported in Schedule RC-C, part I, item 12, column B) as of the previous December 31 report
date.
8.b

Total maximum remaining amount of negative amortization contractually permitted on
closed-end loans secured by 1-4 family residential properties. For all closed-end loans
secured by 1-4 family residential properties whose terms allow for negative amortization (that
were reported in Schedule RC-C, part I, Memorandum item 8.a), report the total maximum
remaining amount of negative amortization permitted under the terms of the loan contract
(i.e., the maximum loan principal balance permitted under the negative amortization cap less
the principal balance of the loan as of the quarter-end report date).

8.c

Total amount of negative amortization on closed-end loans secured by 1-4 family
residential properties included in the carrying amount reported in Memorandum
item 8.a above. For all closed-end loans secured by 1-4 family residential properties whose
terms allow for negative amortization, report the total amount of negative amortization
included in the carrying amount (i.e., the total amount of interest added to the original loan
principal balance that has not yet been repaid) reported in Schedule RC-C, part I,
Memorandum item 8.a above. Once a loan reaches its maximum principal balance, the
amount of negative amortization included in the carrying amount should continue to be
reported until the principal balance of the loan has been reduced through cash payments
below the original principal balance of the loan.

9

Loans secured by 1-4 family residential properties (in domestic offices) in process of
foreclosure. Report the total unpaid principal balance of loans secured by 1-4 family
residential properties (in domestic offices) included in Schedule RC-C, part I, item 1.c,
column B, for which formal foreclosure proceedings to seize the real estate collateral have
started and are ongoing as of quarter-end, regardless of the date the foreclosure procedure
was initiated. Loans should be classified as in process of foreclosure according to local
requirements. If a loan is already in process of foreclosure and the mortgagor files a
bankruptcy petition, the loan should continue to be reported as in process of foreclosure until
the bankruptcy is resolved. Exclude loans where the foreclosure process has been
completed and the bank reports the real estate collateral as “Other real estate owned” in
Schedule RC, item 7. This item should include both closed-end and open-end 1-4 family
residential mortgage loans that are in process of foreclosure.

NOTE: Memorandum items 10 and 11 are to be completed by banks that have elected to measure loans
included in Schedule RC-C, part I, at fair value under a fair value option.
10

Loans measured at fair value. Report in the appropriate subitem the total fair value of
all loans measured at fair value under a fair value option and included in Schedule RC-C,
regardless of whether the loans are held for sale or held for investment.

FFIEC 031 and 041

RC-C-31
(6-08)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.
10.a

Caption and Instructions
Loans secured by real estate. On the FFIEC 041, report in the appropriate subitem the total
fair value of loans secured by real estate included in Schedule RC-C, part I, item 1, measured
at fair value under a fair value option. On the FFIEC 031, report the total fair value of loans
secured by real estate included in Schedule RC-C, part I, item 1, measured at fair value under
a fair value option for the fully consolidated bank in column A, but with a breakdown of these
loans into seven categories for domestic offices in column B.

10.a.(1)

Construction, land development, and other land loans. Report the total fair value of
construction, land development, and other land loans (in domestic offices) included in
Schedule RC-C, part I, items 1.a.(1) and (2), column B, measured at fair value under a fair
value option.

10.a.(2)

Secured by farmland. Report the total fair value of loans secured by farmland (in domestic
offices) included in Schedule RC-C, part I, item 1.b, column B, measured at fair value under a
fair value option.

10.a.(3)

Secured by 1-4 family residential properties. Report in the appropriate subitem the total
fair value of all open-end and closed-end loans secured by 1-4 family residential properties (in
domestic offices) included in Schedule RC-C, part I, item 1.c, column B, measured at fair
value under a fair value option.

10.a.(3)(a) Revolving, open-end loans secured by 1-4 family residential properties and extended
under lines of credit. Report the total fair value of revolving, open-end loans secured by
1-4 family residential properties and extended under lines of credit (in domestic offices)
included in Schedule RC-C, part I, item 1.c.(1), column B, measured at fair value under a fair
value option.
10.a.(3)(b) Closed-end loans secured by 1-4 family residential properties. Report in the appropriate
subitem the total fair value of all closed-end loans secured by 1-4 family residential properties
(in domestic offices) included in Schedule RC-C, part I, item 1.c.(2), column B, measured at
fair value under a fair value option.
10.a.(3)(b)(1) Secured by first liens. Report the total fair value of closed-end loans secured by first
liens on 1-4 family residential properties (in domestic offices) included in Schedule RC-C,
part I, item 1.c.(2)(a), column B, measured at fair value under a fair value option.
10.a.(3)(b)(2) Secured by junior liens. Report the total fair value of closed-end loans secured
by junior liens on 1-4 family residential properties (in domestic offices) included in
Schedule RC-C, part I, item 1.c.(2)(b), column B, measured at fair value under a fair value
option.
10.a.(4)

Secured by multifamily (5 or more) residential properties. Report the total fair value of
loans secured by multifamily (5 or more) residential properties (in domestic offices) included
in Schedule RC-C, part I, item 1.d, column B, measured at fair value under a fair value option.

FFIEC 031 and 041

RC-C-32
(6-08)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

10.a.(5)

Secured by nonfarm nonresidential properties. Report the total fair value of loans secured
by nonfarm nonresidential properties (in domestic offices) included in Schedule RC-C, part I,
items 1.e.(1) and (2), column B, measured at fair value under a fair value option.

10.b

Commercial and industrial loans. Report the total fair value of commercial and industrial
loans included in Schedule RC-C, part I, item 4, measured at fair value under a fair value
option.

10.c

Loans to individuals for household, family, and other personal expenditures. Report in
the appropriate subitem the total fair value of all loans to individuals for household, family, and
other personal expenditures (as defined for Schedule RC-C, part I, item 6) measured at fair
value under a fair value option.

10.c.(1)

Credit cards. Report the total fair value of all extensions of credit to individuals for
household, family, and other personal expenditures arising from credit cards included in
Schedule RC-C, part I, item 6.a, measured at fair value under a fair value option.

10.c.(2)

Other revolving credit plans. Report the total fair value of all extensions of credit to
individuals for household, family, and other personal expenditures arising from prearranged
overdraft plans and other revolving credit plans not accessed by credit cards included in
Schedule RC-C, part I, item 6.b, measured at fair value under a fair value option.

10.c.(3)

Automobile loans. Report the total fair value of loans arising from retail sales of passenger
cars and other vehicles such as minivans, vans, sport-utility vehicles, pickup trucks, and
similar light trucks for personal use included in Schedule RC-C, part I, item 6.c, measured at
fair value under a fair value option.

10.c.(4)

Other consumer loans. Report the total fair value of all other loans to individuals for
household, family, and other personal expenditures included in Schedule RC-C, item 6.d,
measured at fair value under a fair value option.

10.d

Other loans. Report the total fair value of all other loans measured at fair value under a fair
value option that cannot properly be reported in one of the preceding subitems of this
Memorandum item 10. Such loans include “Loans to depository institutions and acceptances
of other banks,” “Loans to finance agricultural production and other loans to farmers,” “Loans
to foreign governments and official institutions,” “Obligations (other than securities and leases)
of states and political subdivisions in the U.S.,” and “Other loans” (as defined for
Schedule RC-C, part I, items 2, 3, 7, 8, and 9).

11

Unpaid principal balance of loans measured at fair value (reported in Memorandum
item 10). Report in the appropriate subitem the total unpaid principal balance outstanding for
all loans measured at fair value reported in Schedule RC-C, part I, Memorandum item 10.

FFIEC 031 and 041

RC-C-33
(3-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.
11.a

Caption and Instructions
Loans secured by real estate. On the FFIEC 041, report in the appropriate subitem the total
unpaid principal balance outstanding for all loans secured by real estate reported in
Schedule RC-C, part I, Memorandum items 10.a.(1) through 10.a.(5). On the FFIEC 031,
report the total unpaid principal balance outstanding for all loans secured by real estate
reported in Schedule RC-C, part I, Memorandum item 10.a, for the fully consolidated bank in
column A, but with a breakdown of these loans into seven categories for domestic offices in
column B.

11.a.(1)

Construction, land development, and other land loans. Report the total unpaid principal
balance outstanding for all construction, land development, and other loans reported in
Schedule RC-C, part I, Memorandum item 10.a.(1).

11.a.(2)

Secured by farmland. Report the total unpaid principal balance outstanding for all loans
secured by farmland reported in Schedule RC-C, part I, Memorandum item 10.a.(2).

11.a.(3)

Secured by 1-4 family residential properties. Report in the appropriate subitem the total
unpaid principal balance outstanding for all loans secured by 1-4 family residential properties
reported in Schedule RC-C, part I, Memorandum item 10.a.(3).

11.a.(3)(a) Revolving, open-end loans secured by 1-4 family residential properties and extended
under lines of credit. Report the total unpaid principal balance outstanding for all revolving,
open-end loans secured by 1-4 family residential properties and extended under lines of credit
reported in Schedule RC-C, part I, Memorandum item 10.a.(3)(a).
11.a.(3)(b) Closed-end loans secured by 1-4 family residential properties. Report in the appropriate
subitem the total unpaid principal balance outstanding for all closed-end loans secured by 1-4
family residential properties reported in Schedule RC-C, part I, Memorandum item 10.a.(3)(b).
11.a.(3)(b)(1) Secured by first liens. Report the total unpaid principal balance outstanding for all
closed-end loans secured by first liens on 1-4 family residential properties reported in
Schedule RC-C, part I, Memorandum item 10.a.(3)(b)(1).
11.a.(3)(b)(2) Secured by junior liens. Report the total unpaid principal balance outstanding for all
closed-end loans secured by junior liens on 1-4 family residential properties reported in
Schedule RC-C, part I, Memorandum item 10.a.(3)(b)(2).
11.a.(4)

Secured by multifamily (5 or more) residential properties. Report the total unpaid
principal balance outstanding for all loans secured by multifamily (5 or more) residential
properties reported in Schedule RC-C, part I, Memorandum item 10.a.(4).

11.a.(5)

Secured by nonfarm nonresidential properties. Report the total unpaid principal balance
outstanding for all loans secured by nonfarm nonresidential properties reported in
Schedule RC-C, part I, Memorandum item 10.a.(5).

11.b

Commercial and industrial loans. Report the total unpaid principal balance outstanding
for all commercial and industrial loans reported in Schedule RC-C, part I, Memorandum
item 10.b.

FFIEC 031 and 041

RC-C-34
(3-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

11.c

Loans to individuals for household, family, and other personal expenditures. Report in
the appropriate subitem the total unpaid principal balance outstanding for all loans to
individuals for household, family, and other personal expenditures reported in Schedule RC-C,
part I, Memorandum item 10.c.

11.c.(1)

Credit cards. Report the total unpaid principal balance outstanding for all extensions of credit
to individuals for household, family, and other personal expenditures arising from credit cards
reported in Schedule RC-C, part I, Memorandum item 10.c.(1).

11.c.(2)

Other revolving credit plans. Report the total unpaid principal balance outstanding for all
extensions of credit to individuals for household, family, and other personal expenditures
arising from prearranged overdraft plans and other revolving credit plans not accessed by
credit cards reported in Schedule RC-C, part I, Memorandum item 10.c.(2).

11.c.(3)

Automobile loans. Report the total unpaid principal balance outstanding for loans arising
from retail sales of passenger cars and other vehicles such as minivans, vans, sport-utility
vehicles, pickup trucks, and similar light trucks for personal use reported in Schedule RC-C,
part I, Memorandum item 10.c.(3).

11.c.(4)

Other consumer loans. Report the total unpaid principal balance outstanding for all other
loans to individuals for household, family, and other personal expenditures reported in
Schedule RC-C, part I, Memorandum item 10.c.(4).

11.d

Other loans. Report the total unpaid principal balance outstanding for all loans reported in
Schedule RC-C, part I, Memorandum item 10.d. Such loans include “Loans to depository
institutions and acceptances of other banks,” “Loans to finance agricultural production and
other loans to farmers,” “Loans to foreign governments and official institutions,” “Obligations
(other than securities and leases) of states and political subdivisions in the U.S.,” and “Other
loans” (as defined for Schedule RC-C, part I, items 2, 3, 7, 8, and 9).

12

Loans (not subject to the requirements of FASB ASC 310-30) and leases held for
investment that were acquired in business combinations with acquisition dates in the
current calendar year. Report in the appropriate subitem and column the specified
information on loans and leases held for investment purposes that were acquired in a
business combination, as prescribed under ASC Topic 805, Business Combinations (formerly
FASB Statement No. 141(R), “Business Combinations”), with an acquisition date in the
1
current calendar year. The acquisition date is the date on which the bank obtains control of
the acquiree. If the reporting bank was acquired in a transaction during the calendar year
pursuant to ASC Topic 805 and push down accounting was applied, report the specified
information on the bank’s loans and leases reported as held for investment after the
application of push down accounting. Acquired loans and leases should be reported in this
item each quarter after their acquisition date through the end of the calendar year of
acquisition regardless of whether the bank still holds the loans and leases.

1

Control has the meaning of “controlling financial interest” in ASC Subtopic 810-10, Consolidation – Overall
(formerly Accounting Research Bulletin No. 51, “Consolidated Financial Statements,” as amended).

FFIEC 031 and 041

RC-C-35
(6-12)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

12
(cont.)

Exclude purchased credit-impaired loans held for investment that are accounted for in
accordance with ASC Subtopic 310-30, Receivables – Loans and Debt Securities Acquired
with Deteriorated Credit Quality (formerly AICPA Statement of Position 03-3, “Accounting for
Certain Loans or Debt Securities Acquired in a Transfer”) (report information on such loans in
Schedule RC-C, Memorandum item 7). (For further information, see the Glossary entry for
“purchased credit-impaired loans and debt securities.”)
Column Instructions
Column A, Fair value of acquired loans and leases at acquisition date: Report in this
column the fair value of acquired loans and leases held for investment at the acquisition date
(see the Glossary entry for "fair value").
Column B, Gross contractual amounts receivable at acquisition date: Report in this
column the gross contractual amounts receivable, i.e., the total undiscounted amount of all
uncollected contractual principal and contractual interest payments on the receivable, both
past due, if any, and scheduled to be paid in the future, on the acquired loans and leases held
for investment at the acquisition date.
Column C, Best estimate at acquisition date of contractual cash flows not expected to
be collected: Report in this column the bank’s best estimate at the acquisition date of the
portion of the contractual cash flows receivable on acquired loans and leases held for
investment that the bank does not expect to collect.

12.a

Loans secured by real estate. Report in the appropriate column the specified amounts for
acquired loans secured by real estate (as defined for Schedule RC-C, part I, item 1) held for
investment that were acquired in a business combination occurring in the current calendar
year.

12.b

Commercial and industrial loans. Report in the appropriate column the specified amounts
for commercial and industrial loans (as defined for Schedule RC-C, part I, item 4) held for
investment that were acquired in a business combination occurring in the current calendar
year.

12.c

Loans to individuals for household, family, and other personal expenditures. Report in
the appropriate column the specified amounts for loans to individuals for household, family,
and other personal expenditures (as defined for Schedule RC-C, part I, item 6) held for
investment that were acquired in a business combination occurring in the current calendar
year.

12.d

All other loans and all leases. Report in the appropriate column the specified amounts
for all other loans and all leases (as defined for Schedule RC-C, part I, items 2, 3, 7, 8, 9,
and 10) held for investment that were acquired in a business combination occurring in the
current calendar year.

FFIEC 031 and 041

RC-C-36
(6-12)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.
13

Caption and Instructions
Construction, land development, and other land loans (in domestic offices) with
interest reserves. Memorandum items 13.a and 13.b are to completed by banks that had
construction, land development, and other land loans (in domestic offices) (as reported in
Schedule RC-C, part I, item 1.a, column B) that exceeded 100 percent of total risk-based
capital (as reported in Schedule RC-R, item 21) as of the previous December 31. For
purposes of Memorandum items 13, 13.a, and 13.b, construction, land development, and
other land loans (in domestic offices) are hereafter referred to as “construction loans.”
When a bank enters into a loan agreement with a borrower on a construction loan, an interest
reserve is often included in the amount of the loan commitment to the borrower and it allows
the lender to periodically advance loan funds to pay interest charges on the outstanding
balance of the loan. The interest is capitalized and added to the loan balance.

13.a

Amount of loans that provide for the use of interest reserves. Report the amount of
construction loans included in Schedule RC-C, part I, item 1.a, column B, for which the loan
agreement with the borrower provides for the use of interest reserves.
If a construction loan included in Schedule RC-C, part I, item 1.a, column B, has been fully
advanced or the funds budgeted for interest have been fully advanced, but the loan
agreement provided for the use of interest reserves, continue to report the loan in this item
even if the borrower is now paying interest from other sources of funds. Similarly, if a
construction loan included in Schedule RC-C, part I, item 1.a, column B, has been renewed or
extended, but the original loan agreement provided for the use of interest reserves, continue
to report the loan in this item.
Include in this item new construction loans (as defined for and reported in Schedule RC-C,
part I, item 1.a, column B) that have been granted for the purpose of paying interest on
existing construction loans (in domestic offices) when the new construction loan is secured by
the same real estate that secures the existing construction loan.
Exclude construction loans for which the loan agreement with the borrower does not provide
for the use of interest reserves.

13.b

Amount of interest capitalized from interest reserves on construction, land
development, and other land loans that is included in interest and fee income on loans
during the quarter. Report the amount of interest advanced to borrowers on construction
loans (as defined for Schedule RC-C, part I, item 1.a, column B) that has been capitalized into
the borrowers’ loan balances through the use of interest reserves (including interest advanced
on new construction loans granted for the purpose of paying interest on existing construction
loans when the loans are secured by the same real estate) and included in interest and fee
income during the quarter on “All other loans secured by real estate” (Schedule RI,
item 1.a.(1)(b), on the FFIEC 041; Schedule RI, item 1.a.(1)(a)(2) on the FFIEC 031).
The amount of capitalized interest included in interest income during the quarter should be
reduced by amounts reversed against interest during the quarter.

14

Pledged loans and leases. Report the amount of all loans and leases included in
Schedule RC-C, part I, above that are pledged to secure deposits, repurchase transactions,
or other borrowings (regardless of the balance of the deposits or other liabilities against which
the loans and leases are pledged) or for any other purpose. Include loans and leases

FFIEC 031 and 041

RC-C-36a
(9-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.

Caption and Instructions

14
(cont.)

that have been transferred in transactions that are accounted for as secured borrowings with
a pledge of collateral because they do not qualify as sales under ASC Topic 860, Transfers and
Servicing (formerly FASB Statement No. 140, “Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities,” as amended). Also include loans and
leases held for sale or investment by consolidated variable interest entities (VIEs) that can be
used only to settle obligations of the same consolidated VIEs (the amounts of which are also
reported in Schedule RC-V, items 1.e and 1.f). In general, the pledging of loans and leases is
the act of setting aside certain loans and leases to secure or collateralize bank transactions with
the bank continuing to own the loans and leases unless the bank defaults on the transaction.
When a bank is subject to a blanket lien arrangement or has otherwise pledged an entire
portfolio of loans to secure its Federal Home Loan Bank advances, it should report the
amount of the entire portfolio of loans subject to the blanket lien in this item. Any loans within
the portfolio that have been explicitly excluded or specifically released from the lien and that
the bank has the right, without constraint, to repledge to another party should not be reported
as pledged in this item. However, if any such loans have been repledged to another party,
they should be reported in this item.

NOTE: Memorandum item 15 is to be completed for the December report only.
15

Reverse mortgages (in domestic offices). A reverse mortgage is an arrangement in which
a homeowner borrows against the equity in his or her home and receives cash either in a
lump sum or through periodic payments. However, unlike a traditional mortgage loan, no
payment is required until the borrower no longer uses the home as his or her principal
residence. Cash payments to the borrower after closing, if any, and accrued interest are
added to the principal balance. These loans may have caps on their maximum principal
balance or they may have clauses that permit the cap on the maximum principal balance to
be increased under certain circumstances. The reverse mortgage market currently consists
of two basic types of products: proprietary products designed and originated by financial
institutions and a federally-insured product known as a Home Equity Conversion Mortgage
(HECM).
Report in the appropriate subitem the specified information about the bank’s involvement with
reverse mortgages (in domestic offices).

15.a

Reverse mortgages outstanding that are held for investment. Report in the appropriate
subitem the amount of HECM and proprietary reverse mortgages held for investment that are
included in Schedule RC-C, part I, item 1.c, Loans “Secured by 1-4 family residential
properties.” A loan is held for investment if the bank has the intent and ability to hold the loan
for the foreseeable future or until maturity or payoff. Exclude reverse mortgages that are held
for sale.

15.a.(1)

Home Equity Conversion Mortgage (HECM) reverse mortgages. Report the amount of
HECM reverse mortgages held for investment that are included in Schedule RC-C, part I,
item 1.c, Loans “Secured by 1-4 family residential properties.”

15.a.(2)

Proprietary reverse mortgages. Report the amount of proprietary reverse mortgages held
for investment that are included in Schedule RC-C, part I, item 1.c, Loans “Secured by 1-4
family residential properties.”

FFIEC 031 and 041

RC-C-36b
(9-11)

RC-C - LOANS AND LEASES

FFIEC 031 and 041

RC-C - LOANS AND LEASES

Part I. (cont.)
Memoranda
Item No.
15.b

Caption and Instructions
Estimated number of reverse mortgage loan referrals to other lenders during the year
from whom compensation has been received for services performed in connection
with the origination of the reverse mortgages. A bank that does not underwrite and fund
reverse mortgages may refer customers to other lenders that underwrite and fund such
mortgages. Under the Real Estate Settlement Procedures Act and its implementing
regulations, a mortgage lender may pay fees or compensation to another party, such as a
bank that has referred a customer to the mortgage lender, only for services actually
performed by that party.
If the bank receives compensation from reverse mortgage lenders for services the bank has
performed in connection with the origination of reverse mortgages granted to customers that
the bank has referred to the reverse mortgage lenders, report in the appropriate subitem a
reasonable estimate of the number of HECM and proprietary reverse mortgages for which the
bank received such compensation during the year. Do not report the estimated amount of
referral fee income in these subitems.

15.b.(1)

Home Equity Conversion Mortgage (HECM) reverse mortgages. Report a reasonable
estimate of the number of HECM reverse mortgages for which the bank received
compensation for services performed during the year in connection with the origination of
HECM reverse mortgages granted to customers that the bank has referred to the reverse
mortgage lenders.

15.b.(2)

Proprietary reverse mortgages. Report a reasonable estimate of the number of proprietary
reverse mortgages for which the bank received compensation for services performed during
the year in connection with the origination of proprietary reverse mortgages granted to
customers that the bank has referred to the reverse mortgage lenders.

15.c

Principal amount of reverse mortgage originations that have been sold during the year.
Report in the appropriate subitem the principal amount of HECM and proprietary reverse
mortgages sold during the year that were originated by the bank. Report the principal balance
outstanding of the reverse mortgages as of their sale dates, which excludes any unused
commitments to the borrowers on the reverse mortgages sold.

15.c.(1)

Home Equity Conversion Mortgage (HECM) reverse mortgages. Report the principal
amount of HECM reverse mortgages sold during the year that were originated by the bank.

15.c.(2)

Proprietary reverse mortgages. Report the principal amount of proprietary reverse
mortgages sold during the year that were originated by the bank.

FFIEC 031 and 041

RC-C-36c
(3-10)

RC-C - LOANS AND LEASES

This page intentionally left blank.

FFIEC 031 and 041

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

Schedule RC-C, Part II. Loans to Small Businesses and Small Farms

General Instructions
Schedule RC-C, part II, is to be completed quarterly.
Schedule RC-C, part II, requests information on the number and amount currently outstanding of "loans
to small businesses" and "loans to small farms," as defined below. This information is being collected
pursuant to Section 122 of the Federal Deposit Insurance Corporation Improvement Act of 1991.
For purposes of this schedule, "loans to small businesses" consist of the following:
(1) Loans with original amounts of $1 million or less that have been reported as “Loans secured by
nonfarm nonresidential properties” (in domestic offices) in Schedule RC-C, part I, items 1.e.(1) and
1.e.(2), column B, and
(2) Loans with original amounts of $1 million or less that have been reported in Schedule RC-C, part I:


On the FFIEC 041 for banks with less than $300 million in total assets, item 4, column B,
"Commercial and industrial loans;"



On the FFIEC 041 for banks with $300 million or more in total assets, item 4.a, "Commercial and
industrial loans to U.S. addressees;" and



On the FFIEC 031, item 4.a, column B, "Commercial and industrial loans to U.S. addressees” in
domestic offices.

For purposes of this schedule, "loans to small farms" consist of the following:
(1) Loans with original amounts of $500,000 or less that have been reported in Schedule RC-C, part I,
item 1.b, column B, "Loans secured by farmland (including farm residential and other improvements)"
(in domestic offices), and
(2) Loans with original amounts of $500,000 or less that have been reported in Schedule RC-C, part I,
item 3, column B, "Loans to finance agricultural production and other loans to farmers" (in domestic
offices).
The following guidelines should be used to determine the "original amount" of a loan:
(1) For loans drawn down under lines of credit or loan commitments, the "original amount" of the loan is
the size of the line of credit or loan commitment when the line of credit or loan commitment was most
recently approved, extended, or renewed prior to the report date. However, if the amount currently
outstanding as of the report date exceeds this size, the "original amount" is the amount currently
outstanding on the report date.
(2) For loan participations and syndications, the "original amount" of the loan participation or syndication
is the entire amount of the credit originated by the lead lender.
(3) For all other loans, the "original amount" is the total amount of the loan at origination or the amount
currently outstanding as of the report date, whichever is larger.

FFIEC 031 and 041

RC-C-37
(3-10)

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

FFIEC 031 and 041

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

Part II. (cont.)
General Instructions (cont.)
The "amount currently outstanding" for a loan is its carrying value, i.e., the amount at which the loan is
reported in Schedule RC-C, part I, item 1.b, 1.e.(1), 1.e.(2), 3, 4, or 4.a.
Except as noted below for "corporate" or "business" credit card programs, when determining "original
amounts" and reporting the number and amount currently outstanding for a category of loans in this
part II, multiple loans to one borrower should be combined and reported on an aggregate basis rather
than as separate individual loans to the extent that the loan systems in which the bank's business and/or
farm loan data are maintained can provide aggregate individual borrower data without undue cost to the
reporting institution. However, if the burden of such aggregation would be excessive, the institution may
report multiple loans to one borrower as separate individual loans.
A bank that offers "corporate" or "business" credit card programs under which credit cards are issued to
one or more of a company's employees for business-related use should treat each company's program
as a single extension of credit to that company. The credit limits for all of the individual credit cards
issued to the company's employees should be totaled and this total should be treated as the "original
amount" of the "corporate" or "business" credit card program established for this company. The
company's program should be reported as one loan and the amount currently outstanding would be the
sum of the credit card balances as of the June 30 report date on each of the individual credit cards
issued to the company's employees. However, when aggregated data for each individual company in a
"corporate" or "business" credit card program are not readily determinable from the bank's credit card
records, the bank should develop reasonable estimates of the number of "corporate" or "business" credit
card programs in existence as of the June 30 report date, the "original amounts" of these programs, and
the "amounts currently outstanding" for these programs and should then report information about these
programs on the basis of its reasonable estimates. In no case should the individual credit cards issued
to a company's employees under a "corporate" or "business" credit card program be reported as
separate individual loans to small businesses.

Item Instructions
Loans to Small Businesses
Item No.
1

Caption and Instructions
Indicate in the appropriate box at the right whether all or substantially all of the dollar
volume of your bank's "Loans secured by nonfarm nonresidential properties" (in
domestic offices) reported in Schedule RC-C, part I, items 1.e.(1) and 1.e.(2), and all or
substantially all of the dollar volume of your bank's "Commercial and industrial loans
(to U.S. addressees)" (in domestic offices) reported in Schedule RC-C, part I, item 4
(or 4.a), have original amounts of $100,000 or less.
If: (a) the average size of the amount currently outstanding for your bank's "Loans secured
by nonfarm nonresidential properties" (in domestic offices) as reported in
Schedule RC-C, part I, above, is $100,000 or less, and
(b) the average size of the amount currently outstanding for your bank's "Commercial
and industrial loans (to U.S. addressees)" (in domestic offices) as reported in
Schedule RC-C, part I, above, is $100,000 or less, and

FFIEC 031 and 041

RC-C-38
(3-10)

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

FFIEC 031 and 041

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

Part II. (cont.)
Item No.

Caption and Instructions

1
(cont.)

(c) your lending officers' knowledge of your bank's loans or other relevant
information pertaining to "Loans secured by nonfarm nonresidential properties" (in
domestic offices) and "Commercial and industrial loans (to U.S. addressees)" (in
domestic offices) indicates that all or substantially all of the dollar volume of your
bank's loans in each of these two categories has "original amounts" (as described
above in the General Instructions to this part II) of $100,000 or less,
place an "X" in the box marked "YES," complete items 2.a and 2.b below, skip items 3 and 4,
and go to item 5.
If your bank has no loans outstanding in both of these two loan categories, place an "X" in
the box marked "NO," skip items 2 through 4, and go to item 5.
Otherwise, place an "X" in the box marked "NO," skip items 2.a and 2.b, complete items 3
and 4 below, and go to item 5.

2

Report the total number of loans currently outstanding for each of the following
Schedule RC-C, part I, loan categories. Multiple loans to one borrower should be
combined and reported on an aggregate basis rather than as separate individual loans to the
extent that the loan systems in which the bank's business and/or farm loan data are
maintained can provide aggregate individual borrower data without undue cost to the
reporting institution. However, if the burden of such aggregation would be excessive, the
institution may report multiple loans to one borrower as separate individual loans.

2.a

Number of "Loans secured by nonfarm nonresidential properties" (in domestic offices)
reported in Schedule RC-C, part I, items 1.e(1) and 1.e.(2). Count the number of
individual loans currently outstanding whose carrying values add up to the amount of “Loans
secured by nonfarm nonresidential properties” (in domestic offices) reported in
Schedule RC-C, part I, items 1.e.(1) and 1.e.(2). The sum of the amounts reported in
Schedule RC-C, part I, items 1.e.(1) and 1.e.(2), column B, divided by the number of loans
reported in this item should not exceed $100,000.

2.b

Number of "Commercial and industrial loans (to U.S. addressees)" (in domestic
offices) reported in Schedule RC-C, part I, item 4 (or 4.a). Count the number of individual
loans currently outstanding whose carrying values add up to the amount reported in
Schedule RC-C, part I:


On the FFIEC 041 for banks with less than $300 million in total assets, item 4, column B,
"Commercial and industrial loans;"



On the FFIEC 041 for banks with $300 million or more in total assets, item 4.a,
"Commercial and industrial loans to U.S. addressees;" and



On the FFIEC 031, item 4.a, column B, "Commercial and industrial loans to U.S.
addressees” in domestic offices.

The amount reported in Schedule RC-C, part I, item 4 or 4.a, as appropriate, divided by the
number of loans reported in this item should not exceed $100,000.

FFIEC 031 and 041

RC-C-39
(6-08)

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

FFIEC 031 and 041

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

Part II. (cont.)
Item No.
3

Caption and Instructions
Number and amount currently outstanding of "Loans secured by nonfarm
nonresidential properties" (in domestic offices) reported in Schedule RC-C, part I,
items 1.e.(1) and 1.e.(2), column B. See the General Instructions to this part II for the
guidelines for determining the "original amount" of a loan. Multiple loans to one borrower
should be combined and reported on an aggregate basis rather than as separate individual
loans to the extent that the loan systems in which the bank's business and/or farm loan data
are maintained can provide aggregate individual borrower data without undue cost to the
reporting institution. However, if the burden of such aggregation would be excessive, the
institution may report multiple loans to one borrower as separate individual loans.
The sum of the amounts currently outstanding reported in items 3.a through 3.c, column B,
must be less than or equal to the sum of the amounts reported in Schedule RC-C, part I,
items 1.e.(1) and 1.e.(2), column B.

3.a

With original amounts of $100,000 or less. Add up the total carrying value of all currently
outstanding "Loans secured by nonfarm nonresidential properties" (in domestic offices) with
"original amounts" of $100,000 or less and report this total amount in column B. Do not add
up the "original amounts" of each of these loans and report the total original amount in
column B.
Count the number of individual "Loans secured by nonfarm nonresidential properties" (in
domestic offices) whose carrying values were included in the amount reported in column B
for this item (i.e., those "Loans secured by nonfarm nonresidential properties" (in domestic
offices) with "original amounts" of $100,000 or less). Report this number in column A.

3.b

With original amounts of more than $100,000 through $250,000. Add up the total
carrying value of all currently outstanding "Loans secured by nonfarm nonresidential
properties" (in domestic offices) with "original amounts" of more than $100,000 through
$250,000 and report this total amount in column B. Do not add up the "original amounts" of
each of these loans and report the total original amount in column B.
Count the number of individual "Loans secured by nonfarm nonresidential properties" (in
domestic offices) whose carrying values were included in the amount reported in column B
for this item (i.e., those "Loans secured by nonfarm nonresidential properties" (in domestic
offices) with "original amounts" of more than $100,000 through $250,000). Report this
number in column A.

3.c

With original amounts of more than $250,000 through $1,000,000. Add up the total
carrying value of all currently outstanding "Loans secured by nonfarm nonresidential
properties" (in domestic offices) with "original amounts" of more than $250,000 through
$1,000,000 and report this total amount in column B. Do not add up the "original amounts" of
each of these loans and report the total original amount in column B.
Count the number of individual "Loans secured by nonfarm nonresidential properties" (in
domestic offices) whose carrying values were included in the amount reported in column B
for this item (i.e., those "Loans secured by nonfarm nonresidential properties" (in domestic
offices) with "original amounts" of more than $250,000 through $1,000,000). Report this
number in column A.

FFIEC 031 and 041

RC-C-40
(6-08)

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

FFIEC 031 and 041

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

Part II. (cont.)
Item No.
4

Caption and Instructions
Number and amount currently outstanding of "Commercial and industrial loans
(to U.S. addressees)" (in domestic offices) reported in Schedule RC-C, part I, item 4 (or
4.a). See the General Instructions to this part II for the guidelines for determining the
"original amount" of a loan and for the treatment of "corporate" or "business" credit card
programs. Multiple loans to one borrower should be combined and reported on an aggregate
basis rather than as separate individual loans to the extent that the loan systems in which the
bank's business and/or farm loan data are maintained can provide aggregate individual
borrower data without undue cost to the reporting institution. However, if the burden of such
aggregation would be excessive, the institution may report multiple loans to one borrower as
separate individual loans.
The sum of the amounts currently outstanding reported in items 4.a through 4.c, column B,
must be less than or equal to the amount reported in Schedule RC-C, part I:

4.a



On the FFIEC 041 for banks with less than $300 million in total assets, item 4, column B,
"Commercial and industrial loans;"



On the FFIEC 041 for banks with $300 million or more in total assets, item 4.a,
"Commercial and industrial loans to U.S. addressees;" and



On the FFIEC 031, item 4.a, column B, "Commercial and industrial loans to U.S.
addressees” in domestic offices.

With original amounts of $100,000 or less. Add up the total carrying value of all currently
outstanding "Commercial and industrial loans (to U.S. addressees)" (in domestic offices) with
"original amounts" of $100,000 or less and report this total amount in column B. Do not add
up the "original amounts" of each of these loans and report the total original amount in
column B.
Count the number of individual "Commercial and industrial loans (to U.S. addressees)" (in
domestic offices) whose carrying values were included in the amount reported in column B
for this item (i.e., those "Commercial and industrial loans (to U.S. addressees)" (in domestic
offices) with "original amounts" of $100,000 or less). Report this number in column A.

4.b

With original amounts of more than $100,000 through $250,000. Add up the total
carrying value of all currently outstanding "Commercial and industrial loans (to U.S.
addressees)" (in domestic offices) with "original amounts" of more than $100,000 through
$250,000 and report this total amount in column B. Do not add up the "original amounts" of
each of these loans and report the total original amount in column B.
Count the number of individual "Commercial and industrial loans (to U.S. addressees)" (in
domestic offices) whose carrying values were included in the amount reported in column B
for this item (i.e., those "Commercial and industrial loans (to U.S. addressees)" (in domestic
offices) with "original amounts" of more than $100,000 through $250,000). Report this
number in column A.

FFIEC 031 and 041

RC-C-41
(6-08)

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

FFIEC 031 and 041

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

Part II. (cont.)
Item No.
4.c

Caption and Instructions
With original amounts of more than $250,000 through $1,000,000. Add up the total
carrying value of all currently outstanding "Commercial and industrial loans (to U.S.
addressees)" (in domestic offices) with "original amounts" of more than $250,000 through
$1,000,000 and report this total amount in column B. Do not add up the "original amounts" of
each of these loans and report the total original amount in column B.
Count the number of individual "Commercial and industrial loans (to U.S. addressees)" (in
domestic offices) whose carrying values were included in the amount reported in column B
for this item (i.e., those "Commercial and industrial loans (to U.S. addressees)" (in domestic
offices) with "original amounts" of more than $250,000 through $1,000,000). Report this
number in column A.

Agricultural Loans to Small Farms
Item No.
5

Caption and Instructions
Indicate in the appropriate box at the right whether all or substantially all of the dollar
volume of your bank's "Loans secured by farmland (including farm residential and
other improvements)" (in domestic offices) reported in Schedule RC-C, part I, item 1.b,
column B, and all or substantially all of the dollar volume of your bank's "Loans to
finance agricultural production and other loans to farmers" (in domestic offices)
reported in Schedule RC-C, part I, item 3, column B, have original amounts of $100,000
or less.
If: (a) the average size of the amount currently outstanding for your bank's "Loans secured
by farmland (including farm residential and other improvements)" (in domestic
offices) as reported in Schedule RC-C, part I, above, is $100,000 or less, and
(b) the average size of the amount currently outstanding for your bank's "Loans to
finance agricultural production and other loans to farmers" (in domestic offices) as
reported in Schedule RC-C, part I, above, is $100,000 or less, and
(c) your lending officers' knowledge of your bank's loans or other relevant information
pertaining to "Loans secured by farmland (including farm residential and other
improvements" (in domestic offices) and your "Loans to finance agricultural
production and other loans to farmers" (in domestic offices) indicates that all or
substantially all of the dollar volume of your bank's loans in each of these two
categories has "original amounts" (as described above in the General Instructions to
this part II) of $100,000 or less,
place an "X" in the box marked "YES," complete items 6.a and 6.b below, and do not
complete items 7 and 8 below.
If your bank has no loans outstanding in both of these two loan categories, place an "X" in
the box marked "NO," and do not complete items 6 through 8.
Otherwise, place an "X" in the box marked "NO," skip items 6.a and 6.b, and complete
items 7 and 8 below.

FFIEC 031 and 041

RC-C-42
(6-08)

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

FFIEC 031 and 041

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

Part II. (cont.)
Item No.

Caption and Instructions

6

Report the total number of loans currently outstanding for each of the following
Schedule RC-C, part I, loan categories. Multiple loans to one borrower should be
combined and reported on an aggregate basis rather than as separate individual loans to the
extent that the loan systems in which the bank's business and/or farm loan data are
maintained can provide aggregate individual borrower data without undue cost to the
reporting institution. However, if the burden of such aggregation would be excessive, the
institution may report multiple loans to one borrower as separate individual loans.

6.a

Number of "Loans secured by farmland (including farm residential and other
improvements)" (in domestic offices) reported in Schedule RC-C, part I, item 1.b,
column B. Count the number of individual loans currently outstanding whose carrying
values add up to the amount reported in Schedule RC-C, part I, item 1.b, column B, "Loans
secured by farmland (including farm residential and other improvements)" (in domestic
offices). The amount reported in Schedule RC-C, part I, item 1.b, column B, divided by the
number of loans reported in this item should not exceed $100,000.

6.b

Number of "Loans to finance agricultural production and other loans to farmers"
(in domestic offices) reported in Schedule RC-C, part I, item 3, column B. Count the
number of individual loans currently outstanding whose carrying values add up to the amount
reported in Schedule RC-C, part I, item 3, column B, "Loans to finance agricultural production
and other loans to farmers" (in domestic offices). The amount reported in Schedule RC-C,
part I, item 3, column B, divided by the number of loans reported in this item should not
exceed $100,000.

7

Number and amount currently outstanding of "Loans secured by farmland
(including farm residential and other improvements)" (in domestic offices) reported in
Schedule RC-C, part I, item 1.b, column B. See the General Instructions to this part II for
the guidelines for determining the "original amount" of a loan. Multiple loans to one borrower
should be combined and reported on an aggregate basis rather than as separate individual
loans to the extent that the loan systems in which the bank's business and/or farm loan data
are maintained can provide aggregate individual borrower data without undue cost to the
reporting institution. However, if the burden of such aggregation would be excessive, the
institution may report multiple loans to one borrower as separate individual loans.
The sum of the amounts currently outstanding reported in items 7.a through 7.c, column B,
must be less than or equal to the amount reported Schedule RC-C, part I, item 1.b, column B.

7.a

With original amounts of $100,000 or less. Add up the total carrying value of all currently
outstanding "Loans secured by farmland (including farm residential and other improvements)"
(in domestic offices) with "original amounts" of $100,000 or less and report this total amount
in column B. Do not add up the "original amounts" of each of these loans and report the total
original amount in column B.
Count the number of individual "Loans secured by farmland (including farm residential and
other improvements" (in domestic offices) whose carrying values were included in the
amount reported in column B for this item (i.e., those "Loans secured by farmland (including
farm residential and other improvements)" (in domestic offices) with "original amounts" of
$100,000 or less). Report this number in column A.

FFIEC 031 and 041

RC-C-43
(6-08)

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

FFIEC 031 and 041

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

Part II. (cont.)
Item No.
7.b

Caption and Instructions
With original amounts of more than $100,000 through $250,000. Add up the total
carrying value of all currently outstanding "Loans secured by farmland (including farm
residential and other improvements" (in domestic offices) with "original amounts" of more
than $100,000 through $250,000 and report this total amount in column B. Do not add up the
"original amounts" of each of these loans and report the total original amount in column B.
Count the number of individual "Loans secured by farmland (including farm residential and
other improvements)" (in domestic offices) whose carrying values were included in the
amount reported in column B for this item (i.e., those "Loans secured by farmland (including
farm residential and other improvements)" (in domestic offices) with "original amounts" of
more than $100,000 through $250,000). Report this number in column A.

7.c

With original amounts of more than $250,000 through $500,000. Add up the total
carrying value of all currently outstanding "Loans secured by farmland (including farm
residential and other improvements)" (in domestic offices) with "original amounts" of more
than $250,000 through $500,000 and report this total amount in column B. Do not add up the
"original amounts" of each of these loans and report the total original amount in column B.
Count the number of individual "Loans secured by farmland (including farm residential and
other improvements)" (in domestic offices) whose carrying values were included in the
amount reported in column B for this item (i.e., those "Loans secured by farmland (including
farm residential and other improvements)" (in domestic offices) with "original amounts" of
more than $250,000 through $500,000). Report this number in column A.

8

Number and amount currently outstanding of "Loans to finance agricultural
production and other loans to farmers" (in domestic offices) reported in
Schedule RC-C, part I, item 3, column B. See the General Instructions to this part II for the
guidelines for determining the "original amount" of a loan. Multiple loans to one borrower
should be combined and reported on an aggregate basis rather than as separate individual
loans to the extent that the loan systems in which the bank's business and/or farm loan data
are maintained can provide aggregate individual borrower data without undue cost to the
reporting institution. However, if the burden of such aggregation would be excessive, the
institution may report multiple loans to one borrower as separate individual loans.
The sum of the amounts currently outstanding reported in items 8.a through 8.c, column B,
must be less than or equal to the amount reported in Schedule RC-C, part I, item 3,
column B.

8.a

With original amounts of $100,000 or less. Add up the total carrying value of all currently
outstanding "Loans to finance agricultural production and other loans to farmers" (in domestic
offices) with "original amounts" of $100,000 or less and report this total amount in column B.
Do not add up the "original amounts" of each of these loans and report the total original
amount in column B.

FFIEC 031 and 041

RC-C-44
(6-08)

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

FFIEC 031 and 041

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

Part II. (cont.)
Item No.

Caption and Instructions

8.a
(cont.)

Count the number of individual "Loans to finance agricultural production and other loans to
farmers" (in domestic offices) whose carrying values were included in the amount reported in
column B for this item (i.e., those "Loans to finance agricultural production and other loans to
farmers" (in domestic offices) with "original amounts" of $100,000 or less). Report this
number in column A.

8.b

With original amounts of more than $100,000 through $250,000. Add up the total
carrying value of all currently outstanding "Loans to finance agricultural production and other
loans to farmers" (in domestic offices) with "original amounts" of more than $100,000 through
$250,000 and report this total amount in column B. Do not add up the "original amounts" of
each of these loans and report the total original amount in column B.
Count the number of individual "Loans to finance agricultural production and other loans to
farmers" (in domestic offices) whose carrying values were included in the amount reported in
column B for this item (i.e., those "Loans to finance agricultural production and other loans to
farmers" (in domestic offices) with "original amounts" of more than $100,000 through
$250,000). Report this number in column A.

8.c

With original amounts of more than $250,000 through $500,000. Add up the total
carrying value of all currently outstanding "Loans to finance agricultural production and other
loans to farmers" (in domestic offices) with "original amounts" of more than $250,000 through
$500,000 and report this total amount in column B. Do not add up the "original amounts" of
each of these loans and report the total original amount in column B.
Count the number of individual "Loans to finance agricultural production and other loans to
farmers" (in domestic offices) whose carrying values were included in the amount reported in
column B for this item (i.e., those "Loans to finance agricultural production and other loans to
farmers" (in domestic offices) with "original amounts" of more than $250,000 through
$500,000). Report this number in column A.

Examples of Reporting in Schedule RC-C, Part II
(1)

A bank has a "Loan secured by owner-occupied nonfarm nonresidential property" which has a
carrying value on the June 30 report date of $70,000 and this amount is included in Schedule RC-C,
part I, item 1.e.(1), column B. The bank made this loan to the borrower in the original amount of
$75,000, so it would be considered a "loan to a small business" and would be reported in
Schedule RC-C, part II. Because the original amount of the loan is $100,000 or less, the bank
would report the $70,000 amount currently outstanding in part II, item 3.a, column B.

(2)

The bank has a second "Loan secured by owner-occupied nonfarm nonresidential property" which
has a carrying value on the June 30 report date of $60,000 and this amount is included in
Schedule RC-C, part I, item 1.e.(1), column B. The bank made this loan to the borrower in the
original amount of $125,000, so it would be considered a "loan to a small business" and would be
reported in Schedule RC-C, part II. Because the original amount of the loan falls within the more
than $100,000 through $250,000 range, the bank would report the $60,000 amount currently
outstanding in part II, item 3.b, column B.

FFIEC 031 and 041

RC-C-45
(6-08)

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

FFIEC 031 and 041

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

Examples of Reporting in Schedule RC-C, Part II (cont.)
(3)

The bank has a "Commercial and industrial loan" (to a U.S. addressee in a domestic office) which
has a carrying value on the June 30 report date of $200,000 and this amount is included in
Schedule RC-C, part I, item 4 or 4.a, as appropriate. The bank made this loan to the borrower in
the original amount of $250,000, so it would be considered a "loan to a small business" and would
be reported in Schedule RC-C, part II. Because the original amount of the loan is exactly $250,000
which is the upper end of the more than $100,000 through $250,000 range, the bank would report
the $200,000 amount currently outstanding in part II, item 4.b, column B.

(4)

The bank has a second "Commercial and industrial loan" (to a U.S. addressee in a domestic office)
which has a carrying value on the June 30 report date of $90,000 and this amount is included in
Schedule RC-C, part I, item 4 or 4.a, as appropriate. The bank made this loan to the borrower in
the original amount of $500,000 and sold loan participations for $400,000 while retaining $100,000.
Nevertheless, based on the entire amount of the credit that was originated by the bank, the loan
would be considered a "loan to a small business" and would be reported in Schedule RC-C, part II.
Because the original amount of the entire loan is $500,000 which falls within the more than
$250,000 through $1,000,000 range, the bank would report the $90,000 amount currently
outstanding in part II, item 4.c, column B.

(5)

The bank has a third "Commercial and industrial loan" (to a U.S. addressee in a domestic office)
which has a carrying value on the June 30 report date of $55,000 and this amount is included in
Schedule RC-C, part I, item 4 or 4.a, as appropriate. This loan represents a participation
purchased by the bank from another lender. The original amount of the entire credit is $750,000
and the bank's original share of this credit was $75,000. Based on the entire amount of the credit
that was originated by the other lender, the loan would be considered a "loan to a small business"
and would be reported in Schedule RC-C, part II. Because the original amount of the entire credit is
$750,000 which falls within the more than $250,000 through $1,000,000 range, the bank would
report the $55,000 amount currently outstanding in part II, item 4.c, column B.

(6)

The bank has another "Commercial and industrial loan" (to a U.S. addressee in a domestic office)
and it has a carrying value on the June 30 report date of $120,000. This amount is included in
Schedule RC-C, part I, item 4 or 4.a, as appropriate. This loan represents a participation
purchased by the bank from another lender. The original amount of the entire credit is $1,250,000
and the bank's original share of this credit was $250,000. Because the original amount of the entire
credit exceeds $1,000,000, the loan would not be considered a "loan to a small business" and
would not be reported in Schedule RC-C, part II.

(7)

The bank has a "Loan secured by other nonfarm nonresidential property" and a "Commercial and
industrial loan" to the same (U.S. addressee) borrower (in its domestic offices). The first loan has a
carrying value on the June 30 report date of $375,000 and this amount is included in
Schedule RC-C, part I, item 1.e.(2), column B. This "Loan secured by nonfarm nonresidential
property" was made in the original amount of $400,000. The second loan has a carrying value on
the June 30 report date of $650,000 and this amount is included in Schedule RC-C, part I, item 4
or 4.a, as appropriate. This "Commercial and industrial loan" was made in the original amount of
$750,000.
Case I: The bank's loan system can provide aggregate individual borrower data without undue cost
to the reporting institution. The loan system indicates that this borrower's two loans have a
combined original amount of $1,150,000 and therefore the loans would not be considered "loans to
a small business" and would not be reported in Schedule RC-C, part II.

FFIEC 031 and 041

RC-C-46
(6-08)

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

FFIEC 031 and 041

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

Examples of Reporting in Schedule RC-C, Part II (cont.)
Case II: The bank's loan system cannot provide aggregate individual borrower data without undue
cost to the reporting institution. Therefore, the borrower's two loans would be treated as separate
loans for purposes of Schedule RC-C, part II. Based on its $400,000 original amount, the "Loan
secured by other nonfarm nonresidential property" would be considered a "loan to a small business"
and would be reported in Schedule RC-C, part II. Because the original amount of the loan falls
within the more than $250,000 through $1,000,000 range, the bank would report the $375,000
amount currently outstanding in part II, item 3.c, column B, and count this loan as one loan for
purposes of part II, item 3.c, column A. Since the "Commercial and industrial loan" is being handled
separately and its original amount is $750,000, it would also be considered a "loan to a small
business” and would be reported in Schedule RC-C, part II. Because the original amount of this
loan falls within the more than $250,000 through $1,000,000 range, the bank would report the
$650,000 amount currently outstanding in part II, item 4.c, column B, and count this loan as one
loan for purposes of part II, item 4.c, column A.
(8)

The bank has a "Loan secured by farmland (including farm residential and other improvements)"
which has a carrying value on the June 30 report date of $225,000. The bank made this loan to the
borrower in the original amount of $260,000 and the loan is secured by a first lien on the borrower's
farmland. The bank has a second "Loan secured by farmland" to this same borrower and it is
secured by a second lien on the borrower's property. This second lien loan has a carrying value of
$50,000 and the original amount of the loan is the same as its carrying value. The carrying values
of both loans (the $225,000 first lien loan and the $50,000 second lien loan) are included in
Schedule RC-C, part I, item 1.b, column B.
Case I: The bank's loan system can provide aggregate individual borrower data without undue cost
to the reporting institution. The loan system indicates that this borrower's two loans have a
combined original amount of $310,000 and therefore the two loans together would be considered a
single "loan to a small farm" and would be reported in Schedule RC-C, part II. Because the original
amount of the two combined loans falls within the more than $250,000 through $500,000 range, the
bank would report the $275,000 combined total of the amounts currently outstanding for the two
loans in part II, item 7.c, column B, and count these two loans to the same borrower as one loan for
purposes of part II, item 7.c, column A.
Case II: The bank's loan system cannot provide aggregate individual borrower data without undue
cost to the reporting institution. Therefore, the borrower's two loans would be treated as separate
loans for purposes of Schedule RC-C, part II. Based on its $260,000 original amount, the first lien
loan would be considered a "loan to a small farm" and would be reported in Schedule RC-C, part II.
Because the original amount of the loan falls within the more than $250,000 through $500,000
range, the bank would report the $225,000 amount currently outstanding in part II, item 7.c,
column B, and count this loan as one loan for purposes of part II, item 7.c, column A. Since the
second lien loan is being handled separately and its original amount is $50,000, it would also be
considered a "loan to a small farm" and would be reported in Schedule RC-C, part II. Because the
original amount of this loan is less than $100,000, the bank would report the $50,000 amount
currently outstanding in part II, item 7.a, column B, and count this loan as one loan for purposes of
part II, item 7.a, column A.

(9)

The bank has one final "Loan secured by farmland" which has a carrying value on the June 30
report date of $5,000 and this amount is included in Schedule RC-C, part I, item 1.b, column B. The
bank made this loan to the borrower in the original amount of $300,000, so it would be considered a
"loan to a small farm" and would be reported in Schedule RC-C, part II. Because the original
amount of the loan falls within the more than $250,000 through $500,000 range, the bank would
report the $5,000 amount currently outstanding in part II, item 7.c, column B.

FFIEC 031 and 041

RC-C-47
(6-08)

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

FFIEC 031 and 041

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

Examples of Reporting in Schedule RC-C, Part II (cont.)
(10) The bank has granted a $150,000 line of credit to a farmer that is not secured by real estate. The
farmer has received advances twice under this line of credit and, rather than having signed a single
note for the entire $150,000 amount of the line of credit, has signed separate notes for each
advance. One note is in the original amount of $30,000 and the other is in the original amount of
$50,000. The carrying values of the two notes on the June 30 report date are the same as their
original amounts and these amounts are included in Schedule RC-C, part I, item 3, column B. For
loans drawn down under lines of credit, the original amount of the loan is the size of the line of
credit when it was most recently approved, extended, or renewed prior to the report date. In this
case, the line of credit was most recently approved for $150,000.
Case I: The bank's loan system can provide aggregate individual borrower data for multiple
advances under lines of credit without undue cost to the reporting institution. Thus, even though a
separate note was signed each time the farmer borrowed under the line of credit, the loan system
combines all information about the farmer's separate borrowings under the line of credit. Therefore,
the loan system indicates that the farmer has a line of credit for $150,000 and that the amount
currently outstanding under the line of credit for the combined carrying values of the two borrowings
under the line of credit is $80,000. Because the line of credit was most recently approved for
$150,000, this $150,000 original amount for the line of credit would be considered a "loan to a small
farm" that would be reported in Schedule RC-C, part II. Therefore, the original amount of the line of
credit falls within the more than $100,000 through $250,000 range and the bank would report the
$80,000 combined total of the amounts currently outstanding for the two notes in part II, item 8.b,
column B, and count these two notes to the farmer under the line of credit as one loan for purposes
of part II, item 8.b, column A.
Case II: The bank's loan system cannot provide aggregate individual borrower data for lines of
credit without undue cost to the reporting institution. Therefore, the farmer's two notes under the
line of credit would be treated as separate loans for purposes of Schedule RC-C, part II. The
original amount of the line of credit is $150,000 and each of the two notes would be considered a
"loan to a small farm" that would be reported in Schedule RC-C, part II. Because each of the two
notes indicates that it is part of a $150,000 line of credit and the $150,000 original amount of the
line of credit falls within the more than $100,000 through $250,000 range, the bank would report
both the $30,000 and $50,000 amounts currently outstanding in part II, item 8.b, column B, and
count these as two loans for purposes of part II, item 8.b, column A.
(11) The bank has one other "Loan to finance agricultural production and other loans to a farmer" which
has a carrying value on the June 30 report date of $75,000 and this amount is included in
Schedule RC-C, part I, item 3, column B. The bank made this loan to the borrower in the original
amount of $100,000, so it would be considered a "loan to a small farm" and would be reported in
Schedule RC-C, part II. Because the original amount of the loan is exactly $100,000 which is the
upper end of the $100,000 or less range, the bank would report the $75,000 amount currently
outstanding in part II, item 8.a, column B.

FFIEC 031 and 041

RC-C-48
(6-08)

RC-C - SMALL BUSINESS AND SMALL FARM LOANS

FFIEC 031 and 041

RC-D – TRADING

SCHEDULE RC-D – TRADING ASSETS AND LIABILITIES
General Instructions
Schedule RC-D is to be completed by banks that reported a quarterly average for trading assets of
$2 million or more in Schedule RC-K, item 7, for any of the four preceding quarterly reports. However,
because banks with domestic offices only and with less than $100 million in total assets do not report a
quarterly average for trading assets in Schedule RC-K, item 7, on the FFIEC 041, Schedule RC-D is not
applicable to such banks. Memorandum items 5 through 10 are to be completed by banks that reported a
quarterly average for trading assets of $1 billion or more in Schedule RC-K, item 7, for any of the four
preceding quarterly reports.
Trading activities typically include (a) regularly underwriting or dealing in securities; interest rate, foreign
exchange rate, commodity, equity, and credit derivative contracts; other financial instruments; and other
assets for resale, (b) acquiring or taking positions in such items principally for the purpose of selling in the
near term or otherwise with the intent to resell in order to profit from short-term price movements, and
(c) acquiring or taking positions in such items as an accommodation to customers or for other trading
purposes.
Pursuant to ASC Subtopic 825-10, Financial Instruments – Overall (formerly FASB Statement No. 159,
“The Fair Value Option for Financial Assets and Financial Liabilities”), all securities within the scope of
ASC Topic 320, Investments – Debt and Equity Securities (formerly FASB Statement No. 115,
“Accounting for Certain Investments in Debt and Equity Securities”), that a bank has elected to report at
fair value under a fair value option with changes in fair value reported in current earnings should be
classified as trading securities. In addition, for purposes of these reports, banks may classify assets
(other than securities within the scope of ASC Topic 320) and liabilities as trading if the bank applies fair
value accounting, with changes in fair value reported in current earnings, and manages these assets and
liabilities as trading positions, subject to the controls and applicable regulatory guidance related to trading
activities. For example, a bank would generally not classify a loan to which it has applied the fair value
option as a trading asset unless the bank holds the loan, which it manages as a trading position, for one
of the following purposes: (a) for market making activities, including such activities as accumulating loans
for sale or securitization; (b) to benefit from actual or expected price movements; or (c) to lock in arbitrage
profits. When reporting loans classified as trading in Schedule RC-D, banks should include only the fair
value of the funded portion of the loan in item 6 of this schedule. If the unfunded portion of the loan, if
any, is classified as trading (and does not meet the definition of a derivative), the fair value of the
commitment to lend should be reported as an “Other trading asset” or an “Other trading liability,” as
appropriate, in Schedule RC-D, item 9 or item 13.b, respectively.
Assets, liabilities, and other financial instruments classified as trading shall be consistently valued at fair
value.
Exclude from this schedule all available-for-sale securities and all loans and leases that do not satisfy
the criteria for classification as trading as described above. (Also see the Glossary entry for “trading
account.”) Available-for-sale securities are generally reported in Schedule RC, item 2.b, and in
Schedule RC-B, columns C and D. However, a bank may have certain assets that fall within the
definition of "securities" in ASC Topic 320 (e.g., nonrated industrial development obligations) that the
bank has designated as "available-for-sale" which are reported for purposes of the Report of Condition in
a balance sheet category other than "Securities" (e.g., "Loans and lease financing receivables"). Loans
and leases that do not satisfy the criteria for the trading account should be reported in Schedule RC,
item 4.a or item 4.b, and in Schedule RC-C.
On the FFIEC 031, this schedule has two columns: column A provides trading asset and liability detail for the
fully consolidated bank and column B provides detail on trading assets and liabilities held by the domestic
offices of the reporting bank. (See the Glossary entry for "domestic office" for the definition of this term.)

FFIEC 031 and 041

RC-D-1
(9-11)

RC-D – TRADING

FFIEC 031 and 041

RC-D – TRADING

Item Instructions
Item No.

Caption and Instructions

ASSETS
1

U.S. Treasury securities. Report the total fair value of securities issued by the U.S.
Treasury (as defined for Schedule RC-B, item 1, "U.S. Treasury securities") held for trading.

2

U.S. Government agency obligations. Report the total fair value of all obligations of U.S.
Government agencies (as defined for Schedule RC-B, item 2, U.S. Government agency
obligations") held for trading. Exclude mortgage-backed securities.

3

Securities issued by states and political subdivisions in the U.S. Report the total fair
value of all securities issued by states and political subdivisions in the United States (as
defined for Schedule RC-B, item 3, "Securities issued by states and political subdivisions in
the U.S.") held for trading.

4

Mortgage-backed securities. Report in the appropriate subitem the total fair value of all
mortgage-backed securities held for trading.

4.a

Residential mortgage pass-through securities issued or guaranteed by FNMA, FHLMC,
or GNMA. Report the total fair value of all residential mortgage pass-through securities
issued or guaranteed by FNMA, FHLMC, or GNMA (as defined for Schedule RC-B,
item 4.a.(1), Residential mortgage pass-through securities "Guaranteed by GNMA," and
item 4.a.(2), Residential pass-through securities "Issued by FNMA and FHLMC") held for
trading.

4.b

Other residential MBS issued or guaranteed by U.S. Government agencies or
sponsored agencies. Report the total fair value of all other residential mortgage-backed
securities issued or guaranteed by U.S. Government agencies or U.S. Governmentsponsored agencies (as defined for Schedule RC-B, item 4.b.(1), Other residential mortgagebacked securities "Issued or guaranteed by U.S. Government agencies or sponsored
agencies") held for trading.
U.S. Government agencies include, but are not limited to, such agencies as the Government
National Mortgage Association (GNMA), the Federal Deposit Insurance Corporation (FDIC),
and the National Credit Union Administration (NCUA). U.S. Government-sponsored agencies
include, but are not limited to, such agencies as the Federal Home Loan Mortgage
Corporation (FHLMC) and the Federal National Mortgage Association (FNMA).

4.c

All other residential MBS. Report the total fair value of all other residential mortgagebacked securities (as defined for Schedule RC-B, item 4.a.(3), "Other [residential mortgage]
pass-through securities," item 4.b.(2), Other residential mortgage-backed securities
"Collateralized by MBS issued or guaranteed by U.S. Government agencies or sponsored
agencies," and item 4.b.(3), "All other residential MBS") held for trading.

4.d

Commercial MBS issued or guaranteed by U.S. Government agencies or sponsored
agencies. Report the total fair value of all commercial mortgage-backed securities (as
defined for Schedule RC-B, item 4.c, “Commercial MBS”) issued or guaranteed by U.S.
Government agencies or U.S. Government-sponsored agencies that are held for trading.
Also include commercial mortgage pass-through securities guaranteed by the Small Business
Administration.

FFIEC 031 and 041

RC-D-2
(9-11)

RC-D – TRADING

FFIEC 031 and 041

Item No.

RC-D – TRADING

Caption and Instructions

4.e

All other commercial MBS. Report the total fair value of all commercial mortgage-backed
securities (as defined for Schedule RC-B, item 4.c, “Commercial MBS”) issued or guaranteed
by non-U.S. Government issuers that are held for trading.

5

Other debt securities:

5.a

Structured financial products. Report in the appropriate subitem the total fair value of all
structured financial products (as defined for Schedule RC-B, item 5.b, “Structured financial
products”) held for trading according to whether the product is a cash, synthetic, or hybrid
instrument.

5.a.(1)

Cash instruments. Report the total fair value of structured financial products that are cash
instruments (as defined for Schedule RC-B, item 5.b.(1)) held for trading.

5.a.(2)

Synthetic instruments. Report the total fair value of structured financial products that are
synthetic instruments (as defined for Schedule RC-B, item 5.b.(2)) held for trading.

5.a.(3)

Hybrid instruments. Report the total fair value of structured financial products that are
hybrid instruments (as defined for Schedule RC-B, item 5.b.(3)) held for trading.

5.b

All other debt securities. Report the total fair value of all other debt securities (as defined
for Schedule RC-B, item 5.a, “Asset-backed securities," and item 6, "Other debt securities")
held for trading.

6

Loans. Report in the appropriate subitem the total fair value of all loans held for trading.
See the Glossary entry for "loan" for further information.

6.a

Loans secured by real estate. On the FFIEC 041, report in the appropriate subitem the
total fair value of loans secured by real estate (as defined for Schedule RC-C, part I, item 1)
held for trading. On the FFIEC 031, report the total fair value of loans secured by real estate
(as defined for Schedule RC-C, part I, item 1) held for trading for the fully consolidated bank
in column A, but with a breakdown of these loans into seven categories for domestic offices
in column B.

6.a.(1)

Construction, land development, and other land loans. Report the total fair value of
construction, land development, and other land loans (as defined for Schedule RC-C,
item 1.a) held for trading.

6.a.(2)

Secured by farmland. Report the total fair value of loans secured by farmland (as defined
for Schedule RC-C, item 1.b) held for trading.

6.a.(3)

Secured by 1-4 family residential properties. Report in the appropriate subitem the total
fair value of all open-end and closed-end loans secured by real estate (as defined for
Schedule RC-C, item 1.c) held for trading.

6.a.(3)(a)

Revolving, open-end loans secured by 1-4 family residential properties and extended
under lines of credit. Report the total fair value of revolving, open-end loans secured by
1-4 family residential properties and extended under lines of credit (as defined for
Schedule RC-C, item 1.c.(1)) held for trading.

FFIEC 031 and 041

RC-D-3
(3-11)

RC-D – TRADING

FFIEC 031 and 041

RC-D – TRADING

Item No.

Caption and Instructions

6.a.(3)(b)

Closed-end loans secured by 1-4 family residential properties. Report in the appropriate
subitem the total fair value of all closed-end loans secured by real estate (as defined for
Schedule RC-C, item 1.c.(2)) held for trading.

6.a.(3)(b)(1)Secured by first liens. Report the total fair value of closed-end loans secured by first liens
on 1-4 family residential properties (as defined for Schedule RC-C, item 1.c.(2)(a)) held for
trading.
6.a.(3)(b)(2)Secured by junior liens. Report the total fair value of closed-end loans secured by junior
liens on 1-4 family residential properties (as defined for Schedule RC-C, item 1.c.(2)(b)) held
for trading.
6.a.(4)

Secured by multifamily (5 or more) residential properties. Report the total fair value
of loans secured by multifamily (5 or more) residential properties (as defined for
Schedule RC-C, item 1.d) held for trading.

6.a.(5)

Secured by nonfarm nonresidential properties. Report the total fair value of loans
secured by nonfarm nonresidential properties (as defined for Schedule RC-C, item 1.e) held
for trading.

6.b

Commercial and industrial loans. Report the total fair value of commercial and industrial
loans (as defined for Schedule RC-C, item 4) held for trading.

6.c

Loans to individuals for household, family, and other personal expenditures. Report in
the appropriate subitem the total fair value of all loans to individuals for household, family,
and other personal expenditures (as defined for Schedule RC-C, item 6) held for trading.

6.c.(1)

Credit cards. Report the total fair value of all extensions of credit to individuals for
household, family, and other personal expenditures arising from credit cards (as defined for
Schedule RC-C, item 6.a) held for trading.

6.c.(2)

Other revolving credit plans. Report the total fair value of all extensions of credit to
individuals for household, family, and other personal expenditures arising from prearranged
overdraft plans and other revolving credit plans not accessed by credit cards (as defined for
Schedule RC-C, item 6.b) held for trading.

6.c.(3)

Automobile loans. Report the total fair value of loans arising from retail sales of passenger
cars and other vehicles such as minivans, vans, sport-utility vehicles, pickup trucks, and
similar light trucks for personal use (as defined for Schedule RC-C, part I, item 6.c) held for
trading.

6.c.(4)

Other consumer loans. Report the total fair value of all other loans to individuals for
household, family, and other personal expenditures (as defined for Schedule RC-C, item 6.d)
held for trading.

6.d

Other loans. Report the total fair value of all other loans held for trading that cannot properly
be reported in one of the preceding subitems of this item 6. Such loans include “Loans to
depository institutions and acceptances of other banks,” “Loans to finance agricultural
production and other loans to farmers,” “Loans to foreign governments and official
institutions,” “Obligations (other than securities and leases) of states and political subdivisions
in the U.S.,” and “Other loans” (as defined for Schedule RC-C, part I, items 2, 3, 7, 8, and 9).

FFIEC 031 and 041

RC-D-4
(3-11)

RC-D – TRADING

FFIEC 031 and 041

Item No.

RC-D – TRADING

Caption and Instructions

7-8

Not applicable.

9

Other trading assets. Report the total fair value of all trading assets that cannot properly be
reported in items 1 through 6. Include certificates of deposit held for trading. Exclude
revaluation gains on interest rate, foreign exchange rate, commodity, equity, and credit
derivative contracts (report in item 11 below).

10

Not applicable.

11

Derivatives with a positive fair value. Report the amount of revaluation gains (i.e., assets)
from the "marking to market" of interest rate, foreign exchange rate, commodity, equity, and
credit derivative contracts held for trading purposes. Revaluation gains and losses (i.e.,
assets and liabilities) from the "marking to market" of the reporting bank's derivative contracts
executed with the same counterparty that meet the criteria for a valid right of setoff contained
in ASC Subtopic 210-20, Balance Sheet – Offsetting (formerly FASB Interpretation No. 39,
“Offsetting of Amounts Related to Certain Contracts”) (e.g., those contracts subject to a
qualifying master netting arrangement) may be reported on a net basis using this item and
item 14 below, as appropriate. (For further information, see the Glossary entry for
"offsetting.")

12

Total trading assets. Report the sum of items 1 through 11. On the FFIEC 041, this item
must equal Schedule RC, item 5, "Trading assets." On the FFIEC 031, the amount in
column A for this item must equal Schedule RC, item 5, "Trading assets."

LIABILITIES
13.a

Liability for short positions. Report the total fair value of the reporting bank's liabilities
resulting from sales of assets that the reporting bank does not own (see the Glossary entry
for "short position").

13.b

Other trading liabilities. Report the total fair value of all trading liabilities other than the
reporting bank's liability for short positions. Exclude revaluation losses on interest rate,
foreign exchange rate, commodity, equity, and credit derivative contracts (report in item 14
below).

14

Derivatives with a negative fair value. Report the amount of revaluation losses
(i.e., liabilities) from the "marking to market" of interest rate, foreign exchange rate,
commodity, equity, and credit derivative contracts held for trading purposes. Revaluation
gains and losses (i.e., assets and liabilities) from the "marking to market" of the reporting
bank's interest rate, foreign exchange rate, commodity, equity, and credit derivative contracts
executed with the same counterparty that meet the criteria for a valid right of setoff contained
in ASC Subtopic 210-20, Balance Sheet – Offsetting (formerly FASB Interpretation No. 39,
“Offsetting of Amounts Related to Certain Contracts”) (e.g., those contracts subject to a
qualifying master netting arrangement) may be reported on a net basis using this item and
item 11 above, as appropriate. (For further information, see the Glossary entry for
"offsetting.")

15

Total trading liabilities. Report the sum of items 13.a, 13.b, and 14. On the FFIEC 041,
this item must equal Schedule RC, item 15, "Trading liabilities." On the FFIEC 031, the
amount in column A for this item must equal Schedule RC, item 15, "Trading liabilities."

FFIEC 031 and 041

RC-D-5
(3-13)

RC-D – TRADING

FFIEC 031 and 041

RC-D – TRADING

Memoranda
Item No.

Caption and Instructions

1

Unpaid principal balance of loans measured at fair value. Report in the appropriate
subitem the total unpaid principal balance outstanding for all loans held for trading reported in
Schedule RC-D, item 6.

1.a

Loans secured by real estate. On the FFIEC 041, report in the appropriate subitem the
total unpaid principal balance outstanding for all loans secured by real estate held for trading
reported in Schedule RC-D, item 6. On the FFIEC 031, report the total unpaid principal
balance outstanding for all loans secured by real estate held for trading reported in
Schedule RC-D, item 6.a, for the fully consolidated bank in column A, but with a breakdown
of these loans into seven categories for domestic offices in column B.

1.a.(1)

Construction, land development, and other land loans. Report the total unpaid principal
balance outstanding for all construction, land development, and other land loans held for
trading reported in Schedule RC-D, item 6.a.(1).

1.a.(2)

Secured by farmland. Report the total unpaid principal balance outstanding for all loans
secured by farmland held for trading reported in Schedule RC-D, item 6.a.(2).

1.a.(3)

Secured by 1-4 family residential properties. Report in the appropriate subitem the total
unpaid principal balance outstanding for all loans secured by 1-4 family residential properties
held for trading reported in Schedule RC-D, item 6.a.(3).

1.a.(3)(a)

Revolving, open-end loans secured by 1-4 family residential properties and extended
under lines of credit. Report the total unpaid principal balance outstanding for all revolving,
open-end loans secured by 1-4 family residential properties and extended under lines of
credit held for trading reported in Schedule RC-D, item 6.a.(3)(a).

1.a.(3)(b)

Closed-end loans secured by 1-4 family residential properties. Report in the appropriate
subitem the total unpaid principal balance outstanding for all closed-end loans secured by
1-4 family residential properties held for trading reported in Schedule RC-D, item 6.a.(3)(b).

1.a.(3)(b)(1)Secured by first liens. Report the total unpaid principal balance outstanding for all closedend loans secured by first liens on 1-4 family residential properties held for trading reported in
Schedule RC-D, item 6.a.(3)(b)(1).
1.a.(3)(b)(2)Secured by junior liens. Report the total unpaid principal balance outstanding for all
closed-end loans secured by junior liens on 1-4 family residential properties held for trading
reported in Schedule RC-D, item 6.a.(3)(b)(2).
1.a.(4)

Secured by multifamily (5 or more) residential properties. Report the total unpaid
principal balance outstanding for all loans secured by multifamily (5 or more) residential
properties held for trading reported in Schedule RC-D, item 6.a.(4).

1.a.(5)

Secured by nonfarm nonresidential properties. Report the total unpaid principal balance
outstanding for all loans secured by nonfarm nonresidential properties held for trading
reported in Schedule RC-D, item 6.a.(5).

1.b

Commercial and industrial loans. Report the total unpaid principal balance outstanding for
all commercial and industrial loans held for trading reported in Schedule RC-D, item 6.b.

FFIEC 031 and 041

RC-D-6
(3-13)

RC-D – TRADING

FFIEC 031 and 041

RC-D – TRADING

Memoranda
Item No.

Caption and Instructions

1.c

Loans to individuals for household, family, and other personal expenditures. Report in
the appropriate subitem the total unpaid principal balance outstanding for all loans to
individuals for household, family, and other personal expenditures held for trading reported in
Schedule RC-D, item 6.c.

1.c.(1)

Credit cards. Report the total unpaid principal balance outstanding for all extensions of
credit to individuals for household, family, and other personal expenditures arising from credit
cards held for trading reported in Schedule RC-D, item 6.c.(1).

1.c.(2)

Other revolving credit plans. Report the total unpaid principal balance outstanding for all
extensions of credit to individuals for household, family, and other personal expenditures
arising from prearranged overdraft plans and other revolving credit plans not accessed by
credit cards held for trading reported in Schedule RC-D, item 6.c.(2).

1.c.(3)

Automobile loans. Report the total unpaid principal balance outstanding for all loans arising
from retail sales of passenger cars and other vehicles such as minivans, vans, sport-utility
vehicles, pickup trucks, and similar light trucks for personal use held for trading reported in
Schedule RC-D, item 6.c.(3).

1.c.(4)

Other consumer loans. Report the total unpaid principal balance outstanding for all other
loans to individuals for household, family, and other personal expenditures held for trading
reported in Schedule RC-D, item 6.c.(4).

1.d

Other loans. Report the total unpaid principal balance outstanding for all loans held for
trading reported in Schedule RC-D, item 6.d. Such loans include “Loans to depository
institutions and acceptances of other banks,” “Loans to finance agricultural production and
other loans to farmers,” “Loans to foreign governments and official institutions,”
“Obligations (other than securities and leases) of states and political subdivisions in the U.S.,”
and “Other loans” (as defined for Schedule RC-C, part I, items 2, 3, 7, 8, and 9).

2

Loans measured at fair value that are past due 90 days or more. Report in the
appropriate subitem the total fair value and unpaid principal balance of all loans held for
trading included in Schedule RC-D, items 6.a through 6.d, that are past due 90 days or more
as of the report date.

2.a

Fair value. Report the total fair value of all loans held for trading included in Schedule RC-D,
items 6.a through 6.d, that are past due 90 days or more as of the report date.

2.b

Unpaid principal balance. Report in the appropriate column the total unpaid principal
balance of all loans held for trading included in Schedule RC-D, items 6.a through 6.d, that
are past due 90 days or more as of the report date.

3

Structured financial products by underlying collateral or reference assets. Report in
the appropriate subitem the total fair value of all structured financial products held for trading
by the predominant type of collateral or reference assets supporting the product. The sum of
Memorandum items 3.a through 3.g must equal the sum of Schedule RC-D, items 5.a.(1)
through 5.a.(3).

3.a

Trust preferred securities issued by financial institutions. Report the total fair value of
structured financial products held for trading that are supported predominantly by trust
preferred securities issued by financial institutions.

FFIEC 031 and 041

RC-D-7
(9-11)

RC-D – TRADING

FFIEC 031 and 041

RC-D – TRADING

Memoranda
Item No.

Caption and Instructions

3.b

Trust preferred securities issued by real estate investment trusts. Report the total fair
value of structured financial products held for trading that are supported predominantly by
trust preferred securities issued by real estate investment trusts.

3.c

Corporate and similar loans. Report the total fair value of structured financial products held
for trading that are supported predominantly by corporate and similar loans.
Exclude securities backed by loans that are commonly regarded as asset-backed securities
rather than collateralized loan obligations in the marketplace (report in Schedule RC-D,
item 5.b).

3.d

1-4 family residential MBS issued or guaranteed by U.S. government-sponsored
enterprises (GSEs). Report the total fair value of structured financial products held for
trading that are supported predominantly by 1-4 family residential mortgage-backed securities
issued or guaranteed by U.S. government-sponsored enterprises.

3.e

1-4 family residential MBS not issued or guaranteed by GSEs. Report the total fair value
of structured financial products held for trading that are supported predominantly by
1-4 family residential mortgage-backed securities not issued or guaranteed by U.S.
government-sponsored enterprises.

3.f

Diversified (mixed) pools of structured financial products. Report the total fair value of
structured financial products held for trading that are supported predominantly by diversified
(mixed) pools of structured financial products. Include such products as CDOs squared and
cubed (also known as “pools of pools”).

3.g

Other collateral or reference assets. Report the total fair value of structured financial
products held for trading that are supported predominantly by other types of collateral or
reference assets not identified above.

4

Pledged trading assets:

4.a

Pledged securities. Report the total fair value of all securities held for trading included in
Schedule RC-D above that are pledged to secure deposits, repurchase transactions, or other
borrowings (regardless of the balance of the deposits or other liabilities against which the
securities are pledged); as performance bonds under futures or forward contracts; or for any
other purpose. Include as pledged securities:
(1) Securities held for trading that have been “loaned” in securities borrowing/lending
transactions that do not qualify as sales under ASC Topic 860, Transfers and Servicing
(formerly FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities,” as amended).
(2) Securities held for trading by consolidated variable interest entities (VIEs) that can be
used only to settle obligations of the same consolidated VIEs (the amount of which is also
reported in Schedule RC-V, item 1.h).
(3) Securities held for trading owned by consolidated insurance subsidiaries and held in
custodial trusts that are pledged to insurance companies external to the consolidated bank.

FFIEC 031 and 041

RC-D-8
(9-11)

RC-D – TRADING

FFIEC 031 and 041

RC-D – TRADING

Memoranda
Item No.
4.b

Caption and Instructions
Pledged loans. Report the total fair value of all loans held for trading included in
Schedule RC-D above that are pledged to secure deposits, repurchase transactions, or other
borrowings (regardless of the balance of the deposits or other liabilities against which the
loans are pledged) or for any other purpose. Include loans held for trading that have been
transferred in transactions that are accounted for as secured borrowings with a pledge of
collateral because they do not qualify as sales under ASC Topic 860, Transfers and Servicing
(formerly FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities,” as amended). Also include loans held for trading
by consolidated variable interest entities (VIEs) that can be used only to settle obligations of
the same consolidated VIEs (the amount of which is also reported in Schedule RC-V,
item 1.h). In general, the pledging of loans is the act of setting aside certain loans to secure
or collateralize bank transactions with the bank continuing to own the loans unless the bank
defaults on the transaction.

NOTE: Memorandum items 5 through 10 are applicable only to banks that reported a quarterly average
for trading assets of $1 billion or more in Schedule RC-K, item 7, for any of the four preceding quarterly
reports.
5

Asset-backed securities. Report in the appropriate subitem the total fair value of all assetbacked securities (other than mortgage-backed securities), including asset-backed
commercial paper, held for trading that are included in Schedule RC-D, item 5.b, above.

5.a

Credit card receivables. Report the total fair value of all asset-backed securities
collateralized by credit card receivables, i.e., extensions of credit to individuals for household,
family, and other personal expenditures arising from credit cards as defined for
Schedule RC-C, part I, item 6.a.

5.b

Home equity lines. Report the total fair value of all asset-backed securities collateralized by
home equity lines of credit, i.e., revolving, open-end lines of credit secured by 1-to-4 family
residential properties as defined for Schedule RC-C, part I, item 1.c.(1).

5.c

Automobile loans. Report the total fair value of all asset-backed securities collateralized by
automobile loans, i.e., loans to individuals for the purpose of purchasing private passenger
vehicles, including minivans, vans, sport-utility vehicles, pickup trucks, and similar light trucks
for personal use as defined for Schedule RC-C, part I, item 6.c.

5.d

Other consumer loans. Report the total fair value of all asset-backed securities
collateralized by other consumer loans, i.e., loans to individuals for household, family, and
other personal expenditures as defined for Schedule RC-C, part I, items 6.b and 6.d.

5.e

Commercial and industrial loans. Report the total fair value of all asset-backed securities
collateralized by commercial and industrial loans, i.e., loans for commercial and industrial
purposes to sole proprietorships, partnerships, corporations, and other business enterprises,
whether secured (other than by real estate) or unsecured, single-payment or installment, as
defined for Schedule RC-C, part I, item 4.

5.f

Other. Report the total fair value of all asset-backed securities collateralized by loans other
than those included in Schedule RC-D, Memorandum items 4.a through 4.g, above, i.e.,
loans as defined for Schedule RC-C, part I, items 2, 3, and 7 through 9 and lease financing
receivables as defined for Schedule RC-C, part I, item 10.

FFIEC 031 and 041

RC-D-9
(9-11)

RC-D – TRADING

FFIEC 031 and 041

RC-D – TRADING

Memoranda
Item No.

Caption and Instructions

6

Retained beneficial interests in securitizations (first-loss or equity tranches). Report
the total fair value of assets held for trading that represent interests that continue to be held
by the bank following a securitization (as defined by ASC Topic 860, Transfers and Servicing
(formerly FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities,” as amended)) to the extent that such interests will
absorb losses resulting from the underlying assets before those losses affect outside
investors. Examples of such items include credit-enhancing interest-only strips (as defined in
the instructions for Schedule RC-R, item 10) and residual interests in securitization trusts (as
defined in the instructions for Schedule RC-R, item 50).

7

Equity securities. Report in the appropriate subitem the total fair value of all equity
securities held for trading that are included in Schedule RC-D, item 9, above. Include
equity securities classified as trading with readily determinable fair values as defined by
ASC Topic 320, Investments-Debt and Equity Securities (formerly FASB Statement No. 115,
“Accounting for Certain Investments in Debt and Equity Securities”), and those equity
securities that are outside the scope of ASC Topic 320.

7.a

Readily determinable fair values. Report the total fair value of all equity securities held for
trading that are within the scope of ASC Topic 320, Investments-Debt and Equity Securities
(formerly FASB Statement No. 115, “Accounting for Certain Investments in Debt and Equity
Securities”).

7.b

Other. Report the total fair value of all equity securities held for trading other than those
included in Schedule RC-D, Memorandum item 7.a, above.

8

Loans pending securitization. Report the total fair value of all loans included in
Schedule RC-D, items 6.a through 6.d, that are held for securitization purposes. Report such
loans in this item only if the bank expects the securitization transaction to be accounted for as
a sale under ASC Topic 860, Transfers and Servicing (formerly FASB Statement No. 140,
“Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities,” as amended).

9

Other trading assets. Disclose in Memorandum items 9.a through 9.c each component of
Schedule RC-D, item 9, “Other trading assets,” and the fair value of such component, that is
greater than $25,000 and exceeds 25 percent of the amount reported for this item. Exclude
equity securities reported in Schedule RC-D, Memorandum items 7.a and 7.b. For each
component of other trading assets that exceeds the disclosure threshold for this
Memorandum item, describe the component with a clear but concise caption in
Memorandum items 9.a through 9.c. These descriptions should not exceed 50 characters
in length (including spacing between words).

10

Other trading liabilities. Disclose in Memorandum items 10.a through 10.c each
component of Schedule RC-D, item 13.b, “Other trading liabilities,” and the fair value of
such component, that is greater than $25,000 and exceeds 25 percent of the amount
reported for this item. For each component of other trading liabilities that exceeds this
disclosure threshold, describe the component with a clear but concise caption in
Memorandum items 10.a through 10.c. These descriptions should not exceed 50 characters
in length (including spacing between words).

FFIEC 031 and 041

RC-D-10
(9-11)

RC-D – TRADING

FFIEC 031 and 041

RC-E - DEPOSITS

SCHEDULE RC-E – DEPOSIT LIABILITIES
General Instructions
A complete discussion of deposits is included in the Glossary entry entitled "deposits." That discussion
addresses the following topics and types of deposits in detail:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)

Federal Deposit Insurance Act definition of deposits;
transaction accounts;
demand deposits;
NOW accounts;
ATS accounts;
telephone or preauthorized transfer accounts;
nontransaction accounts;
savings deposits;
money market deposit accounts;
other savings deposits;
time deposits;
time certificates of deposit;
time deposits, open account;
interest-bearing deposit accounts; and
noninterest-bearing deposit accounts.

Additional discussions pertaining to deposits will also be found under separate Glossary entries for:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)

borrowings and deposits in foreign offices;
brokered deposits;
cash management arrangements;
dealer reserve accounts;
hypothecated deposits;
letter of credit (for letters of credit sold for cash and travelers letters of credit);
overdraft;
pass-through reserve balances;
placements and takings; and
reciprocal balances.

On the FFIEC 031 only, Schedule RC-E consists of two parts. Part I covers the deposit liabilities of the
domestic offices of the consolidated bank. Part II covers the deposit liabilities of the foreign offices
(including Edge and Agreement subsidiaries and IBFs) of the consolidated bank. (See the Glossary
entries for "domestic office" and "foreign office" for the definitions of these terms.)
NOTE: For information about the reporting of deposits for deposit insurance and FICO assessment
purposes, refer to Schedule RC-O.
NOTE: For the appropriate treatment of deposits of depository institutions for which the reporting bank is
serving as a pass-through agent for balances maintained to satisfy reserve balance requirements,
see the Glossary entry for "pass-through reserve balances."
NOTE: For banks that elect to report deposits at fair value under a fair value option, report the fair value
of those deposits in the same items and columns as similar deposits to which a fair value option
has not been applied. Currently, deposits that include a demand feature (e.g., demand and
savings deposits in domestic offices) are not eligible to be reported under a fair value election.

FFIEC 031 and 041

RC-E-1
(9-12)

RC-E - DEPOSITS

FFIEC 031 and 041

RC-E - DEPOSITS

(Part I. Deposits in Domestic Offices)
Definitions
The term "deposits" is defined in the Glossary and generally follows the definitions of deposits used in the
Federal Deposit Insurance Act and in Federal Reserve Regulation D.
Reciprocal balances between the reporting bank and other depository institutions may be reported on a
net basis when a right of setoff exists. See the Glossary entry for "offsetting" for the conditions that must
be met for a right of setoff to exist.
The following are not reported as deposits in Schedule RC-E:
(1) Deposits received in one office of the bank for deposit in another office of the bank.
(2) Outstanding drafts (including advices or authorizations to charge the bank's balance in another
depository institution) drawn in the regular course of business by the reporting bank on other
depository institutions.
(3) Trust funds held in the bank's own trust department that the bank keeps segregated and apart from its
general assets and does not use in the conduct of its business. NOTE: Such uninvested trust funds
must be reported as deposit liabilities in Schedule RC-O, item 1.
(4) Deposits accumulated for the payment of personal loans (i.e., hypothecated deposits), which should
be netted against loans in Schedule RC-C, Loans and Lease Financing Receivables.
(5) All obligations arising from assets sold under agreements to repurchase.
(6) Overdrafts in deposit accounts. Overdrafts are to be reported as loans in Schedule RC-C and not as
negative deposits. Overdrafts in one or more transaction accounts within a group of related
transaction accounts of a single type (i.e., demand deposit accounts or NOW accounts, but not a
combination thereof) maintained in the same right and capacity by a customer (a single legal entity)
that are established under a bona fide cash management arrangement by this customer are not to be
classified as loans unless there is a net overdraft position in the group of related transaction accounts
taken as a whole. For reporting and deposit insurance assessment purposes, such accounts function
as, and are regarded as, one account rather than multiple separate accounts. (NOTE: Affiliates and
subsidiaries are considered separate legal entities.) See the Glossary entry for "cash management
arrangements" for information on bona fide cash management arrangements.
(7) Time deposits sold (issued) by the reporting bank that it has subsequently purchased in the secondary
market (typically as a result of the bank's trading activities) and has not resold as of the report date.
For purposes of these reports, a bank that purchases a time deposit it has issued is regarded as
having paid the time deposit prior to maturity. The effect of the transaction is that the bank has
cancelled a liability as opposed to having acquired an asset for its portfolio.
The following are reported as deposits:
(1) Deposits of trust funds standing to the credit of other banks and all trust funds held or deposited in any
department of the reporting bank other than the trust department.
(2) Credit items that could not be posted to the individual deposit accounts but that have been credited to
the control accounts of the various deposit categories on the general ledger.

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FFIEC 031 and 041

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Definitions (cont.)
(3)

Credit items not yet posted to deposit accounts that are carried in suspense or similar nondeposit
accounts and are material in amount. As described in the Glossary entry for "suspense accounts,"
the items included in such accounts should be reviewed and material amounts reported in the
appropriate balance sheet accounts. NOTE: Regardless of whether deposits carried in suspense
accounts have been reclassified as deposits and reported in Schedule RC-E, they must be reported
as deposit liabilities in Schedule RC-O, items 1 and 4.

(4)

Escrow funds.

(5)

Payments collected by the bank on loans secured by real estate and other loans serviced for others
that have not yet been remitted to the owners of the loans.

(6)

Credit balances resulting from customers' overpayments of account balances on credit cards and
other revolving credit plans.

(7)

Funds received or held in connection with checks or drafts drawn by the reporting bank and drawn
on, or payable at or through, another depository institution either on a zero-balance account or on an
account that is not routinely maintained with sufficient balances to cover checks drawn in the normal
course of business (including accounts where funds are remitted by the reporting bank only when it
has been advised that the checks or drafts have been presented).

(8)

Funds received or held in connection with traveler's checks and money orders sold (but not drawn)
by the reporting bank, until the proceeds of the sale are remitted to another party, and funds received
or held in connection with other such checks used (but not drawn) by the reporting bank, until the
amount of the checks is remitted to another party.

(9)

Checks drawn by the reporting bank on, or payable at or through, a Federal Reserve Bank or a
Federal Home Loan Bank.

(10) Refundable loan commitment fees received or held by the reporting bank prior to loan closing.
(11) Refundable stock subscription payments received or held by the reporting bank prior to the issuance
of the stock. (Report nonrefundable stock subscription payments in Schedule RC-G, item 4, "All
other liabilities.”)
(12) Improperly executed repurchase agreement sweep accounts (repo sweeps). According to
Section 360.8 of the FDIC’s regulations, an “internal sweep account” is “an account held pursuant
to a contract between an insured depository institution and its customer involving the pre-arranged,
automated transfer of funds from a deposit account to . . . another account or investment vehicle
located within the depository institution.” When a repo sweep from a deposit account is improperly
executed by an institution, the customer obtains neither an ownership interest in identified assets
subject to a repurchase agreement nor a perfected security interest in the applicable assets. In this
situation, the institution should report the swept funds as deposit liabilities, not as repurchase
agreements, in the Reports of Condition and Income beginning July 1, 2009.
(13) The unpaid balance of money received or held by the reporting institution that the reporting institution
promises to pay pursuant to an instruction received through the use of a card, or other payment code
or access device, issued on a prepaid or prefunded basis.
In addition, the gross amount of debit items ("throw-outs," "bookkeepers' cutbacks," or "rejects") that
cannot be posted to the individual deposit accounts without creating overdrafts or for some other reason
(e.g., stop payment, missing endorsement, post or stale date, or account closed), but which have been
FFIEC 031 and 041

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(3-13)

RC-E - DEPOSITS

FFIEC 031 and 041

RC-E - DEPOSITS

Definitions (cont.)
charged to the control accounts of the various deposit categories on the general ledger, should be
credited to (added back to) the appropriate deposit control totals and reported in Schedule RC-F, item 6,
"All other assets.”
The Monetary Control Act of 1980 and the resulting revision to Federal Reserve Regulation D, "Reserve
Requirements of Depository Institutions," established, for purposes of federal reserve requirements on
deposit liabilities, a category of deposits designated as "transaction accounts." The distinction between
transaction and nontransaction accounts is discussed in detail in the Glossary entry for "deposits.” NOTE:
Money market deposit accounts (MMDAs) are regarded as savings deposits and are specifically excluded
from the "transaction account" classification.

Summary of Transaction Account Classifications (See the Glossary entry for "deposits" for detailed
definitions and further information.)
A. Always regarded as transaction accounts:
1. Demand deposits.
2. NOW accounts.
3. ATS accounts.
4. Accounts (other than savings deposits) from which payments may be made to third parties by
means of an automated teller machine (ATM), a remote service unit (RSU), or another electronic
device, including by debit card.
5. Accounts (other than savings deposits) that permit third party payments through use of checks,
drafts, negotiable instruments, or other similar instruments.
B. Deposits or accounts that are regarded as transaction accounts if the following specified conditions
exist:
1. Accounts that otherwise meet the definition of savings deposits but that authorize or permit the
depositor to exceed the transfer and withdrawal rules for a savings deposit.
2. Any deposit or account that otherwise meets the definition of a time deposit but that allows
withdrawals within the first six days after the date of deposit and that does not require an early
withdrawal penalty of at least seven days' simple interest on amounts withdrawn within those first
six days, unless the deposit or account meets the definition of a savings deposit. Any such
deposit or account that meets the definition of a savings deposit shall be reported as a savings
deposit, otherwise it shall be reported as a demand deposit, which is a transaction account.
3. The remaining balance of a time deposit from which a partial early withdrawal is made, unless the
remaining balance either (a) is subject to additional early withdrawal penalties of at least seven
days' simple interest on amounts withdrawn within six days after each partial withdrawal (in which
case the deposit or account continues to be reported as a time deposit) or (b) is placed in an
account that meets the definition of a savings deposit (in which case the deposit or account shall
be reported as a savings deposit). Otherwise, the deposit or account shall be reported as a
demand deposit, which is a transaction account.

FFIEC 031 and 041

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(3-13)

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Summary of Transaction Account Classifications (cont.)
C. Not regarded as transaction accounts (unless specified above):
1. Savings deposits (including accounts commonly known as money market deposit accounts
(MMDAs)).
2. Accounts that permit telephone or preauthorized transfers or transfers by ATMs or RSUs to repay
loans made or serviced by the same depository institution.
3. Accounts that permit telephone or preauthorized withdrawals where the proceeds are to be mailed
to or picked up by the depositor.
4. Accounts that permit transfers to other accounts of the depositor at the same institution through
ATMs or RSUs.

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Column Instructions
Deposits as summarized above are divided into two general categories, "Transaction Accounts"
(columns A and B) and "Nontransaction Accounts (including MMDAs)" (column C).
Column A - Total transaction accounts. Report in column A the total of all transaction accounts as
summarized above and fully defined in the Glossary entry for "deposits." With the exceptions noted in the
item instructions and the Glossary entry, the term "transaction account" is defined as a deposit or account
from which the depositor or account holder is permitted to make transfers or withdrawals by negotiable or
transferable instruments, payment orders of withdrawal, telephone transfers, or other similar devices for
the purpose of making third party payments or transfers to third persons or others, or from which the
depositor may make third party payments at an automated teller machine (ATM), a remote service unit
(RSU), or another electronic device, including by debit card.
Column B - Memo: Total demand deposits. Report in item 7, column B, the total of all demand deposits,
both interest-bearing and noninterest-bearing. Also include any matured time or savings deposits without
automatic renewal provisions, unless the deposit agreement specifically provides for the funds to be
transferred at maturity to another type of account (i.e., other than a demand deposit). (See the Glossary
entry for "deposits.")
NOTE: Demand deposits are, of course, one type of transaction account. Therefore, the amount
reported in item 7, column B, should be included by category of depositor in the breakdown of transaction
accounts by category of depositor that is reported in column A.
Column C - Total nontransaction accounts (including MMDAs). Report in column C all deposits other than
transaction accounts as summarized above and defined in the Glossary entry for "deposits." Include in
column C all interest-bearing and noninterest-bearing savings deposits and time deposits together with all
interest paid by crediting savings and time deposit accounts.

Item Instructions
In items 1 through 6 of Schedule RC-E, banks report separate breakdowns of their transaction and
nontransaction accounts by category of depositor. When reporting brokered deposits in these items, the
funds should be categorized as deposits of “Individuals, partnerships, and corporations,” “States and political
subdivisions in the U.S.,” or “Commercial banks and other depository institutions in the U.S.” based on the
beneficial owners of the funds that the broker has placed in the bank. However, if this information is not
readily available to the issuing bank for certain brokered deposits because current deposit insurance rules
do not require the deposit broker to provide information routinely on the beneficial owners of the deposits
and their account ownership capacity to the bank issuing the deposits, these brokered deposits may be
rebuttably presumed to be deposits of “Individuals, partnerships, and corporations” and reported in
Schedule RC-E, item 1, below. For further information, see the Glossary entry for "brokered deposits."

Item No.
1

Caption and Instructions
Deposits of individuals, partnerships, and corporations (include all certified and official
checks). Report in the appropriate column all deposits of individuals, partnerships, and
corporations, wherever located, and all certified and official checks.

FFIEC 031 and 041

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Item No.

Caption and Instructions

1
(cont.)

Include in this item:
(1) Deposits related to the personal, household, or family activities of both farm and nonfarm
individuals and to the business activities of sole proprietorships.
(2) Deposits of corporations and organizations (other than depository institutions), regardless
of whether they are operated for profit, including but not limited to:
(a) mutual funds and other nondepository financial institutions;
(b) foreign government-owned nonbank commercial and industrial enterprises; and
(c) quasi-governmental organizations such as post exchanges on military posts and
deposits of a company, battery, or similar organization (unless the reporting bank has
been designated by the U.S. Treasury as a depository for such funds and appropriate
security for the deposits has been pledged, in which case, report in Schedule RC-E,
item 2).
(3) Dealer reserve accounts (see the Glossary entry for "dealer reserve accounts" for the
definition of this term).
(4) Deposits of U.S. Government agencies and instrumentalities such as the:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)

Banks for Cooperatives,
Export-Import Bank of the U.S.,
Federal Deposit Insurance Corporation,
Federal Financing Bank,
Federal Home Loan Banks,
Federal Home Loan Mortgage Corporation,
Federal Intermediate Credit Banks,
Federal Land Banks,
Federal National Mortgage Association,
National Credit Union Administration Central Liquidity Facility, and
National Credit Union Share Insurance Fund.

(5) Deposits of trust funds standing to the credit of other banks and all trust funds held or
deposited in any department (except the trust department) of the reporting bank if the
beneficiary is an individual, partnership, or corporation.
(6) Credit balances on credit cards and other revolving credit plans as a result of customer
overpayments.
(7) Deposits of a federal or state court held for the benefit of individuals, partnerships, or
corporations, such as bankruptcy funds and escrow funds.

FFIEC 031 and 041

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(9-11)

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FFIEC 031 and 041

RC-E - DEPOSITS

Item No.

Caption and Instructions

1
(cont.)

(8) Certified and official checks, which include the following:
(a) Unpaid depositors' checks that have been certified.
(b) Cashiers' checks, money orders, and other officers' checks issued for any purpose
including those issued in payment for services, dividends, or purchases that are
drawn on the reporting bank by any of its duly authorized officers and that are
outstanding on the report date.
(c) Funds received or held in connection with checks or drafts drawn by the reporting bank
and drawn on, or payable at or through, another depository institution either on a
zero-balance account or on an account that is not routinely maintained with sufficient
balances to cover checks drawn in the normal course of business (including accounts
where funds are remitted by the reporting bank only when it has been advised that
the checks or drafts have been presented).
(d) Funds received or held in connection with traveler's checks and money orders sold
(but not drawn) by the reporting bank, until the proceeds of the sale are remitted to
another party, and funds received or held in connection with other such checks used
(but not drawn) by the reporting bank, until the amount of the checks is remitted to
another party.
(e) Checks drawn by the reporting bank on, or payable at or through, a Federal Reserve
Bank or a Federal Home Loan Bank.

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Item No.

RC-E - DEPOSITS

Caption and Instructions

1
(cont.)

(f) Outstanding travelers' checks, travelers' letters of credit and other letters of credit
(less any outstanding drafts accepted thereunder) sold for cash or its equivalent by
the reporting bank or its agents.
(g) Outstanding drafts and bills of exchange accepted by the reporting bank or its agents
for money or its equivalent, including drafts accepted against a letter of credit issued
for money or its equivalent.
(h) On the FFIEC 031, checks or drafts drawn by, or on behalf of, a non-U.S. office of the
reporting bank on an account maintained at a U.S. office of the reporting bank. Such
drafts are, for Report of Condition and federal deposit insurance assessment
purposes, the same as officers' checks. This would include "London checks,"
"Eurodollar bills payable checks," and any other credit items that the domestic bank
issues in connection with such transactions.
Exclude from this item deposits of:
(1) The U.S. Government (report in Schedule RC-E, item 2).
(2) States and political subdivisions in the U.S. (report in Schedule RC-E, item 3).
(3) Commercial banks in the U.S. (report in Schedule RC-E, item 4).
(4) Other depository institutions in the U.S. (report in Schedule RC-E, item 4).
(5) Banks in foreign countries (report in Schedule RC-E, item 5).

2

Deposits of U.S. Government. Report in the appropriate column all deposits of federal
public funds made by or for the account of the United States or some department, bureau, or
official thereof.
Include in this item:
(1) U.S. Treasury Tax and Loan Accounts, including deposits of federal income tax withheld
from employee salaries, from interest and dividend payments, and from distributions or
payments from pensions, annuities, and other deferred income including IRAs; social
security tax deposits and other federal tax payments; and the proceeds from sales of U.S.
Savings Bonds.
NOTE: Only deposits credited to the U.S. Treasury Tax and Loan demand deposit
accounts that represent funds received as of the close of business of the "current" day
should be reported as Treasury Tax and Loan Demand Deposits. (The "current" day's
deposits should reflect those deposits on the bank's books standing to the credit of the
U.S. Treasury's Tax and Loan Account as of the report date.) Funds credited to Tax and
Loan Demand Deposit Accounts as of the close of business on previous days should
already have been remitted to the Federal Reserve Bank (and thus excluded from this
report) or automatically converted into open-ended interest-bearing notes (to be reported
as “Other borrowings” in Schedule RC-M, item 5.b), depending on the option selected by
the reporting institution.

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Item No.

Caption and Instructions

2
(cont.)

(2) Deposits standing to the credit of certain quasi-governmental institutions when the
reporting bank has been designated by the U.S. Treasury as a depository for such funds.
(3) Deposits of the U.S. Postal Service and local post offices.
Exclude from this item deposits of U.S. Government agencies and instrumentalities. (Such
deposits are to be reported in Schedule RC-E, item 1, above.)

3

Deposits of states and political subdivisions in the U.S. Report in the appropriate column
all deposits standing to the credit of states, counties, municipalities, and local housing
authorities; school, irrigation, drainage, and reclamation districts; other instrumentalities of
one or more states of the United States, the District of Columbia, Puerto Rico, and U.S.
territories and possessions; and Indian tribes in the U.S.
Also include deposits of funds advanced to states and political subdivisions by U.S.
Government agencies and corporations and deposits of withheld income taxes of states and
political subdivisions.

4

Deposits of commercial banks and other depository institutions in the U.S. Report in
the appropriate column all deposits of commercial banks and other depository institutions
located in the U.S.
Commercial banks in the U.S. cover:
(1) U.S. branches and agencies of foreign banks; and
(2) all other commercial banks in the U.S., i.e., U.S. branches of U.S. banks.
Other depository institutions in the U.S. cover:
(1) Building or savings and loan associations, homestead associations, and cooperative
banks;
(2) credit unions; and
(3) mutual and stock savings banks.
For purposes of these reports, U.S. branches and agencies of foreign banks include U.S.
branches and agencies of foreign official banking institutions and investment companies that
are chartered under Article XII of the New York State banking law and that are majority-owned
by one or more foreign banks.
For the appropriate treatment of deposits of depository institutions for which the reporting
bank is serving as a pass-through correspondent for balances maintained to satisfy reserve
balance requirements, see the Glossary entry for "pass-through reserve balances." For the
appropriate treatment of deposits of depository institutions for which the reporting bank is
acting as an agent for an excess balance account at a Federal Reserve Bank, see the
Glossary entry for “excess balance account.”
Refer to the Glossary entries for "banks, U.S. and foreign" and "depository institutions in the
U.S." for further discussion of these terms.

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Item No.

Caption and Instructions

4
(cont.)

Exclude from this item deposits of the following depository institutions:
(1) Banks in foreign countries (report in Schedule RC-E, item 5, below). (See the Glossary
entry for "banks, U.S. and foreign" for the definition of this term.)
(2) On the FFIEC 031, IBFs (report in part II of Schedule RC-E).

5

Deposits of banks in foreign countries. Report in the appropriate column all deposits of
banks located in foreign countries.
Banks in foreign countries cover:
(1) foreign-domiciled branches of other U.S. banks; and
(2) foreign-domiciled branches of foreign banks.
See the Glossary entry for "banks, U.S. and foreign" for further discussion of these terms.
Exclude from this item deposits of foreign official institutions and foreign central banks (to be
reported in Schedule RC-E, item 6 below) and deposits of U.S. branches and agencies of
foreign banks and New York State investment companies (to be reported in Schedule RC-E,
item 4 above).
For the appropriate treatment of deposits of depository institutions for which the reporting
bank is serving as a pass-through agent for balances maintained to satisfy reserve balance
requirements, see the Glossary entry for "pass-through reserve balances."

6

Deposits of foreign governments and official institutions. Report in the appropriate
column all deposits of foreign governments and official institutions. (See the Glossary entry
for "foreign governments and official institutions" for the definition of this term.)
Exclude from this item deposits of:
(1) U.S. branches and agencies of foreign official banking institutions (report in
Schedule RC-E, item 4, above).
(2) Nationalized banks and other banking institutions that are owned by foreign governments
and that do not function as central banks, banks of issue, or development banks (report in
Schedule RC-E, item 5, above).
(3) Foreign government-owned nonbank commercial and industrial enterprises (report in
Schedule RC-E, item 1, above).

7

Total. Report in column B the total of all demand deposits. Report in columns A and C the
sum of items 1 through 6. The sum of columns A and C of this item must equal
Schedule RC, item 13.a, "Deposits in domestic offices."

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Memoranda
Item No.

Caption and Instructions

1

Selected components of total deposits. The amounts to be reported in Memorandum
items 1.a through 1.f below are included as components of total deposits (in domestic offices)
(Schedule RC-E, sum of item 7, columns A and C).

1.a

Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts. Report in this
Memorandum item the total of all IRA and Keogh Plan deposits included in total deposits
(in domestic offices) (Schedule RC-E, sum of item 7, columns A and C). IRAs include
traditional IRAs, Roth IRAs, Simplified Employee Pension (SEP) IRAs, and SIMPLE IRAs.
Exclude deposits in "Section 457" deferred compensation plans and self-directed defined
contribution plans, which are primarily 401(k) plan accounts. Also exclude deposits in Health
Savings Accounts, Medical Savings Accounts, and Coverdell Education Savings Accounts
(formerly known as Education IRAs).

1.b

Total brokered deposits. Report in this Memorandum item the total of all brokered deposits
included in total deposits (in domestic offices) (Schedule RC-E, sum of item 7, columns A
and C), regardless of size or type of deposit instrument. (See the Glossary entry for
"brokered deposits" for the definition of this term.)
Brokered deposits include “reciprocal deposits.” As defined in Section 327.8(s) of the FDIC’s
regulations, “reciprocal deposits” are deposits that an “institution receives through a deposit
placement network on a reciprocal basis, such that: (1) for any deposit received, the
institution (as agent for depositors) places the same amount with other insured depository
institutions through the network; and (2) each member of the network sets the interest rate to
be paid on the entire amount of funds it places with other network members.”

1.c

Fully insured brokered deposits. Report in the appropriate subitem all fully insured
brokered deposits (as defined in the Glossary entry for "brokered deposits") included in
Schedule RC-E, Memorandum item 1.b above.
In some cases, brokered certificates of deposit are issued in $1,000 amounts under a master
certificate of deposit issued by a bank to a deposit broker in an amount that exceeds
$250,000. For these so-called “retail brokered deposits,” multiple purchases by individual
depositors from an individual bank normally do not exceed the applicable deposit insurance
limit (currently $250,000), but under current deposit insurance rules the deposit broker is not
required to provide information routinely on these purchasers and their account ownership
capacity to the bank issuing the deposits. If this information is not readily available to the
issuing bank, these brokered certificates of deposit in $1,000 amounts may be rebuttably
presumed to be fully insured brokered deposits and should be reported in Schedule RC-E,
Memorandum item 1.c.(1), below. In addition, some brokered deposits are transaction
accounts or money market deposit accounts (MMDAs) that are denominated in amounts of
$0.01 and established and maintained by the deposit broker (or its agent) as agent, custodian,
or other fiduciary for the broker’s customers. An individual depositor’s deposits within the
brokered transaction account or MMDA normally do not exceed the applicable deposit
insurance limit. As with retail brokered deposits, if information on these depositors and their
account ownership capacity is not readily available to the bank establishing the transaction
account or MMDA, the amounts in the transaction account or MMDA may be rebuttably
presumed to be fully insured brokered deposits and should be reported in Schedule RC-E,
Memorandum item 1.c.(1), below.

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Memoranda
Item No.

Caption and Instructions

1.c
(cont.)

The dollar amounts used as the basis for reporting fully insured brokered deposits in
Memorandum items 1.c.(1) and 1.c.(2) reflect the deposit insurance limits in effect on the
report date. At present, these limits are $250,000 for “retirement deposit accounts” and
$250,000 for other deposit accounts.

1.c.(1)

Brokered deposits of less than $100,000. Report in this item brokered deposits with
balances of less than $100,000. Also report in this item time deposits issued to deposit
brokers in the form of certificates of deposit of $100,000 or more that have been participated
out by the broker in shares with balances of less than $100,000.
For brokered deposits that represent retirement deposit accounts (as defined in
Schedule RC-O, Memorandum item 1) eligible for $250,000 in deposit insurance coverage,
report such brokered deposits in this item only if their balances are less than $100,000.

1.c.(2)

Brokered deposits of $100,000 through $250,000 and certain brokered retirement
deposit accounts. Report in this item those brokered deposits (including brokered
retirement deposit accounts) with balances of $100,000 through $250,000. Also report in this
item time deposits issued to deposit brokers in the form of certificates of deposit of more than
$250,000 that have been participated out by the broker in shares with balances of $100,000
through $250,000.
For brokered deposits that represent retirement deposit accounts (as defined in
Schedule RC-O, Memorandum item 1) eligible for $250,000 in deposit insurance coverage,
report such brokered deposits in this item only if their balances are $100,000 through
$250,000 or if they have been issued by the bank in denominations of more than $250,000
and have been participated out by the broker in shares of $100,000 through exactly $250,000.

1.d

Maturity data for brokered deposits. Report in the appropriate subitem the indicated
maturity data for brokered deposits (as defined in the Glossary entry for "brokered deposits").

1.d.(1)

Brokered deposits of less than $100,000 with a remaining maturity of one year or less.
Report in this item those brokered time deposits with balances of less than $100,000 reported
in Schedule RC-E, Memorandum item 1.c.(1), above that have a remaining maturity of one
year or less. Remaining maturity is the amount of time remaining from the report date until
the final contractual maturity of a brokered deposit. Also report in this item all brokered
demand and savings deposits with balances of less than $100,000 that were reported in
Schedule RC-E, Memorandum item 1.c.(1), above.

1.d.(2)

Brokered deposits of $100,000 through $250,000 with a remaining maturity of one year
or less. Report in this item those brokered time deposits with balances of $100,000 through
$250,000 reported in Schedule RC-E, Memorandum item 1.c.(2) above that have a remaining
maturity of one year or less. Remaining maturity is the amount of time remaining from the
report date until the final contractual maturity of a brokered deposit. Also report in this item all
brokered demand and savings deposits with balances of $100,000 through $250,000 that
were reported in Schedule RC-E, Memorandum item 1.c.(2) above.

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Memoranda
Item No.

Caption and Instructions

1.d.(3)

Brokered deposits of more than $250,000 with a remaining maturity of one year or less.
Report in this item those brokered time deposits with balances of more than $250,000
reported in Schedule RC-E, Memorandum item 1.b above that have a remaining maturity of
one year or less. Remaining maturity is the amount of time remaining from the report date
until the final contractual maturity of a brokered deposit. Also report in this item all brokered
demand and savings deposits with balances of more than $250,000 that were reported in
Schedule RC-E, Memorandum item 1.b above.

1.e

Preferred deposits. (This item is to be reported for the December 31 report only.)
Report in this item all deposits of states and political subdivisions in the U.S. included in
Schedule RC-E, item 3, columns A and C above, which are secured or collateralized as
required under state law. Exclude deposits of the U.S. Government which are secured or
collateralized as required under federal law. Also exclude deposits of trust funds which are
secured or collateralized as required under state law unless the beneficiary is a state or
political subdivision in the U.S. The amount reported in this memorandum item must be less
than the sum of Schedule RC-E, item 3, column A, and item 3, column C, above.
State law may require a bank to pledge securities (or other readily marketable assets) to
cover the uninsured portion of the deposits of a state or political subdivision. If the bank has
pledged securities with a value that exceeds the amount of the uninsured portion of the state
or political subdivision's deposits, only the uninsured amount (and none of the insured portion
of the deposits) should be reported as a "preferred deposit." For example, a political
subdivision has $450,000 in deposits at a bank which, under state law, is required to pledge
securities to cover only the uninsured portion of such deposits ($200,000 in this example).
The bank has pledged securities with a value of $300,000 to secure these deposits. Only the
$200,000 uninsured amount of the political subdivision's $450,000 in deposits, given the
currently applicable $250,000 deposit insurance limit, would be considered "preferred
deposits."
In other states, banks must participate in a state public deposits program in order to receive
deposits from the state or from political subdivisions within the state in amounts that would not
be covered by federal deposit insurance. Under state law in such states, the value of the
securities a bank must pledge to the state is calculated annually, but represents only a
percentage of the uninsured portion of its public deposits. Institutions participating in the state
program may potentially be required to share in any loss to public depositors incurred in the
failure of another participating institution. As long as the value of the securities pledged to the
state exceeds the calculated requirement, all of the bank's uninsured public deposits are
protected from loss under the operation of the state program if the bank fails and, therefore,
all of the uninsured public deposits are considered "preferred deposits." For example, a bank
participating in a state public deposits program has $1,600,000 in public deposits under the
program from four political subdivisions and $700,000 of this amount is uninsured, given the
currently applicable $250,000 deposit insurance limit. The bank's most recent calculation
indicates that it must pledge securities with a value of at least $77,000 to the state in order to
participate in the state program. The bank has pledged securities with an actual value of
$80,000. The bank should report the $700,000 in uninsured public deposits as "preferred
deposits."

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Memoranda
Item No.
1.f

Caption and Instructions
Estimated amount of deposits obtained through the use of deposit listing services that
are not brokered deposits. Report in this Memorandum item the estimated amount of all
nonbrokered deposits obtained through the use of deposit listing services included in total
deposits (in domestic offices) (Schedule RC-E, sum of item 7, columns A and C), regardless
of size or type of deposit instrument.
The objective of this Memorandum item is not to capture all deposits obtained through the
Internet, such as deposits that a bank receives because a person or entity has seen the rates
the bank has posted on its own Web site or on a rate-advertising Web site that has picked up
and posted the bank’s rates on its site without the bank’s authorization. Rather, the objective
of this Memorandum item is to collect the estimated amount of deposits obtained as a result
of action taken by the bank to have its deposit rates listed by a listing service, and the listing
service is compensated for this listing either by the bank whose rates are being listed or by
the persons or entities who view the listed rates. A bank should establish a reasonable and
supportable estimation process for identifying listing service deposits that meet these
reporting parameters and apply this process consistently over time. However, for those
nonbrokered deposits acquired through the use of a deposit listing service that offers deposit
tracking, the actual amount of listing service deposits, rather than an estimate, should be
reported.
Exclude from this item all brokered deposits reported in Schedule RC-E, Memorandum
item 1.b.
A deposit listing service is a company that compiles information about the interest rates
offered on deposits, such as certificates of deposit, by insured depository institutions. A
particular company could be a deposit listing service (compiling information about certificates
of deposits) as well as a deposit broker (facilitating the placement of certificates of deposit). A
deposit listing service is not a deposit broker if all of the following four criteria are met:
(1) The listing service is not involved in placing deposits. Any funds to be invested in deposit
accounts are remitted directly by the depositor to the insured depository institution and
not, directly or indirectly, by or through the listing service.
(2) The person or entity providing the listing service is compensated solely by means of
subscription fees (i.e., the fees paid by subscribers as payment for their opportunity to see
the rates gathered by the listing service) and/or listing fees (i.e., the fees paid by
depository institutions as payment for their opportunity to list or “post” their rates). The
listing service does not require a depository institution to pay for other services offered by
the listing service or its affiliates as a condition precedent to being listed.
(3) The fees paid by depository institutions are flat fees: they are not calculated on the basis
of the number or dollar amount of deposits accepted by the depository institution as a
result of the listing or “posting” of the depository institution’s rates.
(4) In exchange for these fees, the listing service performs no services except (A) the
gathering and transmission of information concerning the availability of deposits; and/or
(B) the transmission of messages between depositors and depository institutions
(including purchase orders and trade confirmations). In publishing or displaying

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Item No.

Caption and Instructions

1.f
(cont.)

2

information about depository institutions, the listing service must not attempt to steer
funds toward particular institutions (except that the listing service may rank institutions
according to interest rates and also may exclude institutions that do not pay the listing
fee). Similarly, in any communications with depositors or potential depositors, the listing
service must not attempt to steer funds toward particular institutions.
Components of total nontransaction accounts. Memorandum item 2 divides total
nontransaction accounts into two major categories: savings deposits (Memorandum
items 2.a.(1) and 2.a.(2)) and time deposits (Memorandum items 2.b, 2.c, and 2.d). The sum
of Memorandum items 2.a.(1) and 2.a.(2) equals total savings deposits. The sum of
Memorandum items 2.b, 2.c, and 2.d equals total time deposits. The sum of Memorandum
items 2.a.(1) and 2.a.(2) (savings deposits) and Memorandum items 2.b, 2.c, and 2.d
(time deposits) equals total nontransaction deposits reported in item 7, column C, above.

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Memoranda
Item No.

Caption and Instructions

2
(cont.)

Include as time deposits in Memorandum items 2.b, 2.c, and 2.d:
(1) All time deposits (as defined in the Glossary entry for "deposits") with original maturities of
seven days or more that are not classified as transaction accounts.
(2) Interest paid by crediting time deposit accounts.

2.a

Savings deposits. Report in the appropriate subitem all savings deposits included in
column C above. See the Glossary entry for "deposits" for the definition of savings deposits.
Include as savings deposits in Memorandum items 2.a.(1) and 2.a.(2) interest paid by
crediting savings deposit accounts.
Exclude from Memorandum items 2.a.(1) and 2.a.(2):
(1) NOW accounts, ATS accounts, and telephone or preauthorized transfer accounts that
meet the definition of a transaction account (report in Schedule RC-E, column A, as
transaction accounts).
(2) Special passbook or statement accounts, such as "90-day notice accounts," "golden
passbook accounts," or deposits labeled as "savings certificates," that have a specified
original maturity of seven days or more (report as time deposits in Schedule RC-E,
Memorandum item 2.b, 2.c, or 2.d, below).
(3) Interest accrued on savings deposits but not yet paid or credited to a deposit account
(exclude from this schedule and report in Schedule RC-G, item 1.a, "Interest accrued and
unpaid on deposits (in domestic offices)").

2.a.(1)

Money market deposit accounts (MMDAs). Report in this item the total amount of all
money market deposit accounts (MMDAs) that are included in Schedule RC-E, column C,
above. See the Glossary entry for "deposits" for the definition of money market deposit
accounts.

2.a.(2)

Other savings deposits. Report in this item the total amount of all other savings deposits
that are included in Schedule RC-E, column C, above. This item includes those accounts
commonly known as passbook savings and statement savings. See the Glossary entry for
"deposits" for the definition of other savings deposits.

2.b

Total time deposits of less than $100,000. Report in this item all time deposits included in
Schedule RC-E, column C, above with balances of less than $100,000. This item includes
both time certificates of deposit and open-account time deposits with balances of less than
$100,000, regardless of negotiability or transferability. This item also includes time deposits
issued to deposit brokers in the form of large ($100,000 or more) certificates of deposit that
have been participated out by the broker in shares of less than $100,000. In addition, if the
bank has issued a master certificate of deposit to a deposit broker in an amount that exceeds
$100,000 and under which brokered certificates of deposit are issued in $1,000 amounts
(so-called “retail brokered deposits”), individual depositors who purchase multiple certificates
issued by the bank normally do not exceed the applicable deposit insurance limit (currently
$250,000). Under current deposit insurance rules the deposit broker is not required to

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Memoranda
Item No.

Caption and Instructions

2.b
(cont.)

provide information routinely on these purchasers and their account ownership capacity to
the bank issuing the deposits. If this information is not readily available to the issuing bank,
these brokered certificates of deposit in $1,000 amounts should be reported in this item as
time deposits of less than $100,000.
Exclude from this item all time deposits with balances of $100,000 or more (report in
Schedule RC-E, Memorandum items 2.c and 2.d, below).

2.c

Total time deposits of $100,000 through $250,000. Report in this item all time deposits
included in Schedule RC-E, column C, above with balances of $100,000 through $250,000.
This item includes both time certificates of deposit and open-account time deposits with
balances of $100,000 through $250,000, regardless of negotiability or transferability.
Exclude from this item and from Schedule RC-E, Memorandum item 2.d, below:
•
•

all time deposits issued to deposit brokers in the form of large ($100,000 or more)
certificates of deposit that have been participated out by the broker in shares of less than
$100,000, and
all time deposits with balances of less than $100,000,

which should be reported in Schedule RC-E, Memorandum item 2.b, above.
NOTE: Banks should include as time deposits of $100,000 through $250,000 those time
deposits originally issued in denominations of less than $100,000 that, because of interest
paid or credited, or because of additional deposits, now have balances of $100,000 through
$250,000.
2.d

Total time deposits of more than $250,000. Report in this item all time deposits included in
Schedule RC-E, column C, above with balances of more than $250,000. This item includes
both time certificates of deposit and open-account time deposits with balances of more than
$250,000, regardless of negotiability or transferability.
NOTE: Banks should include as time deposits of more than $250,000 those time deposits
originally issued in denominations of $250,000 or less that, because of interest paid or
credited, or because of additional deposits, now have balances of more than $250,000.

2.e

Individual Retirement Accounts (IRAs) and Keogh Plan accounts included in
Memorandum items 2.c and 2.d above. Report in this item all IRA and Keogh Plan time
deposits of $100,000 or more included in Schedule RC-E, Memorandum items 2.c and 2.d,
above. These IRA and Keogh Plan time deposits will also have been included in
Schedule RC-E, Memorandum item 1.a., “Total Individual Retirement Accounts (IRAs) and
Keogh Plan accounts.”
IRAs include traditional IRAs, Roth IRAs, Simplified Employee Pension (SEP) IRAs, and
SIMPLE IRAs. Exclude deposits in "Section 457" deferred compensation plans and selfdirected defined contribution plans, which are primarily 401(k) plan accounts. Also exclude
deposits in Health Savings Accounts, Medical Savings Accounts, and Coverdell Education
Savings Accounts (formerly known as Education IRAs).

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Memoranda
Item No.
3

Caption and Instructions
Maturity and repricing data for time deposits of less than $100,000. Report in the
appropriate subitem maturity and repricing data for the bank's time deposits of less than
$100,000, i.e., the bank's time certificates of deposit of less than $100,000 and the bank's
open-account time deposits of less than $100,000. The time deposits included in this item will
have been reported in Schedule RC-E, Memorandum item 2.b, above. Therefore, the sum of
the amounts reported in Schedule RC-E, Memorandum items 3.a.(1) through 3.a.(4) must
equal Schedule RC-E, Memorandum item 2.b, above.
For purposes of this memorandum item and Schedule RC-E, Memorandum item 4, the
following definitions apply:
A fixed interest rate is a rate that is specified at the origination of the transaction, is fixed and
invariable during the term of the time deposit, and is known to both the bank and the depositor.
Also treated as a fixed interest rate is a predetermined interest rate which is a rate that
changes during the term of the time deposit on a predetermined basis, with the exact rate of
interest over the life of the time deposit known with certainty to both the bank and the depositor
when the time deposit is acquired.
A floating rate is a rate that varies, or can vary, in relation to an index, to some other interest
rate such as the rate on certain U.S. Government securities or the bank's "prime rate," or to
some other variable criterion the exact value of which cannot be known in advance.
Therefore, the exact rate the time deposit carries at any subsequent time cannot be known at
the time the time deposit is received by the bank or subsequently renewed.
When the rate on a time deposit with a floating rate has reached a contractual floor or ceiling
level, the time deposit is to be treated as "fixed rate" rather than as "floating rate" until the rate is
again free to float.
Remaining maturity is the amount of time remaining from the report date until the final
contractual maturity of a time deposit.
Next repricing date is the date the interest rate on a floating rate time deposit can next change
in accordance with the terms of the contract or the contractual maturity date of the deposit,
whichever is earlier.
Banks whose records or information systems provide data on the final contractual maturities
and next repricing dates of their time deposits for time periods that closely approximate the
maturity and repricing periods specified in this Memorandum item and Schedule RC-E,
Memorandum item 4 (e.g., 89 or 90 days rather than three months, 359 or 360 days rather
12 months) may use these data to complete this Memorandum item and Schedule RC-E,
Memorandum item 4.

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Memoranda
Item No.

Caption and Instructions

3
(cont.)

Time deposits held in Individual Retirement Accounts (IRAs) and Keogh Plan accounts should
be reported without regard to distribution schedules that may be in effect for funds held in
certain depositors' accounts. Such time deposits should be reported in this Memorandum item
and in Schedule RC-E, Memorandum item 4, in the same manner as time deposits not held in
IRAs and Keogh Plan accounts.
Noninterest-bearing time deposits should be treated as fixed rate time deposits and reported
according to the amount of time remaining until the final contractual maturity in this
Memorandum item and in Schedule RC-E, Memorandum item 4.
Fixed rate time deposits that offer the depositor the option to reset the interest rate on the
deposit to a current market rate one time during the term of the deposit should be treated as
fixed rate deposits and reported based on their remaining maturity.
Fixed rate time deposits that are callable at the option of the issuing bank should be reported
according to their remaining maturity without regard to their next call date unless the time
deposit has actually been called. When fixed rate time deposits have been called, they should
be reported on the basis of the time remaining until the call date. Callable floating rate time
deposits should be reported on the basis of their next repricing date, without regard to their
next call date unless the time deposit has actually been called. Floating rate time deposits that
have been called should be reported on the basis of their next repricing date or their actual call
date, whichever is earlier.
Fixed rate time deposits that provide depositors with the option to redeem them at one or
more specified dates prior to their contractual maturity date without penalty should be reported
according to their remaining maturity without regard to "put" dates if the depositor has not
exercised the "put." If a redemption option has been exercised, however, such deposits
should be reported on the basis of the time remaining until the date on which the time deposit
will be redeemed. Floating rate time deposits that provide depositors with redemption options
without penalty should be reported on the basis of their next repricing date without regard to the
"put" dates if the depositor has not exercised the "put." If a redemption option has been
exercised but the time deposit has not yet been redeemed, the deposit should be reported on
the basis of its next repricing date or its scheduled redemption date, whichever is earlier.

3.a

3.a.(1)

Time deposits of less than $100,000 with a remaining maturity or next repricing date of.
Report the dollar amount of the bank's fixed rate time deposits of less than $100,000 in the
appropriate subitems according to the amount of time remaining to their final contractual
maturities. Report the dollar amount of the bank's floating rate time deposits of less than
$100,000 in the appropriate subitems according to their next repricing dates.
Three months or less. Report the dollar amount of:
•

the bank's fixed rate time deposits of less than $100,000 with remaining maturities of
three months or less, and

•

the bank's floating rate time deposits of less than $100,000 with the next repricing date
occurring in three months or less.

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Memoranda
Item No.

Caption and Instructions

3.a.(2)

Over three months through 12 months. Report the dollar amount of:

3.a.(3)

3.a.(4)

3.b

•

the bank's fixed rate time deposits of less than $100,000 with remaining maturities of over
three months through 12 months, and

•

the bank's floating rate time deposits of less than $100,000 with the next repricing date
occurring in over three months through 12 months.

Over one year through three years. Report the dollar amount of:
•

the bank's fixed rate time deposits of less than $100,000 with remaining maturities of over
one year through three years, and

•

the bank's floating rate time deposits of less than $100,000 with the next repricing date
occurring in over one year through three years.

Over three years. Report the dollar amount of:
•

the bank's fixed rate time deposits of less than $100,000 with remaining maturities of over
three years, and

•

the bank's floating rate time deposits of less than $100,000 with the next repricing date
occurring in over three years.

Time deposits of less than $100,000 with a remaining maturity of one year or less.
Report all time deposits of less than $100,000 with a remaining maturity of one year or less.
Include both fixed rate and floating rate time deposits of less than $100,000.
The fixed rate time deposits that should be included in this item will also have been reported
by remaining maturity in Schedule RC-E, Memorandum items 3.a.(1) and 3.a.(2), above. The
floating rate time deposits that should be included in this item will have been reported by next
repricing date in Memorandum items 3.a.(1) and 3.a.(2), above. However, these two
Memorandum items may include floating rate time deposits with a remaining maturity of more
than one year, but on which the interest rate can next change in one year or less; those time
deposits should not be included in this Memorandum item 3.b.

4

Maturity and repricing data for time deposits of $100,000 or more. Report in the
appropriate subitem maturity and repricing data for the bank's time deposits of $100,000
or more, i.e., the bank's time certificates of deposit of $100,000 or more and the bank's openaccount time deposits of $100,000 or more. The time deposits included in this item will have
been reported in Schedule RC-E, Memorandum items 2.c and 2.d, above. Therefore, the
sum of the amounts reported in Schedule RC-E, Memorandum items 4.a.(1) through 4.a.(4)
must equal the sum of Schedule RC-E, Memorandum items 2.c and 2.d, above. Refer to the
definitions and other instructions about time deposits in Schedule RC-E, Memorandum item 3,
above.

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Memoranda
Item No.
4.a

4.a.(1)

4.a.(2)

4.a.(3)

4.a.(4)

4.b

Caption and Instructions
Time deposits of $100,000 or more with a remaining maturity or next repricing date of.
Report the dollar amount of the bank's fixed rate time deposits of $100,000 or more in the
appropriate subitems according to the amount of time remaining to their final contractual
maturities. Report the dollar amount of the bank's floating rate time deposits of $100,000 or
more in the appropriate subitems according to their next repricing dates.
Three months or less. Report the dollar amount of:
•

the bank's fixed rate time deposits of $100,000 or more with remaining maturities of three
months or less, and

•

the bank's floating rate time deposits of $100,000 or more with the next repricing date
occurring in three months or less.

Over three months through 12 months. Report the dollar amount of:
•

the bank's fixed rate time deposits of $100,000 or more with remaining maturities of over
three months through 12 months, and

•

the bank's floating rate time deposits of $100,000 or more with the next repricing date
occurring in over three months through 12 months.

Over one year through three years. Report the dollar amount of:
•

the bank's fixed rate time deposits of $100,000 or more with remaining maturities of over
one year through three years, and

•

the bank's floating rate time deposits of $100,000 or more with the next repricing date
occurring in over one year through three years.

Over three years. Report the dollar amount of:
•

the bank's fixed rate time deposits of $100,000 or more with remaining maturities of over
three years, and

•

the bank's floating rate time deposits of $100,000 or more with the next repricing date
occurring in over three years.

Time deposits of $100,000 through $250,000 with a remaining maturity of one year or
less. Report all time deposits of $100,000 through $250,000 with a remaining maturity of one
year or less. Include both fixed rate and floating rate time deposits of $100,000 through
$250,000.
The fixed rate time deposits that should be included in this item will also have been reported
by remaining maturity in Schedule RC-E, Memorandum items 4.a.(1) and 4.a.(2), above. The
floating rate time deposits that should be included in this item will have been reported by next
repricing date in Memorandum items 4.a.(1) and 4.a.(2), above. However, Memorandum
items 4.a.(1) and 4.a.(2) may include floating rate time deposits with a remaining maturity of
more than one year, but on which the interest rate can next change in one year or less; those
time deposits should not be included in this Memorandum item 4.b.

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Memoranda
Item No.
4.c

Caption and Instructions
Time deposits of more than $250,000 with a remaining maturity of one year or less.
Report all time deposits of more than $250,000 with a remaining maturity of one year or less.
Include both fixed rate and floating rate time deposits of more than $250,000.
The fixed rate time deposits that should be included in this item will also have been reported
by remaining maturity in Schedule RC-E, Memorandum items 4.a.(1) and 4.a.(2), above. The
floating rate time deposits that should be included in this item will have been reported by next
repricing date in Memorandum items 4.a.(1) and 4.a.(2), above. However, Memorandum
items 4.a.(1) and 4.a.(2) may include floating rate time deposits with a remaining maturity of
more than one year, but on which the interest rate can next change in one year or less; those
time deposits should not be included in this Memorandum item 4.c.

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Schedule RC-E, Part II. Deposits in Foreign Offices (FFIEC 031 only)

General Instructions
Part II of Schedule RC-E is not applicable to banks filing the FFIEC 041 report forms.
For purposes of this report, IBFs are to be treated as foreign offices and their deposit liabilities should be
reported only in Schedule RC-E, part II. Also included in this part are deposits of all offices of Edge and
Agreement subsidiaries and deposits of offices in foreign countries.
The definition of deposits in Schedule RC-E, part I, will apply directly to deposits of branches in Puerto Rico
and U.S. territories and possessions and to the domestic offices of Edge and Agreement subsidiaries.
However, for all other "foreign offices," the definition of deposits in Schedule RC-E, part I, must be adjusted
for any differences in statutory and regulatory requirements and in institutional practices in foreign
countries.
For these other foreign offices include as deposits:
(1) Liabilities readily identifiable as deposits because of name or definition.
(2) All foreign office liabilities identical to those described for domestic offices that have different names in
different countries.
(3) Liabilities that, owing to law, custom, or banking practice in foreign countries, have characteristics
similar to those defined for Schedule RC-E, part I.
(4) Any other foreign office liability that is treated as a deposit by the laws, local custom, or banking
practice of the country in which it is booked.
Report any nondeposit borrowing of an office in a foreign country as a borrowing in Schedule RC-M,
item 5.b, "Other borrowings," or in other items, as appropriate.
When it is not clear whether a liability in a foreign office should be treated as a deposit or as a borrowing,
treat it as a deposit. Report all deposits in IBFs in Schedule RC-E, part II, whether in the form of deposits,
borrowings, placements, or similar instruments. Exclude IBF liabilities in the form of securities sold under
agreements to repurchase (report in Schedule RC, item 14.b), borrowings of immediately available funds
that have an original maturity of one business day or roll over under a continuing contract that are not
securities repurchase agreements (report in Schedule RC-M, item 5.b), and accrued liabilities, such as
interest accrued but unpaid (report in Schedule RC-G, item 1.b).
For a discussion of deposits in foreign offices, see the Glossary entry for "borrowings and deposits in
foreign offices."
Reciprocal balances between foreign offices of the reporting bank and other depository institutions may be
reported on a net basis when a right of setoff exists. See the Glossary entry for "offsetting" for the
conditions that must be met for a right of setoff to exist.

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Part II. Deposits in Foreign Offices (cont.)
Item Instructions
Item No.

Caption and Instructions

1

Deposits of individuals, partnerships, and corporations (include all certified and official
checks). Report all balances in foreign offices standing to the credit of individuals,
partnerships, and corporations (as defined for Schedule RC-E, part I, item 1). Report all
certified and official checks issued by foreign offices of the reporting bank (as defined for
Schedule RC-E, part I, item 1). Also report all other liabilities that, owing to law, custom, or
banking practice in foreign countries, have characteristics similar to those specified for domestic
offices.

2

Deposits of U.S. banks (including IBFs and foreign branches of U.S. banks) and other
U.S. depository institutions. Report all deposit balances in foreign offices of the reporting
bank standing to the credit of banks and other depository institutions headquartered and
chartered in the United States. Include both U.S. and non-U.S. branches of U.S. commercial
banks and other depository institutions as well as IBFs established by U.S. commercial banks.
Exclude U.S. branches and agencies of foreign banks and IBFs established by such branches
and agencies. (See the Glossary entry for "banks, U.S. and foreign" for the definition of U.S.
banks and the Glossary entry for "depository institutions in the U.S." for further discussion of
this term).

3

Deposits of foreign banks (including U.S. branches and agencies of foreign banks,
including their IBFs). Report all balances in foreign offices of the reporting bank standing
to the credit of banks headquartered and chartered in foreign countries. Include both U.S.
and non-U.S. branches of foreign banks and IBFs established by U.S. branches and
agencies of foreign banks. Exclude foreign offices of U.S. banks. (See the Glossary entry
for "banks, U.S. and foreign" for the definition of foreign banks.)

4

Deposits of foreign governments and official institutions. Report all balances in foreign
offices standing to the credit of foreign governments and official institutions, including foreign
central banks. (See the Glossary entry for "foreign governments and official institutions" for
the definition of this term.)

5

Deposits of U.S. Government and states and political subdivisions in the U.S. Report
all balances in foreign offices standing to the credit of the U.S. Government and states and
political subdivisions in the U.S. (as defined for Schedule RC-E, part I, items 2 and 3).

6

Total. Report the sum of items 1 through 5. This item must equal Schedule RC, item 13.b,
"Deposits in foreign offices, Edge and Agreement subsidiaries, and IBFs."

Memorandum
Item No.
1

Caption and Instructions
Time deposits with a remaining maturity of one year or less. Report all time deposits in
foreign offices with remaining maturities of one year or less. Remaining maturity is the
amount of time remaining from the report date until the final contractual maturity of a time
deposit. The time deposits included in this item will also have been reported in
Schedule RC-E, part II, item 6, above.

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RC-F - OTHER ASSETS

SCHEDULE RC-F – OTHER ASSETS
General Instructions
Complete this schedule for the fully consolidated bank. Eliminate all intrabank transactions between
offices of the consolidated bank.
Item Instructions
Item No.
1

Caption and Instructions
Accrued interest receivable. Report the amount of interest earned or accrued on earning
assets and applicable to current or prior periods that has not yet been collected.
Exclude retained interests in accrued interest receivable related to securitized credit cards
(report in Schedule RC-F, item 6, "All other assets").

2

Net deferred tax assets. Report the net amount after offsetting deferred tax assets (net of
valuation allowance) and deferred tax liabilities measured at the report date for a particular
tax jurisdiction if the net result is a debit balance. If the result for a particular tax jurisdiction is
a net credit balance, report the amount in Schedule RC-G, item 2, "Net deferred tax
liabilities." If the result for each tax jurisdiction is a net credit balance, enter a zero or the word
"none" in this item. (A bank may report a net deferred tax debit, or asset, for one tax
jurisdiction, such as for federal income tax purposes, and also report at the same time a net
deferred tax credit, or liability, for another tax jurisdiction, such as for state or local income tax
purposes.)
For further information on calculating deferred taxes for different tax jurisdictions, see the
Glossary entry for "income taxes."

3

Interest-only strips receivable (not in the form of a security) on. As defined in
ASC Topic 860, Transfers and Servicing (formerly FASB Statement No. 140, “Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” as amended),
an interest-only strip receivable is the contractual right to receive some or all of the interest
due on a bond, mortgage loan, collateralized mortgage obligation, or other interest-bearing
financial asset. This includes, for example, contractual rights to future interest cash flows
that exceed contractually specified servicing fees on financial assets that have been sold.
Report in the appropriate subitem interest-only strips receivable not in the form of a security
1
that are measured at fair value like available-for-sale securities. Report unrealized gains
(losses) on these interest-only strips receivable in Schedule RC, item 26.b, "Accumulated
other comprehensive income."
Exclude from this item interest-only strips receivable in the form of a security, which should
be reported as available-for-sale securities in Schedule RC, item 2.b, or as trading assets in
Schedule RC, item 5, as appropriate. Also exclude interest-only strips not in the form of a
security that are held for trading, which should be reported in Schedule RC, item 5.

3.a

Mortgage loans. Report the fair value of interest-only strips receivable (not in the form of a
security) on mortgage loans.

1

An interest-only strip receivable is not in the form of a security if the strip does not meet the definition of a security in
ASC Topic 320, Investments-Debt and Equity Securities (formerly FASB Statement No. 115, "Accounting for Certain
Investments in Debt and Equity Securities").
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Item No.

RC-F - OTHER ASSETS

Caption and Instructions

3.b

Other financial assets. Report the fair value of interest-only strips receivable (not in the
form of a security) on financial assets other than mortgage loans.

4

Equity securities that do not have readily determinable fair values. Report the historical
cost of equity securities without readily determinable fair values. These equity securities are
outside the scope of ASC Topic 320, Investments-Debt and Equity Securities (formerly
FASB Statement No. 115, “Accounting for Certain Investments in Debt and Equity
Securities”). An equity security does not have a readily determinable fair value if sales or
bid-and-asked quotations are not currently available on a securities exchange registered with
the Securities and Exchange Commission (SEC) and are not publicly reported by the
National Association of Securities Dealers Automated Quotations systems or the National
Quotation Bureau. The fair value of an equity security traded only in a foreign market is not
readily determinable if that foreign market is not of a breadth and scope comparable to one of
the U.S. markets referenced above.
Equity securities that do not have readily determinable fair values may have been purchased
by the reporting bank or acquired for debts previously contracted.
Include in this item:
(1) Paid-in stock of a Federal Reserve Bank.
(2) Stock of a Federal Home Loan Bank.
(3) Common and preferred stocks that do not have readily determinable fair values, such as
stock of bankers' banks and Class B voting common stock of the Federal Agricultural
Mortgage Corporation (Farmer Mac).
(4) "Restricted stock," as defined in ASC Topic 320, i.e., equity securities for which sale is
restricted by governmental or contractual requirement (other than in connection with
being pledged as collateral), except if that requirement terminates within one year or if
the holder has the power by contract or otherwise to cause the requirement to be met
within one year.
(5) Participation certificates issued by a Federal Intermediate Credit Bank, which represent
nonvoting stock of the bank.
(6) Minority interests held by the reporting bank in any company not meeting the definition of
associated company, except minority holdings that indirectly represent bank premises
(report in Schedule RC, item 6), other real estate owned (report in Schedule RC, item 7),
or investments in real estate ventures (report in Schedule RC, item 9), provided that the
fair value of any capital stock representing the minority interest is not readily
determinable. (See the Glossary entry for "subsidiaries" for the definition of associated
company.)
(7) Equity holdings in those corporate ventures over which the reporting bank does not
exercise significant influence, except equity holdings that indirectly represent bank
premises (report in Schedule RC, item 6), other real estate owned (report in
Schedule RC, item 7), or investments in real estate ventures (report in Schedule RC,
item 9). (See the Glossary entry for "subsidiaries" for the definition of corporate joint
venture.)

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Item No.

Caption and Instructions

4
(cont.)

Exclude from this item:

RC-F - OTHER ASSETS

(1) Investments in subsidiaries that have not been consolidated; associated companies;
corporate joint ventures, unincorporated joint ventures, and general partnerships over
which the bank exercises significant influence; and noncontrolling investments in certain
limited partnerships and limited liability companies (described in the Glossary entry for
“equity method of accounting”) (report in Schedule RC, item 8, "Investments in
unconsolidated subsidiaries and associated companies," or item 9, “Direct and indirect
investments in real estate ventures,” as appropriate).
(2) Preferred stock that by its terms either must be redeemed by the issuing enterprise or is
redeemable at the option of the investor (report in Schedule RC-B, item 6, "Other debt
securities").
5

Life insurance assets. Report in the appropriate subitem the amount of the bank’s general
account, separate account, and hybrid account holdings of life insurance that could be
realized under the insurance contracts as of the report date. In general, this amount is the
cash surrender value reported to the bank by the insurance carrier, less any applicable
surrender charges not reflected by the carrier in the reported cash surrender value, on all
forms of permanent life insurance policies owned by the bank, its consolidated subsidiaries,
and grantor (rabbi) trusts established by the bank or its consolidated subsidiaries, regardless
of the purposes for acquiring the insurance. A bank should also consider any additional
amounts included in the contractual terms of the insurance policy in determining the amount
that could be realized under the insurance contract. For further information, see the Glossary
entry for “bank-owned life insurance.”
Permanent life insurance refers to whole and universal life insurance, including variable
universal life insurance. Purposes for which insurance may be acquired include offsetting
pre- and post-retirement costs for employee compensation and benefit plans, protecting
against the loss of key persons, and providing retirement and death benefits to employees.
Include as life insurance assets the bank’s interest in insurance policies under split-dollar life
insurance arrangements with directors, officers, and employees under both the endorsement
and collateral assignment methods.

5.a

General account life insurance assets. Report the amount of the bank’s holdings of life
insurance assets associated with general account insurance policies. In a general account
life insurance policy, the general assets of the insurance company issuing the policy support
the policy’s cash surrender value.
Also include the portion of the carrying value of:
(1) Separate account policies that represents general account claims on the insurance
company, such as realizable deferred acquisition costs and mortality reserves; and
(2) Hybrid account policies that represents general account claims on the insurance
company, such as any shortfall in the value of the separate account assets supporting
the cash surrender value of the policies.

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Item No.

Caption and Instructions

5.b

Separate account life insurance assets. Report the amount of the bank’s holdings of life
insurance assets associated with separate account insurance policies. In a separate account
policy, the policy’s cash surrender value is supported by assets segregated from the general
assets of the insurance carrier. Under such an arrangement, the policyholder neither owns
the underlying separate account created by the insurance carrier on its behalf nor controls
investment decisions in the underlying account, but does assume all investment and price
risk.
Separate accounts are employed by life insurers to meet specific investment objectives of
policyholders. The accounts are often maintained as separate accounting and reporting
entities for pension plans as well as fixed benefit, variable annuity, and other products.
Investment income and investment gains and losses generally accrue directly to such
policyholders and are not accounted for on the general accounts of the insurer. On the
books of the insurer, the carrying values of separate account assets and liabilities usually
approximate each other with little associated capital. Because they are legally segregated,
the assets of each separate account are not subject to claims on the insurer that arise out of
any other business of the insurance company.

5.c

Hybrid account life insurance assets. Report the amount of the bank’s holdings of life
insurance assets associated with hybrid account insurance policies. A hybrid account
insurance policy combines features of both general and separate account insurance
products. Similar to a general account life insurance policy, a hybrid policy offers a
guaranteed minimum crediting rate, does not carry market value risk, and does not require
stable value protection. However, like a separate account life insurance policy, a hybrid
policy’s cash surrender value is supported by assets segregated from the general assets of
the insurance carrier. Because they are legally segregated, the assets of each separate
account are not subject to claims on the insurer that arise out of any other business of the
insurance company. Additionally, the bank holding the hybrid account life insurance policy is
able to select the investment strategy in which the insurance premiums are invested. Under
such an arrangement, the policyholder neither owns the underlying separate account created
by the insurance carrier on its behalf nor controls investment decisions in the underlying
account.

6

All other assets. Report the amount of all other assets (other than those reported in
Schedule RC-F, items 1, 2, 3, 4, and 5, above) that cannot properly be reported in
Schedule RC, items 1 through 10.
Report in Schedule RC-F, items 6.a through 6.i, each component of all other assets, and the
dollar amount of such component, that is greater than $25,000 and exceeds 25 percent of the
amount of all other assets reported in this item. Preprinted captions have been provided in
Schedule RC-F, items 6.a through 6.f, for reporting the following components of all other
assets if the component exceeds this reporting threshold: prepaid expenses (excluding
prepaid assessments), prepaid deposit insurance assessments, repossessed personal
property (including vehicles), derivatives with a positive fair value held for purposes other
than trading, retained interests in accrued interest receivable related to securitized credit
cards, and FDIC loss-sharing indemnification assets. For each component of all other assets
that exceeds the reporting threshold for which a preprinted caption has not been provided,
describe the component with a clear but concise caption in Schedule RC-F, items 6.g through
6.i. These descriptions should not exceed 50 characters in length (including spacing
between words). Any amounts reported in Schedule RC-F, item 6.f, “Prepaid deposit
insurance assessments,” for report dates beginning December 31, 2009, will not be made
available to the public on an individual institution basis.

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Item No.

Caption and Instructions

6
(cont.)

Include as all other assets:
(1)

Prepaid expenses, i.e., those applicable as a charge against earnings in future periods,
including prepaid deposit insurance assessments.1

(2)

Automobiles, boats, equipment, appliances, and similar personal property repossessed
or otherwise acquired for debts previously contracted.

(3)

Derivative instruments that have a positive fair value that the bank holds for purposes
other than trading. For further information, see the Glossary entry for "derivative
contracts."

(4)

Retained interests in accrued interest receivable related to securitized credit cards.
For further information, see the Glossary entry for "accrued interest receivable related
to credit card securitizations."

(5)

Accrued interest on securities purchased (if accounted for separately from “accrued
interest receivable” in the bank’s records).

(6)

Cash items not conforming to the definition of "Cash items in process of collection"
found in the instruction to Schedule RC, item 1.a.

(7)

The full amount (with the exceptions noted below) of customers' liability to the reporting
bank on drafts and bills of exchange that have been accepted by the reporting bank, or
by others for its account, and are outstanding. The amount of customers' liability to the
reporting bank on its acceptances that have not yet matured should be reduced only
when: (a) the customer anticipates its liability to the reporting bank on an outstanding
acceptance by making a payment to the bank in advance of the acceptance's maturity
that immediately reduces the customer's indebtedness to the bank on such an
acceptance; or (b) the reporting bank acquires and holds its own acceptance. See the
Glossary entry for "bankers acceptances" for further information.

(8)

Credit or debit card sales slips in process of collection until the reporting bank has been
notified that it has been given credit (report thereafter in Schedule RC, item 1.a,
"Noninterest-bearing balances and currency and coin," and, if applicable, in
Schedule RC-A, item 2, "Balances due from depository institutions in the U.S.," or
item 3, "Balances due from banks in foreign countries and foreign central banks," as
appropriate).

(9)

Purchased computer software, net of accumulated amortization, and unamortized costs
of computer software to be sold, leased, or otherwise marketed capitalized in
accordance with the provisions of ASC Subtopic 985-20, Software – Costs of Software
to Be Sold, Leased or Marketed (formerly FASB Statement No. 86, “Accounting for the
Cost of Computer Software to be Sold, Leased, or Otherwise Marketed”).

(10) Bullion (e.g., gold or silver) not held for trading purposes.

.
1

For banks involved in insurance activities, examples of prepaid expenses include ceding fees and acquisition fees
paid to insurance carriers external to the consolidated bank.

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RC-F - OTHER ASSETS

FFIEC 031 and 041

RC-F - OTHER ASSETS

Item No.

Caption and Instructions

6
(cont.)

(11) Original art objects, including paintings, antique objects, and similar valuable decorative
articles (report at cost unless there has been a decline in value, judged to be other than
temporary, in which case the object should be written down to its fair value).
(12) Securities or other assets held in charitable trusts (e.g., Clifford Trusts).
(13) Cost of issuing subordinated notes and debentures, net of accumulated amortization.
(14) Furniture and equipment rented to others under operating leases, net of accumulated
depreciation.
(15) Ground rents.
(16) Customers' liability for deferred payment letters of credit.
(17) Reinsurance recoverables from reinsurers external to the consolidated bank.
(18) "Separate account assets" of the reporting bank's insurance subsidiaries.
(19) The positive fair value of unused loan commitments (not accounted for as derivatives)
that the bank has elected to report at fair value under a fair value option.
(20) FDIC loss-sharing indemnification assets. These indemnification assets represent the
carrying amount of the right to receive payments from the FDIC for losses incurred on
specified assets acquired from failed insured depository institutions or otherwise
purchased from the FDIC that are covered by loss-sharing agreements with the FDIC.
(Exclude the assets covered by the FDIC loss-sharing agreements from this component
of “All other assets.” Instead, report each covered asset in the balance sheet category
appropriate to the asset on Schedule RC, e.g., report covered held-for-investment loans
in Schedule RC, item 4.b, “Loans and leases, net of unearned income.”)
Exclude from all other assets:
(1)

Redeemed U.S. savings bonds and food stamps (report in Schedule RC, item 1.a,
"Noninterest-bearing balances and currency and coin," and, if applicable, in
Schedule RC-A, item 1, "Cash items in process of collection, unposted debits, and
currency and coin").

(2)

Real estate owned or leasehold improvements to property intended for future use as
banking premises (report in Schedule RC, item 6, "Premises and fixed assets").

(3)

Accounts identified as "building accounts," "construction accounts," or "remodeling
accounts" (report in Schedule RC, item 6, "Premises and fixed assets").

(4)

Real estate acquired in any manner for debts previously contracted (including, but not
limited to, real estate acquired through foreclosure and real estate acquired by deed in
lieu of foreclosure), even if the bank has not yet received title to the property, and real
estate collateral underlying a loan when the bank has obtained physical possession of
the collateral, regardless of whether formal foreclosure proceedings have been
instituted against the borrower (report as "Other real estate owned" in Schedule RC,
item 7).

FFIEC 031 and 041

RC-F-6
(9-11)

RC-F - OTHER ASSETS

FFIEC 031 and 041

RC-F - OTHER ASSETS

Item No.

Caption and Instructions

6
(cont.)

(5)

Due bills representing purchases of securities or other assets by the reporting bank that
have not yet been delivered (report as loans in Schedule RC-C).

(6)

Factored accounts receivable (report as loans in Schedule RC-C).

7

Total. Report the sum of items 1 through 6. This amount must equal Schedule RC, item 11,
"Other assets."

FFIEC 031 and 041

RC-F-7
(9-11)

RC-F - OTHER ASSETS

This page intentionally left blank.

FFIEC 031 and 041

RC-G - OTHER LIABILITIES

SCHEDULE RC-G – OTHER LIABILITIES
General Instructions
Complete this schedule for the fully consolidated bank. Eliminate all intrabank transactions between
offices of the consolidated bank.
Item Instructions
Item No.

Caption and Instructions

1.a

Interest accrued and unpaid on deposits (in domestic offices). Report the amount of
interest on deposits (in domestic offices) accrued through charges to expense during the
current or prior periods, but not yet paid or credited to a deposit account. For savings banks,
include in this item "dividends" accrued and unpaid on deposits. On the FFIEC 031, exclude
from this item interest accrued and unpaid on deposits in foreign offices (report such
accrued interest in Schedule RC-G, item 1.b below).

1.b

Other expenses accrued and unpaid. Report the amount of income taxes, interest on
nondeposit liabilities (and, on the FFIEC 031, deposits in foreign offices), and other expenses
accrued through charges to expense during the current or prior periods, but not yet paid.
Exclude interest accrued and unpaid on deposits in domestic offices (report such accrued
interest in Schedule RC-G, item 1.a above).

2

Net deferred tax liabilities. Report the net amount after offsetting deferred tax assets
(net of valuation allowance) and deferred tax liabilities measured at the report date for a
particular tax jurisdiction if the net result is a credit balance. If the result for a particular tax
jurisdiction is a net debit balance, report the amount in Schedule RC-F, item 2, "Net deferred
tax assets." If the result for each tax jurisdiction is a net debit balance, enter a zero or the
word "none" in this item. (A bank may report a net deferred tax debit, or asset, for one tax
jurisdiction, such as for federal income tax purposes, and also report at the same time a net
deferred tax credit, or liability, for another tax jurisdiction, such as for state or local income tax
purposes.)
For further information on calculating deferred taxes for different tax jurisdictions, see the
Glossary entry for "income taxes."

3

Allowance for credit losses on off-balance sheet credit exposures. Report the amount
of any allowance for credit losses on off-balance sheet exposures established in accordance
with generally accepted accounting principles.

4

All other liabilities. Report the amount of all other liabilities (other than those reported in
Schedule RC-G, items 1, 2, and 3, above) that cannot properly be reported in Schedule RC,
items 13 through 19.
Disclose in items 4.a through 4.g each component of all other liabilities, and the dollar
amount of such component, that is greater than $25,000 and exceeds 25 percent of the
amount reported for this item.
For each component of all other liabilities that exceeds this disclosure threshold for which a
preprinted caption has not been provided in items 4.a through 4.d, describe the component
with a clear but concise caption in items 4.e through 4.g. These descriptions should not
exceed 50 characters in length (including spacing between words).

FFIEC 031 and 041

RC-G-1
(3-07)

RC-G - OTHER LIABILITIES

FFIEC 031 and 041

RC-G - OTHER LIABILITIES

Item No.

Caption and Instructions

4
(cont.)

Include as all other liabilities:
(1)

Accounts payable (other than expenses accrued and unpaid). (Report the amount of
accounts payable in Schedule RC-G, item 4.a, if this amount is greater than $25,000
and exceeds 25 percent of the amount reported in Schedule RC-G, item 4.)

(2)

Deferred compensation liabilities. (Report the amount of such liabilities in
Schedule RC-G, item 4.b, if this amount is greater than $25,000 and exceeds
25 percent of the amount reported in Schedule RC-G, item 4.)

(3)

Dividends declared but not yet payable, i.e., the amount of cash dividends declared on
limited-life preferred, perpetual preferred, and common stock on or before the report
date but not payable until after the report date. (Report the amount of such dividends in
Schedule RC-G, item 4.c, if this amount is greater than $25,000 and exceeds 25
percent of the amount reported in Schedule RC-G, item 4.) (Report dividend checks
outstanding as deposit liabilities in Schedule RC-E, item 1, column A, and item 7,
column B.)

(4)

Derivative instruments that have a negative fair value that the reporting bank holds for
purposes other than trading. For further information, see the Glossary entry for
"derivative contracts." (Report this negative fair value in Schedule RC-G, item 4.d, if
this amount is greater than $25,000 and exceeds 25 percent of the amount reported in
Schedule RC-G, item 4.)

(5)

Deferred gains from sale-leaseback transactions.

(6)

Unamortized loan fees, other than those that represent an adjustment of the interest
yield, if material (refer to the Glossary entry for "loan fees" for further information).

(7)

Bank's liability for deferred payment letters of credit.

(8)

Recourse liability accounts arising from asset transfers with recourse that are reported
as sales.

(9)

Unearned insurance premiums, claim reserves and claims adjustment expense
reserves, policyholder benefits, contractholder funds, and "separate account liabilities"
of the reporting bank's insurance subsidiaries.

(10) The full amount (except as noted below) of the liability represented by drafts and bills of
exchange that have been accepted by the reporting bank, or by others for its account,
and that are outstanding. The bank's liability on acceptances executed and outstanding
should be reduced prior to the maturity of such acceptances only when the reporting
bank acquires and holds its own acceptances, i.e., only when the acceptances are not
outstanding. See the Glossary entry for "bankers acceptances" for further information.
(11) Servicing liabilities.
(12) The negative fair value of unused loan commitments (not accounted for as derivatives)
that the bank has elected to report at fair value under a fair value option.

FFIEC 031 and 041

RC-G-2
(3-07)

RC-G - OTHER LIABILITIES

FFIEC 031 and 041

RC-G - OTHER LIABILITIES

Item No.

Caption and Instructions

4
(cont.)

Exclude from all other liabilities (report in appropriate items of Schedule RC-E, Deposit
Liabilities):
(1)

Proceeds from sales of U.S. savings bonds.

(2)

Withheld taxes, social security taxes, sales taxes, and similar items.

(3)

Mortgage and other escrow funds (e.g., funds received for payment of taxes or
insurance), sometimes described as mortgagors' deposits or mortgage credit balances.

(4)

Undisbursed loan funds for which borrowers are liable and on which they pay interest.
The amounts of such undisbursed funds should be included in both loans and deposits.

(5)

Funds held as dealer reserves (see the Glossary entry for "dealer reserve accounts" for
the definition of this term).

(6)

Payments collected by the bank on loans secured by real estate and other loans
serviced for others that have not yet been remitted to the owners of the loans.

(7)

Credit balances on credit cards and other revolving credit plans as a result of
customers' overpayments.

Also exclude from all other liabilities due bills or similar instruments representing the bank's
receipt of payment and the bank's liability on capital lease obligations (report in Schedule RC,
item 16, "Other borrowed money").
5

Total. Report the sum of items 1 through 4. This amount must equal Schedule RC, item 20,
"Other liabilities."

FFIEC 031 and 041

RC-G-3
(3-07)

RC-G - OTHER LIABILITIES

This page intentionally left blank.

FFIEC 031

RC-H - DOMESTIC BALANCE SHEET

SCHEDULE RC-H – SELECTED BALANCE SHEET ITEMS FOR
DOMESTIC OFFICES
General Instructions
Schedule RC-H is applicable only to banks filing the FFIEC 031 report forms.
For the following items, report balances outstanding in the bank's domestic offices only.

Item Instructions
Item No.

Caption and Instructions

1

Not applicable.

2

Not applicable.

3

Securities purchased under agreements to resell. Report the amount of securities
purchased under agreements to resell (as defined for Schedule RC, item 3.b) held in
domestic offices of the reporting bank. See the Glossary entry for "repurchase/resale
agreements" for further information.

4

Securities sold under agreements to repurchase. Report the amount of securities sold
under agreements to repurchase (as defined for Schedule RC, item 14.b) held in domestic
offices of the reporting bank. See the Glossary entry for "repurchase/resale agreements" for
further information.

5

Other borrowed money. Report the amount of other borrowed money (as defined for
Schedule RC, item 16, "Other borrowed money") held in domestic offices of the reporting
bank.

6

Net due from own foreign offices, Edge and Agreement subsidiaries, and IBFs.
(See the instructions following item 7 of this schedule.)
OR

7

Net due to own foreign offices, Edge and Agreement subsidiaries, and IBFs. Report in
the appropriate item either the "net due from" (item 6) or the "net due to" (item 7) position of
the domestic offices of the bank relative to all the bank's Edge and Agreement subsidiaries,
foreign branches, IBFs, consolidated foreign subsidiaries, and branches in Puerto Rico and
U.S. territories and possessions. These items must reflect all intrabank transactions of
domestic offices with such other offices of the reporting bank, including investments (both
equity and debt) in consolidated foreign subsidiaries. All other items in the Report of
Condition (except for the memorandum item below) must exclude intrabank transactions.
Calculate a single net amount for all the intrabank due to and due from positions of the
domestic offices and enter it either in item 6 or in item 7 of this schedule, depending on the
nature of the single net amount.

FFIEC 031

RC-H-1
(6-09)

RC-H - DOMESTIC BALANCE SHEET

FFIEC 031

Item No.

RC-H - DOMESTIC BALANCE SHEET

Caption and Instructions

8

Total assets. Report the amount of total assets (as defined for Schedule RC, item 12, "Total
assets") held in domestic offices of the reporting bank. For purposes of this report, "Net due
from own foreign offices, Edge and Agreement subsidiaries, and IBFs" should be excluded
from total assets in domestic offices.

9

Total liabilities. Report the amount of total liabilities (as defined for Schedule RC,
item 21, "Total liabilities") held in domestic offices of the reporting bank. For purposes of this
report, "Net due to own foreign offices, Edge and Agreement subsidiaries, and IBFs" should
be excluded from total liabilities in domestic offices.

NOTE: Items 10 through 17 have two columns for information on securities in domestic offices, one
column for held-to-maturity securities and one column for available-for-sale securities. Report the
amortized cost of held-to-maturity securities in column A and report the fair value of available-for-sale
securities in column B. Information on equity securities with readily determinable fair values is reported in
the column for available-for-sale securities only (column B). Amounts reported in column A will have
been included in the amounts reported in Schedule RC-B, column A. Amounts reported in column B will
have been included in the amounts reported in Schedule RC-B, column D.
Exclude from items 10 through 17 all securities held for trading in domestic offices and securities in
domestic offices the bank has elected to report at fair value under a fair value option even if bank
management did not acquire the securities principally for the purpose of selling them in the near term.
Securities held for trading and securities reported under a fair value option are to be reported in
Schedule RC, item 5, “Trading assets,” and, for certain banks, in Schedule RC-D – Trading Assets and
Liabilities.

Item No.

Caption and Instructions

10

U.S. Treasury securities. Report in the appropriate columns the amortized cost of held-tomaturity and the fair value of available-for-sale U.S. Treasury securities (as defined for
Schedule RC-B, item 1) held in domestic offices of the reporting bank.

11

U.S. Government agency obligations. Report in the appropriate columns the amortized
cost of held-to-maturity and the fair value of available-for-sale U.S. Government agency
obligations (as defined for Schedule RC-B, items 2.a and 2.b) held in domestic offices of the
reporting bank. Exclude mortgage-backed securities (report in Schedule RC-H, item 13
below).

12

Securities issued by states and political subdivisions in the U.S. Report in the
appropriate columns the amortized cost of held-to-maturity and the fair value of available-forsale securities issued by states and political subdivisions in the U.S. (as defined for
Schedule RC-B, item 3) held in domestic offices of the reporting bank.

13

Mortgage-backed securities:

13.a

FFIEC 031

Mortgage pass-through securities. Report in the appropriate columns of the appropriate
subitems the amortized cost of held-to-maturity and the fair value of available-for-sale
mortgage pass-through securities (as defined for Schedule RC-B, items 4.a and 4.c.(1)) held
in domestic offices of the reporting bank.

RC-H-2
(6-09)

RC-H - DOMESTIC BALANCE SHEET

FFIEC 031

RC-H - DOMESTIC BALANCE SHEET

Item No.

Caption and Instructions

13.a.(1)

Issued or guaranteed by FNMA, FHLMC, or GNMA. Report in the appropriate columns the
amortized cost of held-to-maturity and the fair value of available-for-sale mortgage
pass-through securities issued or guaranteed by the Federal National Mortgage Association
(FNMA), the Federal Home Loan Mortgage Corporation (FHLMC), or the Government
National Mortgage Association (GNMA) (as defined for Schedule RC-B, items 4.a.(1), 4.a.(2),
and 4.c.(1)) held in domestic offices of the reporting bank. Also include commercial
mortgage pass-through securities guaranteed by the Small Business Administration.

13.a.(2)

Other mortgage pass-through securities. Report in the appropriate columns the
amortized cost of held-to-maturity and the fair value of available-for-sale mortgage passthrough securities issued by non-U.S. Government issuers (as defined for Schedule RC-B,
items 4.a.(3) and 4.c.(1)) held in domestic offices of the reporting bank.

13.b

Other mortgage-backed securities. Report in the appropriate columns of the appropriate
subitems the amortized cost of held-to-maturity and the fair value of available-for-sale
mortgage pass-through securities other than pass-through securities (as defined for
Schedule RC-B, items 4.b and 4.c.(2)) held in domestic offices of the reporting bank.

13.b.(1)

Issued or guaranteed by U.S. Government agencies or sponsored agencies. Report in
the appropriate columns the amortized cost of held-to-maturity and the fair value of availablefor-sale collateralized mortgage obligations (CMOs), real estate mortgage investment
conduits (REMICs), CMO and REMIC residuals, and stripped mortgage-backed securities
issued or guaranteed by U.S. Government agencies or U.S. Government-sponsored
agencies (as defined for Schedule RC-B, items 4.b.(1) and 4.c.(2)) held in domestic offices of
the reporting bank. Also include REMICs issued by the U.S. Department of Veterans Affairs
(VA) held in domestic offices of the reporting bank.
U.S. Government agencies include, but are not limited to, such agencies as the Government
National Mortgage Association (GNMA), the Federal Deposit Insurance Corporation (FDIC),
and the National Credit Union Administration (NCUA). U.S. Government-sponsored
agencies include, but are not limited to, such agencies as the Federal Home Loan Mortgage
Corporation (FHLMC) and the Federal National Mortgage Association (FNMA).

13.b.(2)

14

FFIEC 031

All other mortgage-backed securities. Report in the appropriate columns the amortized
cost of held-to-maturity and the fair value of available-for-sale collateralized mortgage
obligations (CMOs), real estate mortgage investment conduits (REMICs), CMO and REMIC
residuals, and stripped mortgage-backed securities issued non-U.S. Government issuers (as
defined for Schedule RC-B, items 4.b.(2), 4.b.(3), and 4.c.(2)) held in domestic offices of the
reporting bank.
Other domestic debt securities. Report in the appropriate columns the amortized cost of
held-to-maturity and the fair value of available-for-sale asset-backed securities (as defined for
Schedule RC-B, item 5.a) issued by issuers in the U.S., structured financial products (as
defined for Schedule RC-B, item 5.b) issued by issuers in the U.S., and “Other domestic debt
securities” (as defined for Schedule RC-B, item 6.a) held in domestic offices of the reporting
bank.

RC-H-3
(9-11)

RC-H - DOMESTIC BALANCE SHEET

FFIEC 031

Item No.

RC-H - DOMESTIC BALANCE SHEET

Caption and Instructions

15

Foreign debt securities. Report in the appropriate columns the amortized cost of held-tomaturity and the fair value of available-for-sale asset-backed securities (as defined for
Schedule RC-B, item 5.a) issued by non-U.S. issuers, structured financial products (as
defined for Schedule RC-B, item 5.b) issued by non-U.S. issuers, and foreign debt securities
(as defined for Schedule RC-B, item 6.b) held in domestic offices of the reporting bank.

16

Investments in mutual funds and other equity securities with readily determinable fair
values. Report in column B the fair value of all investments in mutual funds and other equity
securities with readily determinable fair values (as defined for Schedule RC-B, item 7) held in
domestic offices of the reporting bank.

17

Total held-to-maturity and available-for-sale securities. Report the sum of items 10
through 16. The total of column A for this item must be less than or equal to Schedule RC-B,
item 8, column A. The total of column B for this item must be less than or equal to
Schedule RC-B, item 8, column D.

18

Equity securities that do not have readily determinable fair values. Report the
historical cost of equity securities without readily determinable fair values (as defined
for Schedule RC-F, item 4) held in domestic offices of the reporting bank.

FFIEC 031

RC-H-4
(9-11)

RC-H - DOMESTIC BALANCE SHEET

FFIEC 031

RC-I - IBFs

SCHEDULE RC-I -- ASSETS AND LIABILITIES OF IBFs
General Instructions
Schedule RC-I is to be completed only by banks filing the FFIEC 031 report forms that have IBFs
and other "foreign" offices.
This schedule requires the reporting, on a fully consolidated basis, of the total assets and liabilities of all
IBFs established by the reporting bank, i.e., including any IBFs established by the parent bank or by its
Edge or Agreement subsidiaries. Both items represent components of the consolidated items reported for
the consolidated bank and thus include only claims on, or liabilities to, third parties. That is, all intrabank
transactions are excluded. All of the asset and debt relationships, except for those between the
consolidated bank's IBFs and the IBFs of other depository institutions, are with foreign-domiciled
customers or customers domiciled in Puerto Rico and U.S. territories and possessions.

Item Instructions
Item No.

Caption and Instructions

1

Total IBF assets of the consolidated bank. Report the total amount outstanding of assets
of the consolidated bank's IBFs that are included in Schedule RC, item 12, "Total assets."

2

Total IBF liabilities. Report the total amount outstanding of all liabilities of the consolidated
bank's IBFs that are included in Schedule RC, item 21, "Total liabilities."

FFIEC 031

RC-I-1
(3-01)

RC-I - IBFs

This page intentionally left blank.

FFIEC 031 and 041

RC-K – AVERAGES

SCHEDULE RC-K – QUARTERLY AVERAGES
General Instructions
Report for the items on this schedule the average of the balances as of the close of business for each day
for the calendar quarter or an average of the balances as of the close of business on each Wednesday
during the calendar quarter. For days that an office of the bank (or any of its consolidated subsidiaries or
branches) is closed (e.g., Saturdays, Sundays, or holidays), use the amount outstanding from the
previous business day. An office is considered closed if there are no transactions posted to the general
ledger as of that date.
If the reporting bank was the acquirer in a business combination accounted for under the acquisition
method for which the acquisition date was during the calendar quarter, the quarterly averages for the
bank should include in the numerator:


Dollar amounts for the reporting bank for each day (or each Wednesday) from the beginning of the
quarter until the acquisition date and
Dollar amounts for the reporting bank and the acquired bank or business for each day (or each
Wednesday) from the acquisition date through the end of the quarter



and should include in the denominator the number of days (or Wednesdays) in the entire quarter.
If the reporting bank was acquired in a transaction for which the acquisition date was during the calendar
quarter and push down accounting was used to account for the acquisition, the quarterly averages for the
bank should include only the dollar amounts for each day (or each Wednesday) from the acquisition date
to the end of the quarter in the numerator and the number of days (or Wednesdays) from the acquisition
date through the end of the quarter in the denominator.
If the reporting bank entered into a reorganization that became effective during the calendar quarter and
has been accounted for at historical cost in a manner similar to a pooling of interests, the quarterly
averages for the bank should include dollar amounts for both the reporting bank and the bank or business
that was combined in the reorganization for each day (or each Wednesday) from the beginning to the end
of the quarter in the numerator and the number of days (or Wednesdays) in the entire quarter in the
denominator.
For further information on business combinations, push down accounting, and reorganizations, see the
Glossary entry for "business combinations."
If the bank began operating during the calendar quarter, the quarterly averages for the bank should
include only the dollar amounts for the days (or Wednesdays) since the bank began operating in the
numerator and the number of days (or Wednesdays) since the bank began operating in the denominator.
For all banks, the loan categories specified in item 6 of this schedule correspond to the loan category
definitions for Schedule RC-C, part I, Loans and Leases.
Item Instructions
Item No.

Caption and Instructions

ASSETS
1

Interest-bearing balances due from depository institutions. Report the quarterly average
for the fully consolidated bank's interest-bearing balances due from depository institutions (as
defined for Schedule RC, item 1.b, "Interest-bearing balances").

FFIEC 031 and 041

RC-K-1
(9-12)

RC-K – AVERAGES

FFIEC 031 and 041

Item No.

RC-K – AVERAGES

Caption and Instructions

2

U.S. Treasury securities and U.S. Government agency obligations (excluding
mortgage-backed securities). Report the quarterly average of the amortized cost of the
bank's held-to-maturity and available-for-sale U.S. Treasury and Government agency
obligations (as defined for Schedule RC-B, items 1 and 2, columns A and C).

3

Mortgage-backed securities. Report the quarterly average of the amortized cost of the
bank's held-to-maturity and available-for-sale mortgage-backed securities (as defined for
Schedule RC-B, item 4, columns A and C).

4

All other securities. Report the quarterly average of the amortized cost of the bank's
held-to-maturity and available-for-sale securities issued by states and political subdivisions in
the U.S., asset-backed securities and structured financial products, and other debt securities
(as defined for Schedule RC-B, items 3, 5, and 6, columns A and C) plus the quarterly
average of the historical cost of investments in mutual funds and other equity securities with
readily determinable fair values (as defined for Schedule RC-B, item 7, column C).

5

Federal funds sold and securities purchased under agreements to resell. Report the
quarterly average for federal funds sold and securities purchased under agreements to resell
(as defined for Schedule RC, item 3).

6

Loans:

FFIEC 041 FFIEC 031
Item No. Item No. Caption and Instructions
-

6.a

6.a

6.a.(1)

Total loans (in domestic offices). Report the quarterly average for total loans,
net of unearned income (as defined for Schedule RC-C, part I, items 1 through 9,
less item 11, column B).

6.b

6.a.(2)

Loans secured by real estate:

6.a.(2)(a)

Loans secured by 1-4 family residential properties. Report the quarterly
average for loans secured by 1-4 family residential properties (in domestic
offices) (as defined for Schedule RC-C, part I, item 1.c, column B).

6.b.(1)

Loans in domestic offices:

Exclude “1-4 family residential construction loans” (in domestic offices) (as
defined for Schedule RC-C, part I, item 1.a.(1), column B).
6.b.(2)

6.a.(2)(b)

All other loans secured by real estate. Report the quarterly average for all
construction, land development, and other land loans; loans secured by
farmland; loans secured by multifamily (5 or more) residential properties; and
loans secured by nonfarm nonresidential properties (in domestic offices) (as
defined for Schedule RC-C, part I, items 1.a.(1), 1.a.(2), 1.b, 1.d, 1.e.(1), and
1.e.(2), column B).
Exclude loans “Secured by 1-4 family residential properties” (in domestic offices)
(as defined for Schedule RC-C, part I, items 1.c.(1), 1.c.(2)(a), and 1.c.(2)(b),
column B).

FFIEC 031 and 041

RC-K-2
(9-12)

RC-K – AVERAGES

FFIEC 031 and 041

RC-K – AVERAGES

FFIEC 041 FFIEC 031
Item No. Item No. Caption and Instructions
-

6.a.(3)

Loans to finance agricultural production and other loans to farmers. Report
the quarterly average for loans to finance agricultural production and other loans
to farmers in domestic offices (as defined for Schedule RC-C, part I, item 3,
column B).

6.c

6.a.(4)

Commercial and industrial loans. Report the quarterly average for
commercial and industrial loans (in domestic offices) (as defined for
Schedule RC-C, part I, item 4, column B).

6.d

6.a.(5)

Loans to individuals for household, family, and other personal
expenditures:

6.d.(1)

6.a.(5)(a)

Credit cards. Report the quarterly average for credit cards. For purposes of this
schedule, credit cards (in domestic offices) (as defined for Schedule RC-C, part I,
item 6.a, column B).

6.d.(2)

6.a.(5)(b)

Other. Report the quarterly average for loans (in domestic offices) to individuals
for household, family, and other personal expenditures other than credit cards
(as defined for Schedule RC-C, part I, items 6.b, 6.c, and 6.d, column B).

-

6.b

Total loans in foreign offices, Edge and Agreement subsidiaries, and IBFs.
Report the quarterly average for total loans, net of unearned income (as defined
for Schedule RC-C, part I, items 1 through 9, less item 11), held in the reporting
bank’s foreign offices, Edge and Agreement subsidiaries, and IBFs.

FFIEC 031 and 041
Item No. Caption and Instructions
NOTE: On the FFIEC 041, item 7 is to be completed by banks that have $100 million or more in
total assets.
7

Trading assets. Report the quarterly average for the fully consolidated bank's trading assets
(as defined for Schedule RC, item 5). Trading assets include trading derivatives with positive
fair values.

8

Lease financing receivables (net of unearned income). Report the quarterly average for
the fully consolidated bank's lease financing receivables, net of unearned income (as defined
for Schedule RC-C, part I, item 10, column B, on the FFIEC 041; column A on the
FFIEC 031).

9

Total assets. Report the quarterly average for the bank's total assets, as defined for "Total
assets," on Schedule RC, item 12, except that this quarterly average should reflect all debt
securities (not held for trading) at amortized cost and available-for-sale equity securities with
readily determinable fair values at the lower of cost or fair value, and equity securities without
readily determinable fair values at historical cost. In addition, to the extent that net deferred
tax assets included in the bank's total assets, if any, include the deferred tax effects of any
unrealized holding gains and losses on available-for-sale debt securities, these deferred tax
effects may be excluded from the determination of the quarterly average for total assets. If
these deferred tax effects are excluded, this treatment must be followed consistently over
time.
This item is not the sum of items 1 through 8 above.

FFIEC 031 and 041

RC-K-3
(9-12)

RC-K – AVERAGES

FFIEC 031 and 041

Item No.

RC-K – AVERAGES

Caption and Instructions

LIABILITIES
10

Interest-bearing transaction accounts (in domestic offices). Report the quarterly
average for interest-bearing transaction accounts (in domestic offices): interest-bearing
demand deposits, NOW accounts, ATS accounts, and telephone and preauthorized transfer
accounts (as defined for Schedule RC-E, (part I,) column A, "Total transaction accounts").
Exclude noninterest-bearing demand deposits.
See the Glossary entry for "deposits" for the definitions of “demand deposits,” "NOW
accounts," "ATS accounts," and "telephone or preauthorized transfer accounts."

11

Nontransaction accounts (in domestic offices):

11.a

Savings deposits. Report the quarterly average for savings deposits (as defined for
Schedule RC-E, (part I), Memorandum items 2.a.(1) and 2.a.(2)). Savings deposits include
money market deposit accounts (MMDAs) and other savings deposits.

11.b

Time deposits of $100,000 or more. Report the quarterly average for time deposits of
$100,000 or more (as defined for Schedule RC-E, (part I), Memorandum items 2.c and 2.d).

11.c

Time deposits of less than $100,000. Report the quarterly average for time deposits of less
than $100,000 (as defined for Schedule RC-E, (part I,) Memorandum item 2.b).

FFIEC 041 FFIEC 031
Item No. Item No. Caption and Instructions
-

12

Interest-bearing deposits in foreign offices, Edge and Agreement
subsidiaries, and IBFs. Report the quarterly average for interest-bearing
deposits in foreign offices, Edge and Agreement subsidiaries, and IBFs
(as defined for Schedule RC, item 13.b.(2), "Interest-bearing").

12

13

Federal funds purchased and securities sold under agreements to
repurchase. Report the quarterly average for federal funds purchased and
securities sold under agreements to repurchase (as defined for Schedule RC,
item 14).

NOTE: On the FFIEC 041, item 13 is to be completed by banks that have $100 million or more in
total assets.
13

14

FFIEC 031 and 041

Other borrowed money. Report the quarterly average for the fully consolidated
bank's other borrowed money (as defined for Schedule RC, item 16).

RC-K-4
(9-12)

RC-K – AVERAGES

FFIEC 031 and 041

RC-K – AVERAGES

Memorandum
FFIEC 041
Item No. Caption and Instructions
NOTE: Memorandum item 1 is applicable only to banks filing the FFIEC 041 report. There are no
Schedule RC-K memorandum items on the FFIEC 031.
1

Loans to finance agricultural production and other loans to farmers.
Memorandum 1 is to be completed by:



banks with $300 million or more in total assets, and
banks with less than $300 million in total assets and with loans to finance agricultural
production and other loans to farmers (as reported in Schedule RC-C, part I, item 3,
column B) exceeding five percent of total loans, net of unearned income.

All other banks should report a zero or the word "none" in this item.
Report in this item the quarterly average for loans to finance agricultural production and other
loans to farmers (as defined for Schedule RC-C, part I, item 3, column B).

FFIEC 031 and 041

RC-K-5
(9-12)

RC-K – AVERAGES

This page intentionally left blank.

FFIEC 031 and 041

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

SCHEDULE RC-L – DERIVATIVES AND OFF-BALANCE SHEET ITEMS
General Instructions
Schedule RC-L should be completed on a fully consolidated basis. In addition to information about
derivatives, Schedule RC-L includes the following selected commitments, contingencies, and other
off-balance sheet items that are not reportable as part of the balance sheet of the Report of Condition
(Schedule RC). Among the items not to be reported in Schedule RC-L are contingencies arising in
connection with litigation. For those asset-backed commercial paper program conduits that the reporting
bank consolidates onto its balance sheet (Schedule RC) in accordance with ASC Subtopic 810-10,
Consolidation – Overall (formerly FASB Interpretation No. 46 (Revised), “Consolidation of Variable Interest
Entities,” as amended by FASB Statement No. 167, “Amendments to FASB Interpretation No. 46(R)”), any
credit enhancements and liquidity facilities the bank provides to the programs should not be reported in
Schedule RC-L. In contrast, for conduits that the reporting bank does not consolidate, the bank should
report the credit enhancements and liquidity facilities it provides to the programs in the appropriate items
of Schedule RC-L.

Item Instructions
Item No.
1

Caption and Instructions
Unused commitments. Report in the appropriate subitem the unused portions of
commitments. Unused commitments are to be reported gross, i.e., include in the appropriate
subitem the unused amount of commitments acquired from and conveyed or participated to
others. However, exclude commitments conveyed or participated to others that the bank is
not legally obligated to fund even if the party to whom the commitment has been conveyed or
participated fails to perform in accordance with the terms of the commitment.
For purposes of this item, commitments include:
(1) Commitments to make or purchase extensions of credit in the form of loans or
participations in loans, lease financing receivables, or similar transactions.
(2) Commitments for which the bank has charged a commitment fee or other consideration.
(3) Commitments that are legally binding.
(4) Loan proceeds that the bank is obligated to advance, such as:
(a) Loan draws;
(b) Construction progress payments; and
(c) Seasonal or living advances to farmers under prearranged lines of credit.
(5) Rotating, revolving, and open-end credit arrangements, including, but not limited to, retail
credit card lines and home equity lines of credit.
(6) Commitments to issue a commitment at some point in the future, where the bank has
extended terms, the borrower has accepted the offered terms, and the extension and
acceptance of the terms:
(a) Are in writing, regardless of whether they are legally binding on the bank and the
borrower, or

FFIEC 031 and 041

RC-L-1
(9-12)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

Item No.

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Caption and Instructions

1
(cont.)

(b) If not in writing, are legally binding on the bank and the borrower,

1

even though the related loan agreement has not yet been signed and even if the
commitment to issue a commitment is revocable, provided any revocation has not yet
taken effect as of the report date.
(7) Overdraft protection on depositors’ accounts offered under a program where the bank
advises account holders of the available amount of overdraft protection, for example,
when accounts are opened or on depositors' account statements or ATM receipts.
(8) The bank’s own takedown in securities underwriting transactions.
(9) Revolving underwriting facilities (RUFs), note issuance facilities (NIFs), and other similar
arrangements, which are facilities under which a borrower can issue on a revolving basis
short-term paper in its own name, but for which the underwriting banks have a legally
binding commitment either to purchase any notes the borrower is unable to sell by the
rollover date or to advance funds to the borrower.
Exclude forward contracts and other commitments that meet the definition of a derivative
and must be accounted for in accordance with ASC Topic 815, Derivatives and Hedging
(formerly FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging
Activities,” as amended), which should be reported in Schedule RC-L, item 12. Include the
amount (not the fair value) of the unused portions of loan commitments that do not meet the
definition of a derivative that the bank has elected to report at fair value under a fair value
option. Also include forward contracts that do not meet the definition of a derivative.
The unused portions of commitments are to be reported in the appropriate subitem regardless
of whether they contain “material adverse change” clauses or other provisions that are
intended to relieve the issuer of its funding obligations under certain conditions and regardless
of whether they are unconditionally cancelable at any time.
In the case of commitments for syndicated loans, report only the bank’s proportional share of
the commitment.
For purposes of reporting the unused portions of revolving asset-based lending commitments,
the commitment is defined as the amount a bank is obligated to fund – as of the report date –
based on the contractually agreed upon terms. In the case of revolving asset-based lending,
the unused portions of such commitments should be measured as the difference between
(a) the lesser of the contractual borrowing base (i.e., eligible collateral times the advance rate)
or the note commitment limit, and (b) the sum of outstanding loans and letters of credit under
the commitment. The note commitment limit is the overall maximum loan amount beyond
which the bank will not advance funds regardless of the amount of collateral posted. This
definition of “commitment” is applicable only to revolving asset-based lending, which is a
specialized form of secured lending in which a borrower uses current assets (e.g., accounts
receivable and inventory) as collateral for a loan. The loan is structured so that the amount of
credit is limited by the value of the collateral.
1.a

Revolving, open-end lines secured by 1-4 family residential properties. Report the
unused portions of commitments to extend credit under revolving, open-end lines of credit
secured by 1-4 family residential properties. These lines, commonly known as home equity
lines, are typically secured by a junior lien and are usually accessible by check or credit card.

1

For example, either the extension or the acceptance of the terms or both are verbal, but they are nonetheless
legally binding on both parties under applicable law.

FFIEC 031 and 041

RC-L-2
(9-12)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

Item No.

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Caption and Instructions

NOTE: Items 1.a.(1) and (2) are to be completed for the December report only.
1.a.(1)

Unused commitments for Home Equity Conversion Mortgage (HECM) reverse
mortgages outstanding that are held for investment (in domestic offices). For those
HECM reverse mortgages outstanding (in domestic offices) that have been included in
Schedule RC-C, part I, Memorandum item 15.a.(1), that are structured in whole or in part
like home equity lines of credit, report the unused commitments to provide additional funds
after closing to borrowers under the terms of their reverse mortgage loan agreements.
The amount reported in this item should also be included in the amount reported in
Schedule RC-L, item 1.a, “Revolving, open-end lines secured by 1-4 family residential
properties, i.e., home equity lines,” above.

1.a.(2)

Unused commitments for proprietary reverse mortgages outstanding that are held
for investment (in domestic offices). For those proprietary reverse mortgages outstanding
(in domestic offices) that have been included in Schedule RC-C, part I, Memorandum
item 15.a.(2), that are structured in whole or in part like home equity lines of credit, report the
unused commitments to provide additional funds after closing to borrowers under the terms of
their reverse mortgage loan agreements. The amount reported in this item should also be
included in the amount reported in Schedule RC-L, item 1.a, “Revolving, open-end lines
secured by 1-4 family residential properties, i.e., home equity lines,” above.

1.b

Credit card lines. Report the unused portions of all commitments to extend credit both to
individuals for household, family, and other personal expenditures and to other customers,
including commercial or industrial enterprises, through credit cards. Exclude home equity
lines accessible through credit cards. Banks may report unused credit card lines as of the
end of their customers' last monthly billing cycle prior to the report date or as of the report
date.
Banks that have either $300 million or more in total assets or $300 million or more in credit
card lines (as reported in Schedule RC, item 12, and Schedule RC-L, item 1.b, respectively,
as of June 30 of the previous calendar year) should also report a breakdown of their credit
card lines between unused consumer credit card lines (item 1.b.(1)) and other unused credit
card lines (item 1.b.(2)). The sum of Schedule RC-L, items 1.b.(1) and 1.b.(2), must equal
Schedule RC-L, item 1.b.

1.b.(1)

Unused consumer credit card lines. Report the unused portions of all commitments to
extend credit to individuals for household, family, and other personal expenditures through
credit cards that are included in Schedule RC-L, item 1.b, above.

1.b.(2)

Other unused credit card lines. Report the unused portions of all commitments to extend
credit to customers through credit cards for purposes other than household, family, and other
personal expenditures that are included in Schedule RC-L, item 1.b., above. Include, for
example, unused credit card lines under "corporate" or "business" credit card programs under
which credit cards are issued to one or more of a company's employees for business-related
uses.

FFIEC 031 and 041

RC-L-2a
(3-10)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Item No.

Caption and Instructions

1.c.(1)

Commitments to fund commercial real estate, construction, and land development
loans secured by real estate. Report in the appropriate subitem the unused portions of
commitments to extend credit for the specific purpose of financing commercial and multifamily
residential properties (e.g., business and industrial properties, hotels, motels, churches,
hospitals, and apartment buildings), provided that such commitments, when funded, would be
reportable as either loans secured by multifamily residential properties in Schedule RC-C,
part I, item 1.d, or loans secured by nonfarm nonresidential properties in Schedule RC-C,
part I, item 1.e.
Also include the unused portions of commitments to extend credit for the specific purpose of
financing (a) land development (i.e., the process of improving land – laying sewers, water
pipes, etc.) preparatory to erecting new structures or (b) the on-site construction of industrial,
commercial, residential, or farm buildings, provided that such commitments, when funded,
would be reportable as loans secured by real estate in Schedule RC-C, part I, item 1.a,
"Construction, land development, and other land loans." For purposes of this item,
"construction" includes not only construction of new structures, but also additions or
alterations to existing structures and the demolition of existing structures to make way for new
structures. Also include in this item loan proceeds the bank is obligated to advance as
construction progress payments.
Do not include general lines of credit that a borrower, at its option, may draw down to finance
construction and land development (report in Schedule RC-L, item 1.c.(2) or item 1.e.(1),
below, as appropriate).

1.c.(1)(a)

1-4 family residential construction loan commitments. Report the unused portions of
commitments to extend credit for the specific purpose of constructing 1-4 family residential
properties, provided that such commitments, when funded, would be reportable as loans
secured by real estate in Schedule RC-C, part I, item 1.a.(1), “1-4 family residential
construction loans."

1.c.(1)(b)

Commercial real estate, other construction loan, and land development loan
commitments. Report the unused portions of all other commitments to fund commercial real
estate, construction, and land development loans secured by real estate (as defined for
Schedule RC-L, item 1.c.(1)) other than commitments to fund 1-4 family residential
construction (as defined for Schedule RC-L, item 1.c.(1)(a)).

1.c.(2)

Commitments to fund commercial real estate, construction, and land development
loans not secured by real estate. Report the unused portions of all commitments to extend
credit for the specific purpose of financing commercial and residential real estate activities,
e.g., acquiring, developing, and renovating commercial and residential real estate, provided
that such commitments, when funded, would be reportable as "Commercial and industrial
loans" in Schedule RC-C, part I, item 4, or as "Other loans" in Schedule RC-C, part I, item 9.b.
Include in this item loan proceeds the bank is obligated to advance as construction
progresses.
Such commitments generally may include:
(1) commitments to extend credit for the express purpose of financing real estate ventures as
evidenced by loan documentation or other circumstances connected with the loan; or
(2) commitments made to organizations or individuals 80 percent of whose revenue or assets
are derived from or consist of real estate ventures or holdings.

FFIEC 031 and 041

RC-L-2b
(3-10)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Item No.

Caption and Instructions

1.c.(2)
(cont.)

Exclude from this item all commitments that, when funded, would be reportable as "Loans
secured by real estate" in Schedule RC-C, part I, item 1. Also exclude commitments made to
commercial and industrial firms where the sole purpose for the financing is to construct a
factory or office building to house the company's operations or employees.

1.d

Securities underwriting. Report the unsold portion of the reporting bank's own takedown in
securities underwriting transactions. Include note issuance facilities (NIFs) and revolving
underwriting facilities (RUFs) in this item.

1.e

Other unused commitments. Report in the appropriate subitem the unused portion of all
commercial and industrial loan commitments, commitments for loans to financial institutions,
and all other commitments not reportable in Schedule RC-L, items 1.a through 1.d., above.
Include commitments to extend credit through overdraft facilities or commercial lines of credit,
retail check credit and related plans, and those overdraft protection programs in which the
bank advises account holders of the available amount of protection.

1.e.(1)

Commercial and industrial loans. Report the unused portions of commitments to extend
credit for commercial and industrial purposes, i.e., commitments that, when funded, would be
reportable as commercial and industrial loans in Schedule RC-C, part I, item 4, “Commercial
and industrial loans." Exclude unused credit card lines to commercial and industrial
enterprises (report in Schedule RC-L, item 1.b, and, if applicable, item 1.b.(2), above).

1.e.(2)

Loans to financial institutions. Report the unused portions of commitments to extend
credit to financial institutions, i.e., commitments that, when funded, would be reportable either
as loans to depository institutions in Schedule RC-C, part I, item 2, “Loans to depository
institutions and acceptances of other banks," or as loans to nondepository financial institutions
in Schedule RC-C, part I, item 9.a, “Loans to nondepository financial institutions.”

FFIEC 031 and 041

RC-L-2c
(3-10)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

This page intentionally left blank.

FFIEC 031 and 041

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Item No.

Caption and Instructions

1.e.(3)

All other unused commitments. Report the unused portions of commitments not reportable
in Schedule RC-L, items 1.a through 1.e.(2), above.
Include commitments to extend credit secured by 1-4 family residential properties, except
(a) revolving, open-end lines of credit secured by 1-4 family residential properties (e.g., home
equity lines), which should be reported in Schedule RC-L, item 1.a, above, (b) commitments
for 1-4 family residential construction and land development loans (that are secured by such
properties), which should be reported in Schedule RC-L, item 1.c.(1), above, and
(c) commitments that meet the definition of a derivative and must be accounted for in
accordance with ASC Topic 815, Derivatives and Hedging (formerly FASB Statement
No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended),
which should be reported in Schedule RC-L, item 12.

2 and 3

General Instructions for Standby Letters of Credit – Originating banks must report in
items 2 and 3 the full amount outstanding and unused of financial and performance standby
letters of credit, respectively. Include those standby letters of credit that are collateralized by
cash on deposit, that have been acquired from others, and in which participations have been
conveyed to others where (a) the originating and issuing bank is obligated to pay the full
amount of any draft drawn under the terms of the standby letter of credit and (b) the
participating banks have an obligation to partially or wholly reimburse the originating bank,
either directly in cash or through a participation in a loan to the account party.
For syndicated standby letters of credit where each bank has a direct obligation to the
beneficiary, each bank must report only its share in the syndication. Similarly, if several banks
participate in the issuance of a standby letter of credit under a bona fide binding agreement
which provides that (a) regardless of any event, each participant shall be liable only up to a
certain percentage or to a certain amount and (b) the beneficiary is advised and has agreed that
each participating bank is only liable for a certain portion of the entire amount, each bank shall
report only its proportional share of the total standby letter of credit.
For a financial or performance standby letter of credit that is in turn backed by a financial
standby letter of credit issued by another bank, each bank must report the entire amount of the
standby letter of credit it has issued in either item 2 or item 3 below, as appropriate. The
amount of the reporting bank's financial or performance standby letter of credit that is backed
by the other bank's financial standby letter of credit must also be reported in either item 2.a
or 3.a, as appropriate, since the backing of standby letters of credit has substantially the same
effect as the conveying of participations in standby letters of credit.
On the FFIEC 031, also include all financial and performance guarantees issued by
foreign offices of the reporting bank pursuant to Federal Reserve Regulation K or
Section 347.103(a)(1) of the FDIC Rules and Regulations.

2

Financial standby letters of credit (and foreign office guarantees – for the FFIEC 031).
Report the amount outstanding and unused as of the report date of all financial standby letters
of credit (and all legally binding commitments to issue financial standby letters of credit) issued
by any office of the bank. A financial standby letter of credit irrevocably obligates the bank to
pay a third-party beneficiary when a customer (account party) fails to repay an outstanding loan
or debt instrument. (See the Glossary entry for "letter of credit" for further information.)

FFIEC 031 and 041

RC-L-3
(3-11)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Item No.

Caption and Instructions

2
(cont.)

Exclude from financial standby letters of credit:
(1) Financial standby letters of credit where the beneficiary is a consolidated subsidiary of the
reporting bank.
(2) Performance standby letters of credit.
(3) Signature or endorsement guarantees of the type associated with the clearing of
negotiable instruments or securities in the normal course of business.

2.a

Amount of financial standby letters of credit conveyed to others. Item 2.a is to be
completed by banks with $1 billion or more in total assets.
Report that portion of the bank's total contingent liability for financial standby letters of credit
reported in Schedule RC-L, item 2, above, that the bank has conveyed to others. Also include
that portion of the reporting bank's financial standby letters of credit that are backed by other
banks' financial standby letters of credit, as well as the portion that participating banks have
reparticipated to others. Participations and backings may be for any part or all of a given
obligation.

3

Performance standby letters of credit (and foreign office guarantees – for the
FFIEC 031). Report the amount outstanding and unused as of the report date of all
performance standby letters of credit (and all legally binding commitments to issue
performance standby letters of credit) issued by any office of the bank. A performance
standby letter of credit irrevocably obligates the bank to pay a third-party beneficiary when a
customer (account party) fails to perform some contractual non-financial obligation. (See the
Glossary entry for "letter of credit" for further information.)
Exclude from performance standby letters of credit:
(1) Performance standby letters of credit where the beneficiary is a consolidated subsidiary of
the reporting bank.
(2) Financial standby letters of credit.
(3) Signature or endorsement guarantees of the type associated with the clearing of
negotiable instruments or securities in the normal course of business.

3.a

Amount of performance standby letters of credit conveyed to others. Item 3.a is to be
completed by banks with $1 billion or more in total assets.
Report that portion of the bank's total contingent liability for performance standby letters of
credit reported in Schedule RC-L, item 3, above, that the bank has conveyed to others. Also
include that portion of the reporting bank's performance standby letters of credit that are
backed by other banks' financial standby letters of credit, as well as the portion that
participating banks have reparticipated to others. Participations and backings may be for any
part or all of a given obligation.

FFIEC 031 and 041

RC-L-4
(3-11)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

Item No.
4

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Caption and Instructions
Commercial and similar letters of credit. Report the amount outstanding and unused as of
the report date of issued or confirmed commercial letters of credit, travelers' letters of credit
not issued for money or its equivalent, and all similar letters of credit, but excluding standby
letters of credit (which are to be reported in Schedule RC-L, items 2 and 3, above). (See the
Glossary entry for "letter of credit.") Legally binding commitments to issue commercial letters
of credit are to be reported in this item.
Travelers' letters of credit and other letters of credit issued for money or its equivalent by the
reporting bank or its agents should be reported as demand deposit liabilities in
Schedule RC-E.

5

Not applicable.

6

Securities lent. Report the appropriate amount of all securities lent against collateral or on
an uncollateralized basis. Report the book value of bank-owned securities that have been
lent. In addition, for customers who have been indemnified against any losses by the
reporting bank, report the market value as of the report date of such customers' securities,
including customers' securities held in the reporting bank's trust department, that have been
lent. If the reporting bank has indemnified its customers against any losses on their securities
that have been lent by the bank, the commitment to indemnify -- either through a standby
letter of credit or other means -- should not be reported in any other item on Schedule RC-L.

7

Credit derivatives. In general, credit derivatives are arrangements that allow one party
(the “protection purchaser” or "beneficiary") to transfer the credit risk of a "reference asset"
or “reference entity” to another party (the “protection seller” or "guarantor"). Banks should
report the notional amounts of credit derivatives by type of instrument in Schedule RC-L,
items 7.a.(1) through 7.a.(4). Banks should report the gross positive and negative fair values
of all credit derivatives in Schedule RC-L, items 7.b.(1) and 7.b.(2). For both the notional
amounts and gross fair values, report credit derivatives for which the bank is the protection
seller in column A, “Sold Protection,” and those on which the bank is the protection purchaser
in column B, “Purchased Protection.” Banks should report the notional amounts of credit
derivatives by regulatory capital treatment in Schedule RC-L, items 7.c.(1)(a) through
7.c.(2)(c). Banks should report the notional amounts of credit derivatives by remaining
maturity in Schedule RC-L, items 7.d.(1)(a) through 7.d.(2)(b).
All credit derivative transactions within the consolidated bank should be reported on a net
basis, i.e., intrabank transactions should not be reported in this item. No other netting of
contracts is permitted for purposes of this item. Therefore, do not net the notional amounts or
fair values of: (1) credit derivatives with third parties on which the reporting bank is the
protection purchaser against credit derivatives with third parties on which the reporting bank is
the protection seller, or (2) contracts subject to bilateral netting agreements. The notional
amounts of credit derivatives should not be included in Schedule RC-L, items 12 through 14,
and the fair values of credit derivatives should not be included in Schedule RC-L, item 15.

7.a

Notional amounts. Report in the appropriate subitem and column the notional amount
(stated in U.S. dollars) of all credit derivatives. For tranched credit derivative transactions that
relate to an index, e.g., the Dow Jones CDX NA index, report as the notional amount the
dollar amount of the tranche upon which the reporting bank’s credit derivative cash flows are
based.

FFIEC 031 and 041

RC-L-5
(6-12)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Item No.

Caption and Instructions

7.a.(1)

Credit default swaps. Report in the appropriate column the notional amount of all credit
default swaps. A credit default swap is a contract in which a protection seller or guarantor
(risk taker), for a fee, agrees to reimburse a protection purchaser or beneficiary (risk hedger)
for any losses that occur due to a credit event on a particular entity, called the “reference
entity.” If there is no credit default event (as defined by the derivative contract), then the
protection seller makes no payments to the protection purchaser and receives only the
contractually specified fee. Under standard industry definitions, a credit event is normally
defined to include bankruptcy, failure to pay, and restructuring. Other potential credit events
include obligation acceleration, obligation default, and repudiation/moratorium.

7.a.(2)

Total return swaps. Report in the appropriate column the notional amount of all total return
swaps. A total return swap transfers the total economic performance of a reference asset,
which includes all associated cash flows, as well as capital appreciation or depreciation. The
protection purchaser (beneficiary) receives a floating rate of interest and any depreciation on
the reference asset from the protection seller. The protection seller (guarantor) has the
opposite profile. The protection seller receives cash flows on the reference asset, plus any
appreciation, and it pays any depreciation to the protection purchaser, plus a floating interest
rate. A total return swap may terminate upon a default of the reference asset.

7.a.(3)

Credit options. Report in the appropriate column the notional amount of all credit options. A
credit option is a structure that allows investors to trade or hedge changes in the credit quality
of the reference asset. For example, in a credit spread option, the option writer (protection
seller or guarantor) assumes the obligation to purchase or sell the reference asset at a
specified “strike” spread level. The option purchaser (protection purchaser or beneficiary)
buys the right to sell the reference asset to, or purchase it from, the option writer at the strike
spread level.

7.a.(4)

Other credit derivatives. Report in the appropriate column the notional amount of all other
credit derivatives. Other credit derivatives consist of any credit derivatives not reportable as a
credit default swap, a total return swap, or a credit option. Credit linked notes are cash
securities and should not be reported as other credit derivatives.

7.b

Gross fair values. Report in the appropriate subitem and column the gross fair values of all
credit derivatives.
As defined in ASC Topic 820, Fair Value Measurements and Disclosures (formerly FASB
Statement No. 157, “Fair Value Measurements”), fair value for an asset or liability is the price
that would be received to sell the asset or paid to transfer the liability in an orderly transaction
between market participants (not a forced liquidation or distressed sale) in the asset’s or
liability’s principal (or most advantageous) market at the measurement date. For further
information, see the Glossary entry for “fair value.” For purposes of this item, the reporting
bank should determine the fair value of its credit derivative contracts in the same manner that
it determines the fair value of these contracts for other financial reporting purposes.

7.b.(1)

Gross positive fair value. Report in the appropriate column the total fair value of those
credit derivatives reported in Schedule RC-L, items 7.a.(1) through 7.a.(4), above, with
positive fair values.

7.b.(2)

Gross negative fair value. Report in the appropriate column the total fair value of those
credit derivatives reported in Schedule RC-L, items 7.a.(1) through 7.a.(4), above, with
negative fair values. Report the total fair value as an absolute value; do not report with a
minus (-) sign.

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FFIEC 031 and 041

Item No.

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Caption and Instructions

7.c

Notional amount of all credit derivatives by regulatory capital treatment. Report in the
appropriate subitem the notional amount of all credit derivative contracts according to the
reporting bank’s treatment of the derivative for regulatory capital purposes. Because each
subitem under item 7.c is mutually exclusive, each credit derivative contract should be
reported in only one subitem. The sum of Schedule RC-L, items 7.c.(1)(a) and 7.c.(2)(a),
must equal sum of Schedule RC-L, items 7.a.(1) through (4), column A. The sum of
Schedule RC-L, items 7.c.(1)(b), 7.c.(2)(b), and 7.c.(2)(c), must equal sum of Schedule RC-L,
items 7.a.(1) through (4), column B.

7.c.(1)

Positions covered under the Market Risk Rule. For banks subject to the Market Risk Rule,
report in the appropriate subitem the notional amount of covered positions.

7.c.(1)(a)

Sold protection. For those credit derivatives that are covered positions under the Market
Risk Rule, report the notional amount of credit derivative contracts where the bank is the
protection seller (guarantor).

7.c.(1)(b)

Purchased protection. For those credit derivatives that are covered positions under the
Market Risk Rule, report the notional amount of credit derivative contracts where the bank is
the protection purchaser (beneficiary).

7.c.(2)(a)

Sold protection. Report the notional amount of credit derivative contracts where the reporting
bank is the protection seller (guarantor).

7.c.(2)(b)

Purchased protection that is recognized as a guarantee for regulatory capital
purposes. Report the notional amount of credit derivative contracts where the bank is the
protection purchaser (beneficiary) and the protection is recognized as a guarantee for
regulatory capital purposes. The credit derivative contracts to be reported in this item are
limited to those providing purchased protection where an underlying position (usually an asset
of the bank) is being hedged by the protection and credit derivative contract meets the criteria
for recognition as a guarantee under the regulatory capital standards of the bank’s primary
federal regulator.

7.c.(2)(c)

Purchased protection that is not recognized as a guarantee for regulatory capital
purposes. Report the notional amount of credit derivative contracts where the bank is the
protection purchaser (beneficiary) and the protection is not recognized as a guarantee for
regulatory capital purposes. The credit derivative contracts to be reported in this item are
limited to those providing purchased protection where the protection is not being used to
hedge an underlying position or where the “hedging” credit derivative contract does not meet
the criteria for recognition as a guarantee under the regulatory capital standards of the bank’s
primary federal regulator. These “naked” purchased protection positions sometimes arise
when a bank has sold the asset that was being hedged by the credit derivative contract while
retaining the credit derivative contract.

7.d

Notional amounts by remaining maturity. Report in the appropriate subitem and column
the notional amount of all credit derivative contracts. Report notional amounts in the column
corresponding to the contract's remaining term to maturity from the report date. Remaining
maturities are to be reported as (1) one year or less in column A, (2) over one year through
five years in column B, or (3) over five years in column C.

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RC-L-6a
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FFIEC 031 and 041

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Item No.

Caption and Instructions

7.d.(1)

Sold credit protection. Report the notional amount of all credit derivative contracts where
the bank is the protection seller (guarantor). The sum of Schedule RC-L, items 7.d.(1)(a) and
(b), columns A through C, must equal sum of Schedule RC-L, items 7.a.(1) through (4),
column A.

7.d.(1)(a)

Investment grade. Report the remaining maturities of credit derivative contracts where the
underlying reference asset is rated investment grade or, if not rated, is the equivalent of
investment grade under the bank’s internal credit rating system.

7.d.(1)(b)

Subinvestment grade. Report the remaining maturities of credit derivative contracts where
the underlying reference asset is rated below investment grade, i.e., subinvestment grade, or,
if not rated, is the equivalent of below investment grade under the bank’s internal credit rating
system.

7.d.(2)

Purchased protection. Report the notional amount of all credit derivative contracts where
the bank is the protection purchaser (beneficiary). The sum of Schedule RC-L,
items 7.d.(2)(a) and (b), columns A through C, must equal sum of Schedule RC-L,
items 7.a.(1) through (4), column B.

7.d.(2)(a)

Investment grade. Report the remaining maturities of credit derivative contracts where the
underlying reference asset is rated investment grade or, if not rated, is the equivalent of
investment grade under the bank’s internal credit rating system

7.d.(2)(b)

Subinvestment grade. Report the remaining maturities of credit derivative contracts where
the underlying reference asset is rated below investment grade, i.e., subinvestment grade, or,
if not rated, is the equivalent of below investment grade under the bank’s internal credit rating
system.

8

Spot foreign exchange contracts. Report the gross amount (stated in U.S. dollars) of all
spot contracts committing the reporting bank to purchase foreign (non-U.S.) currencies and
U.S. dollar exchange that are outstanding as of the report date. All transactions within the
consolidated bank should be reported on a net basis.
A spot contract is an agreement for the immediate delivery, usually within two business days
or less (depending on market convention), of a foreign currency at the prevailing cash market
rate. Contracts where market convention is for delivery of a foreign currency in less than two
days, e.g., T+1 day (for example, Canadian dollar-U.S. dollar contracts), should be reported
as spot contracts. Any contract exceeding the market convention should be reported as a
foreign exchange forward contract in Schedule RC-L, item 12.b, column B. Spot contracts
are considered outstanding (i.e., open) until they have been cancelled by acquisition or
delivery of the underlying currencies.
Only one side of a spot foreign exchange contract is to be reported. In those transactions
where foreign (non-U.S.) currencies are bought or sold against U.S. dollars, report only that
side of the transaction that involves the foreign (non-U.S.) currency. For example, if the
reporting bank enters into a spot contract which obligates the bank to purchase U.S. dollar
exchange against which it sells Japanese yen, then the bank would report (in U.S. dollar
equivalent values) the amount of Japanese yen sold in this item. In cross-currency spot
foreign exchange transactions, which involve the purchase and sale of two non-U.S.
currencies, only the purchase side is to be reported (in U.S. dollar equivalent values).

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Item No.
9

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Caption and Instructions
All other off-balance sheet liabilities. Report all significant types of off-balance sheet
liabilities not covered in other items of this schedule. Exclude all items which are required to
be reported as liabilities on the balance sheet of the Report of Condition (Schedule RC),
contingent liabilities arising in connection with litigation in which the reporting bank is involved,
commitments to purchase property being acquired for lease to others (report in
Schedule RC-L, item 1.e, above), and signature and endorsement guarantees of the type
associated with the regular clearing of negotiable instruments or securities in the normal
course of business.
Report only the aggregate amount of those types of "other off-balance sheet liabilities" that
individually exceed 10 percent of the bank's total equity capital reported in Schedule RC,
item 27.a. If the bank has no types of "other off-balance sheet liabilities" that individually
exceed 10 percent of total equity capital, report a zero.
Disclose in items 9.a through 9.f each type of "other off-balance sheet liabilities" reportable in
this item, and the dollar amount of the off-balance sheet liability, that individually exceeds
25 percent of the bank's total equity capital reported in Schedule RC, item 27.a. For each
type of off-balance sheet liability that exceeds this disclosure threshold for which a preprinted
caption has not been provided, describe the liability with a clear but concise caption in
items 9.d through 9.f. These descriptions should not exceed 50 characters in length
(including spacing between words).
Include as other off-balance sheet liabilities:
(1) Securities borrowed against collateral (other than cash), or on an uncollateralized basis,
for such purposes as a pledge against deposit liabilities or delivery against short sales.
Report borrowed securities that are fully collateralized by similar securities of equivalent
value at market value at the time they are borrowed. Report other borrowed securities at
market value as of the report date. (Report the amount of securities borrowed in
Schedule RC-L, item 9.a, if this amount exceeds 25 percent of the bank’s total equity
capital reported in Schedule RC, item 27.a.)
(2) Contracts for the purchase of when-issued securities that are excluded from the
requirements of ASC Topic 815, Derivatives and Hedging (formerly FASB Statement
No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended)
(and therefore not reported as forward contracts in Schedule RC-L, item 12.b, below), and
accounted for on a settlement-date basis. (Report the amount of these commitments in
Schedule RC-L, item 9.b, if this amount exceeds 25 percent of the bank’s total equity
capital reported in Schedule RC, item 27.a.)
(3) Standby letters of credit issued by another depository institution (such as a correspondent
bank), a Federal Home Loan Bank, or any other entity on behalf of the reporting bank,
which is the account party on the letters of credit and therefore is obligated to reimburse
the issuing entity for all payments made under the standby letters of credit. (Report the
amount of these standby letters of credit in Schedule RC-L, item 9.c, if this amount
exceeds 25 percent of the bank’s total equity capital reported in Schedule RC, item 27.a.)
(4) Financial guarantee insurance which insures the timely payment of principal and interest
on bond issues.

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RC-L-7
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Item No.

Caption and Instructions

9
(cont.)

(5) Letters of indemnity other than those issued in connection with the replacement of lost or
stolen or official checks.
(6) Shipside or dockside guarantees or similar guarantees relating to missing bills of lading or
title documents and other document guarantees that facilitate the replacement of lost or
stolen official checks.

10

All other off-balance sheet assets. Report to the extent feasible and practicable all
significant types of off-balance sheet assets not covered in other items of this schedule.
Exclude all items which are required to be reported as assets on the balance sheet of the
Report of Condition (Schedule RC), contingent assets arising in connection with litigation in
which the reporting bank is involved, and assets held in or administered by the reporting
bank's trust department.
Report only the aggregate amount of those types of "other off-balance sheet assets" that
individually exceed 10 percent of the bank's total equity capital reported in Schedule RC,
item 27.a. If the bank has no types of "other off-balance sheet assets" that individually
exceed 10 percent of total equity capital for which the reporting is feasible and practicable,
report a zero.
Disclose in items 10.a through 10.e each type of "other off-balance sheet assets" reportable in
this item, and dollar amount of the off-balance sheet asset, that individually exceeds
25 percent of the bank's total equity capital reported in Schedule RC, item 27.a. For each
type of off-balance sheet asset that exceeds this disclosure threshold for which a preprinted
caption has not been provided, describe the asset with a clear and concise caption in
items 10.b through 10.e. These descriptions should not exceed 50 characters in length
(including space between words).
Include as "other off-balance sheet assets" such items as:
(1) Contracts for the sale of when-issued securities that are excluded from the requirements
of ASC Topic 815, Derivatives and Hedging (formerly FASB Statement No. 133,
“Accounting for Derivative Instruments and Hedging Activities,” as amended), (and
therefore not reported as forward contracts in Schedule RC-L, item 12.b, below), and
accounted for on a settlement-date basis. (Report the amount of these commitments in
Schedule RC-L, item 10.a, if this amount exceeds 25 percent of the bank’s total equity
capital reported in Schedule RC, item 27.a.)
(2) Internally developed intangible assets.

11

Year-to-date merchant credit card sales volume. Merchant processing is the settlement of
credit card transactions for merchants. It is a separate and distinct business line from credit
card issuing. Merchant processing activity involves obtaining authorization for credit card
sales transactions, gathering sales information from the merchant, collecting funds from the
card-issuing bank or business, and crediting the merchants' accounts for their sales.
An acquiring bank is a bank that initiates and maintains contractual agreements with
merchants, agent banks, and third parties (e.g., independent sales organizations and member
service providers) for the purpose of accepting and processing credit card transactions. An
acquiring bank has liability for chargebacks for the merchants' sales activity.

FFIEC 031 and 041

RC-L-8
(3-13)

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FFIEC 031 and 041

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Item No.

Caption and Instructions

11
(cont.)

An agent bank with risk is a bank that, by agreement, participates in another bank’s merchant
credit card acceptance program. An agent bank with risk assumes liability for chargebacks for
all or a portion of the loss for the merchants' sales activity.
For purposes of items 11.a and 11.b, banks should include credit card sales transactions
involving bank credit cards, e.g., MasterCard and Visa.
For banks with total assets of $10 billion or more, the year-to-date sales volume may be
reported to the nearest million, with zeros reported in the thousands column, rather than to the
nearest thousand.

11.a

Sales for which the reporting bank is the acquiring bank. Report the year-to-date volume
of sales (in U.S. dollars) generated through the bank's merchant processing activities where
the reporting bank is the acquiring bank. This will include amounts processed for merchants
contracted directly by the acquiring bank, amounts processed for agent banks with risk, and
amounts processed for third parties (e.g., independent sales organizations and member
service providers). Banks that are required to report sales data to the credit card associations
of which they are members (e.g., MasterCard and Visa) should measure sales volume in the
same manner for purposes of this item.

11.b

Sales for which the reporting bank is the agent bank with risk. Report the year-to-date
volume of sales (in U.S. dollars) generated through the bank's merchant processing activities
where the reporting bank is acting as an agent bank with risk. Include all sales transactions
for which the acquiring bank with whom the reporting bank contracted may hold the bank
responsible.

12

Gross amounts (e.g., notional amounts) of derivatives. Report in the appropriate column
and subitem the gross par value (stated in U.S. dollars) (e.g., for futures, forwards, and option
contracts) or the notional amount (stated in U.S. dollars) (e.g., for forward rate agreements
and swaps), as appropriate, of all contracts that meet the definition of a derivative and must
be accounted for in accordance with ASC Topic 815, Derivatives and Hedging (formerly FASB
Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as
amended). Include both freestanding derivative contracts and embedded derivatives that must
be accounted for separately from their host contract under ASC Topic 815. Report each
contract according to its underlying risk exposure: (a) interest rate, (b) foreign exchange,
(c) equity, or (d) commodity and other. Contracts with multiple risk characteristics should be
classified based upon the predominant risk characteristics at the origination of the derivative.
However, exclude from Schedule RC-L, items 12 through 15, all credit derivatives, which
should be reported in Schedule RC-L, item 7, above.
The notional amount or par value to be reported for a derivative contract with a multiplier
component is the contract's effective notional amount or par value. For example, a swap
contract with a stated notional amount of $1,000,000 whose terms called for quarterly
settlement of the difference between 5% and LIBOR multiplied by 10 has an effective notional
amount of $10,000,000.
All transactions within the consolidated bank should be reported on a net basis. No other
netting of contracts is permitted for purposes of this item. Therefore, do not net:
(1) obligations of the reporting bank to purchase from third parties against the bank's
obligations to sell to third parties, (2) written options against purchased options, or
(3) contracts subject to bilateral netting agreements.

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RC-L-9
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RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Item No.

Caption and Instructions

12
(cont.)

For each column, the sum of items 12.a through 12.e must equal the sum of items 13 and 14.
Column Instructions
Column A, Interest Rate Contracts: Interest rate contracts are contracts related to an interestbearing financial instrument or whose cash flows are determined by referencing interest rates
or another interest rate contract (e.g., an option on a futures contract to purchase a Treasury
bill). These contracts are generally used to adjust the bank's interest rate exposure or, if the
bank is an intermediary, the interest rate exposure of others. Interest rate contracts include
interest rate futures, single currency interest rate swaps, basis swaps, forward rate
agreements, and interest rate options, including caps, floors, collars, and corridors.
Exclude contracts involving the exchange of one or more foreign currencies
(e.g., cross-currency swaps and currency options) and other contracts whose predominant
risk characteristic is foreign exchange risk, which are to be reported in column B as foreign
exchange contracts.
Unsettled securities transactions that exceed the regular way settlement time limit that is
customary in each relevant market must be reported as forward contracts in Schedule RC-L,
item 12.b.
Column B, Foreign Exchange Contracts: Foreign exchange contracts are contracts to
purchase foreign (non-U.S.) currencies and U.S. dollar exchange in the forward market, i.e.,
on an organized exchange or in an over-the-counter market. A purchase of U.S. dollar
exchange is equivalent to a sale of foreign currency. Foreign exchange contracts include
cross-currency interest rate swaps where there is an exchange of principal, forward foreign
exchange contracts (usually settling three or more business days from trade date), and
currency futures and currency options. Exclude spot foreign exchange contracts, which are to
be reported in Schedule RC-L, item 8.
Only one side of a foreign currency transaction is to be reported. In those transactions where
foreign (non-U.S.) currencies are bought or sold against U.S. dollars, report only that side of
the transaction that involves the foreign (non-U.S.) currency. For example, if the reporting
bank enters into a futures contract which obligates the bank to purchase U.S. dollar exchange
against which it sells Japanese yen, then the bank would report (in U.S. dollar equivalent
values) the amount of Japanese yen sold in Schedule RC-L, item 12.a. In cross-currency
transactions, which involve the purchase and sale of two non-U.S. currencies, only the
purchase side is to be reported.
All amounts in column B are to be reported in U.S. dollar equivalent values.
Column C, Equity Derivative Contracts: Equity derivative contracts are contracts that have a
return, or a portion of their return, linked to the price of a particular equity or to an index of
equity prices, such as the Standard and Poor's 500.
The contract amount to be reported for equity derivative contracts is the quantity, e.g., number
of units, of the equity instrument or equity index contracted for purchase or sale multiplied by
the contract price of a unit.

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RC-L-10
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Item No.

Caption and Instructions

12
(cont.)

Column D, Commodity and Other Contracts: Commodity contracts are contracts that have a
return, or a portion of their return, linked to the price of or to an index of precious metals,
petroleum, lumber, agricultural products, etc. Commodity and other contracts also include
any other contracts that are not reportable as interest rate, foreign exchange, or equity
derivative contracts.
The contract amount to be reported for commodity and other contracts is the quantity,
e.g., number of units, of the commodity or product contracted for purchase or sale multiplied
by the contract price of a unit.
The notional amount to be reported for commodity contracts with multiple exchanges of
principal is the contractual amount multiplied by the number of remaining payments
(i.e., exchanges of principal) in the contract.

12.a

Futures contracts. Futures contracts represent agreements for delayed delivery of financial
instruments or commodities in which the buyer agrees to purchase and the seller agrees to
deliver, at a specified future date, a specified instrument at a specified price or yield. Futures
contracts are standardized and are traded on organized exchanges that act as the
counterparty to each contract.
Report, in the appropriate column, the aggregate par value of futures contracts that have
been entered into by the reporting bank and are outstanding (i.e., open contracts) as of the
report date. Do not report the par value of financial instruments intended to be delivered
under such contracts if this par value differs from the par value of the contracts themselves.
Contracts are outstanding (i.e., open) until they have been cancelled by acquisition or delivery
of the underlying financial instruments or by offset. Offset is the liquidating of a purchase of
futures through the sale of an equal number of contracts of the same delivery month on the
same underlying instrument on the same exchange, or the covering of a short sale of futures
through the purchase of an equal number of contracts of the same delivery month on the
same underlying instrument on the same exchange.
Column A, Interest Rate Futures: Report futures contracts committing the reporting bank to
purchase or sell financial instruments and whose predominant risk characteristic is interest
rate risk. Some of the more common interest rate futures include futures on 90-day U.S.
Treasury bills; 12-year GNMA pass-through securities; and 2-, 4-, 6-, and 10-year U.S.
Treasury notes.
Column B, Foreign Exchange Futures: Report the gross amount (stated in U.S. dollars) of all
futures contracts committing the reporting bank to purchase foreign (non-U.S.) currencies and
U.S. dollar exchange and whose predominant risk characteristic is foreign exchange risk.
A currency futures contract is a standardized agreement for delayed delivery of a foreign
(non-U.S.) currency or U.S. dollar exchange in which the buyer agrees to purchase and the
seller agrees to deliver, at a specified future date, a specified amount at a specified exchange
rate.
Column C, Equity Derivative Futures: Report futures contracts committing the reporting bank
to purchase or sell equity securities or instruments based on equity indexes such as the
Standard and Poor's 500 or the Nikkei.

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RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Item No.

Caption and Instructions

12.a
(cont.)

Column D, Commodity and Other Futures: Report the contract amount for all futures
contracts committing the reporting bank to purchase or sell commodities such as agricultural
products (e.g., wheat, coffee), precious metals (e.g., gold, platinum), and non-ferrous metals
(e.g., copper, zinc). Include any other futures contract that is not reportable as an interest
rate, foreign exchange, or equity derivative contract in column A, B, or C.

12.b

Forward contracts. Forward contracts represent agreements for delayed delivery of
financial instruments or commodities in which the buyer agrees to purchase and the seller
agrees to deliver, at a specified future date, a specified instrument or commodity at a
specified price or yield. Forward contracts are not traded on organized exchanges and their
contractual terms are not standardized.
Report the aggregate par value of forward contracts that have been entered into by the
reporting bank and are outstanding (i.e., open contracts) as of the report date. Do not report
the par value of financial instruments intended to be delivered under such contracts if this par
value differs from the par value of the contracts themselves.
Contracts are outstanding (i.e., open) until they have been cancelled by acquisition or delivery
of the underlying financial instruments or settled in cash. Such contracts can only be
terminated, other than by receipt of the underlying asset, by agreement of both buyer and
seller.
Include as forward contracts in this item contracts for the purchase and sale of when-issued
securities that are not excluded from the requirements of ASC Topic 815, Derivatives and
Hedging (formerly FASB Statement No. 133, “Accounting for Derivative Instruments and
Hedging Activities,” as amended). Report contracts for the purchase of when-issued
securities that are excluded from the requirements of ASC Topic 815 and accounted for on a
settlement-date basis as "Other off-balance sheet liabilities" in Schedule RC-L, item 9, and
contracts for the sale of when-issued securities that are excluded from the requirements of
ASC Topic 815 and accounted for on a settlement-date basis as "Other off-balance sheet
assets" in Schedule RC-L, item 10, subject to the existing reporting thresholds for these two
items.
Column A, Interest Rate Forwards: Report forward contracts committing the reporting bank to
purchase or sell financial instruments and whose predominant risk characteristic is interest
rate risk. Include in this item firm commitments (i.e., commitments that have a specific
interest rate or price, selling date, and dollar amount) to sell loans secured by 1-to-4 family
residential properties that meet the definition of a derivative contract under ASC Topic 815.
Column B, Foreign Exchange Forwards: Report the gross amount (stated in U.S. dollars) of
all forward contracts committing the reporting bank to purchase foreign (non-U.S.) currencies
and U.S. dollar exchange and whose predominant risk characteristic is foreign exchange risk.
A forward foreign exchange contract is an agreement for delayed delivery of a foreign
(non-U.S.) currency or U.S. dollar exchange in which the buyer agrees to purchase and the
seller agrees to deliver, at a specified future date, a specified amount at a specified exchange
rate.
Column C, Equity Derivative Forwards: Report forward contracts committing the reporting
bank to purchase or sell equity instruments.

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RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Item No.

Caption and Instructions

12.b

Column D, Commodity and Other Forwards: Report the contract amount for all forward
contracts committing the reporting bank to purchase or sell commodities such as agricultural
products (e.g., wheat, coffee), precious metals (e.g., gold, platinum), and non-ferrous metals
(e.g., copper, zinc). Include any other forward contract that is not reportable as an interest
rate, foreign exchange, or equity derivative contract in column A, B, or C.

12.c

Exchange-traded option contracts. Option contracts convey either the right or the
obligation, depending upon whether the reporting bank is the purchaser or the writer,
respectively, to buy or sell a financial instrument or commodity at a specified price by a
specified future date. Some options are traded on organized exchanges.
The buyer of an option contract has, for compensation (such as a fee or premium), acquired
the right (or option) to sell to, or purchase from, another party some financial instrument or
commodity at a stated price on a specified future date. The seller of the contract has, for
such compensation, become obligated to purchase or sell the financial instrument or
commodity at the option of the buyer of the contract. A put option contract obligates the seller
of the contract to purchase some financial instrument or commodity at the option of the buyer
of the contract. A call option contract obligates the seller of the contract to sell some financial
instrument or commodity at the option of the buyer of the contract.

12.c.(1)

Written options. Report in this item the aggregate par value of the financial instruments or
commodities that the reporting bank has, for compensation (such as a fee or premium),
obligated itself to either purchase or sell under exchange-traded option contracts that are
outstanding as of the report date.
Column A, Written Exchange-Traded Interest Rate Options: For exchange-traded option
contracts obligating the reporting bank to either purchase or sell an interest rate futures
contract and whose predominant risk characteristic is interest rate risk, report the par value of
the financial instrument underlying the futures contract. An example of such a contract is a
Chicago Board Options Exchange option on the 13-week Treasury bill rate.
Column B, Written Exchange-Traded Foreign Exchange Options: Report in this item the
gross amount (stated in U.S. dollars) of foreign (non-U.S.) currency and U.S. dollar exchange
that the reporting bank has, for compensation, obligated itself to either purchase or sell under
exchange-traded option contracts whose predominant risk characteristic is foreign exchange
risk. In the case of option contracts obligating the reporting bank to either purchase or sell a
foreign exchange futures contract, report the gross amount (stated in U.S. dollars) of the
foreign (non-U.S.) currency underlying the futures contract. Exchange-traded options on
major currencies such as the Japanese Yen and British Pound Sterling and options on futures
contracts of major currencies are examples of such contracts.
Column C, Written Exchange-Traded Equity Derivative Options: Report the contract amount
for those exchange-traded option contracts where the reporting bank has obligated itself, for
compensation, to purchase or sell an equity instrument or equity index.
Column D, Written Exchange-Traded Commodity and Other Exchange-Traded Options:
Report the contract amount for those exchange-traded option contracts where the reporting
bank has obligated itself, for compensation, to purchase or sell a commodity or product.
Include any other written, exchange-traded option that is not reportable as an interest rate,
foreign exchange, or equity derivative contract in column A, B, or C.

FFIEC 031 and 041

RC-L-13
(3-12)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Item No.

Caption and Instructions

12.c.(2)

Purchased options. Report in this item the aggregate par value of the financial instruments
or commodities that the reporting bank has, for a fee or premium, purchased the right
to either purchase or sell under exchange-traded option contracts that are outstanding as of
the report date.
Column A, Purchased Exchange-Traded Interest Rate Options: For exchange-traded option
contracts giving the reporting bank the right to either purchase or sell an interest rate futures
contract and whose predominant risk characteristic is interest rate risk, report the par value of
the financial instrument underlying the futures contract. An example of such a contract is a
Chicago Board Options Exchange option on the 13-week Treasury bill rate.
Column B, Purchased Exchange-Traded Foreign Exchange Options: Report in this item the
gross amount (stated in U.S. dollars) of foreign (non-U.S.) currency and U.S. dollar exchange
that the reporting bank has, for a fee, purchased the right to either purchase or sell under
exchange-traded option contracts whose predominant risk characteristic is foreign exchange
risk. In the case of option contracts giving the reporting bank the right to either purchase or
sell a currency futures contract, report the gross amount (stated in U.S. dollars) of the foreign
(non-U.S.) currency underlying the futures contract. Exchange-traded options on major
currencies such as the Japanese Yen and British Pound Sterling and options on futures
contracts of major currencies are examples of such contracts.
Column C, Purchased Exchange-Traded Equity Derivative Options: Report the contract
amount of those exchange-traded option contracts where the reporting bank has, for a fee,
purchased the right to purchase or sell an equity instrument or equity index.
Column D, Purchased Exchange-Traded Commodity and Other Exchange-Traded Options:
Report the contract amount for those exchange-traded option contracts where the reporting
bank has, for a fee, purchased the right to purchase or sell a commodity or product. Include
any other purchased, exchange-traded option that is not reportable as an interest rate, foreign
exchange, or equity derivative contract in column A, B, or C.

12.d

Over-the-counter option contracts. Option contracts convey either the right or the
obligation, depending upon whether the reporting bank is the purchaser or the writer,
respectively, to buy or sell a financial instrument or commodity at a specified price by a
specified future date. Options can be written to meet the specialized needs of the
counterparties to the transaction. These customized option contracts are known as over-thecounter (OTC) options. Thus, over-the-counter option contracts include all option contracts
not traded on an organized exchange.
The buyer of an option contract has, for compensation (such as a fee or premium), acquired
the right (or option) to sell to, or purchase from, another party some financial instrument or
commodity at a stated price on a specified future date. The seller of the contract has, for
such compensation, become obligated to purchase or sell the financial instrument or
commodity at the option of the buyer of the contract. A put option contract obligates the seller
of the contract to purchase some financial instrument or commodity at the option of the buyer
of the contract. A call option contract obligates the seller of the contract to some financial
instrument or commodity at the option of the buyer of the contract.
In addition, swaptions, i.e., options to enter into a swap contract, and contracts known as
caps, floors, collars, and corridors should be reported as options.

FFIEC 031 and 041

RC-L-14
(3-12)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Item No.

Caption and Instructions

12.d
(cont.)

Commitments to lend that meet the definition of a derivative and must be accounted for in
accordance with ASC Topic 815, Derivatives and Hedging (formerly FASB Statement
No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended) are
considered options for purposes of Schedule RC-L, item 12. All other commitments to lend
should be reported in Schedule RC-L, item 1.

12.d.(1)

Written options. Report in this item the aggregate par value of the financial instruments or
commodities that the reporting bank has, for compensation (such as a fee or premium),
obligated itself to either purchase or sell under OTC option contracts that are outstanding as
of the report date. Also report an aggregate notional amount for written caps, floors, and
swaptions and for the written portion of collars and corridors.
Column A, Written OTC Interest Rate Options: Interest rate options include options to
purchase and sell interest-bearing financial instruments and whose predominant risk
characteristic is interest rate risk as well as contracts known as caps, floors, collars, corridors,
and swaptions. Include in this item the notional principal amount for interest rate caps and
floors that the reporting bank sells. For interest rate collars and corridors, report a notional
amount for the written portion of the contract in Schedule RC-L, item 12.d.(1), column A, and
for the purchased portion of the contract in Schedule RC-L, item 12.d.(2), column A.
Column B, Written OTC Foreign Exchange Options: A written currency option contract
conveys the obligation to exchange two different currencies at a specified exchange rate.
Report in this item the gross amount (stated in U.S. dollars) of foreign (non-U.S.) currency
and U.S. dollar exchange that the reporting bank has, for compensation, obligated itself to
either purchase or sell under OTC option contracts whose predominant risk characteristic is
foreign exchange risk.
Column C, Written OTC Equity Derivative Options: Report the contract amount for those
OTC option contracts where the reporting bank has obligated itself, for compensation, to
purchase or sell an equity instrument or equity index.
Column D, Written OTC Commodity and Other OTC Options: Report the contract amount for
those OTC option contracts where the reporting bank has obligated itself, for compensation,
to purchase or sell a commodity or product. Include any other written, OTC option that is not
reportable as an interest rate, foreign exchange, or equity derivative contract in column A, B,
or C.

12.d.(2)

Purchased options. Report in this item the aggregate par value of the financial instruments
or commodities that the reporting bank has, for a fee or premium, purchased the right to
either purchase or sell under OTC option contracts that are outstanding as of the report date.
Also report an aggregate notional amount for purchased caps, floors, and swaptions and for
the purchased portion of collars and corridors.
Column A, Purchased OTC Interest Rate Options: Interest rate options include options to
purchase and sell interest-bearing financial instruments and whose predominant risk
characteristic is interest rate risk as well as contracts known as caps, floors, collars,
corridors, and swaptions. Include in this item the notional principal amount for interest rate
caps and floors that the reporting bank purchases. For interest rate collars and corridors,
report a notional amount for the written portion of the contract in Schedule RC-L,
item 12.d.(1), column A, and for the purchased portion of the contract in Schedule RC-L,
item 12.d.(2), column A.

FFIEC 031 and 041

RC-L-15
(3-12)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Item No.

Caption and Instructions

12.d.(2)
(cont.)

Column B, Purchased OTC Foreign Exchange Options: Report in this item the gross amount
(stated in U.S. dollars) of foreign (non-U.S.) currency and U.S. dollar exchange that the
reporting bank has, for a fee, purchased the right to either purchase or sell under option
contracts whose predominant risk characteristic is foreign exchange risk.
Column C, Purchased OTC Equity Derivative Options: Report the contract amount of those
OTC option contracts where the reporting bank has, for a fee, purchased the right to purchase
or sell an equity instrument or equity index.
Column D, Purchased OTC Commodity and Other OTC Options: Report the contract amount
for those option contracts where the reporting bank has, for a fee, purchased the right to
purchase or sell a commodity or product. Include any other purchased OTC option that is not
reportable as an interest rate, foreign exchange or equity derivative contract in column A, B,
or C.

12.e

Swaps. Swaps are transactions in which two parties agree to exchange payment streams
based on a specified notional amount for a specified period. Forward starting swap contracts
should be reported as swaps. The notional amount of a swap is the underlying principal
amount upon which the exchange of interest, foreign exchange or other income or expense
is based. The notional amount to be reported for a swap contract with a multiplier component
is the contract's effective notional amount. In those cases where the reporting bank is acting
as an intermediary, both sides of the transaction are to be reported.
For purposes of these reports, a swap that has an embedded early termination option that
may be exercised either at a specified date or dates before the maturity date of the swap or
during a specified period, which may be until the maturity date of the swap, should be
reported as a swap and not as an option contract.
Column A, Interest Rate Swaps: Report the notional amount of all outstanding interest rate
and basis swaps whose predominant risk characteristic is interest rate risk.
Column B, Foreign Exchange Swaps: Report the notional principal amount (stated in U.S.
dollars) of all outstanding cross-currency interest rate swaps. A cross-currency interest rate
swap is a transaction in which two parties agree to exchange principal amounts of different
currencies, usually at the prevailing spot rate, at the inception of an agreement that lasts for a
certain number of years. At defined intervals over the life of the swap, the counterparties
exchange payments in the different currencies based on specified rates of interest. When the
agreement matures, the principal amounts will be re-exchanged at the same spot rate. The
notional amount of a cross-currency interest rate swap is generally the underlying principal
amount upon which the exchange is based.
Column C, Equity Swaps: Report the notional amount of all outstanding equity or equity index
swaps.
Column D, Commodity and Other Swaps: Report the notional principal amount of all other
swap agreements that are not reportable as either interest rate, foreign exchange, or equity
derivative contracts in column A, B, or C. The notional amount to be reported for commodity
contracts with multiple exchanges of principal is the contractual amount multiplied by the
number of remaining payments (or exchanges of principal) in the contract.

FFIEC 031 and 041

RC-L-16
(3-12)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

Item No.
13

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Caption and Instructions
Total gross notional amount of derivative contracts held for trading. Report, in the
appropriate column, the total notional amount or par value of those derivative contracts
reported in Schedule RC-L, item 12, above that are held for trading purposes. Contracts held
for trading purposes include those used in dealing and other trading activities. Derivative
instruments used to hedge trading activities should also be reported in this item.
Derivative trading activities include (a) regularly dealing in interest rate contracts, foreign
exchange contracts, equity derivative contracts, and other off-balance sheet commodity
contracts, (b) acquiring or taking positions in such items principally for the purpose of selling
in the near term or otherwise with the intent to resell (or repurchase) in order to profit from
short-term price movements, and (c) acquiring or taking positions in such items as an
accommodation to customers.
The reporting bank's trading department may have entered into a derivative contract with
another department or business unit within the consolidated bank (and which has been
reported on a net basis in accordance with the instructions to Schedule RC-L, item 12 above).
If the trading department has also entered into a matching contract with a counterparty
outside the consolidated bank, the contract with the outside counterparty should be
designated as held for trading or as held for purposes other than trading consistent with the
contract's designation for other financial reporting purposes.

14

Total gross notional amount of derivative contracts held for purposes other than
trading. Report, in the appropriate column, the total notional amount or par value of those
contracts reported in Schedule RC-L, item 12, above, that are held for purposes other than
trading.

14.a

Interest rate swaps where the bank has agreed to pay a fixed rate. Report the notional
amount of all outstanding interest rate swaps included in Schedule RC-L, item 14, column A,
above, on which the reporting bank is obligated to pay a fixed rate. The interest rate swaps
that are reported in this item will also have been reported in Schedule RC-L, item 12.e,
column A. Interest rate swaps that are held for trading should not be reported in this
item 14.a.
A fixed interest rate is a rate that is specified at the origination of the transaction, is fixed and
invariable during the term of the interest rate swap, and is known to both the bank and the
swap counterparty. Also treated as a fixed interest rate is a predetermined interest rate which
is a rate that changes during the term of the interest rate swap on a predetermined basis, with
the exact rate of interest over the life of the swap known with certainty to both the bank and
the swap counterparty at the origination of the transaction.

15

Gross fair values of derivative contracts. Report in the appropriate column and subitem
the fair value of all derivative contracts reported in Schedule RC-L, items 13 and 14, above.
For each of the four types of underlying risk exposure in columns A through D, the gross
positive and gross negative fair values will be reported separately for (i) contracts held for
trading purposes (in item 15.a) and (ii) contracts held for purposes other than trading (in
item 15.b). Guidance for reporting by type of underlying risk exposure is provided in the
instructions for Schedule RC-L, item 12, above. Guidance for reporting by purpose is
provided in the instructions for Schedule RC-L, items 13 and 14, above.

FFIEC 031 and 041

RC-L-17
(6-12)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Item No.

Caption and Instructions

15
(cont.)

All transactions within the consolidated bank should be reported on a net basis. No other
netting of contracts is permitted for purposes of this item. Therefore, do not net
(1) obligations of the reporting bank to buy against the bank's obligations to sell, (2) written
options against purchased options, (3) positive fair values against negative fair values, or
(4) contracts subject to bilateral netting agreements.
According to ASC Topic 820, Fair Value Measurements and Disclosures (formerly FASB
Statement No. 157, “Fair Value Measurements”), fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants in the asset’s or liability’s principal (or most advantageous) market at the
measurement date. For purposes of item 15, the reporting bank should determine the
fair value of its derivative contracts in the same manner that it determines the fair value
of these contracts for other financial reporting purposes, consistent with the guidance in
ASC Topic 820.

15.a

Contracts held for trading. Report in the appropriate column and subitem the gross positive
and gross negative fair values of those contracts held for trading that are reported in
Schedule RC-L, item 13, above.

15.a.(1)

Gross positive fair value. Report in the appropriate column the total fair value of those
contracts reported in Schedule RC-L, item 13, above, with positive fair values.

15.a.(2)

Gross negative fair value. Report in the appropriate column the total fair value of those
contracts reported in Schedule RC-L, item 13, above, with negative fair values. Report the
total fair value as an absolute value, do not report with a minus (-) sign.

15.b

Contracts held for purposes other than trading. Report in the appropriate column and
subitem the gross positive and gross negative fair values of those contracts held for purposes
other than trading that are reported in Schedule RC-L, item 14, above.

15.b.(1)

Gross positive fair value. Report in the appropriate column the total fair value of those
contracts reported in Schedule RC-L, item 14, above, with positive fair values.

15.b.(2)

Gross negative fair value. Report in the appropriate column the total fair value of those
contracts reported in Schedule RC-L, item 14, above, with negative fair values. Report the
total fair value as an absolute value, do not report with a minus (-) sign.

FFIEC 031 and 041

RC-L-18
(6-12)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

Item No.
16

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Caption and Instructions
Over-the-counter derivatives. Items 16.a and 16.b.(1) through (8) are to be completed only
by banks with total assets of $10 billion or more. Include all over-the-counter (OTC) interest
rate, foreign exchange, commodity, equity, and credit derivative contracts that are held for
trading and held for purposes other than trading.
Column Instructions for items 16.a and 16.b.(1) through (8):
Column A, Banks and Securities Firms: Banks include U.S. banks and foreign banks as
defined in the Glossary entry for “Banks, U.S. and Foreign.” Securities firms include brokerdealers that are registered with the U.S. Securities and Exchange Commission (SEC), firms
engaged in securities activities in the European Union (EU) that are subject to the EU’s
Capital Adequacy Directive, and other firms engaged in securities activities.
Column B, Monoline Financial Guarantors: Monoline financial guarantors are companies
that are primarily engaged in the business of providing credit enhancement in the form of a
“guarantee” of payment of principal and interest to bond issuers when an issuer defaults. In
essence, these companies provide a back-up guarantee, which generally increases the bond
rating of debt issued by lower-rated borrowers, in exchange for insurance premiums.
Monoline financial guarantors provide guarantees on securities that range from municipal
bonds to structured financial products such as collateralized debt obligations (CDOs).
Column C, Hedge Funds: Hedge funds are generally privately-owned investment funds with
a limited range of investors. Hedge funds are not required to register with the SEC, which
provides them with an exemption in many jurisdictions from regulations governing short
selling, derivative contracts, leverage, fee structures, and the liquidity of investments in the
fund.
Column D, Sovereign Governments: Sovereign governments are the central governments
of foreign countries.
Column E, Corporations and All Other Counterparties: Corporations and all other
counterparties include all counterparties other than those included in columns A through D
above.

16.a

Net current credit exposure. Report in the appropriate column the sum of the net current
credit exposures on OTC derivative contracts by type of counterparty. The sum of the net
current credit exposures reported in columns A through E for this item may not equal the
amount reported in Schedule RC-R, Memorandum item 1, “Current credit exposure across all
derivative contracts covered by the risk-based capital standards,” because the amount
reported in Schedule RC-R, Memorandum item 1, excludes, for example, OTC derivatives not
covered by the risk-based capital standards. All transactions within the consolidated bank
should be reported on a net basis.
The current credit exposure (sometimes referred to as the replacement cost) is the fair value
of a derivative contract when that fair value is positive. The current credit exposure is zero
when the fair value is negative or zero. For purposes of this item, the net current credit
exposure to an individual counterparty should be derived as follows: Determine whether a
legally enforceable bilateral netting agreement is in place between the reporting bank and the
counterparty. If such an agreement is in place, the fair values of all applicable derivative
contracts with that counterparty that are included in the scope of the netting agreement are
netted to a single amount, which may be positive, negative, or zero.

FFIEC 031 and 041

RC-L-19
(6-09)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

Item No.

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

Caption and Instructions

16.b

Fair value of collateral. Report in the appropriate subitem and column the total fair value of
the collateral pledged by counterparties to secure OTC derivative transactions by type of
counterparty, even if the fair value of the collateral as of the report date exceeds the net
current credit exposure to a counterparty or the current credit exposure to a counterparty is
zero. Include the fair value of collateral in the reporting bank’s possession and collateral held
on the bank’s behalf by third party custodians.

16.b.(1)

Cash – U.S. dollar. Report in the appropriate counterparty column the total of all cash
denominated in U.S. dollars held on deposit in the bank or by third party custodians on behalf
of the bank that provide protection to the bank against counterparty risk on OTC derivatives.

16.b.(2)

Cash – Other currencies. Report in the appropriate counterparty column in U.S. dollar
equivalents the total of all cash denominated in non-U.S. currency held on deposit in the bank
or by third party custodians on behalf of the bank that provide protection to the bank against
counterparty risk on OTC derivatives.

16.b.(3)

U.S. Treasury securities. Report in the appropriate counterparty column the fair value of
U.S. Treasury securities held directly by the bank or by third party custodians on behalf of the
bank that provide protection to the bank against counterparty risk on OTC derivatives.

16.b.(4)

U.S. Government agency and U.S. Government-sponsored agency debt securities.
Report in the appropriate counterparty column the fair value of U.S. Government agency and
U.S. Government-sponsored agency debt securities held directly by the bank or by third party
custodians on behalf of the bank that provide protection to the bank against counterparty risk
on OTC derivatives.

16.b.(5)

Corporate bonds. Report in the appropriate counterparty column the fair value of corporate
bonds held directly by the bank or by third party custodians on behalf of the bank that provide
protection to the bank against counterparty risk on OTC derivatives.

16.b.(6)

Equity securities. Report in the appropriate counterparty column the fair value of equity
securities held directly by the bank or by third party custodians on behalf of the bank that
provide protection to the bank against counterparty risk on OTC derivatives.

16.b.(7)

All other collateral. Report in the appropriate counterparty column the fair value of collateral
that cannot properly be reported in Schedule RC-L, item 16.b.(1) through item 16.b.(7), held
directly by the bank or by third party custodians on behalf of the bank that provide protection
to the bank against counterparty risk on OTC derivatives.

16.b.(8)

Total fair value of collateral. For each column, report the sum of items 16.b.(1) through
16.b.(7).

FFIEC 031 and 041

RC-L-20
(6-09)

RC-L – DERIVATIVES AND OFF-BALANCE SHEET

FFIEC 031 and 041

RC-M - MEMORANDA

SCHEDULE RC-M – MEMORANDA
Item No.
1

Caption and Instructions
Extensions of credit by the reporting bank to its executive officers, directors,
principal shareholders, and their related interests as of the report date. For purposes
of this item, the terms "extension of credit," "executive officer," "director," "principal
shareholder," and "related interest," are as defined in Federal Reserve Board Regulation O.
An "extension of credit" is a making or renewal of any loan, a granting of a line of credit, or an
extending of credit in any manner whatsoever. Extensions of credit include, among others,
loans, overdrafts, cash items, standby letters of credit, and securities purchased under
agreements to resell. For lines of credit, the amount to be reported as an extension of credit
is normally the total amount of the line of credit extended to the insider, not just the current
balance of the funds that have been advanced to the insider under the line of credit. See
Section 215.3 of Regulation O for further details.
An "executive officer" of the reporting bank generally means a person who participates or has
authority to participate (other than in the capacity of a director) in major policymaking
functions of the reporting bank, an executive officer of a bank holding company of which the
bank is a subsidiary, and (unless properly excluded by the bank's board of directors or
bylaws) an executive officer of any other subsidiary of that bank holding company. See
Section 215.2(e) of Regulation O for further details.
A "director" of the reporting bank generally means a person who is a director of a bank,
whether or not receiving compensation, a director of a bank holding company of which the
bank is a subsidiary, and (unless properly excluded by the bank's board of directors or
bylaws) a director of any other subsidiary of that bank holding company.
See Section 215.2(d) of Regulation O for further details.
A "principal shareholder" of the reporting bank generally means an individual or a company
(other than an insured bank or foreign bank) that directly or indirectly owns, controls, or has
the power to vote more than ten percent of any class of voting securities of the reporting
bank. See Section 215.11(a)(1) of Regulation O for further details.
A "related interest" means (1) a company (other than an insured bank or a foreign bank) that
is controlled by an executive officer, director, or principal shareholder or (2) a political or
campaign committee that is controlled by or the funds or services of which will benefit an
executive officer, director, or principal shareholder. See Section 215.11(a)(2) of
Regulation O.

1.a

Aggregate amount of all extensions of credit to all executive officers, directors,
principal shareholders, and their related interests. Report the aggregate amount
outstanding as of the report date of all extensions of credit by the reporting bank to all of its
executive officers, directors, and principal shareholders, and to all of the related interests of
its executive officers, directors, and principal shareholders.
Include each extension of credit by the reporting bank in the aggregate amount only one
time, regardless of the number of executive officers, directors, principal shareholders, and
related interests thereof to whom the extension of credit has been made.

FFIEC 031 and 041

RC-M-1
(3-11)

RC-M - MEMORANDA

FFIEC 031 and 041

Item No.
1.b

RC-M - MEMORANDA

Caption and Instructions
Number of executive officers, directors, and principal shareholders to whom the
amount of all extensions of credit by the reporting bank (including extensions of credit
to related interests) equals or exceeds the lesser of $500,000 or 5 percent of total
capital as defined for this purpose in agency regulations. Report the number of
executive officers, directors, and principal shareholders of the reporting bank to whom the
amount of all extensions of credit by the reporting bank outstanding as of the report date
equals or exceeds the lesser of $500,000 or five percent of total capital as defined for this
purpose in regulations issued by the bank's primary federal bank supervisory authority.
For purposes of this item, the amount of all extensions of credit by the reporting bank to an
executive officer, director, or principal shareholder includes all extensions of credit by the
reporting bank to the related interests of the executive officer, director, or principal
shareholder. Furthermore, an extension of credit made by the reporting bank to more than
one of its executive officers, directors, principal shareholders, or related interests thereof
must be included in full in the amount of all extensions of credit for each such executive
officer, director, or principal shareholder.

2

Intangible assets other than goodwill. Report in the appropriate subitem the carrying
amount of intangible assets other than goodwill. Intangible assets primarily result from
business combinations accounted for under the acquisition method in accordance with
ASC Topic 805, Business Combinations (formerly FASB Statement No. 141(R), “Business
Combinations”), from acquisitions of portions or segments of another institution's business
such as mortgage servicing portfolios and credit card portfolios, and from the sale or
securitization of financial assets with servicing retained.
An intangible asset with a finite life (other than a servicing asset) should be amortized over its
estimated useful life and should be reviewed at least quarterly to determine whether events
or changes in circumstances indicate that its carrying amount may not be recoverable. If this
review indicates that the carrying amount may not be recoverable, the intangible asset should
be tested for recoverability (impairment) in accordance with ASC Topic 360, Property, Plant,
and Equipment (formerly FASB Statement No. 144, “Accounting for the Impairment or
Disposal of Long-Lived Assets”). An impairment loss shall be recognized if the carrying
amount of the intangible asset is not recoverable and this amount exceeds the asset’s fair
value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted
expected future cash flows from the intangible asset. An impairment loss is recognized by
writing the intangible asset down to its fair value (which becomes the new accounting basis of
the intangible asset), with a corresponding charge to expense (which should be reported in
Schedule RI, item 7.c.(2)). Subsequent reversal of a previously recognized impairment loss
is prohibited.
An intangible asset with an indefinite useful life should not be amortized, but should be tested
for impairment at least annually in accordance with ASC Topic 350, Intangibles-Goodwill and
Other (formerly FASB Statement No. 142, “Goodwill and Other Intangible Assets”).

2.a

Mortgage servicing assets. Report the carrying amount of mortgage servicing assets,
i.e., contracts to service loans secured by real estate (as defined for Schedule RC-C, part I,
item 1, in the Glossary entry for "Loans secured by real estate") under which the estimated
future revenues from contractually specified servicing fees, late charges, and other ancillary
revenues are expected to more than adequately compensate the servicer for performing the
servicing. A mortgage servicing contract is either (a) undertaken in conjunction with selling or
securitizing the mortgages being serviced or (b) purchased or assumed separately. For
mortgage servicing assets accounted for under the amortization method, the carrying amount
is the unamortized cost of acquiring the mortgage servicing contracts, net of any

FFIEC 031 and 041

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Item No.

Caption and Instructions

2.a
(cont.)

related valuation allowances. For mortgage servicing assets accounted for under the fair
value method, the carrying amount is the fair value of the mortgage servicing contracts.
Exclude servicing assets resulting from contracts to service financial assets other than loans
secured by real estate (report nonmortgage servicing assets in Schedule RC-M, item 2.b).
For further information, see the Glossary entry for "servicing assets and liabilities."

2.a.(1)

Estimated fair value of mortgage servicing assets. Report the estimated fair value of the
capitalized mortgage servicing assets reported in Schedule RC-M, item 2.a.
According to ASC Topic 820, Fair Value Measurements and Disclosures (formerly FASB
Statement No. 157, “Fair Value Measurements”), fair value is defined as the price that would
be received to sell an asset in an orderly transaction between market participants in the
asset’s principal (or most advantageous) market at the measurement date. For purposes of
this item, the reporting bank should determine the fair value of mortgage servicing assets in
the same manner that it determines the fair value of these assets for other financial reporting
purposes, consistent with the guidance in ASC Topic 820.

2.b

Purchased credit card relationships and nonmortgage servicing assets. Report the
carrying amount of purchased credit card relationships plus the carrying amount of
nonmortgage servicing assets.
Purchased credit card relationships represent the right to conduct ongoing credit card
business dealings with the cardholders. In general, purchased credit card relationships are
an amount paid in excess of the value of the purchased credit card receivables. Such
relationships arise when the reporting bank purchases existing credit card receivables and
also has the right to provide credit card services to those customers. Purchased credit card
relationships may also be acquired when the reporting bank purchases an entire depository
institution.
Purchased credit card relationships shall be carried at amortized cost. Management of the
institution shall review the carrying amount at least quarterly, adequately document this
review, and adjust the carrying amount as necessary. This review should determine whether
unanticipated acceleration or deceleration of cardholder payments, account attrition, changes
in fees or finance charges, or other events or changes in circumstances indicate that the
carrying amount of the purchased credit card relationships may not be recoverable. If this
review indicates that the carrying amount may not be recoverable, the intangible asset should
be tested for recoverability, and any impairment loss should be recognized, as described in
the instruction for Schedule RC-M, item 2.
Nonmortgage servicing assets are contracts to service financial assets, other than loans
secured by real estate (as defined for Schedule RC-C, part I, item 1) under which the
estimated future revenues from contractually specified servicing fees, late charges, and other
ancillary revenues are expected to more than adequately compensate the servicer for
performing the servicing. A nonmortgage servicing contract is either (a) undertaken in
conjunction with selling or securitizing the nonmortgage financial assets being serviced or
(b) purchased or assumed separately. For nonmortgage servicing assets accounted for
under the amortization method, the carrying amount is the unamortized cost of acquiring the
nonmortgage servicing contracts, net of any related valuation allowances. For nonmortgage
servicing assets accounted for under the fair value method, the carrying amount is the fair
value of the nonmortgage servicing contracts. For further information, see the Glossary entry
for "servicing assets and liabilities."

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Item No.

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Caption and Instructions

2.c

All other identifiable intangibles. Report the carrying amount of all other specifically
identifiable intangible assets such as core deposit intangibles and favorable leasehold rights.
Exclude goodwill, which should be reported in Schedule RC, item 10.a.

2.d

Total. Report the sum of items 2.a, 2.b, and 2.c. This amount must equal Schedule RC,
item 10.b, "Other intangible assets."

3

Other real estate owned. Report in the appropriate subitem the net book value of all real
estate other than (1) bank premises owned or controlled by the bank and its consolidated
subsidiaries (which should be reported in Schedule RC, item 6) and (2) direct and indirect
investments in real estate ventures (which should be reported in Schedule RC, item 9).
Do not deduct mortgages or other liens on such property (report mortgages or other liens in
Schedule RC, item 16, "Other borrowed money"). Amounts should be reported net of any
applicable valuation allowances.

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Item No.

Caption and Instructions

3
(cont.)

Include as other real estate owned:
(1) Foreclosed real estate, i.e.,
(a) Real estate acquired in any manner for debts previously contracted (including, but
not limited to, real estate acquired through foreclosure and real estate acquired by
deed in lieu of foreclosure), even if the bank has not yet received title to the property.
(b) Real estate collateral underlying a loan when the bank has obtained physical
possession of the collateral, regardless of whether formal foreclosure proceedings
have been instituted against the borrower.
Foreclosed real estate received in full or partial satisfaction of a loan should be recorded
at the fair value less cost to sell of the property at the time of foreclosure. This amount
becomes the "cost" of the foreclosed real estate. When foreclosed real estate is received
in full satisfaction of a loan, the amount, if any, by which the recorded amount of the loan
exceeds the fair value less cost to sell of the property is a loss which must be charged to
the allowance for loan and lease losses at the time of foreclosure. The amount of any
senior debt (principal and accrued interest) to which foreclosed real estate is subject at
the time of foreclosure must be reported as a liability in Schedule RC, item 16, "Other
borrowed money."
After foreclosure, each foreclosed real estate asset must be carried at the lower of (1) the
fair value of the asset minus the estimated costs to sell the asset or (2) the cost of the
asset (as defined in the preceding paragraph). This determination must be made on an
asset-by-asset basis. If the fair value of a foreclosed real estate asset minus the
estimated costs to sell the asset is less than the asset's cost, the deficiency must be
recognized as a valuation allowance against the asset which is created through a charge
to expense. The valuation allowance should thereafter be increased or decreased (but
not below zero) through charges or credits to expense for changes in the asset's fair
value or estimated selling costs. (For further information, see the Glossary entries for
"foreclosed assets" and "troubled debt restructurings.")
(2) Foreclosed real estate backing mortgage loans insured by the Federal Housing
Administration (FHA) or the Farmers Home Administration (FmHA) or guaranteed by the
Veterans Administration (VA) that back Government National Mortgage Association
(GNMA) securities, i.e., "GNMA loans."
(3) Property originally acquired for future expansion but no longer intended to be used for
that purpose.
(4) Foreclosed real estate sold under contract and accounted for under the deposit method
of accounting in accordance with ASC Subtopic 360-20, Property, Plant, and Equipment
– Real Estate Sales (formerly FASB Statement No. 66, “Accounting for Sales of Real
Estate”). Under this method, the seller does not record notes receivable, but continues to
report the real estate and any related existing debt on its balance sheet. The deposit
method is used when a sale has not been consummated and is commonly used when
recovery of the carrying value of the property is not reasonably assured. If the full
accrual, installment, cost recovery, reduced profit, or percentage-of-completion method
of accounting under ASC Subtopic 360-20 is being used to account for the sale, the
receivable resulting from the sale of the foreclosed real estate should be reported as a
loan in Schedule RC-C and any gain on the sale should be recognized in accordance

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Item No.

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Caption and Instructions

3
(cont.)

with ASC Subtopic 360-20. For further information, see the Glossary entry for
"foreclosed assets."
Property formerly but no longer used for banking may be reported either in this item as "All
other real estate owned" or in Schedule RC, item 6, as "Premises and fixed assets."

3.a

Construction, land development, and other land (in domestic offices). Report the net
book value of all other real estate owned (in domestic offices) in the form of, or for which the
underlying real estate consists of, vacant land (but not farmland), land under development, or
structures or facilities under construction, whether or not development or construction is
continuing or has ceased prior to completion. When construction is substantially completed
and the structure or facility is available for occupancy or use, report the net book value in the
subitem below appropriate to the completed structure or facility.
For further information on the meaning of the term "construction, land development, and
other land" see the instruction to Schedule RC-C, part I, item 1.a. However, the amount to be
reported in this item should include all other real estate owned in the form of, or for which the
underlying real estate consists of, vacant land, land under development, or structures or
facilities under construction, not just real estate acquired through foreclosure on loans that
were originally reported as "construction, land development, and other land loans" in
Schedule RC-C, part I, item 1.a, column B.

3.b

Farmland (in domestic offices). Report the net book value of all other real estate owned (in
domestic offices) in the form of, or for which the underlying real estate consists of, farmland.
For further information on the meaning of the term "farmland," see the instruction to
Schedule RC-C, part I, item 1.b. However, the amount to be reported in this item should
include all other real estate owned in the form of, or for which the underlying real estate
consists of, farmland, not just real estate acquired through foreclosure on loans that were
originally reported as "loans secured by farmland" in Schedule RC-C, part I, item 1.b,
column B.

3.c

1-4 family residential properties (in domestic offices). Report the net book value of all
other real estate owned (in domestic offices) in the form of, or for which the underlying real
estate consists of, 1-to-4 family residential properties. Exclude 1-to-4 family residential
properties resulting from foreclosures on real estate backing delinquent “GNMA loans”
(report in Schedule RC-M, item 3.f).
For further information on the meaning of the term "1-4 family residential properties," see the
instruction to Schedule RC-C, part I, item 1.c. However, the amount to be reported in this
item should include all other real estate owned in the form of, or for which the underlying real
estate consists of, 1-to-4 family residential properties, not just real estate acquired through
foreclosure on loans that were originally reported as "loans secured by 1-4 family residential
properties" in Schedule RC-C, part I, item 1.c, column B.

3.d

Multifamily (5 or more) residential properties (in domestic offices). Report the net book
value of all other real estate owned (in domestic offices) in the form of, or for which the
underlying real estate consists of, multifamily residential properties.

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Item No.

Caption and Instructions

3.d
(cont.)

For further information on the meaning of the term "multifamily residential properties," see
the instruction to Schedule RC-C, part I, item 1.d. However, the amount to be reported in this
item should include all other real estate owned in the form of, or for which the underlying real
estate consists of, multifamily residential properties, not just real estate acquired through
foreclosure on loans that were originally reported as "loans secured by multifamily residential
properties" in Schedule RC-C, part I, item 1.d, column B

3.e

Nonfarm nonresidential properties (in domestic offices). Report the net book value of all
other real estate owned (in domestic offices) in the form of, or for which the underlying real
estate consists of, nonfarm nonresidential properties.
For further information on the meaning of the term "nonfarm nonresidential properties," see
the instruction to Schedule RC-C, part I, item 1.e. However, the amount to be reported in this
item should include all other real estate owned in the form of, or for which the underlying real
estate consists of, nonfarm nonresidential properties, not just real estate acquired through
foreclosure on loans that were originally reported as "loans secured by nonfarm
nonresidential properties" in Schedule RC-C, part I, item 1.e, column B.

3.f

Foreclosed properties from “GNMA loans.” Report the net book value of all other real
estate owned (in domestic offices) resulting from foreclosures on real estate backing
delinquent “GNMA loans.”

FFIEC 041 FFIEC 031
Item No. Item No. Caption and Instructions
-

3.g

In foreign offices. Report the net book value of all other real estate owned
which is held in foreign offices of the reporting bank.

3.g

3.h

Total. On the FFIEC 041, report the sum of items 3.a through 3.f. On the
FFIEC 031, report the sum of items 3.a through 3.g. This amount must equal
Schedule RC, item 7, "Other real estate owned."

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Item No.

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Caption and Instructions

4

Not applicable.

5

Other borrowed money. Report in the appropriate subitem the specified information about
Federal Home Loan Bank advances to and other borrowings by the consolidated bank.
A fixed interest rate is a rate that is specified at the origination of the advance or other
borrowing, is fixed and invariable during the term of the advance or other borrowing, and is
known to both the bank and the creditor. Also treated as a fixed interest rate is a
predetermined interest rate, which is a rate that changes on a predetermined basis during the
term of the advance or other borrowing, with the exact rate of interest over the life of the
advance or other borrowing known with certainty to both the bank and the creditor when the
advance or other borrowing is originated.
A floating rate is a rate that varies, or can vary, in relation to an index, to some other interest
rate such as the rate on certain U.S. Government securities, or to some other variable
criterion the exact value of which cannot be known in advance. Therefore, the exact interest
rate the advance or other borrowing carries at any subsequent time cannot be known at the
time the advance or other borrowing is originated by the bank or subsequently renewed.
When the rate on an advance or other borrowing with a floating rate has reached a
contractual floor or ceiling level, the advance or other borrowing is to be treated as
"fixed rate" rather than as "floating rate" until the rate is again free to float.
Remaining maturity is amount of time remaining from the report date until the final contractual
maturity of an advance or an other borrowing without regard to the advance’s or the
borrowing’s repayment schedule, if any.
Next repricing date is (a) the date the interest rate on an advance or other borrowing with
a floating rate can next change in accordance with the terms of the contract or (b) the
contractual maturity date of the advance or other borrowing, whichever is earlier.
Advances and other borrowings with a fixed rate that are callable at the option of the Federal
Home Loan Bank or other creditor should be reported according to their remaining maturity
without regard to their next call date unless the advance or other borrowing has actually been
called. When an advance or other borrowing with a fixed rate has been called, it should be
reported based on the time remaining until the call date. Advances and other borrowings
with a floating rate that are callable should be reported on the basis of their next repricing
date without regard to their next call date unless the advance or other borrowing has actually
been called. Advances and other borrowings with a floating rate that have been called
should be reported on the basis of their next repricing date or their actual call date, whichever
is earlier.

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Item No.

Caption and Instructions

5
(cont.)

Advances and other borrowings with a fixed rate that are puttable at the option of the bank
should be reported according to their remaining maturity without regard to put dates if the
bank has not exercised the put. If a put on an advance or other borrowing with a fixed rate
has been exercised but the advance or other borrowing has not yet been repaid, the advance
or other borrowing should be reported based on the amount of time remaining until the actual
put date. Advances and other borrowings with a floating rate that are puttable should be
reported on the basis of their next repricing date without regard to their next put date unless
the put has actually been exercised. If a put on an advance or other borrowing with a floating
rate has been exercised but the advance or other borrowing has not yet been repaid, the
advance or other borrowing should be reported on the basis of its next repricing date or its
actual put date, whichever is earlier.
Convertible advances should be reported based on the amount of time until the Federal
Home Loan Bank can next opt to convert the rate on the borrowing to a floating rate or the
contractual maturity date, whichever is earlier.
Other borrowings that are noninterest-bearing should be treated as fixed rate and reported
according to the amount of time remaining until the final contractual maturity.
For banks filing the FFIEC 031, for a discussion of borrowings in foreign offices, see the
Glossary entry for “borrowings and deposits in foreign offices.”

5.a

Federal Home Loan Bank advances. Report in the appropriate subitem the specified
information about outstanding advances obtained from a Federal Home Loan Bank. As
defined in 12 CFR Section 900.2, an “advance” is “a loan from a [Federal Home Loan] Bank
that is:
(1) Provided pursuant to a written agreement;
(2) Supported by a note or other written evidence of the borrower’s obligation; and
(3) Fully secured by collateral in accordance with the [Federal Home Loan Bank] Act and”
12 CFR Part 950.
Exclude from advances borrowings from a Federal Home Loan Bank in the form of securities
repurchase agreements (report in Schedule RC, item 14.b, “Securities sold under
agreements to repurchase”) and federal funds purchased (report in Schedule RC, item 14.a).

5.a.(1)

Advances with a remaining maturity or next repricing date of. Report the amount of the
bank’s fixed rate advances from a Federal Home Loan Bank in the appropriate subitems
according to the amount of time remaining until their final contractual maturities. Report the
amount of the bank’s floating rate advances from a Federal Home Loan Bank in the
appropriate subitems according to their next repricing dates.

5.a.(1)(a)

One year or less. Report the amount of:



fixed rate Federal Home Loan Bank advances with a remaining maturity of one year or
less, and
floating rate Federal Home Loan Bank advances with a next repricing date occurring in
one year or less.

Include all overnight advances in this item.

FFIEC 031 and 041

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(6-09)

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FFIEC 031 and 041

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Item No.

Caption and Instructions

5.a.(1)(b)

Over one year through three years. Report the amount of:



5.a.(1)(c)

Over three years through five years. Report the amount of:



5.a.(1)(d)

fixed rate Federal Home Loan Bank advances with a remaining maturity of over three
years through five years, and
floating rate Federal Home Loan Bank advances with a next repricing date occurring in
over three years through five years.

Over five years. Report the amount of:



5.a.(2)

fixed rate Federal Home Loan Bank advances with a remaining maturity of over one year
through three years, and
floating rate Federal Home Loan Bank advances with a next repricing date occurring in
over one year through three years.

fixed rate Federal Home Loan Bank advances a remaining maturity of over five years,
and
floating rate Federal Home Loan Bank advances with a next repricing date occurring in
over five years.

Advances with a remaining maturity of one year or less. Report all Federal Home Loan
Bank advances with a remaining maturity of one year or less. Include both fixed rate and
floating rate advances with a remaining maturity of one year or less.
The fixed rate advances that should be included in this item will also have been reported by
remaining maturity in Schedule RC-M, item 5.a.(1)(a), above. The floating rate advances that
should be included in this item will also have been reported by next repricing date in
Schedule RC-M, item 5.a.(1)(a), above. However, exclude those floating rate advances
included in Schedule RC-M, item 5.a.(1)(a), with a next repricing date of one year or less that
have a remaining maturity of over one year.

5.a.(3)

5.b

Structured advances. Report the amount of structured Federal Home Loan Bank
advances outstanding. Structured advances are advances containing options. Structured
advances include (1) callable advances, i.e., fixed rate advances that the Federal Home Loan
Bank has the option to call after a specified amount of time, (2) convertible advances, i.e.,
fixed rate advances that the Federal Home Loan Bank has the option to convert to floating
rate after a specified amount of time, and (3) puttable advances, i.e., fixed rate advances that
the bank has the option to prepay without penalty on a specified date or dates. Any other
advances that have caps, floors, or other embedded derivatives should also be reported as
structured advances.
Other borrowings. Report in the appropriate subitem the specified information about
amounts borrowed by the consolidated bank:
(1)

by issuing interest-bearing demand notes issued by the bank to the U.S. Treasury. 1

(2)

on its promissory notes;

1

If the bank participates in the Treasury Tax and Loan note program, funds received for credit to the
U.S. Government are demand deposits on the day received and become note balances on the following business
day.

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Item No.

Caption and Instructions

5.b
(cont.)

(3)

on notes and bills rediscounted (including commodity drafts rediscounted):

(4)

on financial assets (other than securities) sold under repurchase agreements that have
an original maturity of more than one business day and sales of participations in pools
of loans that have an original maturity of more than one business day;

(5)

by transferring financial assets in exchange for cash or other consideration (other than
beneficial interests in the transferred assets) in transactions that do not satisfy the
criteria for sale treatment under ASC Topic 860, Transfers and Servicing (formerly
FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities,” as amended) (see the Glossary entry for "transfers
of financial assets" for further information);

(6)

by the creation of due bills representing the bank's receipt of payment and similar
instruments, whether collateralized or uncollateralized (see the Glossary entry for "due
bills");

(7)

from Federal Reserve Banks;

(8)

by overdrawing "due from" balances with depository institutions, except overdrafts
arising in connection with checks or drafts drawn by the reporting bank and drawn on,
or payable at or through, another depository institution either on a zero-balance
account or on an account that is not routinely maintained with sufficient balances to
cover checks or drafts drawn in the normal course of business during the period until
the amount of the checks or drafts is remitted to the other depository institution (in
which case, report the funds received or held in connection with such checks or drafts
as deposits in Schedule RC-E until the funds are remitted);

(9)

on purchases of so-called "term federal funds" (as defined in the Glossary entry for
"federal funds transactions");

(10) on notes and debentures issued by consolidated subsidiaries of the reporting bank;
(11) through mortgages, liens, or other encumbrances on bank premises and other real
estate owned and obligations under capitalized leases;
(12) by borrowing immediately available funds in foreign offices that have an original
maturity of one business day or roll over under a continuing contrast that are not
securities repurchase agreements; and
(13) on any other obligation for the purpose of borrowing money not reported elsewhere on
Schedule RC, Balance Sheet, or in Schedule RC-M, item 5.a, “Federal Home Loan
Bank advances.”
Also include any borrowings by an Employee Stock Ownership Plan (ESOP) that the
reporting bank must report as a borrowing on its own balance sheet in accordance with
generally accepted accounting principles. For further information, see ASC Subtopic 718-40,
Compensation-Stock Compensation – Employee Stock Ownership Plans (formerly AICPA
Statement of Position 93-6, Employers' Accounting for Employee Stock Ownership Plans”).

FFIEC 031 and 041

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(3-11)

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FFIEC 031 and 041

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Item No.

Caption and Instructions

5.b
(cont.)

Exclude from other borrowings:
(1) federal funds purchased (in domestic offices) and securities sold under agreements to
repurchase (report in Schedule RC, items 14.a and 14.b, respectively);
(2) liability for short positions (report in Schedule RC, item 15);
(3) subordinated notes and debentures (report in Schedule RC, item 19).

5.b.(1)

Other borrowings with a remaining maturity or next repricing date of. Report the
amount of the bank’s fixed rate other borrowings in the appropriate subitems according to the
amount of time remaining until their final contractual maturities. Report the amount of the
bank’s floating rate other borrowings in the appropriate subitems according to their next
repricing dates.

5.b.(1)(a)

One year or less. Report the amount of:



fixed rate “Other borrowings” with a remaining maturity of one year or less, and
floating rate “Other borrowings” with a next repricing date occurring in one year or less.

Include in this item those overdrawn “due from” balances with depository institutions that are
reportable as “Other borrowed money,” as described in the instructions to Schedule RC-M,
item 5.b, above.
5.b.(1)(b)

Over one year through three years. Report the amount of:



5.b.(1)(c)

Over three years through five years. Report the amount of:



5.b.(1)(d)

fixed rate “Other borrowings” with a remaining maturity of over three years through five
years, and
floating rate “Other borrowings” with a next repricing date occurring in over three years
through five years.

Over five years. Report the amount of:



5.b.(2)

fixed rate “Other borrowings” with a remaining maturity of over one year through three
years, and
floating rate “Other borrowings” with a next repricing date occurring in over one year
through three years.

fixed rate “Other borrowings” with a remaining maturity of over five years, and
floating rate “Other borrowings” with a next repricing date occurring in over five years.

Other borrowings with a remaining maturity of one year or less. Report all “Other
borrowings” with a remaining maturity of one year or less. Include both fixed rate and floating
rate borrowings with a remaining maturity of one year or less.
The fixed rate borrowings that should be included in this item will also have been reported by
remaining maturity in Schedule RC-M, item 5.b.(1)(a), above. The floating rate borrowings
that should be included in this item will also have been reported by next repricing date in
Schedule RC-M, item 5.b.(1)(a), above. However, exclude those floating rate borrowings
included in Schedule RC-M, item 5.b.(1)(a), with a next repricing date of one year or less that
have a remaining maturity of over one year.

FFIEC 031 and 041

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FFIEC 031 and 041

Item No.

RC-M - MEMORANDA

Caption and Instructions

5.c

Total. Report the sum of items 5.a.(1)(a) through (d) and items 5.b.(1)(a) through (d). This
sum must equal Schedule RC, item 16, “Other borrowed money.”

6

Does the reporting bank sell private label or third party mutual funds and annuities?
Indicate whether the reporting bank currently sells private label or third party mutual funds and
annuities. Place an “X” in the box marked “YES” if the bank, a bank subsidiary or other bank
affiliate, or an unaffiliated entity sells private label or third party mutual funds and annuities:
(1) on bank premises;
(2) from which the bank receives income at the time of the sale or over the duration of the
account (e.g., annual fees, Rule 12b-1 fees or "trailer fees," and redemption fees); or
(3) through the reporting bank's trust department in transactions that are not executed in a
fiduciary capacity (e.g., trustee, executor, administrator, and conservator).
Otherwise, place an “X” in the box marked “NO”.
Mutual fund is the common name for an open-end investment company whose shares are
sold to the investing public. An annuity is an investment product, typically underwritten by an
insurance company, that pays either a fixed or variable payment stream over a specified
period of time. Both proprietary and private label mutual funds and annuities are established
in order to be marketed primarily to a bank's or banking organization's customers. A
proprietary product is a product for which the reporting bank or a subsidiary or other affiliate
of the reporting bank acts as investment adviser and may perform additional support
services. In a private label product, an unaffiliated entity acts as the investment adviser. The
identity of the investment adviser is normally disclosed in the prospectus for a mutual fund or
annuity. Mutual funds and annuities that are not proprietary or private label products are
considered third party products. For example, third party mutual funds and annuities include
products that are widely marketed by numerous parties to the investing public and have
investment advisers that are not affiliated with the reporting bank.

7

Assets under the reporting bank’s management in proprietary mutual funds and
annuities. Report the amount of assets (stated in U.S. dollars) held by mutual funds and
annuities as of the report date for which the reporting bank or a subsidiary of the bank acts as
investment adviser.
A general description of a proprietary product is included in the instruction to Schedule RC-M,
item 6, above. Proprietary mutual funds and annuities are typically created by large banking
organizations and offered to customers of the banking organization's subsidiary banks.
Therefore, small, independent banks do not normally act as investment advisers for mutual
funds and annuities.
If neither the bank nor any subsidiary of the bank acts as investment adviser for a mutual fund
or annuity, the bank should report a zero or the word "none" in this item.

FFIEC 031 and 041

RC-M-13
(3-11)

RC-M - MEMORANDA

FFIEC 031 and 041

Item No.
8

RC-M - MEMORANDA

Caption and Instructions
Primary Internet Web site address of the bank (home page). If the bank has an Internet
Web site or home page, report in this item the primary Web address for this site. If the bank
does not have its own Web site or home page, but information on or functions of the bank can
be accessed through an affiliate’s Web address, that affiliate’s primary Web address should
be reported. A bank that maintains more than one Web site should provide the Web address
that best represents the institution. Web site addresses should not exceed 75 characters in
length. Do not provide an e-mail address in the space for the Web address.
A bank’s primary Internet Web address is the public Internet site address (also known as the
Uniform Resource Locator or URL) that the bank’s customers or potential customers enter into
Internet browser software in order to find the first page of the bank’s Web site. Examples of
Web site addresses are www.bank.com, www.isp.com/bank/, and bank.isp.com. When
entering a Web address in this item, the Web address should not be prefaced with http://
because this is already included on the form. Because Web addresses reported in this item
are publicly available, each bank should ensure that it accurately reports its Web address, if
any.
If a bank has no Web site or home page of its own and the bank cannot be accessed through
an affiliate’s Web address, this item should be left blank.

9

Do any of the bank’s Internet Web sites have transactional capability, i.e., allow the
bank’s customers to execute transactions on their accounts through the Web site?
Indicate whether any of the reporting bank’s Internet Web sites have transactional capability.
Place an “X” in the box marked “Yes” if the bank or a bank affiliate has any Internet Web sites
that allow the bank’s customers to execute transactions on their accounts through the Web
site. Otherwise, place an “X” in the box marked “No.”
The Internet Web address of the Web site (or sites) with transactional capability does not
have to be the address of the bank’s primary Internet Web site that is reported in
Schedule RC-M, item 8, above.

10

Secured liabilities. Report in the appropriate subitem the carrying amount of federal funds
purchased (in domestic offices) and “Other borrowings” that are secured, i.e., the carrying
amount of these types of liabilities for which the bank (or a consolidated subsidiary) has
pledged securities, loans, or other assets as collateral.

10.a

Amount of “Federal funds purchased (in domestic offices)” that are secured.
Report the carrying amount of federal funds purchased (in domestic offices) (as defined for
Schedule RC, item 14.a) that are secured.

10.b

Amount of “Other borrowings” that are secured. Report the carrying amount of “Other
borrowings” (as defined for Schedule RC-M, item 5.b) that are secured. Secured “Other
borrowings” include, but are not limited to, transfers of financial assets accounted for as
financing transactions because they do not satisfy the criteria for sale accounting under
ASC Topic 860, Transfers and Servicing (formerly FASB Statement No. 140, “Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” as amended),
mortgages payable on bank premises and other real estate owned, and obligations under
capitalized leases.

FFIEC 031 and 041

RC-M-14
(3-11)

RC-M - MEMORANDA

FFIEC 031 and 041

Item No.

RC-M - MEMORANDA

Caption and Instructions

11

Does the bank act as trustee or custodian for Individual Retirement Accounts, Health
Savings Accounts, and other similar accounts? Indicate whether the institution acts as
trustee or custodian for Individual Retirement Accounts (IRAs), Health Savings Accounts
(HSAs), or other similar accounts. Other similar accounts include Roth IRAs, Coverdell
Education Savings Accounts, and Archer Medical Savings Accounts. State-chartered
institutions are allowed, under certain circumstances, to act as trustee or custodian for these
types of accounts without obtaining trust powers. In addition, national banks can serve as
custodian to IRAs, HSAs, and other similar accounts without obtaining trust powers. Place an
“X” in the box marked “Yes” if the reporting institution acts as trustee or custodian for these
types of accounts, regardless of whether it has trust powers. Otherwise, place an “X” in the
box marked “No.”

12

Does the bank provide custody, safekeeping, or other services involving the
acceptance of orders for the sale or purchase of securities? Indicate whether the
institution takes orders from customers for the sale or purchase of securities, regardless of
whether this activity occurs in a custody or safekeeping account or elsewhere in the
institution as an accommodation to the customer. Place an “X” in the box marked “Yes” if the
reporting institution takes securities sale or purchase orders from customers. Otherwise,
place an “X” in the box marked “No.”
For example, if the only persons accepting customers’ orders for securities are licensed dual
employees (i.e., individuals who are both employees of the bank and licensed
representatives of a registered broker-dealer) who take orders under a third-party networking
arrangement with a registered broker, the employees would be accepting the orders in their
capacity as registered representatives of the broker and not in their capacity as bank
employees. In this situation, the bank should place an “X” in the box marked “No.”

13

Assets covered by loss-sharing agreements with the FDIC. Under a loss-sharing
agreement, the FDIC agrees to absorb a portion of the losses on a specified pool of a failed
insured depository institution’s assets in order to maximize asset recoveries and minimize the
FDIC’s losses. In general, for transactions that occurred before April 2010, the FDIC
reimburses 80 percent of losses incurred by an acquiring institution on covered assets over a
specified period of time up to a stated threshold amount, with the acquirer absorbing
20 percent of the losses on these assets. Any losses above the stated threshold amount are
reimbursed by the FDIC at 95 percent of the losses recognized by the acquirer. For more
recent transactions, the FDIC generally reimburses 80 percent of the losses incurred by the
acquirer on covered assets, with the acquiring institution absorbing 20 percent.
Report in the appropriate subitem the balance sheet carrying amount as of the report date of
all assets acquired from failed insured depository institutions or otherwise purchased from the
FDIC that are covered by loss-sharing agreements with the FDIC. These asset amounts
should also be included in the balance sheet category appropriate to the asset on
Schedule RC, Balance Sheet.
Do not report the “book value” of the covered assets on the failed institution’s books, which
may be the amount upon which payments from the FDIC to the reporting bank are to be
based in accordance with the loss-sharing agreement.

13.a

Loans and leases. Report in the appropriate subitem the carrying amount of loans and
leases held for sale and the recorded investment in loans held for investment included in
Schedule RC-C, part I, items 1 through 10, acquired from failed insured depository
institutions or otherwise purchased from the FDIC that are covered by loss-sharing
agreements with the FDIC.

FFIEC 031 and 041

RC-M-15
(3-11)

RC-M - MEMORANDA

FFIEC 031 and 041

RC-M - MEMORANDA

Item No.

Caption and Instructions

13.a.(1)

Loans secured by real estate (in domestic offices):

13.a.(1)(a) Construction, land development, and other land loans:
13.a.(1)(a)(1) 1-4 family residential construction loans. Report the amount of 1-4 family residential
construction loans included in Schedule RC-C, part I, item 1.a.(1), column B, acquired from
failed insured depository institutions or otherwise purchased from the FDIC that are covered
by loss-sharing agreements with the FDIC.
13.a.(1)(a)(2) Other construction loans and all land development and other land loans. Report
the amount of other construction loans and all land development and other land loans
included in Schedule RC-C, part I, item 1.a.(2), column B, acquired from failed insured
depository institutions or otherwise purchased from the FDIC that are covered by losssharing agreements with the FDIC.
13.a.(1)(b) Secured by farmland. Report the amount of loans secured by farmland included in
Schedule RC-C, part I, item 1.b, column B, acquired from failed insured depository
institutions or otherwise purchased from the FDIC that are covered by loss-sharing
agreements with the FDIC.
13.a.(1)(c) Secured by 1-4 family residential properties:
13.a.(1)(c)(1) Revolving, open-end loans secured by 1-4 family residential properties and
extended under lines of credit. Report the amount of revolving, open-end loans secured
by 1-4 family residential properties and extended under lines of credit loans included in
Schedule RC-C, part I, item 1.c.(1), column B, acquired from failed insured depository
institutions or otherwise purchased from the FDIC that are covered by loss-sharing
agreements with the FDIC.
13.a.(1)(c)(2)

Closed-end loans secured by 1-4 family residential properties:

13.a.(1)(c)(2)(a)
Secured by first liens. Report the amount of closed-end loans secured by first liens
on 1-4 family residential properties included in Schedule RC-C, part I, item 1.c.(2)(a),
column B, acquired from failed insured depository institutions or otherwise purchased from
the FDIC that are covered by loss-sharing agreements with the FDIC.
13.a.(1)(c)(2)(b)
Secured by junior liens. Report the amount of closed-end loans secured by junior
liens on 1-4 family residential properties included in Schedule RC-C, part I, item 1.c.(2)(b),
column B, acquired from failed insured depository institutions or otherwise purchased from
the FDIC that are covered by loss-sharing agreements with the FDIC.
13.a.(1)(d) Secured by multifamily (5 or more) residential properties. Report the amount of loans
secured by multifamily (5 or more) residential properties included in Schedule RC-C, part I,
item 1.d, column B, acquired from failed insured depository institutions or otherwise
purchased from the FDIC that are covered by loss-sharing agreements with the FDIC.
13.a.(1)(e) Secured by nonfarm nonresidential properties:
13.a.(1)(e)(1) Loans secured by owner-occupied nonfarm nonresidential properties. Report the
amount of loans secured by owner-occupied nonfarm nonresidential properties included in
Schedule RC-C, part I, item 1.e.(1), column B, acquired from failed insured depository
institutions or otherwise purchased from the FDIC that are covered by loss-sharing
agreements with the FDIC.

FFIEC 031 and 041

RC-M-16
(3-11)

RC-M - MEMORANDA

FFIEC 031 and 041

Item No.

RC-M - MEMORANDA

Caption and Instructions

13.a.(1)(e)(2) Loans secured by other nonfarm nonresidential properties. Report the amount of
loans secured by other nonfarm nonresidential properties included in Schedule RC-C, part I,
item 1.e.(2), column B, acquired from failed insured depository institutions or otherwise
purchased from the FDIC that are covered by loss-sharing agreements with the FDIC.
NOTE: Item 13.a.(2) is not applicable to banks filing the FFIEC 041 report form.
13.a.(2)

Loans to finance agricultural production and other loans to farmers. Report the amount
of loans to finance agricultural production and other loans to farmers included in
Schedule RC-C, part I, item 3, column, acquired from failed insured depository institutions or
otherwise purchased from the FDIC that are covered by loss-sharing agreements with the
FDIC.

13.a.(3)

Commercial and industrial loans. Report the amount of commercial and industrial loans
included in Schedule RC-C, part I, item 4, column B on the FFIEC 041, and in
Schedule RC-C, part I, items 4.a and 4.b, column A on the FFIEC 031, acquired from failed
insured depository institutions or otherwise purchased from the FDIC that are covered by
loss-sharing agreements with the FDIC.

13.a.(4)

Loans to individuals for household, family, and other personal expenditures:

13.a.(4)(a) Credit cards. Report the amount of extensions of credit arising from credit cards included in
Schedule RC-C, part I, item 6.a, column B on the FFIEC 041 and column A on the
FFIEC 031, acquired from failed insured depository institutions or otherwise purchased from
the FDIC that are covered by loss-sharing agreements with the FDIC.
13.a.(4)(b) Automobile loans. Report the amount of automobile loans included in Schedule RC-C,
part I, item 6.c, column B on the FFIEC 041 and column A on the FFIEC 031, acquired from
failed insured depository institutions or otherwise purchased from the FDIC that are covered
by loss-sharing agreements with the FDIC.
13.a.(4)(c) Other. Report the amount of extensions of credit arising from other revolving credit plans
and other consumer loans included in Schedule RC-C, part I, items 6.b and 6.d, column B on
the FFIEC 041 and column A on the FFIEC 031, acquired from failed insured depository
institutions or otherwise purchased from the FDIC that are covered by loss-sharing
agreements with the FDIC.
13.a.(5)

All other loans and all leases. Report the amount of loans that cannot properly be reported
in Schedule RC-C, part I, Memorandum items 13.a.(1) through 13.a.(4), above acquired from
failed insured depository institutions or otherwise purchased from the FDIC that are covered
by loss-sharing agreements with the FDIC. Include in this item covered loans in the following
categories:
(1) Loans to depository institutions and acceptances of other banks included in
Schedule RC-C, part I, item 2, column B on the FFIEC 041 and in Schedule RC-C, part I,
items 2.a.(1) through 2.c.(2), column A on the FFIEC 031;
(2) On the FFIEC 041 only, loans to finance agricultural production and other loans to
farmers included in Schedule RC-C, part I, item 3, column B;
(3) Loans to foreign governments and official institutions included in Schedule RC-C, part I,
item 7, column B on the FFIEC 041 and column A on the FFIEC 031;

FFIEC 031 and 041

RC-M-17
(3-12)

RC-M - MEMORANDA

FFIEC 031 and 041

RC-M - MEMORANDA

Item No.

Caption and Instructions

13.a.(5)
(cont.)

(4) Obligations (other than securities and leases) of states and political subdivisions in the
U.S. included in Schedule RC-C, part I, item 8, column B on the FFIEC 041 and
column A on the FFIEC 031;
(5) Loans to nondepository financial institutions and other loans included in Schedule RC-C,
part I, items 9.a and 9.b, column B on the FFIEC 041, and in Schedule RC-C, part I,
item 9, column A on the FFIEC 031; and
(6) On the FFIEC 031 only, loans secured by real estate in foreign offices included in
Schedule RC-C, part I, item 1, column A.
Also include all lease financing receivables included in Schedule RC-C, part I, item 10,
column B on the FFIEC 041, and in Schedule RC-C, part I, items 10.a and 10.b, column A on
the FFIEC 031, acquired from failed insured depository institutions or otherwise purchased
from the FDIC that are covered by loss-sharing agreements with the FDIC.
Report in Schedule RC-M, items 13.a.(5)(a) through 13.a.(5)(d) on the FFIEC 041
(items 13.a.(5)(a) through 13.a.(5)(e) on the FFIEC 031), each category of loans and leases
within “All other loans and all leases” covered by loss-sharing agreements with the FDIC, and
the dollar amount of covered assets in such category, that exceeds 10 percent of total loans
and leases covered by loss-sharing agreements with the FDIC (i.e., 10 percent of the sum of
Schedule RC-M, items 13.a.(1) through 13.a.(5)). Preprinted captions have been provided in
items 13.a.(5)(a) through 13.a.(5)(d) on the FFIEC 041 (items 13.a.(5)(a) through 13.a.(5)(e)
on the FFIEC 031) for reporting the amount of covered loans and leases for the following
loan and lease categories if the amount for a loan or lease category exceeds the 10 percent
reporting threshold: Loans to depository institutions and acceptances of other banks, Loans
to foreign governments and official institutions, Other loans (i.e., Obligations (other than
securities and leases) of states and political subdivisions in the U.S., Loans to nondepository
financial institutions and other loans, and, on the FFIEC 041, Loans to finance agricultural
production and other loans to farmers); Loans secured by real estate in foreign offices (on the
FFIEC 031), and Lease financing receivables.
On the FFIEC 041, for:



Banks with $300 million or more in total assets and
Banks with less than $300 million in total assets that have loans to finance agricultural
production and other loans to farmers (Schedule RC-C, part I, item 3) exceeding five
percent of total loans,

a preprinted caption has been provided in item 13.a.(5)(c)(1) for reporting the amount of
“Loans to finance agricultural production and other loans to farmers” covered by loss-sharing
agreements with the FDIC if the amount of such loans included in Schedule RC-M,
item 13.a.(5)(c), “All other loans and all leases,” exceeds 10 percent of total loans and
leases covered by loss-sharing agreements with the FDIC (i.e., 10 percent of the sum of
Schedule RC-M, items 13.a.(1) through 13.a.(5)).
13.b

Other real estate owned. Report in the appropriate subitem the carrying amount of other
real estate owned (included in Schedule RC, item 7) acquired from failed insured depository
institutions or otherwise purchased from the FDIC that are covered by loss-sharing
agreements with the FDIC.

FFIEC 031 and 041

RC-M-18
(3-12)

RC-M - MEMORANDA

FFIEC 031 and 041

RC-M - MEMORANDA

Item No.

Caption and Instructions

13.b.(1)

Construction, land development, and other land (in domestic offices). Report the
carrying amount of all other real estate owned included in Schedule RC-M, item 3.a,
“Construction, land development, and other land (in domestic offices),” acquired from failed
insured depository institutions or otherwise purchased from the FDIC that are covered by
loss-sharing agreements with the FDIC.

13.b.(2)

Farmland (in domestic offices). Report the carrying amount of all other real estate owned
included in Schedule RC-M, item 3.b, “Farmland (in domestic offices),” acquired from failed
insured depository institutions or otherwise purchased from the FDIC that are covered by
loss-sharing agreements with the FDIC.

13.b.(3)

1-4 family residential properties (in domestic offices). Report the carrying amount of all
other real estate owned included in Schedule RC-M, item 3.c, “1-4 family residential
properties (in domestic offices),” acquired from failed insured depository institutions or
otherwise purchased from the FDIC that are covered by loss-sharing agreements with the
FDIC.

13.b.(4)

Multifamily (5 or more) residential properties (in domestic offices). Report the carrying
amount of all other real estate owned included in Schedule RC-M, item 3.d, “Multifamily (5 or
more) residential properties (in domestic offices),” acquired from failed insured depository
institutions or otherwise purchased from the FDIC that are covered by loss-sharing
agreements with the FDIC.

13.b.(5)

Nonfarm nonresidential properties (in domestic offices). Report the carrying amount of
all other real estate owned included in Schedule RC-M, item 3.e, “Nonfarm nonresidential
properties (in domestic offices),” acquired from failed insured depository institutions or
otherwise purchased from the FDIC that are covered by loss-sharing agreements with the
FDIC.

NOTE: Item 13.b.(6) is not applicable to banks filing the FFIEC 041 report forms.
13.b.(6)

In foreign offices. Report the carrying amount of all other real estate owned included in
Schedule RC-M, item 3.g, “In foreign offices,” acquired from failed insured depository
institutions or otherwise purchased from the FDIC that are covered by loss-sharing
agreements with the FDIC.

13.b.(7)

Portion of covered other real estate owned included in items 13.b.(1) through (5) [or
(6)] above that is protected by FDIC loss-sharing agreements. Report the maximum
amount recoverable from the FDIC under loss-sharing agreements covering the other real
estate owned reported in Schedule RC-M, items 13.b.(1) through (5) on the FFIEC 041, and
in Schedule RC-M, items 13.b.(1) through (6) on the FFIEC 031, beyond the amount that has
already been reflected in the measurement of the reporting bank’s indemnification asset,
which represents the right to receive payments from the FDIC under the loss-sharing
agreement.
In general, the maximum amount recoverable from the FDIC on covered other real estate
owned is the carrying amount of the other real estate, as reported in the preceding
Schedule RC-M items, multiplied by the currently applicable loss coverage rate (e.g.,
80 percent or 95 percent). This product will normally be the maximum amount recoverable
because reimbursements from the FDIC for covered losses related to the amount by which
the “book value” of a covered asset on the failed institution’s books (which is the amount

FFIEC 031 and 041

RC-M-19
(6-11)

RC-M - MEMORANDA

FFIEC 031 and 041

RC-M - MEMORANDA

Item No.

Caption and Instructions

13.b.(7)
(cont.)

upon which payments under an FDIC loss-sharing agreement are based) exceeds the
amount at which the reporting bank reports the covered asset on Schedule RC, Balance
Sheet, should already have been taken into account in measuring the carrying amount of the
reporting bank’s loss-sharing indemnification asset, which is reported in Schedule RC-F,
item 6, “All other assets.”

13.c

Debt securities. Report the amortized cost of held-to-maturity debt securities (included in
Schedule RC, item 2.a) and the fair value of available-for-sale debt securities (included in
Schedule RC, item 2.b) acquired from failed insured depository institutions or otherwise
purchased from the FDIC and covered by loss-sharing agreements with the FDIC.

13.d

Other assets. Report the balance sheet carrying amount of all assets that cannot properly
be reported in Schedule RC-M, items 13.a through 13.c, and have been acquired from failed
insured depository institutions or otherwise purchased from the FDIC and are covered by
loss-sharing agreements with the FDIC.
Exclude FDIC loss-sharing indemnification assets. These indemnification assets represent
the carrying amount of the right to receive payments from the FDIC for losses incurred on
specified assets acquired from failed insured depository institutions or otherwise purchased
from the FDIC that are covered by loss-sharing agreements with the FDIC. Report FDIC
loss-sharing indemnification assets in Schedule RC-F, item 6, “All other assets,” and, if the
amount of these indemnification assets is greater than $25,000 and exceeds 25 percent of
the amount of “All other assets,” also report the indemnification assets in Schedule RC-F,
item 6.e.

14

Captive insurance and reinsurance subsidiaries:

14.a

Total assets of captive insurance subsidiaries. Report the carrying amount of all assets
held by consolidated captive insurance subsidiaries of the reporting bank. A captive
insurance company is a limited purpose insurer licensed as a direct writer of insurance.
Some common lines of business include credit life, accident, and health insurance; disability
insurance; and employee benefits coverage. Report total assets before eliminating
intercompany transactions between the consolidated insurance subsidiary and other offices
or subsidiaries of the consolidated bank.

14.b

Total assets of captive reinsurance subsidiaries. Report the carrying amount of all assets
held by consolidated captive reinsurance subsidiaries of the reporting bank. Reinsurance is
the transfer, with indemnification, of all or part of the underwriting risk from one insurer to
another for a portion of the premium or other consideration.
Some common lines of business include credit life, accident, and health reinsurance;
disability reinsurance; reinsurance of employee benefits coverage; private mortgage guaranty
reinsurance; and terrorism risk reinsurance. Report total assets before eliminating
intercompany transactions between the consolidated reinsurance subsidiary and other offices
or subsidiaries of the consolidated bank.

FFIEC 031 and 041

RC-M-20
(6-11)

RC-M - MEMORANDA

FFIEC 031 and 041

Item No.
15

RC-M - MEMORANDA

Caption and Instructions
Qualified Thrift Lender (QTL) test. Items 15.a and 15.b are to be completed by all
savings associations and by those state savings banks and cooperative banks that have
applied and have been permitted, under Section 10(l) of the Home Owners’ Loan Act (HOLA)
(12 U.S.C. 1467a(l)), to be deemed a savings association for purposes of holding company
regulation.
The QTL test has been in place since it was enacted as part of the Competitive Equality
Banking Act of 1987. To be a QTL, a savings association (or a state savings or cooperative
bank that has elected to be treated as a QTL) must either meet the HOLA QTL test (12
U.S.C. 1467a(m)) or the Internal Revenue Service (IRS) Domestic Building and Loan
Association (DBLA) test (26 CFR 301.7701-13A). Under the HOLA QTL test, an institution
must hold “Qualified Thrift Investments” equal to at least 65 percent of its portfolio assets. To
be a QTL under the IRS DBLA test, an institution must meet a “business operations test” and
a “60 percent of assets test.” An institution may use either test to qualify and may switch
from one test to the other. However, the institution must meet the time requirements of the
respective test, which is:



Nine out of the last 12 months for the HOLA QTL test, and
The taxable year (which may be either a calendar or fiscal year) for the IRS DBLA test.

A savings association (or a state savings or cooperative bank that has elected to be treated
as a QTL) that fails to meet the QTL requirements is subject to certain restrictions, including
limits on activities, branching, and dividends.
15.a

Does the institution use the Home Owners’ Loan Act (HOLA) QTL test or the Internal
Revenue Service Domestic Building and Loan Association (IRS DBLA) test to
determine its QTL compliance? Indicate the test that the reporting institution uses to
determine its compliance with the QTL requirements. For the HOLA QTL test, enter the
number “1”; for the IRS DBLA test, enter the number “2.”

15.b

Has the institution been in compliance with the HOLA QTL test as of each month end
during the quarter or the IRS DBLA test for its most recent taxable year, as applicable?
Indicate whether the reporting institution has been in compliance with the HOLA QTL test as
of each month end during the quarter ending with the report date or the IRS DBLA test for its
most recent taxable year, as applicable. Place an “X” in the box marked “Yes” if the
institution has been in compliance with the applicable test for the specified period.
Otherwise, place an “X” in the box marked “No.”

FFIEC 031 and 041

RC-M-21
(3-12)

RC-M - MEMORANDA

This page intentionally left blank.

FFIEC 031 and 041

RC-N - PAST DUE

SCHEDULE RC-N – PAST DUE AND NONACCRUAL LOANS, LEASES,
AND OTHER ASSETS
General Instructions
Report on a fully consolidated basis all loans, leases, debt securities, and other assets that are past due
or are in nonaccrual status, regardless of whether such credits are secured or unsecured and regardless
of whether such credits are guaranteed or insured by the U.S. Government or by others. Report the
full recorded investment in assets that are past due or in nonaccrual status, as reported for purposes of
Schedule RC, Balance Sheet, not simply the delinquent payments. Loan amounts should be reported net
of unearned income to the extent that they are reported net of unearned income in Schedule RC-C. All
lease, debt security, and other asset amounts must be reported net of unearned income.
For report dates through December 31, 2000, the information reported in column A on assets past due
30 through 89 days and still accruing and in all of Memorandum item 1 on restructured loans and leases
included in the past due and nonaccrual totals will be treated as confidential on an individual bank basis
by the federal bank supervisory agencies. Beginning with the March 31, 2001, report date, all of the
information reported in Schedule RC-N for each bank will be publicly available.
When a bank services residential mortgage loans insured by the Federal Housing Administration (FHA)
or the Farmers Home Administration (FmHA) or guaranteed by the Veterans Administration (VA) that
back Government National Mortgage Association (GNMA) securities, i.e., "GNMA loans," after it has
securitized the loans in a transfer accounted for as a sale, ASC Topic 860, Transfers and Servicing
(formerly FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities,” as amended) requires the bank to bring individual delinquent GNMA loans
that it previously accounted for as sold back onto its books as loan assets when, under the GNMA
Mortgage-Backed Securities Guide, the loan meets GNMA's specified delinquency criteria and is eligible
for repurchase. This rebooking of GNMA loans is required regardless of whether the bank, as sellerservicer, intends to exercise the repurchase (buy-back) option. A seller-servicer must report all
delinquent rebooked GNMA loans that have been repurchased or are eligible for repurchase as past due
in Schedule RC-N in accordance with their contractual repayment terms. In addition, if a bank services
GNMA loans, but was not the transferor of the loans that were securitized, and purchases individual
delinquent loans out of the GNMA securitization, the bank must report the purchased loans as past due in
Schedule RC-N in accordance with their contractual repayment terms even though the bank was not
required to record the delinquent GNMA loans as assets prior to purchasing the loans. Such delinquent
GNMA loans should be reported in items 1.c, 10, and 10.b of Schedule RC-N.

Definitions
Past Due – The past due status of a loan or other asset should be determined in accordance with its
contractual repayment terms. For purposes of this schedule, grace periods allowed by the bank after a
loan or other asset technically has become past due but before the imposition of late charges are not to
be taken into account in determining past due status. Furthermore, loans, leases, debt securities, and
other assets are to be reported as past due when either interest or principal is unpaid in the following
circumstances:
(1) Closed-end installment loans, amortizing loans secured by real estate, and any other loans and lease
financing receivables with payments scheduled monthly are to be reported as past due when the
borrower is in arrears two or more monthly payments. (At a bank's option, loans and leases with
payments scheduled monthly may be reported as past due when one scheduled payment is due and
unpaid for 30 days or more.) Other multipayment obligations with payments scheduled other than
monthly are to be reported as past due when one scheduled payment is due and unpaid for 30 days
or more.
FFIEC 031 and 041

RC-N-1
(6-12)

RC-N - PAST DUE

FFIEC 031 and 041

RC-N - PAST DUE

Definitions (cont.)
(2) Open-end credit such as credit cards, check credit, and other revolving credit plans are to be
reported as past due when the customer has not made the minimum payment for two or more billing
cycles.
(3) Single payment and demand notes, debt securities, and other assets providing for the payment of
interest at stated intervals are to be reported as past due after one interest payment is due and
unpaid for 30 days or more.
(4) Single payment notes, debt securities, and other assets providing for the payment of interest at
maturity are to be reported as past due after maturity if interest or principal remains unpaid for
30 days or more.
(5) Unplanned overdrafts are to be reported as past due if the account remains continuously overdrawn
for 30 days or more.
For purposes of this schedule, banks should use one of two methods to recognize partial payments on
“retail credit,” i.e., open-end and closed-end credit extended to individuals for household, family, and
other personal expenditures, including consumer loans and credit cards, and loans to individuals secured
by their personal residence, including home equity and home improvement loans. A payment equivalent
to 90 percent or more of the contractual payment may be considered a full payment in computing
delinquency. Alternatively, a bank may aggregate payments and give credit for any partial payment
received. For example, if a regular monthly installment is $300 and the borrower makes payments of only
$150 per month for a six-month period, the loan would be $900 ($150 shortage times six payments), or
three monthly payments past due. A bank may use either or both methods for its retail credit, but may not
use both methods simultaneously with a single loan.
When accrual of income on a purchased credit-impaired loan accounted for individually or a purchased
credit-impaired debt security is appropriate, the delinquency status of the individual asset should be
determined in accordance with its contractual repayment terms for purposes of reporting the carrying
amount of the loan or debt security as past due in the appropriate items of Schedule RC-N, column A
or B. When accrual of income on a pool of purchased credit-impaired loans with common risk
characteristics is appropriate, delinquency status should be determined individually for each loan in the
pool in accordance with the individual loan’s contractual repayment terms for purposes of reporting the
carrying amount (before any post-acquisition loan loss allowance) of individual loans within the pool as
past due in the appropriate items of Schedule RC-N, column A or B. For further information, see the
Glossary entry for “purchased credit-impaired loans and debt securities.”
Nonaccrual – For purposes of this schedule, an asset is to be reported as being in nonaccrual status if:
(1) It is maintained on a cash basis because of deterioration in the financial condition of the borrower,
(2) Payment in full of principal or interest is not expected, or
(3) Principal or interest has been in default for a period of 90 days or more unless the asset is both well
secured and in the process of collection.
An asset is "well secured" if it is secured (1) by collateral in the form of liens on or pledges of real or
personal property, including securities, that have a realizable value sufficient to discharge the debt
(including accrued interest) in full, or (2) by the guarantee of a financially responsible party. An asset is
"in the process of collection" if collection of the asset is proceeding in due course either (1) through legal
action, including judgment enforcement procedures, or, (2) in appropriate circumstances, through
collection efforts not involving legal action which are reasonably expected to result in repayment of the
debt or in its restoration to a current status in the near future.
FFIEC 031 and 041

RC-N-2
(6-12)

RC-N - PAST DUE

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RC-N - PAST DUE

Definitions (cont.)
For purposes of applying the third test for nonaccrual status listed above, the date on which an asset
reaches nonaccrual status is determined by its contractual terms. If the principal or interest on an asset
becomes due and unpaid for 90 days or more on a date that falls between report dates, the asset should
be placed in nonaccrual status as of the date it becomes 90 days past due and it should remain in
nonaccrual status until it meets the criteria for restoration to accrual status described below.
In the following situations, an asset need not be placed in nonaccrual status:
(1) The criteria for accrual of income under the interest method specified in ASC Subtopic 310-30,
Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality (formerly AICPA
Statement of Position 03-3, "Accounting for Certain Loans or Debt Securities Acquired in a Transfer"),
are met for a purchased credit-impaired loan, pool of loans, or debt security accounted for in
accordance with that Subtopic, regardless of whether the loan, the loans in the pool, or debt security
had been maintained in nonaccrual status by its seller. (For purchased credit-impaired loans with
common risk characteristics that are aggregated and accounted for as a pool, the determination of
nonaccrual or accrual status should be made at the pool level, not at the individual loan level.) For
further information, see the Glossary entry for "purchased credit-impaired loans and debt securities."
(2) The criteria for amortization (i.e., accretion of discount) specified in AICPA Practice Bulletin No. 6,
"Amortization of Discounts on Certain Acquired Loans," are met with respect to a loan or other debt
instrument accounted for in accordance with that Practice Bulletin that was acquired at a discount
(because there is uncertainty as to the amounts or timing of future cash flows) from an unaffiliated
third party (such as another institution or the receiver of a failed institution), including those that the
seller had maintained in nonaccrual status.
(3) The asset upon which principal or interest is due and unpaid for 90 days or more is a consumer loan
(as defined for Schedule RC-C, part I, item 6, "Loans to individuals for household, family, and other
personal expenditures") or a loan secured by a 1-to-4 family residential property (as defined for
Schedule RC-C, part I, item 1.c, Loans "Secured by 1-4 family residential properties"). Nevertheless,
such loans should be subject to other alternative methods of evaluation to assure that the bank's net
income is not materially overstated. To the extent that the bank has elected to carry such a loan in
nonaccrual status on its books, the loan must be reported as nonaccrual in this schedule.
As a general rule, a nonaccrual asset may be restored to accrual status when:
(1) None of its principal and interest is due and unpaid, and the bank expects repayment of the
remaining contractual principal and interest, or
(2) When it otherwise becomes well secured and in the process of collection.
For purposes of meeting the first test for restoration to accrual status, the bank must have received
repayment of the past due principal and interest unless, as discussed in the Glossary entry for
"nonaccrual status,"
(1) The asset has been formally restructured and qualifies for accrual status,
(2) The asset is a purchased credit-impaired loan, pool of loans, or debt security accounted for in
accordance with ASC Subtopic 310-30 and it meets the criteria for accrual of income under the
interest method specified in that Subtopic,

FFIEC 031 and 041

RC-N-3
(6-12)

RC-N - PAST DUE

FFIEC 031 and 041

RC-N - PAST DUE

Definitions (cont.)
(3) The asset has been acquired at a discount (because there is uncertainty as to the amounts or timing
of future cash flows) from an unaffiliated third party, is accounted for in accordance with AICPA
Practice Bulletin No. 6, and meets the criteria for amortization (i.e., accretion of discount) specified in
that Practice Bulletin, or
(4) The borrower has resumed paying the full amount of the scheduled contractual interest and principal
payments on a loan that is past due and in nonaccrual status, even though the loan has not been
brought fully current, and certain repayment criteria are met.
For further information, see the Glossary entry for "nonaccrual status."
Restructured in Troubled Debt Restructurings – A troubled debt restructuring is a restructuring of a loan
in which a bank, for economic or legal reasons related to a borrower's financial difficulties, grants a
concession to the borrower that it would not otherwise consider. For purposes of this schedule, the
concession consists of a modification of terms, such as a reduction of the loan’s stated interest rate,
principal, or accrued interest or an extension of the loan’s maturity date at a stated interest rate lower
than the current market rate for new debt with similar risk, regardless of whether the loan is secured or
unsecured and regardless of whether the loan is guaranteed by the government or by others.
Once an obligation has been restructured in a troubled debt restructuring, it continues to be considered a
troubled debt restructuring until paid in full or otherwise settled, sold, or charged off. However, if a
restructured obligation is in compliance with its modified terms and the restructuring agreement specifies
an interest rate that at the time of the restructuring is greater than or equal to the rate that the bank was
willing to accept for a new extension of credit with comparable risk, the loan need not continue to be
reported as a troubled debt restructuring in calendar years after the year in which the restructuring took
place. A loan extended or renewed at a stated interest rate equal to the current interest rate for new debt
with similar risk is not considered a troubled debt restructuring. Also, a loan to a third party purchaser of
"other real estate owned" by the reporting bank for the purpose of facilitating the disposal of such real
estate is not considered a troubled debt restructuring.
For further information, see the Glossary entry for "troubled debt restructurings."

Column Instructions
The columns of Schedule RC-N are mutually exclusive. Any given loan, lease, debt security, or other
asset should be reported in only one of columns A, B, and C. Information reported for any given
derivative contract should be reported in only column A or column B.
Report in columns A and B of Schedule RC-N (except for Memorandum item 6) the recorded investments
(not just delinquent payments) in loans, leases, debt securities, and other assets that are past due and
upon which the bank continues to accrue interest, as follows:
(1) In column A, report closed-end monthly installment loans, amortizing loans secured by real estate,
lease financing receivables, and open-end credit in arrears two or three monthly payments; other
multipayment obligations with payments scheduled other than monthly when one scheduled payment
is due and unpaid for 30 through 89 days; single payment and demand notes, debt securities, and
other assets providing for payment of interest at stated intervals after one interest payment is due and
unpaid for 30 through 89 days; single payment notes, debt securities, and other assets providing for
payment of interest at maturity, on which interest or principal remains unpaid for 30 through 89 days
after maturity; unplanned overdrafts, whether or not the bank is accruing interest on them, if the
account remains continuously overdrawn for 30 through 89 days.

FFIEC 031 and 041

RC-N-4
(6-12)

RC-N - PAST DUE

FFIEC 031 and 041

RC-N - PAST DUE

Column Instructions (cont.)
(2) In column B, report the loans, lease financing receivables, debt securities, and other assets as
specified above on which payment is due and unpaid for 90 days or more.
Include in columns A and B, as appropriate (except for Memorandum item 6), all loans, leases, debt
securities, and other assets which, subsequent to their restructuring by means of a modification of terms,
have become 30 days or more past due and upon which the bank continues to accrue interest. Exclude
from columns A and B all loans, leases, debt securities, and other assets that are in nonaccrual status.
Report in columns A and B of Memorandum item 6 the fair value, if positive, of all interest rate, foreign
exchange rate, equity, and commodity and other derivative contracts on which a required payment by the
bank's counterparty is due and unpaid for 30 through 89 days and due and unpaid for 90 days or more,
respectively.

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RC-N-4a
(6-12)

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FFIEC 031 and 041

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Column Instructions (cont.)
Report in column C the recorded investments in loans, leases, debt securities, and other assets that are
in nonaccrual status. Include all restructured loans, leases, debt securities, and other assets that are in
nonaccrual status. However, restructured loans, leases, debt securities, and other assets with a zero
percent effective interest rate are not to be reported in this column as nonaccrual assets.
Item Instructions
The loan and lease category definitions used in Schedule RC-N correspond with the loan and lease
category definitions found in Schedule RC-C, part I. Consistent with Schedule RC-C, part I, the categoryby-category breakdown of loans and leases in Schedule RC-N includes (1) loans and leases held for sale
and (2) loans and leases that the bank has the intent and ability to hold for the foreseeable future or until
maturity or payoff.
Item No.

Caption and Instructions

1

Loans secured by real estate. Report in the appropriate subitem and column all loans
secured by real estate included in Schedule RC-C, part I, item 1, that are past due 30 days or
more or are in nonaccrual status as of the report date.

1.a

Construction, land development, and other land loans (in domestic offices). Report in
the appropriate subitem and column the amount of all construction, land development, and
other land loans (in domestic offices) included in Schedule RC-C, part I, item 1.a, column B,
that are past due 30 days or more or are in nonaccrual status as of the report date.

1.a.(1)

1-4 family residential construction loans. Report in the appropriate column the amount of
all 1-4 family residential construction loans (in domestic offices) included in Schedule RC-C,
part I, item 1.a.(1), column B, that are past due 30 days or more or are in nonaccrual status
as of the report date.

1.a.(2)

Other construction loans and all land development and other land loans. Report in the
appropriate column the amount of all other construction loans and all land development and
other land loans (in domestic offices) included in Schedule RC-C, part I, item 1.a.(2),
column B, that are past due 30 days or more or are in nonaccrual status as of the report date.

1.b

Secured by farmland (in domestic offices). Report in the appropriate column the amount
of all loans secured by farmland (in domestic offices) included in Schedule RC-C, part I,
item 1.b, column B, that are past due 30 days or more or are in nonaccrual status as of the
report date.

1.c

Secured by 1-4 family residential properties (in domestic offices). Report in the
appropriate subitem and column the amount of all loans secured by 1-4 family residential
properties (in domestic offices) included in Schedule RC-C, part I, item 1.c, column B, that
are past due 30 days or more or are in nonaccrual status as of the report date.

1.c.(1)

Revolving, open-end loans secured by 1-4 family residential properties and extended
under lines of credit. Report in the appropriate column the amount outstanding under all
revolving, open-end loans secured by 1-to-4 family residential properties and extended under
lines of credit (in domestic offices) included in Schedule RC-C, part I, item 1.c.(1), column B,
that are past due 30 days or more or are in nonaccrual status as of the report date.

1.c.(2)

Closed-end loans secured by 1-4 family residential properties. Report in the appropriate
subitem and column the amount of all closed-end loans secured by 1-to-4 family residential
properties (in domestic offices) included in Schedule RC-C, part I, item 1.c.(2), column B, that
are past due 30 days or more or are in nonaccrual status as of the report date.

FFIEC 031 and 041

RC-N-5
(3-11)

RC-N - PAST DUE

FFIEC 031 and 041

RC-N - PAST DUE

Item No.

Caption and Instructions

1.c.(2)(a)

Secured by first liens. Report in the appropriate column the amount of all closed-end loans
secured by first liens on 1-to-4 family residential properties (in domestic offices) included in
Schedule RC-C, part I, item 1.c.(2)(a), column B, that are past due 30 days or more or are in
nonaccrual status as of the report date.

1.c.(2)(b)

Secured by junior liens. Report in the appropriate column the amount of all closed-end
loans secured by junior liens on 1-to-4 family residential properties (in domestic offices)
included in Schedule RC-C, part I, item 1.c.(2)(b), column B, that are past due 30 days or
more or are in nonaccrual status as of the report date. Include loans secured by junior liens
in this item even if the bank also holds a loan secured by a first lien on the same 1-to-4 family
residential property and there are no intervening junior liens.

1.d

Secured by multifamily (5 or more) residential properties (in domestic offices). Report
in the appropriate column the amount of all loans secured by multifamily (5 or more)
residential properties (in domestic offices) included in Schedule RC-C, part I, item 1.d,
column B, that are past due 30 days or more or are in nonaccrual status as of the report date.

1.e

Secured by nonfarm nonresidential properties (in domestic offices). Report in the
appropriate subitem and column the amount of all loans secured by nonfarm residential
properties (in domestic offices) included in Schedule RC-C, part I, item 1.e, column B, that
are past due 30 days or more or are in nonaccrual status as of the report date.

1.e.(1)

Loans secured by owner-occupied nonfarm nonresidential properties. Report in the
appropriate column the amount of loans secured by owner-occupied nonfarm nonresidential
properties (in domestic offices) included in Schedule RC-C, part I, item 1.e.(1), column B, that
are past due 30 days or more or are in nonaccrual status as of the report date.

1.e.(2)

Loans secured by other nonfarm nonresidential properties. Report in the appropriate
column the amount of loans secured by other nonfarm nonresidential properties (in domestic
offices) included in Schedule RC-C, part I, item 1.e.(2), column B, that are past due 30 days
or more or are in nonaccrual status as of the report date.

NOTE: Item 1.f is not applicable to banks filing the FFIEC 041 report form.
1.f

In foreign offices. Report in the appropriate column the amount of all loans secured by real
estate in foreign offices included in Schedule RC-C, part I, item 1, that are past due 30 days
or more or are in nonaccrual status as of the report date.

2

Loans to depository institutions and acceptances of other banks. Report on the
FFIEC 041 in the appropriate column and on the FFIEC 031 in the appropriate subitem and
column the amount of all loans to depository institutions and acceptances of other banks
included in Schedule RC-C, part I, item 2, that are past due 30 days or more or are in
nonaccrual status as of the report date.

NOTE: Items 2.a, 2.b, and 3 are not applicable to banks filing the FFIEC 041 report form.
2.a

To U.S. banks and other U.S. depository institutions. Report in the appropriate column
the amount of loans to and acceptances of U.S. banks and other U.S. depository institutions
included in Schedule RC-C, part I, items 2.a.(2), 2.b, and 2.c.(1), column A, that are past due
30 days or more or are in nonaccrual status as of the report date.

FFIEC 031 and 041

RC-N-6
(3-11)

RC-N - PAST DUE

FFIEC 031 and 041

Item No.

RC-N - PAST DUE

Caption and Instructions

2.b

To foreign banks. Report in the appropriate column the amount of all loans to and
acceptances of foreign banks included in Schedule RC-C, part I, items 2.a.(1) and 2.c.(2),
column A, that are past due 30 days or more or are in nonaccrual status as of the report date.

3

Loans to finance agricultural production and other loans to farmers. Report in the
appropriate column the amount of all loans to finance agricultural production and other loans
to farmers included in Schedule RC-C, part I, item 3, column A, that are past due 30 days or
more or are in nonaccrual status as of the report date.

4

Commercial and industrial loans. Report on the FFIEC 041 in the appropriate column and
on the FFIEC 031 in the appropriate subitem and column the amount of all commercial and
industrial loans included in Schedule RC-C, part I, item 4, that are past due 30 days or more
or are in nonaccrual status as of the report date.

NOTE: Items 4.a and 4.b are not applicable to banks filing the FFIEC 041 report form.
4.a

To U.S. addressees (domicile). Report in the appropriate column the amount of all
commercial and industrial loans to U.S. addressees included in Schedule RC-C, part I,
item 4.a, column A, that are past due 30 days or more or are in nonaccrual status as of the
report date.

4.b

To non-U.S. addressees (domicile). Report in the appropriate column the amount of all
commercial and industrial loans to non-U.S. addressees included in Schedule RC-C, part I,
item 4.b, column A, that are past due 30 days or more or are in nonaccrual status as of the
report date.

5

Loans to individuals for household, family, and other personal expenditures. Report in
the appropriate subitem and column the amount of all loans to individuals for household,
family, and other personal expenditures (i.e., consumer loans) included in Schedule RC-C,
part I, item 6, that are past due 30 days or more or are in nonaccrual status as of the report
date.

5.a

Credit cards. Report in the appropriate column the amount of all extensions of credit to
individuals for household, family, and other personal expenditures arising from credit cards
included in Schedule RC-C, part I, item 6.a, that are past due 30 days or more or are in
nonaccrual status as of the report date.

5.b

Automobile loans. Report in the appropriate column the amount of loans arising from retail
sales of passenger cars and other vehicles such as minivans, vans, sport-utility vehicles,
pickup trucks, and similar light trucks for personal use included in Schedule RC-C, part I,
item 6.c, that are past due 30 days or more or are in nonaccrual status as of the report date.

5.c

Other. Report in the appropriate column the amount of all other loans to individuals for
household, family, and other personal expenditures included in Schedule RC-C, part I,
items 6.b and 6.d, that are past due 30 days or more or are in nonaccrual status as of the
report date.

6

Loans to foreign governments and official institutions. Report in the appropriate column
the amount of all loans to foreign governments and official institutions included in
Schedule RC-C, part I, item 7, that are past due 30 days or more or are in nonaccrual status
as of the report date.

FFIEC 031 and 041

RC-N-7
(3-12)

RC-N - PAST DUE

FFIEC 031 and 041

Item No.
7

RC-N - PAST DUE

Caption and Instructions
All other loans. Report in the appropriate column the amount of all:




obligations (other than securities and leases) of states and political subdivisions in the
U.S. included in Schedule RC-C, part I, item 8;
loans to nondepository financial institutions and other loans included in Schedule RC-C,
part I, item 9; and
on the FFIEC 041 only, all loans to finance agricultural production and other loans to
farmers included in Schedule RC-C, part I, item 3,

that are past due 30 days or more or are in nonaccrual status as of the report date.
8

Lease financing receivables (net of unearned income). Report on the FFIEC 041 in
the appropriate column and on the FFIEC 031 in the appropriate subitem and column the
amount of all lease financing receivables (net of unearned income) included in
Schedule RC-C, part I, item 10, that are past due 30 days or more or are in nonaccrual status
as of the report date.

NOTE: Items 8.a and 8.b are not applicable to banks filing the FFIEC 041 report form.
8.a

Leases to individuals for household, family, and other personal expenditures. Report
in the appropriate column the amount of all leases (net of unearned income) to individuals for
household, family, and other personal expenditures included in Schedule RC-C, part I,
item 10.a, column A, that are past due 30 days or more or are in nonaccrual status as of the
report date.

8.b

All other leases. Report in the appropriate column the amount of all other leases (net of
unearned income) included in Schedule RC-C, part I, item 10.b, column A, that are past due
30 days or more or are in nonaccrual status as of the report date.

9

Debt securities and other assets. Report in the appropriate column all assets other than
loans and leases reportable in Schedule RC-C that are past due 30 days or more or are in
nonaccrual status as of the report date. Include such assets as debt securities and
interest-bearing balances due from depository institutions. Also include operating lease
payments receivable that have been recorded as assets in Schedule RC, item 11, when the
operating lease is past due 30 days or more or in nonaccrual status.
Exclude other real estate owned reportable in Schedule RC, item 7, and other repossessed
assets reportable in Schedule RC, item 11, such as automobiles, boats, equipment,
appliances, and similar personal property.

10

Loans and leases reported in items 1 through 8 above that are wholly or partially
guaranteed by the U.S. Government, excluding loans and leases covered by losssharing agreements with the FDIC. Report in the appropriate column the aggregate
recorded investment in all loans and leases reported in Schedule RC-N, items 1 through 8,
above for which repayment of principal is wholly or partially guaranteed or insured by the
U.S. Government, including its agencies and its government-sponsored agencies, but
excluding loans and leases covered by loss-sharing agreements with the FDIC, which are
reported in Schedule RC-N, item 11, below. Examples include loans guaranteed by the
Small Business Administration and the Federal Housing Administration. Amounts need not
be reported in this item and in items 10.a and 10.b below if they are considered immaterial.

FFIEC 031 and 041

RC-N-8
(3-12)

RC-N - PAST DUE

FFIEC 031 and 041

RC-N - PAST DUE

Item No.

Caption and Instructions

10
(cont.)

Exclude from this item loans and leases guaranteed or insured by state or local
governments, state or local government agencies, foreign (non-U.S.) governments, and
private agencies or organizations. Also exclude loans and leases collateralized by securities
issued by the U.S. Government, including its agencies and its government-sponsored
agencies.

10.a

Guaranteed portion of loans and leases included in item 10 above, excluding rebooked
“GNMA loans.” Report in the appropriate column the maximum amount recoverable from
the U.S. Government, including its agencies and its government-sponsored agencies, under
the guarantee or insurance provisions applicable to the loans and leases included in
Schedule RC-N, item 10, above.
Seller-servicers of GNMA loans should exclude all delinquent rebooked GNMA loans that
have been repurchased or are eligible for repurchase from this item (report such rebooked
GNMA loans in item 10.b below). Servicers of GNMA loans should exclude individual
delinquent loans (for which they were not the transferor) that they have purchased out of
GNMA securitizations from this item (report such purchased GNMA loans in item 10.b
below).

10.b

Rebooked "GNMA loans" that have been repurchased or are eligible for repurchase
included in item 10 above. Report in the appropriate column the recorded investment in:
(1) Delinquent rebooked GNMA loans that have been repurchased or are eligible for
repurchase by seller-servicers of GNMA loans; and
(2) Delinquent loans that have been purchased out of GNMA securitizations by servicers of
GNMA loans that were not the transferors of the loans.

11

11.a
11.a.(1)

Loans and leases reported in items 1 through 8 above that are covered by loss-sharing
agreements with the FDIC. Report in the appropriate subitem and column the aggregate
recorded investment in all loans and leases covered by loss-sharing agreements with the
FDIC and reported in Schedule RC-M, items 13.a.(1)(a)(1) through 13.a.(5), that have been
included in Schedule RC-N, items 1 through 8, because they are past due 30 days or more or
are in nonaccrual status as of the report date. Amounts need not be reported in
Schedule RC-N, items 11.a.(1)(a) through 11.f, below if they are considered immaterial.
Loans secured by real estate (in domestic offices):
Construction, land development, and other land loans:

11.a.(1)(a) 1-4 family residential construction loans. Report in the appropriate column the amount of
all covered 1-4 family residential construction loans reported in Schedule RC-M,
item 13.a.(1)(a)(1), that are included in Schedule RC-N, item 1.a.(1), above because they are
past due 30 days or more or are in nonaccrual status as of the report date.
11.a.(1)(b) Other construction loans and all land development and other land loans. Report in the
appropriate column the amount of all other covered construction loans and all covered land
development and other land loans reported in Schedule RC-M, item 13.a.(1)(a)(2), that are
included in Schedule RC-N, item 1.a.(2), above because they are past due 30 days or more
or are in nonaccrual status as of the report date.

FFIEC 031 and 041

RC-N-9
(3-11)

RC-N - PAST DUE

FFIEC 031 and 041

RC-N - PAST DUE

Item No.

Caption and Instructions

11.a.(2)

Secured by farmland. Report in the appropriate column the amount of all covered loans
secured by farmland reported in Schedule RC-M, item 13.a.(1)(b), that are included in
Schedule RC-N, item 1.b, above because they are past due 30 days or more or are in
nonaccrual status as of the report date.

11.a.(3)

Secured by 1-4 family residential properties:

11.a.(3)(a) Revolving, open-end loans secured by 1-4 family residential properties and extended
under lines of credit. Report in the appropriate column the amount of all covered revolving,
open-end loans secured by 1-4 family residential properties and extended under lines of
credit loans held for sale and held for investment reported in Schedule RC-M,
item 13.a.(1)(c)(1), that are included in Schedule RC-N, item 1.c.(1), above because they are
past due 30 days or more or are in nonaccrual status as of the report date.
11.a.(3)(b) Closed-end loans secured by 1-4 family residential properties:
11.a.(3)(b)(1) Secured by first liens. Report in the appropriate column the amount of all covered
closed-end loans secured by first liens on 1-4 family residential properties reported in
Schedule RC-M, item 13.a.(1)(c)(2)(a), that are included in Schedule RC-N, item 1.c.(2)(a),
above because they are past due 30 days or more or are in nonaccrual status as of the
report date.
11.a.(3)(b)(2) Secured by junior liens. Report in the appropriate column the amount of all covered
closed-end loans secured by junior liens on 1-4 family residential properties reported in
Schedule RC-M, item 13.a.(1)(c)(2)(b), that are included in Schedule RC-N, item 1.c.(2)(b),
above because they are past due 30 days or more or are in nonaccrual status as of the
report date.
11.a.(4)

Secured by multifamily (5 or more) residential properties. Report in the appropriate
column the amount of all covered loans secured by multifamily (5 or more) residential
properties reported in Schedule RC-M, item 13.a.(1)(d), that are included in Schedule RC-N,
item 1.d, above because they are past due 30 days or more or are in nonaccrual status as of
the report date.

11.a.(5)

Secured by nonfarm nonresidential properties:

11.a.(5)(a) Loans secured by owner-occupied nonfarm nonresidential properties. Report in the
appropriate column the amount of all covered loans secured by owner-occupied nonfarm
nonresidential properties reported in Schedule RC-M, item 13.a.(1)(e)(1), that are included in
Schedule RC-N, item 1.e.(1), above because they are past due 30 days or more or are in
nonaccrual status as of the report date.
11.a.(5)(b) Loans secured by other nonfarm nonresidential properties. Report in the appropriate
column the amount of all covered loans secured by other nonfarm nonresidential properties
reported in Schedule RC-M, item 13.a.(1)(e)(2), that are included in Schedule RC-N,
item 1.e.(2), above because they are past due 30 days or more or are in nonaccrual status as
of the report date.

FFIEC 031 and 041

RC-N-10
(3-11)

RC-N - PAST DUE

FFIEC 031 and 041

Item No.

RC-N - PAST DUE

Caption and Instructions

NOTE: Item 11.b is not applicable to banks filing the FFIEC 041 report form.
11.b

Loans to finance agricultural production and other loans to farmers. Report in the
appropriate column the amount of all covered loans to finance agricultural production and
other loans to farmers reported in Schedule RC-M, item 13.a.(2), that are included in
Schedule RC-N, item 3, above because they are past due 30 days or more or are in
nonaccrual status as of the report date.

11.c

Commercial and industrial loans. Report in the appropriate column the amount of all
covered commercial and industrial loans reported in Schedule RC-M, item 13.a.(3), that are
included in Schedule RC-N, item 4, above because they are past due 30 days or more or are
in nonaccrual status as of the report date.

11.d

Loans to individuals for household, family, and other personal expenditures:

11.d.(1)

Credit cards. Report in the appropriate column the amount of all covered extensions of
credit arising from credit cards reported in Schedule RC-M, item 13.a.(4)(a), that are included
in Schedule RC-N, item 6.a, above because they are past due 30 days or more or are in
nonaccrual status as of the report date.

11.d.(2)

Automobile loans. Report in the appropriate column the amount of all covered automobile
loans reported in Schedule RC-M, item 13.a.(4)(b), that are included in Schedule RC-N,
item 6.c, above because they are past due 30 days or more or are in nonaccrual status as of
the report date.

11.d.(3)

Other. Report in the appropriate column the amount of all covered extensions of credit
arising from other revolving credit plans and all other covered consumer loans reported in
Schedule RC-M, item 13.a.(4)(c), that are included in Schedule RC-N, items 6.b and 6.d,
above because they are past due 30 days or more or are in nonaccrual status as of the
report date.

11.e

All other loans and all leases. Report in the appropriate column the amount of covered
loans and leases reported in Schedule RC-M, item 13.a.(5), “All other loans and all leases,”
that are past due 30 days or more or are in nonaccrual status as of the report date. Include
in the appropriate column of this item covered loans in the following categories that are past
due 30 days or more or are in nonaccrual status as of the report date:
(1) Loans to depository institutions and acceptances of other banks included in
Schedule RC-N, item 2;
(2) On the FFIEC 041, loans to finance agricultural production and other loans to farmers
included in Schedule RC-N, item 7;
(3) Loans to foreign governments and official institutions included in Schedule RC-N, item 6;
(4) Obligations (other than securities and leases) of states and political subdivisions in the
U.S. included in Schedule RC-N, item 7;
(5) Loans to nondepository financial institutions and other loans included in Schedule RC-N,
item 7; and
(6) On the FFIEC 031, loans secured by real estate in foreign offices included in
Schedule RC-N, item 1.f.
Also include in the appropriate column all covered lease financing receivables included in
Schedule RC-N, item 8, above that are past due 30 days or more or are in nonaccrual status
as of the report date.

FFIEC 031 and 041

RC-N-11
(3-12)

RC-N - PAST DUE

FFIEC 031 and 041

RC-N - PAST DUE

Item No.

Caption and Instructions

11.e
(cont.)

For each category of loans and leases within “All other loans and all leases” for which the
reporting bank reported the amount of covered loans or leases in Schedule RC-M,
items 13.a.(5)(a) through 13.a.(5)(d) on the FFIEC 041 (items 13.a.(5)(a) through 13.a.(5)(e)
on the FFIEC 031), report in the appropriate column in Schedule RC-N, items 11.e.(1)
through 11.e.(4) on the FFIEC 041 (items 11.e.(1) through 11.e.(5) on the FFIEC 031) the
amount of covered loans or leases in that category that are past due 30 days or more or are
in nonaccrual status as of the report date.

11.f

Portion of covered loans and leases included in items 11.a through 11.e above that is
protected by FDIC loss-sharing agreements. Report the maximum amount recoverable
from the FDIC under loss-sharing agreements covering the past due and nonaccrual loans
and leases reported in Schedule RC-N, items 11.a.(1)(a) through 11.e, above beyond the
amount that has already been reflected in the measurement of the reporting bank’s
indemnification asset, which represents the right to receive payments from the FDIC under
the loss-sharing agreement.
In general, the maximum amount recoverable from the FDIC on covered past due and
nonaccrual loans and leases is the recorded amount of these loans and leases, as reported
in Schedule RC-N, items 11.a.(1)(a) through 11.e, multiplied by the currently applicable loss
coverage rate (e.g., 80 percent or 95 percent). This product will normally be the maximum
amount recoverable because reimbursements from the FDIC for covered losses related to
the amount by which the “book value” of a covered asset on the failed institution’s books
(which is the amount upon which payments under an FDIC loss-sharing agreement are
based) exceeds the amount at which the reporting bank reports the covered asset on
Schedule RC, Balance Sheet, should already have been taken into account in measuring the
carrying amount of the reporting bank’s loss-sharing indemnification asset, which is reported
in Schedule RC-F, item 6, “All other assets.”

FFIEC 031 and 041

RC-N-12
(3-12)

RC-N - PAST DUE

FFIEC 031 and 041

RC-N - PAST DUE

Memoranda
Item No.
1

Caption and Instructions
Loans restructured in troubled debt restructurings included in Schedule RC-N, items 1
through 7, above. Report in the appropriate subitem and column loans that have been
restructured in troubled debt restructurings (as described in “Definitions” above) and are past
due 30 days or more or are in nonaccrual status as of the report date. Such loans will have
been included in one or more of the loan categories in items 1 through 7 of this schedule.
Exclude all loans restructured in troubled debt restructurings that are in compliance with their
modified terms (report in Schedule RC-C, part I, Memorandum item 1),
For further information, see the Glossary entry for "troubled debt restructurings."

1.a

Construction, land development, and other land loans (in domestic offices):

1.a.(1)

1-4 family construction loans. Report in the appropriate column all loans secured by real
estate for the purpose of constructing 1-4 family residential properties included in item 1.a.(1)
of this schedule that have been restructured in troubled debt restructurings and, under their
modified repayment terms, are past due 30 days or more or are in nonaccrual status as of
the report date.

1.a.(2)

Other construction loans and all land development and other land loans. Report in
the appropriate column all construction loans for purposes other than constructing 1-4 family
residential properties, all land development loans, and all other land loans included in
item 1.a.(2) of this schedule that have been restructured in troubled debt restructurings and,
under their modified repayment terms, are past due 30 days or more or are in nonaccrual
status as of the report date.

1.b

Loans secured by 1-4 family residential properties (in domestic offices). Report in the
appropriate column all loans secured by 1-4 family residential properties (in domestic offices)
included in item 1.c of this schedule that have been restructured in troubled debt
restructurings and, under their modified repayment terms, are past due 30 days or more or
are in nonaccrual status as of the report date.

1.c

Loans secured by multifamily (5 or more) residential properties (in domestic offices).
Report in the appropriate column all loans secured by multifamily (5 or more) residential
properties (in domestic offices) included in item 1.d of this schedule that have been
restructured in troubled debt restructurings and, under their modified repayment terms, are
past due 30 days or more or are in nonaccrual status as of the report date.

1.d

Secured by nonfarm nonresidential properties (in domestic offices:

1.d.(1)

Loans secured by owner-occupied nonfarm nonresidential properties. Report in the
appropriate column all loans secured by owner-occupied nonfarm nonresidential properties
included in item 1.e.(1) of this schedule that have been restructured in troubled debt
restructurings and, under their modified repayment terms, are past due 30 days or more or
are in nonaccrual status as of the report date.

1.d.(2)

Loans secured by other nonfarm nonresidential properties. Report in the appropriate
column all nonfarm nonresidential real estate loans not secured by owner-occupied nonfarm
nonresidential properties included in item 1.e.(2) of this schedule that have been restructured
in troubled debt restructurings and, under their modified repayment terms, are past due 30
days or more or are in nonaccrual status as of the report date.

FFIEC 031 and 041

RC-N-13
(3-11)

RC-N - PAST DUE

FFIEC 031 and 041

RC-N - PAST DUE

Memoranda
Item No.
1.e

Caption and Instructions
Commercial and industrial loans. Report all commercial and industrial loans included in
item 4 of this schedule that have been restructured in troubled debt restructurings and, under
their modified repayment terms, are past due 30 days or more or are in nonaccrual status as
of the report date. On the FFIEC 041, all banks should report the total of these restructured
loans in Memorandum item 1.e, and banks with $300 million or more in total assets should
also report in Memorandum items 1.e.(1) and (2) a breakdown of these restructured loans
between those loans to U.S. and non-U.S. addressees. On the FFIEC 031, all banks should
report a breakdown of these restructured loans between those to U.S. and non-U.S.
addressees for the fully consolidated bank in Memorandum items 1.e.(1) and (2).

NOTE: Memorandum items 1.e.(1) and 1.e.(2) are not applicable to banks filing the FFIEC 041 report
forms that have less than $300 million in total assets.
1.e.(1)

To U.S. addressees (domicile). On the FFIEC 041, report in the appropriate column all
commercial and industrial loans to U.S. addressees included in Memorandum item 1.e of this
schedule that have been restructured in troubled debt restructurings and, under their
modified repayment terms, are past due 30 days or more or are in nonaccrual status as of
the report date. On the FFIEC 031, report in the appropriate column all commercial and
industrial loans to U.S. addressees included in item 4.a of this schedule that have been
restructured in troubled debt restructurings and, under their modified repayment terms, are
past due 30 days or more or are in nonaccrual status as of the report date.

1.e.(2)

To non-U.S. addressees (domicile). On the FFIEC 041, report in the appropriate column
all commercial and industrial loans to non-U.S. addressees included in Memorandum item
3.c of this schedule that have been restructured in troubled debt restructurings and, under
their modified repayment terms, are past due 30 days or more or are in nonaccrual status as
of the report date. On the FFIEC 031, report in the appropriate column all commercial and
industrial loans to non-U.S. addressees included in item 4.b of this schedule that have been
restructured in troubled debt restructurings and, under their modified repayment terms, are
past due 30 days or more or are in nonaccrual status as of the report date.

1.f

All other loans. Report in the appropriate column all other loans that cannot properly be
reported in Memorandum items 1.a through 1.e above that have been restructured in
troubled debt restructurings and, under their modified repayment terms, are past due 30 days
or more or are in nonaccrual status as of the report date. Include in the appropriate column
of this item all loans in the following categories that have been restructured in troubled debt
restructurings and, under their modified repayment terms, are past due 30 days or more or
are in nonaccrual status as of the report date:
(1) Loans secured by farmland (in domestic offices) included in Schedule RC-N, item 1.b;
(2) Loans to depository institutions and acceptances of other banks included in
Schedule RC-N, item 2;
(3) Loans to finance agricultural production and other loans to farmers included in
Schedule RC-N, item 7 on the FFIEC 041 and item 3 on the FFIEC 31;
(4) Consumer credit cards included in Schedule RC-N, item 5.a;
(5) Consumer automobile loans included in Schedule RC-N, item 5.b;
(6) Other consumer loans included in Schedule RC-N, items 5.c;
(7) Loans to foreign governments and official institutions included in Schedule RC-N, item 6;

FFIEC 031 and 041

RC-N-14
(3-11)

RC-N - PAST DUE

FFIEC 031 and 041

RC-N - PAST DUE

Memoranda
Item No.

Caption and Instructions

1.f
(cont.)

(8) Obligations (other than securities and leases) of states and political subdivisions in the
U.S. included in Schedule RC-N, item 7;
(9) Loans to nondepository financial institutions and other loans included in Schedule RC-N,
item 7; and
(10)On the FFIEC 031, loans secured by real estate in foreign offices included in
Schedule RC-N, item 1.f.
Report in Schedule RC-N, Memorandum items 1.f.(1) through 1.f.(6) on the FFIEC 041
(Memorandum items 1.f.(1) through 1.f.(7) on the FFIEC 031), each category of loans within
“All other loans” that have been restructured in troubled debt restructurings and, under their
modified repayment terms, are past due 30 days or more or are in nonaccrual status as of
the report date, and the dollar amount of loans in such category, that exceeds 10 percent of
total loans restructured in troubled debt restructurings that are past due 30 days or more or
are in nonaccrual status as of the report date (i.e., 10 percent of the sum of Schedule RC-N,
Memorandum items 1.a through 1.e plus Memorandum item 1.f, columns A through C).
Preprinted captions have been provided in Memorandum items 1.f.(1) through 1.f.(6) on the
FFIEC 041 (Memorandum items 1.f.(1) through 1.f.(7) on the FFIEC 031) for reporting the
amount of such restructured loans for the following loan categories if the amount for a loan
category exceeds this 10 percent reporting threshold: Loans secured by farmland (in
domestic offices); Loans to depository institutions and acceptances of other banks; Loans to
finance agricultural production and other loans to farmers (on the FFIEC 031); (Consumer)
Credit cards; (Consumer) Automobile loans; Other consumer loans; Loans to foreign
governments and official institutions; and Other loans (i.e., Obligations (other than securities
and leases) of states and political subdivisions in the U.S., Loans to nondepository financial
institutions and other loans, and, on the FFIEC 041, Loans to finance agricultural production
and other loans to farmers); and Loans secured by real estate in foreign offices (on the
FFIEC 031 only).
On the FFIEC 041, for:



Banks with $300 million or more in total assets and
Banks with less than $300 million in total assets that have loans to finance agricultural
production and other loans to farmers (Schedule RC-C, part I, item 3) exceeding five
percent of total loans,

a preprinted caption has been provided in Memorandum item 1.f.(6)(a) for reporting the
amount of “Loans to finance agricultural production and other loans to farmers” that have
been restructured in troubled debt restructurings and, under their modified repayment terms,
are past due 30 days or more or are in nonaccrual status as of the report date if the amount
of such loans included in Schedule RC-N, Memorandum item 1.f.(6), “Other loans,” exceeds
10 percent of total loans restructured in troubled debt restructurings that, under their modified
repayment terms, are past due 30 days or more or are in nonaccrual status as of the report
date (i.e., 10 percent of the sum of Schedule RC-N, Memorandum items 1.a through 1.e plus
Memorandum item 1.f).

FFIEC 031 and 041

RC-N-15
(3-11)

RC-N - PAST DUE

FFIEC 031 and 041

RC-N - PAST DUE

Memoranda
Item No.
2

Caption and Instructions
Loans to finance commercial real estate, construction, and land development activities
included in Schedule RC-N, items 4 and 7, above. Report in the appropriate column the
amount of loans to finance commercial real estate, construction, and land development
activities not secured by real estate included in Schedule RC-C, part I, Memorandum item
3, that are past due 30 days or more or are in nonaccrual status as of the report date. Such
loans will have been included in items 4 and 7 of Schedule RC-N above. Exclude from this
item all loans secured by real estate included in item 1 of Schedule RC-N above.

NOTE: Memorandum item 3 is not applicable to banks filing the FFIEC 041 report form.
3

Loans secured by real estate to non-U.S. addressees (domicile). Report in the
appropriate column the amount of all loans secured by real estate to non-U.S. addressees
that are 30 days or more past due or are in nonaccrual status as of the report date. Such
loans will have been included in Schedule RC-N, items 1.a through 1.f, above.

NOTE: Memorandum items 3.a through 3.d are not applicable to banks filing the FFIEC 031 report form.
On the FFIEC 041 report form, Memorandum items 3.a through 3.d are not applicable to banks that have
less than $300 million in total assets.
3.a

Loans secured by real estate to non-U.S. addressees (domicile). Report in the
appropriate column the amount of all loans secured by real estate to non-U.S. addressees
that are 30 days or more past due or are in nonaccrual status as of the report date. Such
loans will have been included in Schedule RC-N, items 1.a through 1.e, above.

3.b

Loans to and acceptances of foreign banks. Report in the appropriate column the amount
of all loans to and acceptances of foreign banks included in Schedule RC-C, part I,
items 2.a.(1) and 2.c.(2), column A, that are past due 30 days or more or are in nonaccrual
status as of the report date. Such loans and acceptances will have been included in
Schedule RC-N, item 2, above.

3.c

Commercial and industrial loans to non-U.S. addressees (domicile). Report in the
appropriate column the amount of all commercial and industrial loans to non-U.S. addressees
included in Schedule RC-C, part I, item 4.b, column A, that are past due 30 days or more or
are in nonaccrual status as of the report date. Such loans will have been included in
Schedule RC-N, item 4, above.

3.d

Leases to individuals for household, family, and other personal expenditures. Report
in the appropriate column the amount of all leases to individuals for household, family, and
other personal expenditures (net of unearned income) included in Schedule RC-C, part I,
item 10.a, column A, that are past due 30 days or more or are in nonaccrual status as of the
report date. Such leases will have been included in Schedule RC-N, item 8, above.

FFIEC 031 and 041

RC-N-16
(3-11)

RC-N - PAST DUE

FFIEC 031 and 041

RC-N - PAST DUE

Memoranda
Item No.

Caption and Instructions

NOTE: Memorandum item 4 is not applicable to banks filing the FFIEC 031 report form. On the
FFIEC 041 report form, Memorandum item 4 is to be completed by:



banks with $300 million or more in total assets, and
banks with less than $300 million in total assets that have loans to finance agricultural production and
other loans to farmers, as defined for Schedule RC-C, part I, item 3, column B, exceeding five
percent of total loans.
4

Loans to finance agricultural production and other loans to farmers. Report in the
appropriate column the amount of all loans to finance agricultural production and other loans
to farmers included in Schedule RC-C, part I, item 3, column B, that are past due 30 days or
more or are in nonaccrual status as of the report date. Such loans will have been included in
Schedule RC-N, item 7, above.

5

Loans and leases held for sale and loans measured at fair value. Report in the
appropriate subitem and column the amount of all loans and leases held for sale, whether
measured at the lower of cost or fair value or at fair value under a fair value option, and all
loans held for investment measured at fair value under a fair value option that are past due
30 days or more or are in nonaccrual status as of the report date. Such loans and leases will
have been included in one or more of the loan and lease categories in items 1 through 8 of
Schedule RC-N above and would, therefore, exclude any loans classified as trading assets
and included in Schedule RC, item 5.

5.a

Loans and leases held for sale. Report in the appropriate column the carrying amount of
all loans and leases classified as held for sale included in Schedule RC, item 4.a, which are
reported at the lower of cost or fair value or at fair value under a fair value option, that are
past due 30 days or more or are in nonaccrual status as of the report date.

5.b

Loans measured at fair value. Report in the appropriate subitem and column the total fair
value and unpaid principal balance of all loans held for investment that are measured at fair
value under a fair value option included in Schedule RC, item 4.b, that are past due 30 days
or more or are in nonaccrual status as of the report date.

5.b.(1)

Fair value. Report in the appropriate column the total fair value of all loans held for
investment that are measured at fair value under a fair value option included in Schedule RC,
item 4.b, that are past due 30 days or more or are in nonaccrual status as of the report date.

5.b.(2)

Unpaid principal balance. Report in the appropriate column the total unpaid principal
balance of all loans held for investment that are measured at fair value under a fair value
option included in Schedule RC, item 4.b, that are past due 30 days or more or are in
nonaccrual status as of the report date.

FFIEC 031 and 041

RC-N-17
(6-12)

RC-N - PAST DUE

FFIEC 031 and 041

RC-N - PAST DUE

Memoranda
Item No.

Caption and Instructions

NOTE: On the FFIEC 041, Memorandum item 6 is not applicable to banks that have less than
$300 million in total assets.
6

Derivative contracts: Fair value of amounts carried as assets. Report in the appropriate
column the fair value of all credit derivative contracts (as defined for Schedule RC-L, item 7)
and all interest rate, foreign exchange rate, equity, and commodity and other derivative
contracts (as defined for Schedule RC-L, item 12) on which a required payment by the bank's
counterparty is past due 30 days or more as of the report date.

7

Additions to nonaccrual assets during the quarter. Report the aggregate amount of all
loans, leases, debt securities, and other assets (net of unearned income) that have been
placed in nonaccrual status during the calendar quarter ending on the report date. Include
those assets placed in nonaccrual status during the quarter that are included as of the
quarter-end report date in Schedule RC-N, column C, items 1 through 9. Also include those
assets placed in nonaccrual status during the quarter that, before the current quarter-end,
have been sold, paid off, charged-off, settled through foreclosure or concession of collateral
(or any other disposition of the nonaccrual asset) or have been returned to accrual status. In
other words, the aggregate amount of assets placed in nonaccrual status since the prior
quarter-end that should be reported in this item should not be reduced, for example, by any
charge-offs or sales of such nonaccrual assets. If a given asset is placed in nonaccrual
status more than once during the quarter, report the amount of the asset only once.

8

Nonaccrual assets sold during the quarter. Report the total of the outstanding balances
of all loans, leases, debt securities, and other assets held in nonaccrual status (i.e.,
reportable in Schedule RC-N, column C, items 1 through 9) that were sold during the
calendar quarter ending on the report date. The amount to be included in this item is the
outstanding balance (net of unearned income) of each nonaccrual asset at the time of its
sale. Do not report the sales price of the nonaccrual assets and do not include any gains or
losses from the sale. For purposes of this item, only include those transfers of nonaccrual
assets that meet the criteria for a sale as set forth in ASC Topic 860, Transfers and Servicing
(formerly FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities,” as amended). For further information, see the
Glossary entry for “transfers of financial assets.”

9

Purchased credit-impaired loans accounted for in accordance with FASB ASC 310-30
(former AICPA Statement of Position 03-3). Report in the appropriate subitem and column
the outstanding balance and carrying amount of "purchased credit-impaired loans" reported
as held for investment in Schedule RC-C, part I, Memorandum items 7.a and 7.b,
respectively, that are past due 30 days or more or are in nonaccrual status as of the report
date. The carrying amount of such loans will have been included by loan category in items 1
through 7 of Schedule RC-N, above. Purchased credit-impaired loans are accounted for in
accordance with ASC Subtopic 310-30, Receivables – Loans and Debt Securities Acquired
with Deteriorated Credit Quality (formerly AICPA Statement of Position 03-3, “Accounting for
Certain Loans or Debt Securities Acquired in a Transfer”). Purchased credit-impaired loans
are loans that an institution has purchased, including those acquired in a purchase business
combination, where there is evidence of deterioration of credit quality since the origination of
the loan and it is probable, at the purchase date, that the institution will be unable to collect
all contractually required payments receivable. Loans held for investment are those that the
institution has the intent and ability to hold for the foreseeable future or until maturity or
payoff.

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Memoranda
Item No.

Caption and Instructions

9
(cont.)

For guidance on determining the delinquency and nonaccrual status of purchased
credit-impaired loans accounted for individually and purchased credit-impaired loans with
common risk characteristics that are aggregated and accounted for as a pool, refer to the
“Definitions” section of the Schedule RC-N instructions and the Glossary entry for “purchased
credit-impaired loans and debt securities.”

9.a

Outstanding balance. Report in the appropriate column the outstanding balance of all
purchased credit-impaired loans reported as held for investment in Schedule RC-C, part I,
Memorandum item 7.a, that are past due 30 days or more or are in nonaccrual status as of
the report date. The outstanding balance is the undiscounted sum of all amounts, including
amounts deemed principal, interest, fees, penalties, and other under the loan, owed to the
institution at the report date, whether or not currently due and whether or not any such
amounts have been charged off by the institution. However, the outstanding balance does
not include amounts that would be accrued under the contract as interest, fees, penalties,
and other after the report date.

9.b

Carrying amount included in Schedule RC-N, items 1 through 7, above. Report in the
appropriate column the carrying amount (before any allowances established after acquisition
for decreases in cash flows expected to be collected) of, i.e., the recorded investment in, all
purchased credit-impaired loans reported as held for investment in Schedule RC-C, part I,
Memorandum item 7.b, that are past due 30 days or more or are in nonaccrual status as of
the report date.

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RC-O - ASSESSMENTS

SCHEDULE RC-O – OTHER DATA FOR DEPOSIT INSURANCE AND
FICO ASSESSMENTS
General Instructions
Each FDIC-insured depository institution must complete items 1 and 2, 4 through 9, 10, and 11 and
Memorandum items 1 and 5, and, if applicable, items 3 and 9.a and Memorandum items 2 and 3 each
quarter. Each “large institution” and each “highly complex institution,” which generally are FDIC-insured
depository institutions with $10 billion or more in total assets, must complete Memorandum items 6
through 12, 13.a, and 16 and, if applicable, Memorandum item 17 each quarter. In addition, each “large
institution” must complete Memorandum items 13.b through 13.g and each “highly complex institution”
must complete Memorandum items 14 and 15 each quarter. The terms “large institution” and “highly
complex institution” are more fully described in the General Instructions preceding Memorandum item 6.
Each separately chartered depository institution that is insured by the FDIC has a unique FDIC certificate
number. When one FDIC-insured institution owns another FDIC-insured institution as a subsidiary, the
parent institution should complete items 1 through 11 (except item 9.a) and Memorandum items 1 through
5 of Schedule RC-O by accounting for the insured institution subsidiary under the equity method of
accounting instead of consolidating it, i.e., on an “unconsolidated single FDIC certificate number basis.”
Thus, each FDIC-insured institution should report only its own amounts in items 1 through 11 (except
item 9.a) and Memorandum items 1 through 5 of Schedule RC-O under its own FDIC certificate number
without eliminating the parent and subsidiary institutions’ intercompany balances. (However, an FDICinsured institution that owns another FDIC-insured institution should complete item 9.a by consolidating its
subsidiary institution.) In contrast, when an FDIC-insured institution has entities other than FDIC-insured
institutions that must be consolidated for purposes of Schedule RC, Balance Sheet, the parent institution
should complete items 1 through 11 and Memorandum items 1 through 5 of Schedule RC-O on a
consolidated basis with respect to these other entities.
“Large institutions” and “highly complex institutions,” including those that own another FDIC-insured
institution as a subsidiary, should complete Memorandum items 6 through 17, as appropriate, on a fully
consolidated basis.
Item Instructions
Item No.
1

Caption and Instructions
Total deposit liabilities before exclusions (gross) as defined in Section 3(l) of the
Federal Deposit Insurance Act and FDIC regulations. Report on an unconsolidated single
FDIC certificate number basis the gross total deposit liabilities as of the calendar quarter-end
report date that meet the statutory definition of deposits in Section 3(l) of the Federal Deposit
Insurance Act before deducting allowable exclusions from total deposits. An institution’s
gross total deposit liabilities are the combination of:
•
•
•
•
•
•

FFIEC 031 and 041

All deposits in “domestic offices” reported in Schedule RC, item 13.a;
All deposits in “foreign offices” reported in Schedule RC, item 13.b, on the FFIEC 031
report;
Interest accrued and unpaid on deposits in “domestic offices” reported in Schedule RC-G,
item 1.a;
Interest accrued and unpaid on deposits in “foreign offices” included in Schedule RC-G,
item 1.b;
Uninvested trust funds held in the institution’s own trust department;
Deposits of consolidated subsidiaries (except any consolidated subsidiary that is an
FDIC-insured institution) and the interest accrued and unpaid on such deposits;

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Item No.

Caption and Instructions

1
(cont.)

•

•
●

•
•

The amount by which demand deposits reported in Schedule RC, item 13, have been
reduced from the netting of the reporting institution’s reciprocal demand balances with
foreign banks and foreign offices of other U.S. banks (other than insured branches in
Puerto Rico and U.S. territories and possessions); and
The amount by which any other deposit liabilities reported in Schedule RC, item 13, have
been reduced by assets netted against these liabilities in accordance with generally
accepted accounting principles;
Less the amount of unamortized premiums included in the amount of deposit liabilities
reported in Schedule RC, item 13;
Plus the amount of unamortized discounts reflected in the amount of deposit liabilities
reported in Schedule RC, item 13;
Plus other obligations meeting the Section 3(l) statutory definition of a deposit that may be
housed in systems of record not normally thought of as deposit systems, such as loan,
payroll, and escrow systems and manual records that contain information needed to
answer depositors’ questions on their deposits.

See the Glossary entry for “deposits” for the statutory definition of deposits.
If unposted debits and unposted credits are included in the gross total deposit liabilities
reported in this item, they may be excluded in Schedule RC-O, item 2 below.
2

Total allowable exclusions, including interest accrued and unpaid on allowable
exclusions (including foreign deposits). Report on an unconsolidated single FDIC
certificate number basis the total amount of allowable exclusions from deposits as of the
calendar quarter-end report date if the institution maintains such records as will readily permit
verification of the correctness of its reporting of exclusions.
Any accrued and unpaid interest on the allowable exclusions listed below should also be
reported in this item as an allowable exclusion.
The allowable exclusions include:
(1) Foreign Deposits: As defined in Section 3(l)(5) of the Federal Deposit Insurance Act,
foreign deposits include
(A) any obligation of a depository institution which is carried on the books and records of
an office of such bank or savings association located outside of any State, unless –
(i) such obligation would be a deposit if it were carried on the books and records of
the depository institution, and would be payable at, an office located in any State;
and
(ii) the contract evidencing the obligation provides by express terms, and not by
implication, for payment at an office of the depository institution located in any
State; and
(B) any international banking facility deposit, including an international banking facility
time deposit, as such term is from time to time defined by the Board of Governors of
the Federal Reserve System in regulation D or any successor regulation issued by
the Board of Governors of the Federal Reserve System.
NOTE: Foreign deposits are deposit obligations under the FDIC certificate number of the
reporting bank only. Deposit obligations of a subsidiary depository institution chartered in
a foreign country should not be included in amounts reported in Schedule RC-O under the
domestic bank’s FDIC certificate number.

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Item No.

Caption and Instructions

2
(cont.)

(2) Reciprocal balances: Any demand deposit due from or cash item in the process of
collection due from any depository institution (not including a foreign bank or foreign office
of another U.S. depository institution) up to the total amount of deposit balances due to
and cash items in the process of collection due such depository institution.
(3) Drafts drawn on other depository institutions: Any outstanding drafts (including advices
and authorization to charge the depository institution’s balance in another bank) drawn in
the regular course of business by the reporting depository institution.
(4) Pass-through reserve balances: Reserve balances passed through to the Federal
Reserve by the reporting institution that are also reflected as deposit liabilities of the
reporting institution. This exclusion is not applicable to an institution that does not act as
a correspondent bank in any pass-through reserve balance relationship. A state
nonmember bank generally cannot act as a pass-through correspondent unless it
maintains an account for its own reserve balances directly with the Federal Reserve.
(5) Depository institution investment contracts: Liabilities arising from depository institution
investment contracts that are not treated as insured deposits under section 11(a)(5) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(a)(5)). A Depository Institution
Investment Contract is a separately negotiated depository agreement between an
employee benefit plan and an insured depository institution that guarantees a specified
rate for all deposits made over a prescribed period and expressly permits benefitresponsive withdrawals or transfers.
(6) Accumulated deposits: Deposits accumulated for the payment of personal loans that are
assigned or pledged to assure payment of the loans at maturity. Deposits that simply
serve as collateral for loans are not an allowable exclusion.

NOTE: Item 3 is applicable only to banks filing the FFIEC 031 report form.
3

Total foreign deposits, including interest accrued and unpaid thereon (included in
item 2 above). Report on an unconsolidated single FDIC certificate number basis the total
amount of foreign deposits (including International Banking Facility deposits), including
interest accrued and unpaid on these deposits, as of the calendar quarter-end report date
included in Schedule RC-O, item 2 above.

4

Average consolidated total assets for the calendar quarter. Report average consolidated
total assets for the calendar quarter on a single FDIC certificate number basis.
Averaging methods – An institution that reported $1 billion or more in quarter-end
consolidated total assets in its Consolidated Reports of Condition and Income (Schedule RC,
item 12, “Total assets”) or Thrift Financial Report (Schedule SC, line item SC60, “Total
assets”) for March 31, 2011, and any institution that becomes FDIC-insured after March 31,
2011, must report average consolidated total assets in this item on a daily average basis. An
institution that reported less than $1 billion in quarter-end consolidated total assets in its
Consolidated Reports of Condition and Income (Schedule RC, item 12, “Total assets”) or
Thrift Financial Report (Schedule SC, line item SC60, “Total assets”) for March 31, 2011, may
report average consolidated total assets in this item on a weekly average basis, or it

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Item No.

Caption and Instructions

4
(cont.)

may at any time opt permanently to report average consolidated total assets on a daily
average basis. Once an institution that reports average consolidated total assets using a
weekly average reports average consolidated total assets of $1 billion or more in this item for
two consecutive quarters, it must permanently report average consolidated total assets using
daily averaging beginning the next quarter.
Daily average consolidated total assets should be calculated by adding the institution’s
consolidated total assets as of the close of business for each day of the calendar quarter and
dividing by the number of days in the calendar quarter (the number of days in a quarter
ranges from 90 days to 92 days). For days that an institution is closed (e.g., Saturdays,
Sundays, or holidays), the amount from the previous business day would be used. An
institution is considered closed if there are no transactions posted to the general ledger as of
that date.
Weekly average consolidated total assets should be calculated by adding the institution’s
consolidated total assets as of the close of business on each Wednesday during the calendar
quarter and dividing by the number of Wednesdays in the quarter.
An institution that becomes newly insured and begins operating during the calendar quarter
should report average consolidated total assets on a daily average basis. Daily average
consolidated total assets for such an institution should be calculated by adding the institution’s
consolidated total assets as of the close of business for each day during the quarter since it
became insured and operational, and dividing by the number of calendar days since it
became insured and operational.
Measuring consolidated total assets – Consolidated total assets should be measured in
accordance with the instructions for Schedule RC-K, item 9, average “Total assets,” except as
follows:
(1) If the reporting institution has an FDIC-insured depository institution subsidiary, the
subsidiary should not be consolidated. Instead, the reporting institution’s investment in
this subsidiary should be included in average consolidated total assets using the equity
method of accounting.
(2) If the reporting institution is the surviving or resulting institution in a merger or
consolidation that occurred during the calendar quarter, the reporting institution should
calculate its average consolidated total assets by including the consolidated total assets
of all entities that were merged or consolidated into the reporting institution as if the
merger or consolidation occurred on the first day of the calendar quarter. Acceptable
methods for including a merged or consolidated entity’s consolidated total assets in this
calculation for the days during the calendar quarter preceding the merger or consolidation
date include using either (a) the acquisition date fair value of the merged or consolidated
entity’s consolidated total assets for all days (or all Wednesdays) during the calendar
quarter preceding the acquisition date or (b) the merged or consolidated entity’s
consolidated total assets, as defined for Schedule RC-K, item 9, average “Total assets,”
for each day (or each Wednesday) during the calendar quarter preceding the acquisition
date.

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Item No.

Caption and Instructions

4
(cont.)

(3) If the reporting institution was acquired in a transaction that became effective during the
calendar quarter and push down accounting was used to account for the acquisition, the
reporting institution should calculate its average consolidated total assets as if the
acquisition occurred on the first day of the calendar quarter. Acceptable methods for
including the institution’s consolidated total assets in this calculation for the days during
the calendar quarter preceding the acquisition date include using either (a) the acquisition
date fair value of the reporting institution’s consolidated total assets for all days (or all
Wednesdays) during the calendar quarter preceding the acquisition date or (b) the
reporting institution’s consolidated total assets, as defined for Schedule RC-K, item 9,
average “Total assets,” for each day (or each Wednesday) during the calendar quarter
preceding the acquisition date.

4.a

Averaging method used. Indicate the averaging method that the reporting institution used to
report its average consolidated total assets in Schedule RC-O, item 4, above. For daily
averaging, enter the number “1”; for weekly averaging, enter the number “2.”

5

Average tangible equity for the calendar quarter. Report average tangible equity for the
calendar quarter on an unconsolidated single FDIC certificate number basis. For purposes of
this item, tangible equity is defined as Tier 1 capital as set forth in the banking agencies’
regulatory capital standards and reported in Schedule RC-R, item 11.
Averaging methods – An institution that reported $1 billion or more in quarter-end
consolidated total assets in its Consolidated Reports of Condition and Income (Schedule RC,
item 12, “Total assets”) or Thrift Financial Report (Schedule SC, line item SC60, “Total
assets”) for March 31, 2011, and any institution that becomes FDIC-insured after March 31,
2011, must report average tangible equity on a monthly average basis. An institution that
reported less than $1 billion in quarter-end consolidated total assets in its Consolidated
Reports of Condition and Income (Schedule RC, item 12, “Total assets”) or Thrift Financial
Report (Schedule SC, line item SC60, “Total assets”) for March 31, 2011, may report its
quarter-end tangible equity rather than an average amount, or it may at any time opt
permanently to report average tangible equity on a monthly average basis. Once an
institution that reports average consolidated total assets using a weekly average reports
average consolidated total assets of $1 billion or more in Schedule RC-O, item 4, for two
consecutive quarters, it must permanently report average tangible equity using monthly
averaging beginning the next quarter.
Monthly average tangible equity should be calculated by adding Tier 1 capital as of each
month-end date during the calendar quarter and dividing by three. For example, monthly
average tangible equity for June 30, 2011, would be the sum of Tier 1 capital as of April 30,
May 31, and June 30, 2011, divided by three. However, institutions required or electing to
report average tangible equity on a monthly average basis normally are not required to
perform monthly loan loss provision or deferred tax calculations in accordance with generally
accepted accounting principles for the first two months of a quarter. Accordingly, such
institutions may use one third of the amount of the provision for loan and lease losses and
deferred tax expense (benefit) reported for the calendar quarter for purposes of estimating the
retained earnings component of Tier 1 capital in each of the first two months of the quarter.
An institution that becomes newly insured and begins operating during the calendar quarter
should report average tangible equity on a monthly average basis. Monthly average tangible
equity for such an institution should be calculated by adding the institution’s Tier 1 capital as
of each month-end date during the quarter since it became insured and operational, and
dividing by the number of month-end dates since it became insured and operational.

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Item No.

Caption and Instructions

5
(cont.)

An institution that becomes newly insured and begins operating during the calendar quarter
should report average tangible equity on a monthly average basis. Monthly average tangible
equity for such an institution should be calculated by adding the institution’s Tier 1 capital as
of each month-end date during the quarter since it became insured and operational, and
dividing by the number of month-end dates since it became insured and operational.
Measuring tangible equity – Tangible equity should be measured in accordance with the
instructions for Schedule RC-R, item 11, “Tier 1 capital,” except as follows:
(1) If the reporting institution has an FDIC-insured depository institution subsidiary, the
subsidiary should not be consolidated. Instead, the reporting institution should measure
its equity capital and its Tier 1 capital by accounting for this subsidiary using the equity
method of accounting.
(2) If the reporting institution is the surviving or resulting institution in a merger or
consolidation that occurred after the end of the first month of the calendar quarter and it
reports its average tangible equity on a monthly average basis, the reporting institution
should calculate its average tangible equity as if the merger or consolidation occurred on
the first day of the calendar quarter. An acceptable method for measuring tangible equity
for month-end dates during the calendar quarter preceding the merger or consolidation
date would be to use the amount of Tier 1 capital for the month-end date immediately
following the merger or consolidation date as the amount of Tier 1 capital for the monthend date or dates preceding the merger or consolidation date.
(3) If the reporting institution was acquired in a transaction that became effective after the
end of the first month of the calendar quarter, push down accounting was used to account
for the acquisition, and the institution reports its average tangible equity on a monthly
average basis, the reporting institution should calculate its average tangible equity as if
the acquisition occurred on the first day of the calendar quarter. An acceptable method
for measuring tangible equity for month-end dates during the calendar quarter preceding
the acquisition date would be to use the amount of Tier 1 capital for the month-end date
immediately following the acquisition date as the amount of Tier 1 capital for the monthend date or dates preceding the acquisition date.

6

Holdings of long-term unsecured debt issued by other FDIC-insured depository
institutions. Report on an unconsolidated single FDIC certificate number basis the balance
sheet amount of the reporting institution’s holdings of long-term unsecured debt issued by
other FDIC-insured depository institutions. Long-term unsecured debt includes senior
unsecured debt, subordinated debt, and limited-life preferred stock with a remaining maturity
of at least one year that has been issued by another depository institution. Any debt for which
the reporting institution has the option to redeem the debt within the next 12 months is not
considered long-term and may be excluded from this item.
Depending on the form of the debt and the intent for which it is held, holdings of long-term
unsecured debt issued by other insured depository institutions are included in Schedule RC-B,
item 6.a, “Other domestic debt securities”; Schedule RC-C, part I, item 2, “Loans to depository
institutions and acceptances of other banks”; Schedule RC-D, item 5.b, “All other debt
securities”; and Schedule RC-D, item 6.d, “Other loans.” For an institution that does not
complete Schedule RC-D – Trading Assets and Liabilities, long-term unsecured debt issued
by other insured depository institutions that is held for trading is included in Schedule RC,
item 5, “Trading assets.”

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Item No.

Caption and Instructions

6
(cont.)

Exclude holdings of long-term unsecured debt issued by bank and thrift holding companies.
Also exclude holdings of debt issued by other insured depository institutions that are
guaranteed by the FDIC under the Debt Guarantee Program component of the FDIC’s
Temporary Liquidity Guarantee Program.

7

Unsecured "Other borrowings" with a remaining maturity of. Report on an
unconsolidated single FDIC certificate number basis the amount of the bank’s unsecured
“Other borrowings” (as defined for Schedule RC-M, item 5.b) in the appropriate subitems
according to the amount of time remaining until their final contractual maturities. Include both
fixed rate and floating rate “Other borrowings” that are unsecured. In general, “Other
borrowings” are unsecured if the bank (or a consolidated subsidiary) has not pledged
securities, loans, or other assets as collateral for the borrowing. Exclude “Other borrowings”
that are guaranteed by the FDIC under the Debt Guarantee Program component of the
FDIC’s Temporary Liquidity Guarantee Program.
The sum of Schedule RC-O, items 7.a through 7.d, must be less than or equal to
Schedule RC-M, items 5.b.(1)(a) through (d) minus item 10.b.

7.a

One year or less. Report on an unconsolidated single FDIC certificate number basis all
unsecured “Other borrowings” with a remaining maturity of one year or less. Include
unsecured “Other borrowings” with a remaining maturity of over one year for which the holder
has the option to redeem the debt instrument within one year of the report date. Except for
such optionally redeemable borrowings, the unsecured “Other borrowings” that should be
included in this item will also have been reported in Schedule RC-M, item 5.b.(2), “Other
borrowings with a remaining maturity of one year or less.”

7.b

Over one year through three years. Report on an unconsolidated single FDIC certificate
number basis all unsecured “Other borrowings” with a remaining maturity of over one year
through three years.

7.c

Over three years through five years. Report on an unconsolidated single FDIC certificate
number basis all unsecured “Other borrowings” with a remaining maturity of over three years
through five years.

7.d

Over five years. Report on an unconsolidated single FDIC certificate number basis all
unsecured “Other borrowings” with a remaining maturity of over five years.

8

Subordinated notes and debentures with a remaining maturity of. Report on an
unconsolidated single FDIC certificate number basis the amount of the bank’s subordinated
notes and debentures (as defined for Schedule RC, item 19, and in the Glossary entry for
“subordinated notes and debentures”) in the appropriate subitems according to the amount of
time remaining until their final contractual maturities. Include both fixed rate and floating rate
subordinated notes and debentures.
The sum of Schedule RC-O, items 8.a through 8.d, must be less than or equal to
Schedule RC, item 19, “Subordinated notes and debentures.”

8.a

One year or less. Report on an unconsolidated single FDIC certificate number basis all
subordinated notes and debentures with a remaining maturity of one year or less. Include
subordinated notes and debentures with a remaining maturity of over one year for which the
holder has the option to redeem the subordinated debt within one year of the report date.

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Item No.

RC-O - ASSESSMENTS

Caption and Instructions

8.b

Over one year through three years. Report on an unconsolidated single FDIC certificate
number basis all subordinated notes and debentures with a remaining maturity of over one
year through three years.

8.c

Over three years through five years. Report on an unconsolidated single FDIC certificate
number basis all subordinated notes and debentures with a remaining maturity of over three
years through five years.

8.d

Over five years. Report on an unconsolidated single FDIC certificate number basis all
subordinated notes and debentures with a remaining maturity of over five years.

9

Reciprocal brokered deposits. Report on an unconsolidated single FDIC certificate number
basis the amount of reciprocal deposits included in the amount of brokered deposits (in
domestic offices) reported in Schedule RC-E, (part I,) Memorandum item 1.b, “Total brokered
deposits.”
As defined in Section 327.8(s) of the FDIC’s regulations, “reciprocal deposits” are “[d]eposits
that an insured depository institution receives through a deposit placement network on a
reciprocal basis, such that: (1) for any deposit received, the institution (as agent for
depositors) places the same amount with other insured depository institutions through the
network; and (2) each member of the network sets the interest rate to be paid on the entire
amount of funds it places with other network members.”

NOTE: Item 9.a is to be completed on a fully consolidated basis by institutions that own another insured
depository institution.
9.a

Fully consolidated reciprocal brokered deposits. Report on a fully consolidated basis the
amount of reciprocal deposits (as defined in Schedule RC-O, item 9, above) included in the
amount of brokered deposits (in domestic offices) reported in Schedule RC-E, (part I,)
Memorandum item 1.b, “Total brokered deposits.”

10

Banker’s bank certification: Does the reporting institution meet both the statutory
definition of a banker’s bank and the business conduct test set forth in FDIC
regulations? If the reporting institution meets both of these criteria on an unconsolidated
single FDIC certificate number basis, it is a qualifying banker’s bank and should answer
“Yes” to item 10 and complete items 10.a and 10.b. If the reporting institution does not meet
both of these criteria, it should answer “No” to item 10 and it should not complete items 10.a
and 10.b.
The definition of “banker’s bank” is set forth in 12 U.S.C. 24, which states that a banker’s
bank is an FDIC-insured bank where the stock of the bank or its parent holding company “is
owned exclusively (except to the extent directors’ qualifying shares are required by law) by
depository institutions or depository institution holding companies (as defined in section 1813
of this title)” and the bank or its parent holding “company and all subsidiaries thereof are
engaged exclusively in providing services to or for other depository institutions, their holding
companies, and the officers, directors, and employees of such institutions and companies,
and in providing correspondent banking services at the request of other depository institutions
or their holding companies.”
A bank that would otherwise meet the definition of a banker’s bank, but has received funds
from federal capital infusion programs (such as the Troubled Assets Relief Program and the
Small Business Lending Fund), has stock owned by the FDIC as a result of bank failures, or
has non-bank-owned stock resulting from equity compensation programs, is not excluded
from the definition of a banker’s bank for purposes of Schedule RC-O, item 10, provided the
bank also meets the business conduct test.

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Item No.

Caption and Instructions

10
(cont.)

To meet the business conduct test, which is set forth in Section 327.5(b)(3) of the FDIC’s
regulations, a bank must conduct 50 percent or more of its business with entities other than
its parent holding company or entities other than those controlled either directly or indirectly
by its parent holding company. Control has the same meaning as in section 3(w)(5) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(w)(5)).

10.a

Banker’s bank deduction. A qualifying banker’s bank is eligible to have the FDIC deduct
certain assets from its assessment base, subject to a limit. Report in this item on an
unconsolidated single FDIC certificate number basis the banker’s bank deduction, which
equals the sum of a qualifying banker’s bank’s average balances due from Federal Reserve
Banks plus its average federal funds sold. These averages should be calculated on a daily
or weekly basis consistent with the qualifying banker’s bank’s calculation of its average
consolidated total assets in Schedule RC-O, item 4 (and as reported in Schedule RC-O,
item 4.a).
Balances due from Federal Reserve Banks include the total balances due from Federal
Reserve Banks, including the qualifying banker’s bank’s own reserves and other balances as
well as reserve balances actually passed through to a Federal Reserve Bank by the banker’s
bank on behalf of its respondent depository institutions (as described in the instructions for
Schedule RC-A, item 4, “Balances due from Federal Reserve Banks”). For a qualifying
banker’s bank that is a respondent in a pass-through reserve relationship with a
correspondent bank, balances due from Federal Reserve Banks include the reserve balances
the correspondent bank has passed through to a Federal Reserve Bank for the respondent
banker’s bank. Balances due from Federal Reserve Banks also include the qualifying
banker’s bank’s excess balance accounts, which are limited-purpose accounts at Federal
Reserve Banks for maintaining an institution’s excess balances that are eligible to earn
interest on their Federal Reserve balances. See the Glossary entry for “pass-through reserve
balances.”
Federal funds sold are defined in the instructions for Schedule RC, item 3.a, “Federal funds
sold.” See also the Glossary entry for “federal funds transactions.”

10.b

Banker’s bank deduction limit. A qualifying banker’s bank is eligible to have the FDIC
deduct certain assets from its assessment base, subject to a limit. Report in this item on an
unconsolidated single FDIC certificate number basis the banker’s bank deduction limit, which
equals the sum of a qualifying banker’s bank’s average deposits of commercial banks and
other depository institutions in the U.S. plus its average federal funds purchased. These
averages should be calculated on a daily or weekly basis consistent with the qualifying
banker’s bank’s calculation of its average consolidated total assets in Schedule RC-O, item 4
(and as reported in Schedule RC-O, item 4.a).
Deposits of commercial banks and other depository institutions in the U.S. are defined in the
instructions for Schedule RC-E, item 4.
Federal funds purchased are defined in the instructions for Schedule RC, item 14.a, “Federal
funds purchased.” See also the Glossary entry for “federal funds transactions.”

11

Custodial bank certification: Does the reporting institution meet the definition of a
custodial bank set forth in FDIC regulations? If the reporting institution meets the
custodial bank definition on an unconsolidated single FDIC certificate number basis, it should
answer “Yes” to item 11 and complete items 11.a and 11.b. If the reporting institution does not
meet the custodial bank definition, it should answer “No” to item 11 and it should not complete
items 11.a and 11.b.

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Item No.

Caption and Instructions

11
(cont.)

A custodial bank, as defined in Section 327.5(c)(1) of the FDIC’s regulations, is an insured
depository institution that had:
(1) “Fiduciary and custody and safekeeping assets” (the sum of item 10, columns A and B,
plus item 11, column B, in Schedule RC-T – Fiduciary and Related Services) of $50 billion
or more as of the end of the previous calendar year, or
(2) Income from fiduciary activities (Schedule RI, item 5.a) that was more than 50 percent of
its total revenue (interest income plus noninterest income, which is the sum of items 1.h
and 5.m of Schedule RI) during the previous calendar year.

11.a

Custodial bank deduction. An institution that meets the definition of a custodial bank is
eligible to have the FDIC deduct certain assets from its assessment base, subject to a limit.
Report in this item on an unconsolidated single FDIC certificate number basis the custodial
bank deduction, which equals average qualifying low-risk assets. Qualifying low-risk assets
are determined without regard to the maturity of the assets. Average qualifying low-risk
assets equals the sum of the following amounts, all on an unconsolidated single FDIC
certificate number basis:
(1) The average amount of cash and balances due from depository institutions with a risk
weighting for risk-based capital purposes of zero percent (as defined for Schedule RC-R,
item 34, column C) plus 50 percent of the average amount of cash and balances due
from depository institutions with a risk weighting of 20 percent (as defined for
Schedule RC-R, item 34, column D);
(2) The average amount of held-to-maturity securities with a risk weighting for risk-based
capital purposes of zero percent (as defined for Schedule RC-R, item 35, column C) plus
50 percent of the average amount of held-to-maturity securities with a risk weighting of 20
percent (as defined for Schedule RC-R, item 35, column D);
(3) The average amount of available-for-sale securities with a risk weighting for risk-based
capital purposes of zero percent (as defined for Schedule RC-R, item 36, column C) plus
50 percent of the average amount of available-for-sale securities with a risk weighting of
20 percent (as defined for Schedule RC-R, item 36, column D); and
(4) The average amount of federal funds sold and securities purchased under agreements to
resell with a risk weighting for risk-based capital purposes of zero percent (as defined for
Schedule RC-R, item 37, column C) plus 50 percent of the average amount of federal
funds sold and securities purchased under agreements to resell with a risk weighting of
20 percent (as defined for Schedule RC-R, item 37, column D).
These averages should be calculated on a daily or weekly basis consistent with the custodial
bank’s calculation of its average consolidated total assets in Schedule RC-O, item 4 (and as
reported in Schedule RC-O, item 4.a).

11.b

Custodial bank deduction limit. An institution that meets the definition of a custodial bank
is eligible to have the FDIC deduct certain assets from its assessment base, subject to a limit.
Report in this item on an unconsolidated single FDIC certificate number basis the custodial
bank deduction limit, which equals the average amount of the institution’s transaction account
deposit liabilities identified by the institution as being directly linked to a fiduciary, custodial, or
safekeeping account reported in Schedule RC-T – Fiduciary and Related Services. The titling
of a transaction account or specific references in the deposit account documents should
clearly demonstrate the link between the transaction account and a fiduciary, custodial, or
safekeeping account.

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Item No.

Caption and Instructions

11.b
(cont.)

For deposits in domestic offices, the term “transaction account” is defined in Federal Reserve
Regulation D and in the Glossary entry for “deposits” and such deposits are reported in
Schedule RC-E, (part I,) item 7, column A. In general, a transaction account is a deposit or
account from which the depositor or account holder is permitted to make transfers or
withdrawals by negotiable or transferable instruments, payment orders of withdrawal,
telephone transfers, or other similar devices for the purpose of making payments or transfers
to third persons or others or from which the depositor may make third party payments at an
automated teller machine, a remote service unit, or another electronic device, including by
debit card. For purposes of reporting the custodial bank deduction limit in this item, a
custodial bank with deposits in foreign offices should include foreign office deposit liabilities
(reported in Schedule RC-E, part II) with the characteristics of a transaction account that are
linked to a fiduciary, custody, or safekeeping account reported in Schedule RC-T – Fiduciary
and Related Services.
Exclude from this item escrow accounts, Interest on Lawyers Trust Accounts, and other trust
and custody-related deposit accounts related to commercial bank services, or otherwise
offered outside a custodial bank’s fiduciary business unit or another distinct business unit
devoted to institutional custodial services. Also exclude all nontransaction account deposit
liabilities (i.e., savings and time deposits).
This average should be calculated on a daily or weekly basis consistent with the custodial
bank’s calculation of its average consolidated total assets in Schedule RC-O, item 4 (and as
reported in Schedule RC-O, item 4.a).

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Memoranda
Item No.
1

Caption and Instruction
Total deposit liabilities of the bank, including related interest accrued and unpaid, less
allowable exclusions, including related interest accrued and unpaid. Memorandum
items 1.a.(1) through 1.d.(2) are to be completed each quarter. These Memorandum items
should be reported on an unconsolidated single FDIC certificate number basis.
The sum of Memorandum items 1.a.(1), 1.b.(1), 1.c.(1), and 1.d.(1) must equal
Schedule RC-O, item 1, “Total deposit liabilities before exclusions (gross) as defined in
Section 3(l) of the Federal Deposit Insurance Act and FDIC regulations,” less item 2,
“Total allowable exclusions, including interest accrued and unpaid on allowable exclusions
(including foreign deposits).” Accordingly, all amounts included in the bank’s total deposit
liabilities less allowable exclusions, not just those included in its “Deposits in domestic offices”
(reported in Schedule RC, item 13.a), should be reported in the appropriate subitem of
Memorandum item 1. For example, the interest accrued and unpaid on a deposit account
(that is not an allowable exclusion) should be reported together with the deposit account in
Memorandum item 1.a.(1), 1.b.(1), 1.c.(1), or 1.d.(1), as appropriate.
The dollar amounts used as the basis for reporting the number and amount of deposit
accounts in Memorandum items 1.a.(1) through 1.d.(2) reflect the deposit insurance limits of
$250,000 for “retirement deposit accounts” and $250,000 for other deposit accounts.
“Retirement deposit accounts” that are eligible for $250,000 in deposit insurance coverage are
deposits made in connection with the following types of retirement plans:
•
•
•
•
•

Individual Retirement Accounts (IRAs), including traditional and Roth IRAs;
Simplified Employee Pension (SEP) plans;
"Section 457" deferred compensation plans;
Self-directed Keogh (HR 10) plans; and
Self-directed defined contribution plans, which are primarily 401(k) plan accounts.

The term ‘‘self-directed’’ means that the plan participants have the right to direct how
their funds are invested, including the ability to direct that the funds be deposited at an
FDIC-insured institution.
Retirement deposit accounts exclude Coverdell Education Savings Accounts, formerly known
as Education IRAs.
In some cases, brokered certificates of deposit are issued in $1,000 amounts under a master
certificate of deposit issued by a bank to a deposit broker in an amount that exceeds
$250,000. For these so-called “retail brokered deposits,” multiple purchases by individual
depositors from an individual bank normally do not exceed the applicable deposit insurance
limit ($250,000), but under current deposit insurance rules the deposit broker is not required
to provide information routinely on these purchasers and their account ownership capacity to
the bank issuing the deposits. If this information is not readily available to the issuing bank,
these brokered certificates of deposit in $1,000 amounts may be rebuttably presumed to be
fully insured and should be reported as “deposit accounts of $250,000 or less” in
Schedule RC-O, Memorandum items 1.a and 1.c, below. When determining the number of
deposit accounts of $250,000 or less to be reported in Schedule RC-O, Memorandum
items 1.a.(2) and 1.c.(2), the issuing institution should count each such master certificate of
deposit as one account, not as multiple accounts.

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Memoranda
Item No.

Caption and Instruction

1
(cont.)

Some brokered deposits are transaction accounts or money market deposit accounts
(MMDAs) that are denominated in amounts of $0.01 and established and maintained by the
deposit broker (or its agent) as agent, custodian, or other fiduciary for the broker’s customers.
An individual depositor’s deposits within the brokered transaction account or MMDA normally
do not exceed the applicable deposit insurance limit. As with retail brokered deposits, if
information on these depositors and their account ownership capacity is not readily available
to the bank establishing the transaction account or MMDA, the amounts in the transaction
account or MMDA may be rebuttably presumed to be fully insured and should be reported as
“deposit accounts of $250,000 or less” in Schedule RC-O, Memorandum items 1.a and 1.c,
below. When determining the number of deposit accounts of $250,000 or less to be reported
in Schedule RC-O, Memorandum items 1.a.(2) and 1.c.(2), the issuing institution should count
each such brokered transaction account or MMDA as one account, not as multiple accounts.
Time deposits issued to deposit brokers in the form of large ($250,000 or more) certificates of
deposit that have been participated out by the broker in shares of less than $250,000 should
also be reported as “deposit accounts of $250,000 or less” in Schedule RC-O, Memorandum
items 1.a and 1.c, below. When determining the number of deposit accounts of $250,000 or
less to be reported in Schedule RC-O, Memorandum items 1.a.(2) and 1.c.(2), the issuing
institution should count each such brokered certificate of deposit as one account, not as
multiple accounts.
When determining the number and size of deposit accounts, each individual certificate,
passbook, account, and other evidence of deposit is to be treated as a separate account.
For purposes of completing this Memorandum item, multiple accounts of the same depositor
should not be aggregated. In situations where a bank assigns a single account number to
each depositor so that one account number may represent multiple deposit contracts between
the bank and the depositor (e.g., one demand deposit account, one money market deposit
account, and three certificates of deposit), each deposit contract is a separate account.

1.a

Deposit accounts (excluding retirement accounts) of $250,000 or less. Report in the
appropriate subitem on an unconsolidated single FDIC certificate number basis the amount
outstanding and the number of deposit accounts, excluding retirement deposit accounts (as
defined in Schedule RC-O, Memorandum item 1), with a balance of $250,000 or less as of the
report date.

1.a.(1)

Amount of deposit accounts (excluding retirement accounts) of $250,000 or less.
Report on an unconsolidated single FDIC certificate number basis the aggregate balance of
all deposit accounts, certificates, or other evidences of deposit (demand, savings, and time),
excluding retirement deposit accounts, with a balance on the report date of $250,000 or less.
This amount should represent the total of the balances of the deposit accounts enumerated in
Schedule RC-O, Memorandum item 1.a.(2) below.

1.a.(2)

Number of deposit accounts (excluding retirement accounts) of $250,000 or less.
Report on an unconsolidated single FDIC certificate number basis the total number of deposit
accounts (demand, savings, and time), excluding retirement deposit accounts, with a balance
on the report date of $250,000 or less. Count each certificate, passbook, account, and other
evidence of deposit that has a balance of $250,000 or less.

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Memoranda
Item No.
1.b

Caption and Instruction
Deposit accounts (excluding retirement accounts) of more than $250,000. Report in the
appropriate subitem on an unconsolidated single FDIC certificate number basis the amount
outstanding and the number of deposit accounts, excluding retirement deposit accounts (as
defined in Schedule RC-O, Memorandum item 1), with a balance of more than $250,000 as of
the report date.

1.b.(1)

Amount of deposit accounts (excluding retirement accounts) of more than $250,000.
Report on an unconsolidated single FDIC certificate number basis the aggregate balance of
all deposit accounts, certificates, or other evidences of deposit (demand, savings, and time),
excluding retirement deposit accounts, with a balance on the report date of more than
$250,000. This amount should represent the total of the balances of the deposit accounts
enumerated in Schedule RC-O, Memorandum item 1.b.(2) below.

1.b.(2)

Number of deposit accounts (excluding retirement accounts) of more than $250,000.
Report on an unconsolidated single FDIC certificate number basis the total number of deposit
accounts (demand, savings, and time), excluding retirement deposit accounts, with a balance
on the report date of more than $250,000. Count each certificate, passbook, account, and
other evidence of deposit that has a balance of more than $250,000.

1.c

Retirement deposit accounts of $250,000 or less. Report in the appropriate subitem on an
unconsolidated single FDIC certificate number basis the amount outstanding and the number
of retirement deposit accounts (as defined in Schedule RC-O, Memorandum item 1) with a
balance of $250,000 or less as of the report date.

1.c.(1)

Amount of retirement deposit accounts of $250,000 or less. Report on an unconsolidated
single FDIC certificate number basis the aggregate balance of all retirement deposit accounts,
certificates, or other evidences of deposit (demand, savings, and time) with a balance on the
report date of $250,000 or less. This amount should represent the total of the balances of the
retirement deposit accounts enumerated in Schedule RC-O, Memorandum item 1.c.(2) below.

1.c.(2)

Number of retirement deposit accounts of $250,000 or less. Report on an unconsolidated
single FDIC certificate number basis the total number of retirement deposit accounts
(demand, savings, and time) with a balance on the report date of $250,000 or less. Count
each certificate, passbook, account, and other evidence of deposit which has a balance of
$250,000 or less.

1.d

Retirement deposit accounts of more than $250,000. Report in the appropriate subitem
on an unconsolidated single FDIC certificate number basis the amount outstanding and the
number of retirement deposit accounts (as defined in Schedule RC-O, Memorandum item 1)
with a balance of more than $250,000 as of the report date.

1.d.(1)

Amount of retirement deposit accounts of more than $250,000. Report on an
unconsolidated single FDIC certificate number basis the aggregate balance of all retirement
deposit accounts, certificates, or other evidences of deposit (demand, savings, and time) with
a balance on the report date of more than $250,000. This amount should represent the total
of the balances of the retirement deposit accounts enumerated in Schedule RC-O.
Memorandum item 1.d.(2) below.

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Memoranda
Item No.

Caption and Instruction

1.d.(2)

Number of retirement deposit accounts of more than $250,000. Report on an
unconsolidated single FDIC certificate number basis the total number of retirement deposit
accounts (demand, savings, and time) with a balance on the report date of more than
$250,000. Count each certificate, passbook, account, and other evidence of deposit which
has a balance of more than $250,000.

2

Estimated amount of uninsured deposits (in domestic offices of the bank and in
insured branches in Puerto Rico and U.S. territories and possessions), including
related interest accrued and unpaid.
Schedule RC-O, Memorandum item 2, is to be completed on an unconsolidated single FDIC
certificate number basis by banks with $1 billion or more in total assets.
Report on an unconsolidated single FDIC certificate number basis the estimated amount of
the bank's deposits (in domestic offices and in insured branches in Puerto Rico and U.S.
territories and possessions) that is not covered by federal deposit insurance. This estimate
should reflect the deposit insurance limits of $250,000 for “retirement deposit accounts” (as
defined in Schedule RC-O, Memorandum item 1) and $250,000 for other deposit accounts.
The reporting of this uninsured deposit information is mandated by Section 7(a)(9) of the
Federal Deposit Insurance Act.
The estimated amount of uninsured deposits reported in this item should be based on the
bank’s deposits included in Schedule RC-O, item 1, “Total deposit liabilities before exclusions
(gross) as defined in Section 3(l) of the Federal Deposit Insurance Act and FDIC regulations,”
less item 2, “Total allowable exclusions, including interest accrued and unpaid on allowable
exclusions (including foreign deposits).” In addition to the uninsured portion of deposits in
“domestic offices” reported in Schedule RC, item 13.a, the estimate of uninsured deposits
should take into account all other items included in Schedule RC-O, item 1 less item 2,
including, but not limited to:
•
•
•
•

Interest accrued and unpaid on deposits in domestic offices;
Deposits in insured branches in Puerto Rico and U.S. territories and possessions
(including interest accrued and unpaid on these deposits);
Deposits of consolidated subsidiaries in domestic offices and in insured branches in
Puerto Rico and U.S. territories and possessions (including interest accrued and unpaid
on these deposits); and
Deposit liabilities that have been reduced by assets netted against these liabilities in
accordance with generally accepted accounting principles.

The bank's estimate of its uninsured deposits should be reported in accordance with the
following criteria. In this regard, it is recognized that a bank may have multiple automated
information systems for different types of deposits and that the capabilities of a bank’s

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Memoranda
Item No.

Caption and Instruction

2
(cont.)

information systems to provide an estimate of its uninsured deposits will differ from bank to
bank at any point in time and, within an individual institution, may improve over time.
(1) If the bank has brokered deposits, which must be reported in Schedule RC-E,
Memorandum item 1.b, "Total brokered deposits," it must use the information it has
developed for completing Schedule RC-E, Memorandum item 1.c, "Fully insured brokered
deposits," to determine its best estimate of the uninsured portion of its brokered deposits.
(2) If the bank has deposit accounts whose ownership is based on a fiduciary relationship,
Part 330 of the FDIC's regulations generally states that the titling of the deposit account
(together with the underlying records) must indicate the existence of the fiduciary
relationship in order for insurance coverage to be available on a "pass-through" basis.
Fiduciary relationships include, but are not limited to, relationships involving a trustee,
agent, nominee, guardian, executor, or custodian.
A bank with fiduciary deposit accounts with balances of more than $250,000 must
diligently use the available data on these deposit accounts, including data indicating the
existence of different principal and income beneficiaries and data indicating that some or
all of the funds on deposit represent retirement deposit accounts eligible for $250,000 in
deposit insurance coverage, to determine its best estimate of the uninsured portion of
these accounts.
(3) If the bank has deposit accounts of employee benefit plans, Part 330 of the FDIC's
regulations states that these accounts are insured on a "pass-through" basis for the
non-contingent interest of each plan participant provided that certain prescribed
recordkeeping requirements are met. A bank with employee benefit plan deposit
accounts with balances of more than $250,000 must diligently use the available data on
these deposit accounts to determine its best estimate of the uninsured portion of these
accounts.
(4) If the bank's deposit accounts include benefit-responsive "Depository Institution
Investment Contracts," which must be included in Schedule RC-O, item 2, these deposit
liabilities are not eligible for federal deposit insurance pursuant to Section 11(a)(8) of the
Federal Deposit Insurance Act. A bank with benefit-responsive "Depository Institution
Investment Contracts" must include the entire amount of these contracts in the estimated
amount of uninsured deposits it reports in this Memorandum item 2.
(5) If the bank has deposit accounts with balances in excess of the federal deposit
insurance limit that it has collateralized by pledging assets, such as deposits of the
U.S. Government and of states and political subdivisions in the U.S. (which must be
reported in Schedule RC-E, items 2 and 3, and, on the FFIEC 031 report form, in
Schedule RC-E, part II, item 5), the bank should make a reasonable estimate of the
portion of these deposits that is uninsured using the data available from its information
systems.
(6) If the bank has deposit accounts with balances in excess of the federal deposit insurance
limit for which it has acquired private deposit insurance to cover this excess amount, the
bank should make a reasonable estimate of the portion of these deposits that is not
insured by the FDIC using the data available from its information systems.

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Memoranda
Item No.

Caption and Instruction

2
(cont.)

(7) For all other deposit accounts, the bank should make a reasonable estimate of the
portion of these deposits that is uninsured using the data available from its information
systems. In developing this estimate, if the bank has automated information systems in
place that enable it to identify jointly owned accounts and estimate the deposit insurance
coverage of these deposits, the higher level of insurance afforded these joint accounts
should be taken into consideration. Similarly, if the bank has automated information
systems in place that enable it to classify accounts by deposit owner and/or ownership
capacity, the bank should incorporate this information into its estimate of the amount of
uninsured deposits by aggregating accounts held by the same deposit owner in the same
ownership capacity before applying the $250,000 insurance limit. Ownership capacities
include, but are not limited to, single ownership, joint ownership, business (excluding sole
proprietorships), revocable trusts, irrevocable trusts, and retirement accounts.
In the absence of automated information systems, a bank may use nonautomated information
such as paper files or less formal knowledge of its depositors if such information provides
reasonable estimates of appropriate portions of its uninsured deposits. A bank's use of such
nonautomated sources of information is considered appropriate unless errors associated with
the use of such sources would contribute significantly to an overall error in the FDIC's
estimate of the amount of insured and uninsured deposits in the banking system.

3

Has the reporting institution been consolidated with a parent bank or savings
association in that parent bank's or parent savings association's Call Report? If the
reporting institution is owned by another bank or savings association and that parent bank or
parent savings association is consolidating the reporting institution as part of the parent
institution's Call Report for this report date, report the legal title and FDIC Certificate Number
of the parent institution in this item.

4

Not applicable.

5

Noninterest-bearing transaction accounts (as defined in Section 343 of the Dodd-Frank
Act) of more than $250,000.
Schedule RC-O, Memorandum items 5.a and 5.b, below, for the amount and number of
noninterest-bearing transaction accounts of more than $250,000 are to be completed by all
FDIC-insured depository institutions. Memorandum items 5.a and 5.b are to be reported as of
the quarter-end report date, not as daily averages for the quarter.
As defined in Section 11(a)(1)(B) of the Federal Deposit Insurance Act, as added by Section
343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and as
subsequently amended, a “noninterest-bearing transaction account” is:

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Memoranda
Item No.

Caption and Instruction

5
(cont.)

(1) A deposit or an account (in a domestic office or an insured branch in Puerto Rico or a
U.S. territory or possession):
(a) “with respect to which interest is neither accrued nor paid;”
(b) “on which the depositor or account holder is permitted to make withdrawals by
negotiable or transferable instrument, payment orders of withdrawal, telephone or
other electronic media transfers, or other similar items for the purpose of making
payments or transfers to third parties or others; and”
(c) “on which the insured depository institution does not reserve the right to require
advance notice of an intended withdrawal; and”
(2) “a trust account established by an attorney or law firm on behalf of a client, commonly
known as an ‘Interest on Lawyers Trust Account’, or a functionally equivalent account, as
determined by the Corporation.”
Thus, the term “noninterest-bearing transaction account” includes all demand deposits,
including certified checks and official checks (such as cashiers’ checks and money orders)
drawn on the reporting institution, on which the institution makes no payment to or for the
account of any depositor as compensation for the use of funds constituting a deposit.
However, pursuant to Section 627 of the Dodd-Frank Act, as of July 21, 2011, institutions are
no longer restricted from paying interest on demand deposit accounts. If an institution
modifies the terms of its demand deposit account agreement on or after July 21, 2011, so that
the account may earn interest, the account will no longer satisfy the definition of a noninterestbearing transaction account and should no longer be reported in Memorandum items 5.a
and 5.b.
Even if checks may be drawn on the account, a “noninterest-bearing transaction account”
does not include, for example, any transaction account that may earn interest, such as a
negotiable order of withdrawal (NOW) account, or a money market deposit account (MMDA)
as defined in Federal Reserve Regulation D.
Account features such as the waiver of fees or the provision of fee-reducing credits do not
prevent an account from qualifying as a noninterest-bearing transaction account as long as
the account otherwise satisfies the definition of a noninterest-bearing transaction account.
In determining whether funds are in a noninterest-bearing transaction account for purposes of
reporting in Memorandum items 5.a and 5.b, the FDIC will apply its normal rules and
procedures under Section 360.8 of the FDIC’s regulations for determining account balances
at a failed insured depository institution. Under these procedures, funds may be swept or
transferred from a noninterest-bearing transaction account to another type of deposit account
or product that is not a noninterest-bearing transaction account. Except as described in the
following sentence, unless the funds are in a noninterest-bearing transaction account after the
completion of a sweep under Section 360.8, the funds in the resulting account or product
should not be reported in Memorandum items 5.a and 5.b. However, in the case of funds
swept from a noninterest-bearing transaction account to a noninterest-bearing savings
account as defined in Federal Reserve Regulation D, the FDIC will treat the swept funds as
being in a noninterest-bearing transaction account. If the sum of the swept funds in the
noninterest-bearing savings account plus any amount remaining in the related noninterestbearing transaction account is more than $250,000, this sum should be reported in

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Memoranda
Item No.

Caption and Instruction

5
(cont.)

Memorandum item 5.a and the swept funds and the related noninterest-bearing transaction
account should be reported as one account in Memorandum item 5.b.
Include public funds held in “noninterest-bearing transaction accounts” of more than $250,000
whether or not they are collateralized with pledged securities or other pledged assets.
Report in the appropriate subitem on an unconsolidated single FDIC certificate number basis
the amount outstanding and the number of noninterest-bearing transaction accounts (as
defined above and in the FDIC’s regulations implementing Section 343) with a balance on the
report date of more than $250,000. An institution may exclude noninterest-bearing
transaction accounts with a balance of more than $250,000 if the entire balance in the
account is fully insured under the FDIC’s regular deposit insurance rules, such as joint
account relationship rules or “pass-through” insurance coverage rules. In noninterest-bearing
transaction accounts with a balance of more than $250,000 where the entire balance is not
fully insured under the FDIC’s regular deposit insurance rules, an institution may exclude any
amounts over $250,000 that are otherwise insured under the regular deposit insurance rules.
These amounts may be excluded to the extent that they can be determined by the institution
and fully supported in the institution’s workpapers for this report. An institution is not required
to make a determination of amounts otherwise insured but may do so at its option.

5.a

Amount of noninterest-bearing transaction accounts of more than $250,000.
Report on an unconsolidated single FDIC certificate number basis the aggregate balance of
all noninterest-bearing transaction accounts (as defined in Schedule RC-O, Memorandum
item 5, above) with a balance on the report date of more than $250,000. This amount should
represent the total of the balances of the noninterest-bearing transaction accounts
enumerated in Call Report Schedule RC-O, Memorandum item 5.b, below.

5.b

Number of noninterest-bearing transaction accounts of more than $250,000.
Report on an unconsolidated single FDIC certificate number basis the total number of
noninterest-bearing transaction accounts (as defined in Schedule RC-O, Memorandum
item 5, above) with a balance on the report date of more than $250,000.

General Instructions for Schedule RC-O, Memorandum items 6 through 17
Memorandum items 6 through 17 are applicable only to large institutions and/or highly complex institutions
as defined below. Amounts reported in Memorandum items 6 through 9, 14, and 15 will not be made
available to the public on an individual institution basis. Large institutions and highly complex institutions
should complete Memorandum items 6 through 17, as appropriate, on a fully consolidated basis. Thus,
when a large institution or highly complex institution owns another FDIC-insured institution as a subsidiary,
it should complete Memorandum items 6 through 17, as appropriate, on a fully consolidated basis.
According to Section 327.8(f) of the FDIC’s regulations, a large institution is an FDIC-insured bank or
savings association that reported total assets of $10 billion or more as of December 31, 2006, that does
not meet the definition of a highly complex institution. After December 31, 2006, if a bank or savings
association not previously classified as a large institution reports total assets of $10 billion or more for four
consecutive quarters, the bank or savings association will be classified as a large institution beginning the
following quarter. In the Consolidated Reports of Condition and Income, an FDIC-insured depository
institution’s total assets is reported in Schedule RC, item 12.

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General Instructions for Schedule RC-O, Memorandum items 6 through 17 (cont.)
According to Section 327.8(g) of the FDIC’s regulations, a highly complex institution is an FDIC-insured
1
bank or savings association (excluding a credit card bank ) that:
(1) Has had $50 billion or more in total assets for at least four consecutive quarters that either is
controlled by a U.S. parent holding company that has had $500 billion or more in total assets for four
consecutive quarters, or is controlled by one or more intermediate U.S. parent holding companies that
are controlled by a U.S. holding company that has had $500 billion or more in total assets for four
consecutive quarters; or
(2) Is a processing bank or trust company that has had $10 billion or more in total assets for at least four
consecutive quarters. According to Section 327.8(s) of the FDIC’s regulations, a processing bank or
trust company is “an institution whose last three years’ non-lending interest income, fiduciary
revenues, and investment banking fees, combined, exceed 50 percent of total revenues (and its last
three years fiduciary revenues are non-zero), and whose total fiduciary assets total $500 billion or
more.”
If, after December 31, 2010, a bank or savings association classified as a highly complex institution falls
below $50 billion in total assets for four consecutive quarters, or its parent company or companies fall
below $500 billion in total assets for four consecutive quarters, or a processing bank or trust company falls
below $10 billion in total assets for four consecutive quarters, the FDIC will reclassify the bank or savings
association as a large institution or a small institution, as appropriate, beginning the quarter after the fourth
consecutive quarter.
Transition Guidance for Reporting “Subprime Consumer Loans” and “Leveraged Loans and Securities” as
2
Defined for Assessment Purposes Only in FDIC Regulations – For loans originated or purchased prior to
April 1, 2013, and for securities where the underlying loans were originated predominantly prior to April 1,
2013, for which the reporting institution does not have the information necessary to determine subprime
consumer or leveraged status in accordance with the definitions of these asset categories set forth in the
FDIC’s assessment regulations and these instructions, the institution may use its existing internal
methodology for identifying subprime consumer or leveraged loans and securities as the basis for
reporting these assets for deposit insurance assessment purposes in Schedule RC-O, Memorandum
items 8 and 9. Institutions that do not have an existing methodology in place to identify subprime
consumer or leveraged loans and securities (because they are not required to report on these exposures
to their primary federal regulator for examination or other supervisory purposes or did not measure and
monitor loans and securities with these characteristics for internal risk management purposes) may, as an
alternative to applying the definitions in the FDIC’s assessment regulations to pre-April 1, 2013, loans and
securities, apply existing guidance provided by their primary federal regulator, the agencies’ 2001
3
Expanded Guidance for Subprime Lending Programs, or the February 2008 Comptroller’s Handbook on
1

As defined in Section 327.8(t) of the FDIC’s regulation, a credit card bank is “a bank for which credit card
receivables plus securitized receivables exceed 50 percent of assets plus securitized receivables.”
2
The definitions for subprime consumer and leveraged loans included in these Instructions are essentially the same
as the definitions for subprime consumer and leveraged loans included in the FDIC’s assessment regulations
(12 CFR Part 327, Subpart A, Appendix C, as amended in February 2011,
http://www.fdic.gov/regulations/laws/federal/2011/11FinalFeb25.pdf). However, to assist institutions in properly
identifying subprime consumer and leveraged loans for reporting in Schedule RC-O and deposit insurance pricing
purposes, certain clarifications to the definitions in the assessment regulations have been included in these
instructions to facilitate the identification of such loans for assessment reporting purposes.
3
http://www.fdic.gov/news/news/press/2001/pr0901a.html.

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General Instructions for Schedule RC-O, Memorandum items 6 through 17 (cont.)
1

Leveraged Lending for purposes of identifying subprime consumer and leveraged loans originated or
purchased prior to April 1, 2013, and subprime consumer and leveraged securities where the underlying
loans were originated predominantly prior to April 1, 2013. All loans originated on or after April 1, 2013,
and all securities where the underlying loans were originated predominantly on or after April 1, 2013, must
be reported according to the definitions of these asset categories set forth in the FDIC’s assessment
regulations and these instructions.
However, for such pre-April 1, 2013, loans and securities, leveraged loans that are renewed and subprime
consumer loans that are refinanced on or after April 1, 2013, must then be reported as leveraged or
subprime consumer loans and securities according to the definitions of these higher-risk asset categories
set forth in the FDIC’s assessment regulations and these instructions.
For loans purchased on or after April 1, 2013, institutions may apply this transition guidance to loans
originated prior to that date. Loans purchased on or after April 1, 2013, that also were originated on or
after that date must be reported as subprime or leveraged according to the definitions of these asset
categories set forth in the FDIC’s assessment regulations and these instructions.
Large and highly complex institutions may need to revise their data systems to support the reporting of
newly originated or purchased subprime consumer and leveraged loans and securities for assessment
purposes only in accordance with the definitions in the FDIC’s assessment regulations and these
instructions on a going-forward basis beginning no later than April 1, 2013. Large and highly complex
institutions relying on the transition guidance described above for reporting pre-April 1, 2013, subprime
consumer and leveraged loans and securities will be expected to provide the FDIC qualitative descriptions
of how the characteristics of the assets reported using their existing internal methodologies for identifying
loans and securities in these higher-risk asset categories differ from those specified in the subprime
consumer and leveraged loan definitions for assessment purposes only in the FDIC’s assessment
regulations and these instructions, including the principal areas of difference between these two
approaches for each higher-risk asset category. The FDIC may review these descriptions of differences
and assess the extent to which institutions’ existing internal methodologies align with the applicable
supervisory policy guidance for categorizing these loans. Any departures from such supervisory policy
guidance discovered in these reviews, as well as institutions’ progress in planning and implementing
necessary data systems changes, will be considered when forming supervisory strategies for remedying
departures from existing supervisory policy guidance and exercising deposit insurance pricing discretion
for individual large and highly complex institutions.
Amounts Guaranteed or Insured by the U.S. Government, its Agencies, or its Government-Sponsored
Agencies – The instructions for Schedule RC-O, Memorandum items 6 through 9, 10.b, 11, 13, and 16
refer to amounts recoverable from, or guaranteed or insured by, the U.S. government, its agencies, or its
government-sponsored agencies under guarantee or insurance provisions. Examples include guarantees
or insurance (or reinsurance) provided by the Department of Veterans Affairs, the Federal Housing
Administration, the Small Business Administration (SBA), the Department of Agriculture Rural
Development Loan Program, and the Department of Education for individual loans as well as coverage
provided by the FDIC under loss-sharing agreements. For loan securitizations and securities, examples
include those guaranteed by the Government National Mortgage Association, the Federal National
Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac) as
well as SBA Guaranteed Loan Pool Certificates and securities covered by FDIC loss-sharing agreements.
However, if an institution holds securities backed by mortgages it has transferred to Fannie Mae or
Freddie Mac with recourse or other transferor-provided credit enhancements, these
1

http://www.occ.gov/static/publications/handbook/LeveragedLending.pdf.

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General Instructions for Schedule RC-O, Memorandum items 6 through 17 (cont.)
securities should not be considered guaranteed to the extent of the institution’s maximum contractual
credit exposure arising from the credit enhancements. NOTE: Because certain information on coverage
under FDIC loss-sharing agreements is reported elsewhere in the Consolidated Reports of Condition and
Income, the treatment of FDIC loss-sharing agreements varies in Schedule RC-O, Memorandum items 6
through 9, 10.b, 11, 13, and 16.
Item No.

Caption and Instruction

NOTE: Memorandum items 6 through 12 are to be completed on a fully consolidated basis by “large
institutions” and “highly complex institutions.”
6

Criticized and classified items. Criticized and classified items should be reported on a
consolidated basis and include all on- and off-balance sheet items an institution or its primary
federal regulator has graded Special Mention or worse (Substandard, Doubtful, or Loss).
Such items include, but are not limited to, retail items adversely classified under the agencies’
1
Uniform Retail Credit Classification and Account Management Policy, securities, funded and
2
unfunded loans, other real estate owned, other assets, and marked-to-market counterparty
3
positions (less credit valuation adjustments for these counterparty positions). Criticized and
classified items exclude loans and securities reported as trading assets, and the amount
recoverable on an on- or off-balance sheet item from the U.S. government, its agencies, or its
government-sponsored agencies under guarantee or insurance provisions, including FDIC
loss-sharing agreements.
For purposes of the criticized and classified items definition, Loss items include any items
graded Loss that have not yet been written off against the allowance for loan and lease losses
(or another valuation allowance) or charged directly to earnings, as appropriate. However,
because an item should be written off or charged off in the period in which the item is deemed
Loss, the amount reported in Memorandum item 6.d, below, generally should be zero.
A marked-to-market counterparty position is equal to the sum of the net marked-to-market
derivative exposures for each counterparty. The net marked-to-market derivative exposure
equals the sum of all positive marked-to-market exposures net of legally enforceable netting
provisions and net of all collateral held under a legally enforceable Credit Support Annex plus
any exposure where excess collateral has been posted to the counterparty. For purposes of
this item, a marked-to-market counterparty position less any credit valuation adjustment can
never be less than zero.

6.a

Special mention. Report on a fully consolidated basis the amount of on- and off-balance
sheet items the reporting institution or its primary federal regulator has graded Special
Mention.

1

http://www.fdic.gov/news/news/financial/2000/fil0040a.pdf.
The amount of the unfunded loan that should be reported as criticized or classified should equal the amount that
the borrower is entitled to draw upon as of the reporting date, i.e., the unused commitment as defined in the
instructions for Schedule RC-L, item 1.
3
An institution that has not previously measured its marked-to-market counterparty positions net of any applicable
credit valuation adjustments for purposes of reporting criticized and classified items internally and to its primary
federal regulator may report these positions in this same manner in Schedule RC-O, Memorandum item 6,
particularly if the institution concludes that updating its reporting systems to net these adjustments would impose an
undue burden on the institution.
2

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Item No.

Caption and Instruction

6.b

Substandard. Report on a fully consolidated basis the amount of on- and off-balance sheet
items the reporting institution or its primary federal regulator has graded Substandard.

6.c

Doubtful. Report on a fully consolidated basis the amount of on- and off-balance sheet items
the reporting institution or its primary federal regulator has graded Doubtful.

6.d

Loss. Report on a fully consolidated basis the amount of on- and off-balance sheet items the
reporting institution or its primary federal regulator has graded Loss.

7

“Nontraditional 1-4 family residential mortgage loans” as defined for assessment
purposes only in FDIC regulations. Report on a fully consolidated basis the balance sheet
amount of nontraditional 1-4 family residential mortgage loans, as defined for assessment
purposes only in Appendix C to Subpart A to Part 327 of the FDIC’s regulations (as amended
in February 2011, http://www.fdic.gov/regulations/laws/federal/2011/11FinalFeb25.pdf), which
includes all 1-4 family residential loan products (as defined for Schedule RC-C, part I,
item 1.c) that allow the borrower to defer repayment of principal or interest and includes all
interest-only products, teaser rate mortgages, and negative amortizing mortgages, with the
exception of home equity lines of credit and reverse mortgages. Nontraditional mortgage
loans do not include loans reported as trading assets in Schedule RC, item 5; conventional
fully amortizing adjustable rate mortgage loans that do not have a teaser rate; and interestonly residential construction loans, but include conventional fully amortizing adjustable rate
mortgage loans that have a teaser rate.
A teaser-rate mortgage loan is defined for assessment purposes as a mortgage with a
discounted initial rate. A discounted initial rate is an effective interest rate at the time of
origination or refinancing that is less than the rate the bank is willing to accept for an
otherwise similar extension of credit with comparable risk. A mortgage loan is no longer
considered a nontraditional mortgage once the teaser rate has expired, or in the case of an
escalating interest rate, once the rate is no longer discounted and the borrower is making full
principal and interest payments (has not been granted any principal and interest
concessions). Nontraditional mortgage loans can be reclassified as traditional loans once
they become fully amortizing loans, provided they no longer have a teaser rate.
Nontraditional 1-4 family residential mortgage loans as defined for assessment purposes also
include securitizations where more than 50 percent of the assets backing the securitization
meet one or more of the preceding criteria for nontraditional 1-4 family residential mortgage
loans, with the exception of those securities reported as trading assets in Schedule RC,
item 5.
The amount to be reported in this item for nontraditional mortgage loans should include
purchased credit impaired loans as defined in ASC Subtopic 310-30, Receivables – Loans
and Debt Securities Acquired with Deteriorated Credit Quality (formerly AICPA Statement of
Position 03-3, “Accounting for Certain Loans or Debt Securities Acquired in a Transfer”),
provided they meet the characteristics of nontraditional as described above.
The amount to be reported in this item should exclude amounts recoverable on nontraditional
mortgage loans from the U.S. government, its agencies, or its government-sponsored
agencies under guarantee or insurance provisions, including FDIC loss-sharing agreements.

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Item No.
8

Caption and Instruction
“Subprime consumer loans” as defined for assessment purposes only in FDIC
regulations. Report on a fully consolidated basis the balance sheet amount of subprime
consumer loans, as defined for assessment purposes only in Appendix C to Subpart A to
Part 327 of the FDIC’s regulations (as amended in February 2011,
http://www.fdic.gov/regulations/laws/federal/2011/11FinalFeb25.pdf), excluding subprime
consumer loans that have been reported as nontraditional 1-4 family residential mortgage
loans in Memorandum item 7 above. For assessment purposes, subprime consumer loans
are loans secured by 1-4 family residential properties (as defined for Schedule RC-C, part I,
item 1.c) and loans to individuals for household, family, and other personal expenditures
(as defined for Schedule RC-C, part I, item 6) that have been made to borrowers who display
one or more of the following credit risk characteristics at origination or upon refinancing,
whichever is more recent:
•
•
•
•

Two or more 30-day delinquencies in the last 12 months, or one or more 60-day
delinquencies in the last 24 months;
Judgment, foreclosure, repossession, or charge-off in the prior 24 months;
Bankruptcy in the last 5 years; or
Debt service-to-income ratio of 50 percent or greater, or otherwise limited ability to cover
family living expenses after deducting total monthly debt-service requirements from
1
monthly income.

For assessment purposes, subprime consumer loans also include loans identified by an
insured depository institution as subprime loans based upon similar borrower characteristics
and securitizations where more than 50 percent of assets backing the securitization meet one
or more of the preceding criteria for subprime loans, excluding those securities reported as
trading assets in Schedule RC, item 5.
The amount to be reported in this item for subprime consumer loans should include
purchased credit impaired loans as defined in ASC Subtopic 310-30, Receivables – Loans
and Debt Securities Acquired with Deteriorated Credit Quality (formerly AICPA Statement of
Position 03-3, “Accounting for Certain Loans or Debt Securities Acquired in a Transfer”),
provided they meet the characteristics of subprime above.
The amount to be reported in this item should exclude consumer loans reported as trading
assets in Schedule RC, item 5, and amounts recoverable on subprime consumer loans from
the U.S. government, its agencies, or its government-sponsored agencies under guarantee or
insurance provisions, including FDIC loss-sharing agreements.
9

“Leveraged loans and securities” as defined for assessment purposes only in FDIC
regulations. Report on a fully consolidated basis the balance sheet amount plus the
unfunded amount of leveraged loans and securities as defined for assessment purposes only
in Appendix C to Subpart A to Part 327 of the FDIC’s regulations (as amended in February
2011, http://www.fdic.gov/regulations/laws/federal/2011/11FinalFeb25.pdf). For assessment
purposes, leveraged loans and securities include:

1

http://www.fdic.gov/news/news/press/2001/pr0901a.html; however, the definition of subprime consumer loans in
the FDIC’s assessment regulations and in the instructions for this Memorandum item excludes any reference to
FICO or other credit bureau scores.

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Item No.

Caption and Instruction

9
(cont.)

(1) All commercial and industrial loans (funded and unfunded) (as defined for
Schedule RC-C, part I, item 4, but excluding loans to individuals for commercial,
1
industrial, and professional purposes) with an original amount greater than $1 million that
2
meet any one of the conditions below at either origination or renewal;
(2) Securities issued by commercial borrowers that meet any one of the conditions below at
either origination or renewal, except securities reported as trading assets in Schedule RC,
item 5; and
(3) Securitizations that are more than 50 percent collateralized by assets that meet any one
of the conditions below at either origination or renewal, except securities reported as
trading assets in Schedule RC, item 5.
Leveraged loans exclude loans secured by real estate (as defined for Schedule RC-C, part I,
item 1), loans to finance agricultural production and other loans to farmers (as defined for
Schedule RC-C, part I, item 3), and commercial and industrial loans reported as trading
assets in Schedule RC, item 5..
The conditions to be considered when evaluating whether loans or securities should be
reported as leveraged loans or securities are:
•

1

Loans or securities where the borrower’s post-financing total debt or senior debt to trailing
twelve-month earnings before interest, taxes, depreciation, and amortization (EBITDA)
(i.e., operating leverage ratio) is greater than 4 or 3 times, respectively. For purposes of
this calculation, the only permitted EBITDA adjustments are those adjustments
specifically permitted for that borrower in its credit agreement; or

The following guidelines should be used to determine the “original amount” of a loan:

(1) For loans drawn down under lines of credit or loan commitments, the “original amount” of the loan is the size of
the line of credit or loan commitment when the line of credit or loan commitment was most recently approved,
extended, or renewed prior to the report date. However, if the amount currently outstanding as of the report
date exceeds this size, the “original amount” is the amount currently outstanding on the report date.
(2) For loan participations and syndications, the “original amount” of the loan participation or syndication is the
entire amount of the credit originated by the lead lender.
(3) For all other loans, the “original amount” is the total amount of the loan at origination or the amount currently
outstanding as of the report date, whichever is larger.
Consistent with the definition of “original amount” in the instructions for Schedule RC-C, part II, multiple loans to one
borrower should be combined and reported on an aggregate basis rather than as separate individual loans to the
extent that the loan systems in which the institution's business loan data are maintained can provide aggregate
individual borrower data without undue cost to the reporting institution. However, if the burden of such aggregation
would be excessive, the institution may treat multiple loans to one borrower as separate individual loans.
2

The leveraged loans criteria to be used for assessment purposes only are based on guidance issued by the Office
of the Comptroller of the Currency in its Comptroller’s Handbook on Leveraged Lending,
http://www.occ.gov/static/publications/handbook/LeveragedLending.pdf, but do not include all of the criteria in the
handbook.

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Item No.

Caption and Instruction

9
(cont.)

●

Loans or securities that are designated as highly leveraged transactions by the
1
syndication agent.

For the purposes of calculating debt/EBITDA ratios, total debt is defined as short-term
borrowings plus long-term borrowings as follows:
•

•

Short-term borrowings include bank overdrafts, short-term debts and borrowings,
repurchase agreements (repos), the short-term portion of long-term borrowings or debt,
current obligations under capital (finance) leases, trust receipts, and bankers
acceptances.
Long-term borrowings (or long-term debt) include all interest-bearing financial obligations
that are not previously captured in short-term borrowings. These obligations include
debentures, bonds, loans, mortgage debts, sinking funds, long-term bank overdrafts and
capital (finance) lease obligations, including those obligations that are convertible,
redeemable, or retractable. They also include mandatory redeemable preferred and trust
preferred securities accounted for as liabilities in accordance with ASC Subtopic 480-10,
Distinguishing Liabilities from Equity – Overall (formerly FASB Statement No. 150,
“Accounting for Certain Financial Instruments with Characteristics of both Liabilities and
Equity”), and subordinated capital notes. Long-term borrowings exclude the short-term
portion of long-term debt, pension obligations, deferred tax liabilities, and preferred equity.

Senior debt shall include any portion of total debt as previously defined that has a priority
claim on the assets of the borrower.
Institutions should report the balance sheet amount of leveraged loans as defined for
assessment purposes that have been funded as well as the unfunded portion of leveraged
loans. Institutions should report unfunded amounts that include the unused portions of
irrevocable and revocable commitments to make or purchase leveraged loans, i.e., the
unused commitment as defined in the instructions for Schedule RC-L, item 1.
The amount to be reported in this item for leveraged loans and securities should include
purchased credit impaired loans and securities as defined in ASC Subtopic 310-30,
Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality (formerly
AICPA Statement of Position 03-3, “Accounting for Certain Loans or Debt Securities Acquired
in a Transfer”), provided the loans and securities meet the definition of a leveraged loan or
security.
The amount to be reported in this item should exclude amounts recoverable on leveraged
loans and securities from the U.S. government, its agencies, or its government-sponsored
agencies under guarantee or insurance provisions, including FDIC loss-sharing agreements.
10

1

Commitments to fund construction, land development, and other land loans secured
by real estate (in domestic offices). For purposes of Memorandum items 10.a and 10.b,
construction, land development, and other land loans are defined in the instructions for
Schedule RC-C, part I, item 1.a, “Construction, land development, and other land loans.”
Commitments are defined in the instructions for Schedule RC-L, item 1, “Unused
commitments.”

http://www.fdic.gov/news/news/press/2001/pr2801.html.

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Item No.

Caption and Instruction

10.a

Total unfunded commitments. Report on a fully consolidated basis the unused portion of
commitments (in domestic offices) to extend credit to fund construction, land development,
and other land loans that, when funded, would be reportable as loans secured by real estate
in Schedule RC-C, part I, item 1.a. The amount reported in this item should also have been
included in the amounts reported in Schedule RC-L, items 1.c.(1)(a) and (b).

10.b

Portion of unfunded commitments guaranteed or insured by the U.S. government.
Report on a fully consolidated basis the amount of the unused portion of the construction,
land development, and other land loan commitments reported in Schedule RC-O,
Memorandum item 10.a, above that is recoverable from the U.S. government, its agencies, or
its government-sponsored agencies under guarantee or insurance provisions, including FDIC
loss-sharing agreements.
Exclude amounts recoverable from state or local governments, state or local government
agencies, foreign (non-U.S.) governments, and private agencies or organizations.

11

Amount of other real estate owned recoverable from the U.S. government under
guarantee or insurance provisions (excluding FDIC loss-sharing agreements).
Report on a fully consolidated basis the amount of other real estate owned (as defined in
Schedule RC-M, item 3) that is recoverable from the U.S. government, its agencies, or its
government-sponsored agencies under guarantee or insurance provisions, excluding any
other real estate owned that is covered under FDIC loss-sharing agreements.
Exclude other real estate owned that is protected under guarantee or insurance provisions by
state or local governments, state or local government agencies, foreign (non-U.S.)
governments, and private agencies or organizations.

12

Nonbrokered time deposits of more than $250,000 (in domestic offices). Report on a
fully consolidated basis the amount of time deposits of more than $250,000 (in domestic
offices) included in Schedule RC-E, (part I), Memorandum item 2.d, that are not brokered
deposits. See the Glossary entry for “brokered deposits” for the definition of this term.

NOTE: Memorandum item 13.a is to be completed by “large institutions” and “highly complex institutions.”
Memorandum items 13.b through 13.g are to be completed by “large institutions” only.
13

Portion of funded loans guaranteed or insured by the U.S. government (excluding FDIC
loss-sharing agreements). Report in the appropriate subitem on a fully consolidated basis
the portion of the balance sheet amount of funded loans that is guaranteed or insured by the
U.S. government, including its agencies and its government-sponsored agencies, other than
by the FDIC under loss-sharing agreements.
Exclude loans guaranteed or insured by state or local governments, state or local government
agencies, foreign (non-U.S.) governments, and private agencies or organizations as well as
loans collateralized by securities issued by the U.S. government, including its agencies and its
government-sponsored agencies.

13.a

Construction, land development, and other land loans secured by real estate (in
domestic offices). Report on a fully consolidated basis the portion of the balance sheet
amount of construction, land development, and other land loans (in domestic offices) (as
defined for Schedule RC-C, part I, item 1.a) that is guaranteed or insured by the U.S.
government, including its agencies and its government-sponsored agencies, other than by the
FDIC under loss-sharing agreements.

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Item No.

Caption and Instruction

13.b

Loans secured by multifamily residential and nonfarm nonresidential properties (in
domestic offices). Report on a fully consolidated basis the portion of the balance sheet
amount of loans secured by multifamily (5 or more) residential properties and loans secured
by nonfarm nonresidential properties (in domestic offices) (as defined for Schedule RC-C,
part I, items 1.d and 1.e., respectively) that is guaranteed or insured by the U.S. government,
including its agencies and its government-sponsored agencies, other than by the FDIC under
loss-sharing agreements.

13.c

Closed-end loans secured by first liens on 1-4 family residential properties (in
domestic offices). Report on a fully consolidated basis the portion of the balance sheet
amount of closed-end loans secured by first liens on 1-4 family residential properties (in
domestic offices) (as defined for Schedule RC-C, part I, item 1.c.(2)(a)) that is guaranteed or
insured by the U.S. government, including its agencies and its government-sponsored
agencies, other than by the FDIC under loss-sharing agreements.

13.d

Closed-end loans secured by junior liens on 1-4 family residential properties and
revolving, open-end loans secured by 1-4 family residential properties and extended
under lines of credit (in domestic offices). Report on a fully consolidated basis the portion
of the balance sheet amount of closed-end loans secured by junior liens on 1-4 family
residential properties revolving, open-end loans secured by 1-4 family residential properties
and extended under lines of credit (in domestic offices) (as defined for Schedule RC-C, part I,
items 1.c.(2)(b) and 1.c.(1), respectively) that is guaranteed or insured by the U.S.
government, including its agencies and its government-sponsored agencies, other than by the
FDIC under loss-sharing agreements.

13.e

Commercial and industrial loans. Report on a fully consolidated basis the portion of the
balance sheet amount of commercial and industrial loans (as defined for Schedule RC-C,
part I, item 4) that is guaranteed or insured by the U.S. government, including its agencies
and its government-sponsored agencies, other than by the FDIC under loss-sharing
agreements.

13.f

Credit card loans to individuals for household, family, and other personal
expenditures. Report on a fully consolidated basis the portion of the balance sheet amount
of credit card loans to individuals for household, family, and other personal expenditures (as
defined for Schedule RC-C, part I, item 6.a) that is guaranteed or insured by the U.S.
government, including its agencies and its government-sponsored agencies, other than by the
FDIC under loss-sharing agreements.

13.g

Revolving credit plans other than credit cards, automobile loans, and other consumer
loans. Report on a fully consolidated basis the portion of the balance sheet amount of
revolving credit plans other than credit cards, automobile loans, and other consumer loans (as
defined for Schedule RC-C, part I, items 6.b, 6.c, and 6.d) that is guaranteed or insured by the
U.S. government, including its agencies and its government-sponsored agencies, other than
by the FDIC under loss-sharing agreements.

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RC-O - ASSESSMENTS

FFIEC 031 and 041

RC-O - ASSESSMENTS

Memoranda
Item No.

Caption and Instruction

NOTE: Memorandum items 14 and 15 are to be completed by “highly complex institutions.”
14

Amount of the institution’s largest counterparty exposure. Report on a fully consolidated
basis the amount of total exposure to the counterparty to which the institution has the largest
total counterparty exposure.
Counterparty exposure is equal to the sum of (1) the exposure at default (EAD) associated
with derivatives trading and securities financing transactions (SFTs) and (2) the gross lending
exposure (including all unfunded commitments) for each counterparty or borrower at the
1
consolidated entity level of the counterparty. Counterparty exposure, for deposit insurance
pricing purposes, excludes exposure amounts arising from due from accounts, federal funds
sold, investments in debt and equity securities, and credit protection purchased or sold where
the counterparty under consideration is the reference entity.
Exclude all counterparty exposure to the U.S. Government and departments or agencies of
the U.S. Government that are unconditionally guaranteed by the full faith and credit of the
United States.
To adopt an Internal Models Methodology (IMM) to calculate EAD, an institution must receive
approval from its primary federal regulator in accordance with the risk-based capital standards
issued by its regulator. Institutions supervised by the FDIC should follow the methodology
prescribed by 12 CFR Part 325, Appendix D, Section 32. Institutions supervised by the
Office of the Comptroller of the Currency should follow the methodology prescribed by
12 CFR Part 3, Appendix C, Section 32. Institutions supervised by the Federal Reserve
should follow the methodology prescribed by 12 CFR Part 208, Appendix F, Section 32. If an
institution has not received regulatory approval to adopt an IMM, then it may calculate EAD
using the current exposure methodology in accordance with the risk-based capital standards
issued by its primary federal regulator. As an alternative, an institution without approval to
adopt the IMM or not adopting an IMM may report the credit equivalent amount for each
counterparty’s derivative exposures as calculated in accordance with the instructions for
Schedule RC-R, item 54, “Derivative contracts.”

15

Total amount of the institution’s 20 largest counterparty exposures. Report on a fully
consolidated basis the sum of the total exposure amounts to the 20 counterparties to which
the institution has the 20 largest total counterparty exposures.
Counterparty exposure should be measured as described in the instructions for
Schedule RC-O, Memorandum item 14, above.

1

EAD and SFTs are defined and described in the compilation issued by the Basel Committee on Banking
Supervision in its June 2006 document, “International Convergence of Capital Measurement and Capital Standards,”
http://www.bis.org/publ/bcbs128.pdf. The definitions are described in detail in Annex 4 of the document. Any
updates to the Basel II capital treatment of counterparty credit risk that would affect these definitions should be
implemented as they are adopted.

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RC-O-29
(6-12)

RC-O - ASSESSMENTS

FFIEC 031 and 041

RC-O - ASSESSMENTS

Memoranda
Item No.

Caption and Instructions

NOTE: Memorandum item 16 is to be completed on a fully consolidated basis by “large institutions” and
“highly complex institutions.”
16

Portion of loans restructured in troubled debt restructurings that are in compliance
with their modified terms and are guaranteed or insured by the U.S. government
(including the FDIC). Report on a fully consolidated basis the portion of loans restructured in
troubled debt restructurings that are in compliance with their modified terms (included in
Schedule RC-C, part I, Memorandum item 1) that is guaranteed or insured by the
U.S. government, its agencies, or its government-sponsored agencies, including restructured
loans guaranteed under FDIC loss-sharing agreements.
Exclude restructured loans guaranteed or insured by state or local governments, state or local
government agencies, foreign (non-U.S.) governments, and private agencies or organizations
as well as restructured loans collateralized by securities issued by the U.S. government,
including its agencies and its government-sponsored agencies.

NOTE: Memorandum item 17 is to be completed on a fully consolidated basis by “large institutions” and
“highly complex institutions” that own another insured depository institution.
17

Selected fully consolidated data for deposit insurance assessment purposes:

17.a

Total deposit liabilities before exclusions (gross) as defined in Section 3(l) of the
Federal Deposit Insurance Act and FDIC regulations. Report on a fully consolidated
basis the gross total deposit liabilities as of the calendar quarter-end report date that meet
the statutory definition of deposits in Section 3(l) of the Federal Deposit Insurance Act
before deducting allowable exclusions from total deposits. Refer to the instructions for
Schedule RC-O, item 1, for a description of gross total deposit liabilities.

17.b

Total allowable exclusions, including interest accrued and unpaid on allowable
exclusions (including foreign deposits). Report on a fully consolidated basis the total
amount of allowable exclusions from deposits as of the calendar quarter-end report date if the
institution maintains records that will readily permit verification of the correctness of its
reporting of exclusions. Refer to the instructions for Schedule RC-O, item 2, for a description
of allowable exclusions.

17.c

Unsecured “Other borrowings” with a remaining maturity of one year or less. Report
on a fully consolidated basis the amount of the institution’s “Other borrowings” (as defined for
Schedule RC-M, item 5.b) that are unsecured and have a remaining maturity of one year or
less. Refer to the instructions for Schedule RC-O, items 7 and 7.a, for further guidance on
reporting unsecured “Other borrowings” with a remaining maturity of one year or less.

17.d

Estimated amount of uninsured deposits (in domestic offices of the institution and
in insured branches in Puerto Rico and U.S. territories and possessions), including
related interest accrued and unpaid. Report on a fully consolidated basis the estimated
amount of the institution's deposits (in domestic offices and in insured branches in Puerto
Rico and U.S. territories and possessions) that is not covered by federal deposit insurance.
Refer to the instructions for Schedule RC-O, Memorandum item 2, for further guidance on
reporting the estimated amount of uninsured deposits.

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RC-O-30
(6-12)

RC-O - ASSESSMENTS

FFIEC 031 and 041

RC-P - MORTGAGE BANKING ACTIVITIES

SCHEDULE RC-P – 1-4 FAMILY RESIDENTIAL MORTGAGE BANKING
ACTIVITIES
General Instructions
Schedule RC-P is to be completed by (1) all banks with $1 billion or more in total assets and (2) those
banks with less than $1 billion in total assets where any of the following residential mortgage banking
activities (in domestic offices) exceeds $10 million for two consecutive quarters:
(a) Closed-end and open-end first lien and junior lien 1-4 family residential mortgage loan originations
and purchases for resale from all sources during a calendar quarter; or
(b) Closed-end and open-end first lien and junior lien 1-4 family residential mortgage loan sales during a
calendar quarter; or
(c) Closed-end and open-end first lien and junior lien 1-4 family residential mortgage loans held for sale
and held for trading at calendar quarter-end.
For purposes of measuring 1-4 family residential mortgage banking activities (at banks with less than
$1 billion in total assets) and reporting on these activities in Schedule RC-P, banks should include those
1-4 family residential mortgage loans that would be reportable as held for sale as well as those that would
be reportable as held for trading.
For a bank with less than $1 billion in total assets, the bank must complete Schedule RC-P beginning the
second quarter in which the $10 million threshold is exceeded and continue to complete the schedule
through the end of the calendar year. Open-end mortgage banking activities should be measured using
the “total commitment under the lines of credit” as defined below. For example, if the bank’s closed-end
and open-end first and junior lien 1-4 family residential mortgage loan originations and purchases for
resale from all sources exceeded $10 million during the quarter ended June 30, 2010, and the bank’s
sales of such loans exceeded $10 million during the quarter ended September 30, 2010, the bank would
be required to complete Schedule RC-P in its September 30 and December 31, 2010, Call Reports. If its
total assets remain less than $1 billion, the level of this bank’s mortgage banking activities during the
fourth quarter of 2010 and the first quarter of 2011 would determine whether it would need to complete
Schedule RC-P each quarter during 2011 beginning March 31, 2011.
For purposes of Schedule RC-P, closed-end 1-4 family residential mortgage loans are defined in
Schedule RC-C, part I, item 1.c.(2), “Closed-end loans secured by 1-4 family residential properties.”
All closed-end 1-4 family residential mortgage loans secured by junior (i.e., other than first) liens should
be reported as junior liens in Schedule RC-P even if the bank has also originated or purchased a loan
secured by a first lien on the same 1-4 family residential property and there are no intervening junior liens.
Open-end 1-4 family residential mortgage loans are defined in Schedule RC-C, part I, item 1.c.(1),
“Revolving, open-end loans secured by 1-4 family residential properties and extended under lines of
credit.” These Schedule RC-C definitions also apply to closed-end and open-end 1-4 family residential
mortgage loans that would be reportable as held for trading in Schedule RC-D and in Schedule RC,
item 5, “Trading assets.”
For purposes of reporting on open-end loans extended under lines of credit in Schedule RC-P, the “total
commitment under the lines of credit” is defined as the total amount of the lines of credit granted to
customers at the time the open-end credits were originated. For retail and wholesale originations of such
open-end loans, the “principal amount funded under the lines of credit” is defined as the initial fundings
made to customers on newly established lines of credit. For open-end loans purchased, sold, held for
sale or trading, and repurchased or indemnified, the “principal amount funded under the lines of credit” is
defined as the principal balance outstanding of loans extended under lines of credit at the transaction
date or at quarter-end, as appropriate.

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RC-P-1
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RC-P - MORTGAGE BANKING ACTIVITIES

Item Instructions
Item No. Caption and Instructions
1

Retail originations during the quarter of 1-4 family residential mortgage loans for sale.
Report in the appropriate subitem retail originations of closed-end and open-end 1-4 family
residential mortgage loans for resale during the calendar quarter ending on the report date.
Include as retail originations those closed-end and open-end 1-4 family residential mortgage
loans for which the origination and underwriting process was handled exclusively by the bank
or a consolidated subsidiary of the bank. However, if the reporting bank is acting merely as a
broker or agent and forwards loan applications and supporting documentation to another
party who closes or funds the loans in its name (even if the reporting bank has some
involvement in processing and underwriting the loans), the reporting bank should not report
these loans as originations or purchases in this schedule.
Exclude closed-end and open-end 1-4 family residential mortgage loans originated or
purchased for the reporting bank’s own loan portfolio.

1.a

Closed-end first liens. Report the principal amount of retail originations of closed-end first
lien 1-4 family residential mortgage loans for resale during the calendar quarter.

1.b

Closed-end junior liens. Report the principal amount of retail originations of closed-end
junior lien 1-4 family residential mortgage loans for resale during the calendar quarter.

1.c

Open-end loans extended under lines of credit:

1.c.(1)

Total commitment under the lines of credit. Report the total amount of open-end
commitments under retail originations of revolving, open-end lines of credit secured by 1-4
family residential properties for resale during the calendar quarter.

1.c.(2)

Principal amount funded under the lines of credit. Report the total principal amount
funded under open-end commitments arising from the retail originations of revolving, openend lines of credit secured by 1-4 family residential properties for resale during the calendar
quarter reported in item 1.c.(1) above.

2

Wholesale originations and purchases during the quarter of 1-4 family residential
mortgage loans for sale. Report in the appropriate subitem wholesale originations and
purchases of closed-end and open-end 1-4 family residential mortgage loans for resale
during the calendar quarter ending on the report date. Include as wholesale originations and
purchases those closed-end and open-end 1-4 family residential mortgage loans for resale
for which the origination and underwriting process was handled in whole or in part by another
party, such as a correspondent or mortgage broker, even if the loan was closed in the name
of the bank or a consolidated subsidiary of the bank (often referred to as “table funding
arrangements”). Also include acquisitions of closed-end and open-end 1-4 family residential
mortgage loans for resale that were closed in the name of a party other than the bank or a
consolidated subsidiary of the bank. However, if the reporting bank is acting merely as a
broker or agent and forwards loan applications and supporting documentation to another
party who closes or funds the loans in its name (even if the reporting bank has some
involvement in processing and underwriting the loans), the reporting bank should not report
these loans as originations or purchases in this schedule.
Exclude closed-end and open-end 1-4 family residential mortgage loans originated or
purchased for the reporting bank’s own loan portfolio.

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FFIEC 031 and 041

RC-P - MORTGAGE BANKING ACTIVITIES

Item No. Caption and Instructions
2.a

Closed-end first liens. Report the principal amount of wholesale originations and purchases
of closed-end first lien 1-4 family residential mortgage loans for resale during the calendar
quarter.

2.b

Closed-end junior liens. Report the principal amount of wholesale originations and
purchases of closed-end junior lien 1-4 family residential mortgage loans for resale during the
calendar quarter.

2.c

Open-end loans extended under lines of credit:

2.c.(1)

Total commitment under the lines of credit. Report the total amount of open-end
commitments under wholesale originations and purchases of revolving, open-end lines of
credit secured by 1-4 family residential properties for resale during the calendar quarter.

2.c.(2)

Principal amount funded under the lines of credit. Report the total principal amount
funded under open-end commitments arising from the wholesale originations of revolving,
open-end lines of credit secured by 1-4 family residential properties for resale during the
calendar quarter reported in item 2.c.(1) above.

3

1-4 family residential mortgage loans sold during the quarter. Report in the appropriate
subitem closed-end and open-end 1-4 family residential mortgage loans sold during the
calendar quarter ending on the report date. Include transfers of closed-end and open-end
1-4 family residential mortgage loans originated or purchased for resale from retail or
wholesale sources that have been accounted for as sales in accordance with ASC Topic 860,
Transfers and Servicing (formerly FASB Statement No. 140, “Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities,” as amended), i.e., those
transfers where the loans are no longer included in the bank’s consolidated total assets. Also
include all sales during the quarter of closed-end and open-end 1-4 family residential
mortgage loans directly from the bank’s loan portfolio. For further information, see the
Glossary entry for “transfers of financial assets.”

3.a

Closed-end first liens. Report the principal amount of closed-end first lien 1-4 family
residential mortgage loans sold during the calendar quarter.

3.b

Closed-end junior liens. Report the principal amount of closed-end junior lien 1-4 family
residential mortgage loans sold during the calendar quarter.

3.c

Open-end loans extended under lines of credit:

3.c.(1)

Total commitment under the lines of credit. Report the total amount of open-end
commitments under revolving, open-end lines of credit secured by 1-4 family residential
properties sold during the calendar quarter.

3.c.(2)

Principal amount funded under the lines of credit. Report the total principal amount
funded under open-end commitments associated with the revolving, open-end lines of credit
secured by 1-4 family residential properties sold during the calendar quarter reported in
item 3.c.(1) above.

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FFIEC 031 and 041

Item No.

RC-P - MORTGAGE BANKING ACTIVITIES

Caption and Instructions

4

1–4 family residential mortgage loans held for sale or trading at quarter-end. Report in
the appropriate subitem closed-end and open-end 1-4 family residential mortgages held for
sale or trading as of the quarter-end report date and included in Schedule RC, item 4.a,
“Loans and leases held for sale,” and in Schedule RC, item 5, “Trading assets.” Loans held
for sale should be reported at the lower of cost or fair value consistent with their presentation
in Schedule RC, item 4.a. Loans held for trading should be reported at fair value consistent
with their presentation in Schedule RC, item 5. Closed-end and open-end 1-4 family
residential mortgage loans held for sale or trading at quarter-end include any mortgage loans
transferred at any time from the bank’s loan portfolio to a held-for-sale account or a trading
account that have not been sold by quarter-end.

4.a

Closed-end first liens. Report the carrying amount of closed-end first lien 1-4 family
residential mortgage loans held for sale or trading at quarter-end.

4.b

Closed-end junior liens. Report the carrying amount of closed-end junior lien 1-4 family
residential mortgage loans held for sale or trading at quarter-end.

4.c

Open-end loans extended under lines of credit:

4.c.(1)

Total commitment under the lines of credit. Report the total amount of open-end
commitments under revolving, open-end lines of credit secured by 1-4 family residential
properties held for sale or trading at quarter-end.

4.c.(2)

Principal amount funded under the lines of credit. Report the total principal amount
funded under open-end commitments associated with the revolving, open-end lines of credit
secured by 1-4 family residential properties held for sale of trading at quarter-end reported in
item 4.c.(1) above.

5

Noninterest income for the quarter from the sale, securitization, and servicing of
1-4 family residential mortgage loans. Report in the appropriate subitem the noninterest
income earned during the calendar quarter ending on the report date from mortgage banking
activities involving closed-end and open-end 1-4 family residential mortgage loans. Include
the portion of the consolidated bank’s “Trading revenue,” “Net servicing fees,” “Net
securitization income,” and “Net gains (losses) on sales of loans and leases” (items 5.c, 5.f,
5.g, and 5.i of Schedule RI) earned during the quarter that is attributable to closed-end and
open-end 1-4 family residential mortgage loans.

5.a

Closed-end 1-4 family residential mortgage loans. Report the noninterest income earned
during the calendar quarter ending on the report date from the sale, securitization, and
servicing of closed-end 1-4 family residential mortgage loans.

5.b

Open-end 1-4 family residential mortgage loans extended under lines of credit. Report
the noninterest income earned during the calendar quarter ending on the report date from the
sale, securitization, and servicing of revolving, open-end lines of credit secured by 1-4 family
residential properties.

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FFIEC 031 and 041

Item No.
6

RC-P - MORTGAGE BANKING ACTIVITIES

Caption and Instructions
Repurchases and indemnifications of 1-4 family residential mortgage loans during the
quarter. As a result of its 1–4 family residential mortgage banking activities, a bank may be
obligated to repurchase mortgage loans that it has sold or otherwise indemnify the loan
purchaser against loss because of borrower defaults, loan defects, other breaches of
representations and warranties, or for other reasons. Report in the appropriate subitem all
1-4 family residential mortgage loans previously sold by the bank or a consolidated subsidiary
subject to an obligation to repurchase or indemnify that have been repurchased or
indemnified during the calendar quarter ending on the report date. Do not reduce this
amount by any third-party indemnifications or reimbursements that the bank has received.
Repurchased 1-4 family residential mortgage loans include loans that the bank (or a
consolidated subsidiary) had sold but subsequently repurchased under repurchase obligation
provisions of the sales agreement because of a delinquency, noncompliance with the sellers’
representations and warranties, fraud or misrepresentation, or any other contractual
requirement. Exclude 1-4 family residential mortgage loans that have been repurchased
solely at the discretion of the bank (such as delinquent mortgage loans backing GNMA
mortgage-backed securities), i.e., where the sales agreement contains a repurchase option
(which may be conditional), but not a repurchase obligation.
Indemnifications of 1-4 family residential mortgage loans are limited to reimbursements to
loan purchasers or other third parties for credit losses on loans that the bank (or a
consolidated subsidiary) has sold. Include reimbursements made on loans where the bank
has agreed with the purchaser or other third party not to repurchase the loan as required
under the sales agreement, but rather to guarantee that no credit loss is sustained.
Indemnifications also include loans for which payments have been made by the bank (or a
consolidated subsidiary) to purchasers or other third parties as reimbursements for deficiency
balances arising from sales of real estate collateral (whether or not foreclosed) on loans that
the bank (or a consolidated subsidiary) has sold. Exclude indemnification arrangements that
are limited to reimbursements of legal fees or administrative costs.

6.a

Closed-end first liens. Report the total principal amount outstanding as of the date of
repurchase or indemnification of closed-end first lien 1-4 family residential mortgage loans
previously sold by the bank or a consolidated subsidiary that have been repurchased or
indemnified during the calendar quarter ending on the report date.

6.b

Closed-end junior liens. Report the total principal amount outstanding as of the date of
repurchase or indemnification of closed-end junior lien 1-4 family residential mortgage loans
previously sold by the bank or a consolidated subsidiary that have been repurchased or
indemnified during the calendar quarter ending on the report date.

6.c

Open-end loans extended under lines of credit:

6.c.(1)

Total commitment under the lines of credit. Report the total amount of open-end
commitments under revolving, open-end lines of credit secured by 1-4 family residential
properties that have been repurchased or indemnified during the calendar quarter ending on
the report date.

6.c.(2)

Principal amount funded under the lines of credit. Report the total principal amount
funded under open-end commitments associated with the revolving, open-end lines of credit
secured by 1-4 family residential properties reported in item 6.c.(1) above that have been
repurchased or indemnified during the calendar quarter ending on the report date.

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FFIEC 031 and 041

Item No.
7

RC-P - MORTGAGE BANKING ACTIVITIES

Caption and Instructions
Representation and warranty reserves for 1-4 family residential mortgage loans sold.
When an institution sells or securitizes mortgage loans, it typically makes certain
representations and warranties to the investors or other purchasers of the loans at the time
of the sale and to any financial guarantors or mortgage insurers of the loans sold. The
specific representations and warranties may relate to the ownership of the loan, the validity of
the lien securing the loan, and the loan’s compliance with specified underwriting standards.
Under ASC Subtopic 450-20, Contingencies – Loss Contingencies (formerly FASB Statement
No. 5, “Accounting for Contingencies”), an institution is required to accrue loss contingencies
relating to the representations and warranties made in connection with its mortgage
securitization activities and mortgage loan sales when it is probable that a loss has been
incurred and the amount of the loss can be reasonably estimated.
Report in the appropriate subitem the amount of representation and warranty reserves
included in Schedule RC-G, item 4, “All other liabilities,” that the institution maintains for
1-4 family residential mortgage loans sold, including those mortgage loans transferred in
securitizations accounted for as sales.
Amounts reported in Schedule RC-P, items 7.a and 7.b, will not be made available to the
public on an individual institution basis. Amounts reported in Schedule RC-P, item 7.c, will be
publicly available.

7.a

For representations and warranties made to U.S. Government agencies and
Government-sponsored agencies. Report the amount of reserves that the institution
maintains for representations and warranties made to U.S. Government agencies and
Government-sponsored agencies in connection with sales of 1-4 family residential mortgage
loans, including mortgage loans transferred in securitizations accounted for as sales.
U.S. Government agencies and Government-sponsored agencies include, but are not limited
to, such agencies as the Federal Housing Administration (FHA), the Department of Veterans
Affairs (VA), the Government National Mortgage Association (GNMA), the Federal Home
Loan Mortgage Corporation (FHLMC), and the Federal National Mortgage Association
(FNMA).

7.b

For representations and warranties made to other parties. Report the amount of
reserves that the institution maintains for representations and warranties made to parties
other than U.S. Government agencies and Government-sponsored agencies in connection
with sales of 1-4 family residential mortgage loans, including mortgage loans transferred in
securitizations accounted for as sales.

7.c

Total representation and warranty reserves. Report the sum of items 7.a and 7.b.

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FFIEC 031 and 041

RC-Q – FAIR VALUE

SCHEDULE RC-Q – ASSETS AND LIABILITIES MEASURED AT FAIR
VALUE ON A RECURRING BASIS
General Instructions
Schedule RC-Q is to be completed by banks that:
(1) Had total assets of $500 million or more as of the beginning of their fiscal year; or
(2) Had total assets of less than $500 million as of the beginning of their fiscal year and either:
(a) Have elected to report financial instruments or servicing assets and liabilities at fair value under a
fair value option with changes in fair value recognized in earnings, or
(b) Are required to complete Schedule RC-D, Trading Assets and Liabilities.
Banks should report all assets and liabilities that are measured at fair value in the financial statements on
a recurring basis (i.e., annually or more frequently).
Column Instructions
Column A, Total Fair Value Reported on Schedule RC
Report in Column A the total fair value, as defined by ASC Topic 820, Fair Value Measurements and
Disclosures (formerly FASB Statement No. 157, “Fair Value Measurements”), of those assets and
liabilities reported on Schedule RC, Balance Sheet, that the bank reports at fair value on a recurring
basis.
Columns B through E, Fair Value Measurements and Netting Adjustments
For items reported in Column A, report in Columns C, D, and E the fair value amounts which fall in their
entirety in Levels 1, 2, and 3, respectively. The level in the fair value hierarchy within which a fair value
measurement in its entirety falls should be determined based on the lowest level input that is significant to
the fair value measurement in its entirety. Thus, for example, if the fair value of an asset or liability has
elements of both Level 2 and Level 3 measurement inputs, report the entire fair value of the asset or
liability in Column D or Column E based on the lowest level measurement input with the most significance
to the fair value of the asset or liability in its entirety as described in ASC Topic 820. For assets and
liabilities that the bank has netted under legally enforceable master netting agreements in accordance
with ASC Subtopic 210-20, Balance Sheet – Offsetting (formerly FASB Interpretation No. 39, “Offsetting
of Amounts Related to Certain Contracts,” and FASB Interpretation No. 41, “Offsetting of Amounts
Related to Certain Repurchase and Reverse Repurchase Agreements”), report the gross amounts in
Columns C, D, and E and the related netting adjustment in Column B. For more information on Level 1,
2, and 3 measurement inputs, see the Glossary entry for “fair value.”
Item Instructions
For each item in Schedule RC-Q, the sum of columns C, D, and E less column B must equal column A.
Item No.
1

Caption and Instructions
Available-for-sale securities. Report in the appropriate column the total fair value of
available-for-sale debt and equity securities as reported in Schedule RC, item 2.b; the fair
values determined using Level 1, Level 2, and Level 3 measurement inputs; and any netting
adjustments.

FFIEC 031 and 041

RC-Q-1
(3-11)

RC-Q – FAIR VALUE

FFIEC 031 and 041

Item No.

RC-Q – FAIR VALUE

Caption and Instructions

2

Federal funds sold and securities purchased under agreements to resell. Report in the
appropriate column the total fair value of those federal funds sold and securities purchased
under agreements to resell reported in Schedule RC, items 3.a and 3.b, that the bank has
elected to report under the fair value option; the fair values determined using Level 1, Level
2, and Level 3 measurement inputs; and any netting adjustments.

3

Loans and leases held for sale. Report in the appropriate column the total fair value of
those loans held for sale reported in Schedule RC-C, part I, that the bank has elected to
report under the fair value option; the fair values determined using Level 1, Level 2, and
Level 3 measurement inputs; and any netting adjustments. Loans held for sale that the bank
has elected to report under the fair value option are included in Schedule RC-C, part I, and
Schedule RC, item 4.a. Exclude loans held for sale that are reported at the lower of cost or
fair value in Schedule RC, item 4.a, and loans that have been reported as trading assets in
Schedule RC, item 5. Leases are generally not eligible for the fair value option.

4

Loans and leases held for investment. Report in the appropriate column the total fair
value of those loans held for investment reported in Schedule RC-C, part I, that the bank has
elected to report under the fair value option; the fair values determined using Level 1, Level
2, and Level 3 measurement inputs; and any netting adjustments. Loans held for investment
that the bank has elected to report under the fair value option are included in Schedule RC-C,
part I, and Schedule RC, item 4.b. Leases are generally not eligible for the fair value option.

5

Trading assets:

5.a

Derivative assets. Report in the appropriate column the total fair value of derivative assets
held for trading purposes as reported in Schedule RC, item 5; the fair values determined
using Level 1, Level 2, and Level 3 measurement inputs; and any netting adjustments.

5.b

Other trading assets. Report in the appropriate column the total fair value of all trading
assets, except for derivatives, as reported in Schedule RC, item 5; the fair values determined
using Level 1, Level 2, and Level 3 measurement inputs, including the fair values of loans
that have been reported as trading assets; and any netting adjustments.

5.b.(1)

Nontrading securities at fair value with changes in fair value reported in current
earnings. Report in the appropriate column the total fair value of those securities the bank
has elected to report under the fair value option that is included in Schedule RC-Q, item 5.b
above; the fair values determined using Level 1, Level 2, and Level 3 measurement inputs;
and any netting adjustments. Securities that the bank has elected to report at fair value
under the fair value option are reported as trading securities pursuant to ASC Subtopic
825-10, Financial Instruments – Overall (formerly FASB Statement No. 159, “The Fair Value
Option for Financial Assets and Financial Liabilities”) even though management did not
acquire the securities principally for the purpose of trading.

6

All other assets. Report in the appropriate column the total fair value of all other assets that
are required to be measured at fair value on a recurring basis or that the bank has elected to
report under the fair value option that is included in Schedule RC, Balance Sheet, and is not
reported in Schedule RC-Q, items 1 through 5 above; the fair values determined using
Level 1, Level 2, and Level 3 measurement inputs; and any netting adjustments.
Include derivative assets held for purposes other than trading, interest-only strips receivable
(not in the form of a security) held for purposes other than trading, and other categories of
assets required to be measured at fair value on the balance sheet on a recurring basis under
applicable accounting standards.

FFIEC 031 and 041

RC-Q-2
(3-11)

RC-Q – FAIR VALUE

FFIEC 031 and 041

Item No.

RC-Q – FAIR VALUE

Caption and Instructions

7

Total assets measured at fair value on a recurring basis. Report the sum of items 1
through 5.b plus item 6.

8

Deposits. Report in the appropriate column the total fair value of those deposits reported in
Schedule RC, items 13.a and 13.b, that the bank has elected to report under the fair value
option; the fair values determined using Level 1, Level 2, and Level 3 measurement inputs;
and any netting adjustments. Deposits withdrawable on demand (e.g., demand and savings
deposits in domestic offices) are generally not eligible for the fair value option.

9

Federal funds purchased and securities sold under agreements to repurchase. Report
in the appropriate column the total fair value of those federal funds purchased and securities
sold under agreements to repurchase reported in Schedule RC, items 14.a and 14.b, that the
bank has elected to report under the fair value option; the fair values determined using
Level 1, Level 2, and Level 3 measurement inputs; and any netting adjustments.

10

Trading liabilities:

10.a

Derivative liabilities. Report in the appropriate column the total fair value of derivative
liabilities held for trading purposes as reported in Schedule RC, item 15; the fair values
determined using Level 1, Level 2, and Level 3 measurement inputs; and any netting
adjustments.

10.b

Other trading liabilities. Report in the appropriate column the total fair value of trading
liabilities, except for derivatives, as reported in Schedule RC, item 15; the fair values
determined using Level 1, Level 2, and Level 3 measurement inputs; and any netting
adjustments.

11

Other borrowed money. Report in the appropriate column the total fair value of those
Federal Home Loan Bank advances and other borrowings reported in Schedule RC, item 16,
that the bank has elected to report under the fair value option; the fair values determined
using Level 1, Level 2, and Level 3 measurement inputs; and any netting adjustments.

12

Subordinated notes and debentures. Report in the appropriate column the total fair value
of those subordinated notes and debentures (including mandatory convertible debt) reported
in Schedule RC, item 19, that the bank has elected to report under the fair value option; the
fair values determined using Level 1, Level 2, and Level 3 measurement inputs; and any
netting adjustments.

13

All other liabilities. Report in the appropriate column the total fair value of all other liabilities
that are required to be measured at fair value on a recurring basis or that the bank has
elected to report under the fair value option that is included in Schedule RC, Balance Sheet,
and is not reported in Schedule RC-Q, items 8 through 12 above; the fair values determined
using Level 1, Level 2, and Level 3 measurement inputs; and any netting adjustments.
Include derivative liabilities held for purposes other than trading and other categories of
liabilities required to be measured at fair value on the balance sheet on a recurring basis
under applicable accounting standards.

14

Total liabilities measured at fair value on a recurring basis. Report the sum of items 8
through 13.

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RC-Q-3
(9-09)

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FFIEC 031 and 041

RC-Q – FAIR VALUE

Memoranda
Item No.
1

Caption and Instructions
All other assets. Disclose in Memorandum items 1.a through 1.f each component of all
other assets, and the dollar amount of such component, that is greater than $25,000 and
exceeds 25 percent of the amount reported in Schedule RC-Q, item 6, column A. For each
component of all other assets that exceeds this disclosure threshold for which a preprinted
caption has not been provided in Memorandum items 1.a and 1.b, describe the component
with a clear but concise caption in Memorandum items 1.c through 1.f. These descriptions
should not exceed 50 characters in length (including spacing between words).
Preprinted captions have been provided for the following categories of all other assets:
•
•

2

Memorandum item 1.a, “Mortgage servicing assets,” and
Memorandum item 1.b, “Nontrading derivative assets.”

All other liabilities. Disclose in Memorandum items 2.a through 2.f each component of all
other liabilities, and the dollar amount of such component, that is greater than $25,000 and
exceeds 25 percent of the amount reported in Schedule RC-Q, item 13, column A. For each
component of all other liabilities that exceeds this disclosure threshold for which a preprinted
caption has not been provided in Memorandum items 2.a and 2.b, describe the component
with a clear but concise caption in Memorandum items 2.c through 2.f. These descriptions
should not exceed 50 characters in length (including spacing between words).
Preprinted captions have been provided for the following categories of all other liabilities:
•
•

FFIEC 031 and 041

Memorandum item 2.a, “Loan commitments (not accounted for as derivatives),” and
Memorandum item 2.b, “Nontrading derivative liabilities.”

RC-Q-4
(9-09)

RC-Q – FAIR VALUE

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

SCHEDULE RC-R – REGULATORY CAPITAL
General Instructions
The instructions for Schedule RC-R should be read in conjunction with the capital guidelines issued by
the reporting bank’s primary federal supervisory authority. Under the banking agencies' risk-based capital
guidelines, assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned
to one of several broad risk categories according to the obligor, or, if relevant, the guarantor or the nature
of the collateral. The aggregate dollar amount in each risk category is then multiplied by the risk weight
associated with that category. The resulting weighted values from each of the risk categories are added
together, and generally this sum is the bank's total risk weighted assets which comprises the denominator
of the risk-based capital ratio.
Risk weights for derivative contracts and off-balance sheet items are determined by a two-step process.
First, the "credit equivalent amount" is determined. In the case of derivative contracts, the credit
equivalent amount is the sum of the current credit exposure (fair value of the contract, if positive) and the
potential future exposure. In the case of most off-balance sheet items, the credit equivalent amount is
determined by multiplying the face value or notional amount of the off-balance sheet item by a credit
conversion factor. Second, the credit equivalent amount is treated like a balance sheet asset and
generally is assigned to the appropriate risk category according to the obligor or, if relevant, the guarantor
or the nature of the collateral. A summary of the credit conversion factors for off-balance sheet items is
presented below.
In general, if a particular asset, derivative contract, or off-balance sheet item has features that could place
it in more than one risk category, it is assigned to the category that has the lowest risk weight. For
example, a holding of a U.S. municipal revenue bond that is fully guaranteed by a U.S. bank would be
assigned the 20 percent risk weight appropriate to claims guaranteed by U.S. banks, rather than the 50
percent risk weight appropriate to U.S. municipal revenue bonds.
At each bank's option, assets and the credit equivalent amounts of derivative contracts and
off-balance sheet items that are assigned to a risk weight category of less than 100 percent may
be included in the amount reported for a higher risk weight category (e.g., the 100 percent
category) than the risk weight category to which the asset or credit equivalent amount of the
off-balance sheet item would otherwise be assigned.
For risk-based capital purposes, the term "claim" refers to loans to, securities issued by, balances due
from, accrued interest receivable from, and all other claims against the various entities with which the
reporting bank conducts its business.
If a reporting bank has conveyed risk participations in bankers acceptances, standby letters of credit, and
commitments, it may segregate the amounts conveyed from the total outstanding amount. The bank may
then risk weight the amounts conveyed according to the guarantors (i.e., the parties that have acquired
the conveyances) separately from the amounts retained if this results in a lower risk weight for the
amounts conveyed.
When assets have been transferred with recourse, the amount of risk-based capital required to be
maintained to support this exposure may not exceed the maximum amount of recourse for which the
transferring institution is contractually liable under the recourse agreement. This rule applies to recourse
transactions in which a bank contractually limits its recourse exposure to less than the full effective
minimum risk-based capital requirement for the assets transferred – generally, four percent for first lien
residential mortgage loans and eight percent for most other assets. These types of asset transfers are
referred to as low level recourse transactions and should be reported in Schedule RC-R, item 50,
column A.

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RC-R-1
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FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

General Instructions (cont.)
Credit Conversion Factors for Off-Balance Sheet Items – A summary of the credit conversion factors
follows. For further information on these factors, refer to the risk-based capital guidelines.
Off-balance sheet items subject to a 100 percent conversion factor:
(1) Direct credit substitutes, including general guarantees of indebtedness and guarantee -type
instruments, such as financial standby letters of credit.
(2) Risk participations acquired in bankers acceptances and in direct credit substitutes such as financial
standby letters of credit.
(3) Sale and repurchase agreements and assets sold with recourse, if not included on the balance sheet,
except low level recourse transactions and small business obligations transferred with recourse under
Section 208 of the Riegle Community Development and Regulatory Improvement Act of 1994, each
of which is discussed below.
(4) Forward agreements/contingent obligations to purchase assets with drawdown certain. (Exclude
forward agreements that are reported as derivative contracts.)
(5) Securities lent, if the lending bank is exposed to risk of loss.
Off-balance sheet items subject to a 50 percent conversion factor:
(1) Transaction-related contingencies, including performance standby letters of credit, shipside
guarantees, bid bonds, performance bonds, and warranties.
(2) Unused portions of commitments with an original maturity exceeding one year, including underwriting
commitments and commercial credit lines.
(3) Revolving underwriting facilities (RUFs), note issuance facilities (NIFs), and other similar
arrangements, regardless of maturity.
Off-balance sheet items subject to a 20 percent conversion factor:
(1) Short-term, self-liquidating, trade-related contingencies, including commercial letters of credit.
Off-balance sheet items subject to a zero percent conversion factor:
(1) Unused portions of commitments with an original maturity of one year or less.
(2) Unused portions of commitments (regardless of maturity) which are unconditionally cancellable at any
time, provided a separate credit decision is made before each drawing.
Item Instructions
Item No.

Caption and Instructions

Tier 1 Capital
1

Total bank equity capital. Report the amount of the bank’s total equity capital as reported
in Schedule RC, item 27.a.

2

LESS: Net unrealized gains (losses) on available-for-sale securities. Report the amount
of net unrealized holding gains (losses) on available-for-sale securities, net of applicable
taxes, that is included in Schedule RC, item 26.b, "Accumulated other comprehensive
income." Also include any other-than-temporary impairment losses on both held-to-maturity
and available-for-sale debt securities related to factors other than credit loss that are
reported, net of applicable taxes, in Schedule RC, item 26.b, “Accumulated other
comprehensive income.” If the amount is a net gain, report it as a positive value in this item.
If the amount is a net loss, report it as a negative value in this item.

3

LESS: Net unrealized loss on available-for-sale equity securities. Report as a positive
value the amount of any net unrealized holding loss on available-for-sale equity securities
that is included in Schedule RC, item 26.b, "Accumulated other comprehensive income."

FFIEC 031 and 041

RC-R-2
(6-09)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

Item No.
4

RC-R – REGULATORY CAPITAL

Caption and Instructions
LESS: Accumulated net gains (losses) on cash flow hedges and amounts recorded in
AOCI resulting from the initial and subsequent application of FASB ASC 715-20
(former FASB Statement No. 158) to defined benefit postretirement plans. Report the
amount of accumulated net gains (losses) on cash flow hedges that is included in
Schedule RC, item 26.b, "Accumulated other comprehensive income" (AOCI). Also include
any amounts recorded in Schedule RC, item 26.b, net of applicable taxes, resulting from the
initial and subsequent application of both the funded status and measurement date provisions
of ASC Subtopic 715-20, Compensation-Retirement Benefits – Defined Benefit PlansGeneral (formerly FASB Statement No. 158, “Employers’ Accounting for Defined Benefit
Pension and Other Postretirement Plans” (FAS 158)), thereby neutralizing for regulatory
capital purposes the effect on AOCI of the application of ASC Subtopic 715-20.
If the sum of the amounts to be reported in this item for cash flow hedges and defined benefit
postretirement plans represents a net gain (i.e., a net increase) in reported equity capital,
report this sum as a positive value in this item. If the sum represents a net loss (i.e., a
decrease) in reported equity capital, report this sum as a negative value in this item.

5

LESS: Nonqualifying perpetual preferred stock. Report the portion of perpetual preferred
stock (and any related surplus) included in Schedule RC, item 23, that does not qualify for
inclusion in Tier 1 capital based on the capital guidelines of the bank’s primary federal
supervisory authority. Generally, banks should include in this item the book value of all
perpetual preferred stock except for noncumulative perpetual preferred stock. However,
noncumulative perpetual preferred stock in which the dividend rate is periodically reset based
on the bank’s credit standing or financial condition e.g., Dutch auction, money market, and
remarketable preferred stock, is not eligible for Tier 1 capital and should be included in this
item. Although the amount reported in this item is not eligible for Tier 1 capital, it may be
eligible for inclusion in Tier 2 capital in Schedule RC-R, item 13.

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RC-R-2a
(6-12)

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This page intentionally left blank.

FFIEC 031 and 041

Item No.

RC-R – REGULATORY CAPITAL

Caption and Instructions

6

Qualifying noncontrolling (minority) interests in consolidated subsidiaries. Report the
portion of noncontrolling interests (also called minority interests) in consolidated subsidiaries
included in Schedule RC, item 27.b, that is eligible for inclusion in Tier 1 capital based on the
capital guidelines of the bank’s primary federal supervisory authority. Generally, banks may
include noncontrolling interests in equity capital accounts (both common and noncumulative
perpetual preferred stocks) of consolidated subsidiaries unless such accounts would not
otherwise qualify for inclusion in Tier 1 capital. For example, a bank may not include
noncontrolling interests representing cumulative preferred stock in consolidated subsidiaries
since such preferred stock if issued directly by the bank would not eligible for inclusion in
Tier 1 capital.

7.a

LESS: Disallowed goodwill and other disallowed intangible assets. Report the portion
of goodwill included in Schedule RC, item 10.a, and the portion of other identifiable intangible
assets included in Schedule RC-M, item 2.c, that does not qualify for inclusion in Tier 1
capital based on the capital guidelines of the bank's primary federal supervisory authority.
Generally, all goodwill reported in Schedule RC, item 10.a, and all other identifiable intangible
assets reported in Schedule RC-M, item 2.c, do not qualify for Tier 1 capital and should be
included in this item.
However, if the bank has a deferred tax liability that is specifically related to (a) goodwill
acquired in a taxable purchase business combination or (b) an intangible asset (other than
servicing assets and purchased credit card relationships) acquired in a nontaxable purchase
business combination that it chooses to net against the intangible asset for regulatory capital
purposes, the amount of disallowed intangibles to be reported in this item should be reduced
by the amount of this deferred tax liability. However, a deferred tax liability that the bank
chooses to net against the related intangible asset for purposes of this item may not also be
netted against deferred tax assets when the bank determines the amount of deferred tax
assets that are dependent upon future taxable income and calculates the maximum allowable
amount of such deferred tax assets for regulatory capital purposes.
For state member banks, if the amount reported for other identifiable intangible assets in
Schedule RC-M, item 2.c, includes intangible assets that were recorded on the reporting
bank's balance sheet on or before February 19, 1992, the remaining book value as of the
report date of these intangible assets may be excluded from this item.

7.b

LESS: Cumulative change in fair value of all financial liabilities accounted for under a
fair value option that is included in retained earnings and is attributable to changes in
the bank’s own creditworthiness. When determining the fair value of a financial liability
reported on Schedule RC – Balance Sheet, that is accounted for under a fair value option,
banks should consider the effect of a change in their own creditworthiness on the fair value of
the liability. The agencies have determined that banks should exclude from Tier 1 capital the
cumulative change in the fair value of financial liabilities accounted for under a fair value
option that is included in retained earnings (Schedule RC, item 26.a) and is attributable to
changes in the bank's own creditworthiness. Banks should report in this item the amount of
this cumulative change, net of applicable taxes.
If the amount of the cumulative change is a net gain, report it as a positive value in this item.
If the amount of the cumulative change is a net loss, report it as a negative value in this item.

FFIEC 031 and 041

RC-R-3
(6-10)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

Item No.

RC-R – REGULATORY CAPITAL

Caption and Instructions

8

Subtotal. Report the sum of Schedule RC-R, items 1 and 6, less items 2, 3, 4, 5, and 7.a,
and 7.b. The amount reported in this item should be used to determine the limitations on
servicing assets and purchased credit card relationships for Schedule RC-R, item 9.a;
deferred tax assets for Schedule RC-R, item 9.b; and credit-enhancing interest-only strips
and nonfinancial equity investments for Schedule RC-R, item 10, below.

9.a

LESS: Disallowed servicing assets and purchased credit card relationships. Report
the portion of servicing assets and purchased credit card relationships included in
Schedule RC-M, items 2.a and 2.b, that does not qualify for inclusion in Tier 1 capital based
on the capital guidelines of the bank's primary federal supervisory authority. Generally,
servicing assets and purchased credit card relationships (PCCRs) are limited to 100 percent
of Tier 1 capital. In addition, nonmortgage servicing assets and PCCRs are subject to a
separate sublimit of 25 percent of Tier 1 capital. Banks may use the following approach to
determine the amount of disallowed servicing assets and PCCRs.
Disallowed Mortgage Servicing Assets, Nonmortgage Servicing Assets, and
PCCRs Calculation
(a) Enter the amount from Schedule RC-R, item 8

________

(b) Enter 25% of the amount in (a) above

________

(c) Enter the amount of nonmortgage servicing assets
and PCCRs reported in Schedule RC-M, item 2.b

________

(d) Enter 90% of the fair value of the nonmortgage servicing
assets and PCCRs reported in (c) above

________

(e) Enter the lesser of (b), (c), or (d)

________

(f) Minimum amount of nonmortgage servicing assets and
PCCRs to be deducted from Tier 1 capital: subtract
(e) from (c); enter 0 if the result is a negative amount

________

(g) Enter the amount of mortgage servicing assets
reported in Schedule RC-M, item 2.a

________

(h) Enter 90% of the estimated fair value of mortgage servicing
assets reported in Schedule RC-M, item 2.a.(1)
________

FFIEC 031 and 041

(i) Enter the lesser of (a), (g), or (h)

________

(j) Minimum amount of mortgage servicing assets to be
deducted from Tier 1 capital: subtract (i) from (g);
enter 0 if the result is a negative amount

________

(k) Excess nonmortgage servicing assets, PCCRs, and
mortgage servicing assets (i.e., the combined amount
exceeding 100% of Tier 1 capital): sum of (e) and (i)
minus (a); enter 0 if the result is a negative amount

________

(l) Disallowed nonmortgage servicing assets, PCCRs, and
mortgage servicing assets: enter the sum of
(f), (j), and (k)

________

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(6-10)

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FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

9.a
(cont.)

Banks are permitted, but not required, to deduct disallowed servicing assets on a basis that is
net of a proportional amount of any associated deferred tax liability recorded on the balance
sheet. Any deferred tax liability used in this manner would not be available for the bank to
use in determining the amount of disallowed deferred tax assets in Schedule RC-R, item 9.b,
below.

9.b

LESS: Disallowed deferred tax assets. Report the portion of net deferred tax assets
included in Schedule RC-F, item 2, that does not qualify for inclusion in Tier 1 capital based
on the capital guidelines of the reporting bank's primary federal supervisory authority.
Generally, deferred tax assets that are dependent upon future taxable income are limited to
the lesser of: (i) the amount of such deferred tax assets that the bank expects to realize
within one year of the calendar quarter-end date, based on its projected future taxable
income for that year or (ii) 10% of the amount of the bank's Tier 1 capital. A bank may
calculate one overall limit on deferred tax assets that covers all tax jurisdictions in which the
bank operates.
Deferred tax assets that are dependent upon future taxable income are (a) deferred tax
assets arising from deductible temporary differences that exceed the amount of taxes
previously paid that a bank could recover through loss carrybacks if the bank's temporary
differences (both deductible and taxable) fully reverse at the report date and (b) deferred tax
assets arising from operating loss and tax credit carryforwards. Therefore, for purposes of
this item, all temporary differences should be assumed to fully reverse at the report date.
A bank may use its future taxable income projection for its current fiscal year (adjusted for any
significant changes that have occurred or are expected to occur) when determining the
regulatory capital limit for its deferred tax assets at an interim calendar quarter-end date rather
than preparing a new projection each quarter. Projected future taxable income should not
include net operating loss carryforwards expected to be used within one year of the quarter-end
report date or the amount of existing temporary differences expected to reverse within that year,
but should include the estimated effect of tax planning strategies that are expected to be
implemented to realize carryforwards that will otherwise expire during that year.
When determining the amount to be reported in this item, each reporting bank's calculations
should be made on a separate entity basis. Under the separate entity method, a bank (together
with its consolidated subsidiaries) that is a subsidiary of a holding company is treated as a
separate taxpayer rather than as part of the consolidated group of which it is a member.
Deferred tax assets which can be realized from taxes paid in prior carryback years and from
future reversals of existing taxable temporary differences should generally not be reported in
this item. However, for a bank that is a subsidiary of a holding company, the parent holding
company may not have the financial capability to reimburse the reporting bank for tax
benefits derived from the bank's carryback of net operating losses or tax credits. In such a
situation, when determining the amount of deferred tax assets that are dependent upon future
taxable income, the amount of carryback potential the bank may consider as being available
for the realization of its deferred tax assets shall be limited to the amount which the bank
could reasonably expect to have refunded by its parent.
Treatment of deferred tax assets relating to available-for-sale securities – In accordance with
ASC Topic 320, Investments-Debt and Equity Securities (formerly FASB Statement No. 115,
“Accounting for Certain Investments in Debt and Equity Securities”), available-for-sale
securities are reported in the Reports of Condition and Income at fair value, with unrealized
holding gains and losses on such securities, net of tax effects, included in a separate

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(9-11)

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FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

9.b
(cont.)

component of equity capital. These tax effects may increase or decrease the reported
amount of a bank's deferred tax assets. The federal banking agencies exclude from
regulatory capital the amount of net unrealized holding gains and losses on available-for-sale
securities (except net unrealized holding losses on available-for-sale equity securities with
readily determinable fair values). When determining the regulatory capital limit for deferred
tax assets, a bank may, but is not required to, adjust the amount of its deferred tax assets for
any deferred tax assets and liabilities arising from marking-to-market available-for-sale debt
securities for purposes of these reports. A bank must follow a consistent approach with
respect to such adjustments.

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RC-R-6
(9-11)

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FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

9.b
(cont.)

Banks may use the following approach to determine the amount of disallowed deferred tax
assets.
Disallowed Deferred Tax Assets Calculation
(a) Enter the amount from Schedule RC-R, item 8

________

(b) Enter 10% of the amount in (a) above

________

(c1) Enter the amount of deferred tax assets reported in
Schedule RC-F, item 2

________

(c2) Enter adjustments to the amount of deferred tax assets in
(c1) above for:
(1) the deferred tax effects of certain items reported in Schedule RC,
item 26.b, “Accumulated other comprehensive income” (AOCI),
that are excluded from regulatory capital (i.e., unrealized holding
gains and losses on available-for-sale debt securities, other-thantemporary impairment losses on debt securities, and defined
1
benefit postretirement plan amounts reported in AOCI), and
(2) any deferred tax liabilities the bank has netted against assets
2
deducted from Tier 1 capital (i.e., disallowed mortgage and
nonmortgage servicing assets, intangible assets acquired in
nontaxable business combinations, goodwill acquired in taxable
business combinations, disallowed credit-enhancing interestonly strips, and deducted nonfinancial equity investments)
________
(c3) Subtotal: (c1) plus or minus (c2), as appropriate

________

(d) Enter the amount of taxes previously paid that the bank could
recover through loss carrybacks if the bank's temporary differences
(both deductible and taxable) fully reverse at the report date
________
(e) Amount of deferred tax assets that is dependent upon future
taxable income: subtract (d) from (c3); enter 0 if the result is a
negative amount
(f)

Enter the portion of (e) that the bank could realize within the next
12 months based on the estimated taxes payable on its projected
future taxable income. Future taxable income should not include
net operating loss carryforwards to be used during the next
12 months or existing temporary differences that are expected to
reverse over the next 12 months.

________

________

(g) Enter the lesser of (b) and (f)

________

(h) Disallowed net deferred tax assets - subtract (g) from (e);
enter 0 if the result is a negative amount

________

1

A bank may, but is not required to, adjust for these deferred tax effects, but must follow a consistent
approach over time with respect to these adjustments.
2
Any deferred tax liability netted in this manner cannot also be netted against deferred tax assets when determining
the amount of deferred tax assets dependent upon future taxable income and the disallowed amount of deferred tax
assets, if any, for regulatory capital purposes.

FFIEC 031 and 041

RC-R-6a
(6-12)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

Item No.
10

RC-R – REGULATORY CAPITAL

Caption and Instructions
Other additions to (deductions from) Tier 1 capital. Report the amount of any additions to
or deductions from Tier 1 capital based on the capital guidelines of the reporting bank's
primary federal supervisory authority that are not included in Schedule RC-R, items 1
through 9.b, above. If the amount to be reported in this item is a net deduction, report the
amount with a minus (-) sign.
For example, include the portion of credit-enhancing interest-only strips included in the bank's
total assets that does not qualify for inclusion in Tier 1 capital based on the capital guidelines

FFIEC 031 and 041

RC-R-6b
(6-12)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

10
(cont.)

of the bank's primary federal supervisory authority. A credit-enhancing interest-only strip is
defined in the capital guidelines as "an on-balance sheet asset that, in form or in substance:
(i) represents the contractual right to receive some or all of the interest due on transferred
assets; and (ii) exposes the bank to credit risk directly or indirectly associated with the
transferred assets that exceeds a pro rata share of the bank’s claim on the assets, whether
through subordination provisions or other credit enhancement techniques." Credit-enhancing
interest-only strips include other similar "spread" assets and can be either retained or
purchased. In general, credit-enhancing interest-only strips are limited to 25 percent of Tier 1
capital. Banks may use the following approach to determine the amount of disallowed creditenhancing interest-only strips.
Disallowed Credit-Enhancing Interest-Only Strips Calculation
(a) Enter the amount from Schedule RC-R, item 8

____________

(b) Enter 25% of the amount in (a) above

____________

(c) Retained credit-enhancing interest-only strips from
Schedule RC-S, items 2.a and 12: enter the fair value of
those strips included in Schedule RC, item 5, "Trading
assets," and the amortized cost of those strips not held
1
for trading

____________

(d) Purchased credit-enhancing interest-only strips included
2
in Schedule RC-S, item 9: enter the fair value of those
strips included in Schedule RC, item 5, "Trading assets,"
3
and the amortized cost of those strips not held for trading

____________

(e) Total credit-enhancing interest-only strips: enter the
sum of (c) and (d)

____________

(f) Enter the lesser of (b) and (e)

____________

(g) Disallowed credit-enhancing interest-only strips:
subtract (f) from (e); enter 0 if the result is a negative
amount

_____________

If the bank has disallowed credit-enhancing interest-only strips, i.e., line (g) in the preceding
calculation is a positive amount, include this amount as a deduction from Tier 1 capital in this
item. Banks are permitted, but not required, to deduct disallowed credit-enhancing interestonly strips, i.e., the amount from line (g) above, on a basis that is net of a proportional
amount of any associated deferred tax liability recorded on the balance sheet. Any deferred
tax liability used in this manner would not be available for the bank to use in determining the
amount of disallowed deferred tax assets in Schedule RC-R, item 9.b, above.

1

While credit-enhancing interest-only strips not held for trading are reported at fair value in Schedule RC-S, the
amortized cost of these strips should be used in this calculation.
2

Also include any purchased interest-only strips that act as credit enhancements for assets that have not been
securitized because these strips are not reported in Schedule RC-S, item 9.

3

See footnote 1 above.

FFIEC 031 and 041

RC-R-7
(3-11)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

10
(cont.)

If a bank has nonfinancial equity investments that are subject to Tier 1 capital deductions,
these deductions should be reported in this item. Under the banking agencies’ capital rules
on nonfinancial equity investments, which were published on January 25, 2002, a
nonfinancial equity investment is any equity investment that a bank holds in a nonfinancial
1
company:
•

through a small business investment company (SBIC) under section 302(b) of the
2
Small Business Investment Act of 1958 (15 U.S.C. 682(b)),
under the portfolio investment provisions of Federal Reserve Regulation K
(12 CFR 211.8(c)(3)), or
under section 24 of the Federal Deposit Insurance Act (12 U.S.C. 1831a). However,
investments made by state banks under section 24(f) of the Federal Deposit Insurance
Act are exempt from these capital rules and are not subject to any Tier 1 capital
deductions.

•
•

The banking agencies’ capital rules impose Tier 1 capital deductions on nonfinancial equity
investments that increase as the aggregate amount of nonfinancial equity investments held
by a bank increases. These marginal capital charges are based on the adjusted carrying
value of the investments as a percent of the bank's Tier 1 capital as calculated in item 8 of
Schedule RC-R. The total adjusted carrying value of a nonfinancial equity investment that is
subject to the Tier 1 deduction is excluded from the bank's risk-weighted assets for purposes
of computing the bank's risk-based capital ratio and from average assets for purposes of
computing the bank's Tier 1 leverage ratio. The adjusted carrying value is the value at which
the investment is recorded on the balance sheet of the banking organization, reduced by (i)
any net unrealized gains that are included in the carrying value but that have not been
included in Tier 1 capital and (ii) any associated deferred tax liabilities.
The following table details the marginal capital charges for nonfinancial equity investments:
Deduction for Nonfinancial Equity Investments
Aggregate adjusted carrying value of all nonfinancial equity
investments held directly or indirectly by the bank (as a
percentage of the bank's Tier 1 capital as reported in
Schedule RC-R, item 8)
Less than 15%
Greater than or equal to 15% but less than 25%
Greater than or equal to 25%

Deduction from Tier 1 capital
as a percentage of the
adjusted carrying value of the
investment
8%
12%
25%

Note: “High concentrations” (generally more than 50% of Tier 1 capital) of nonfinancial
equity investments will be monitored and may be subject to heightened supervision and a
higher minimum capital requirement.
1

Generally, this capital calculation does not apply to investments in nonconvertible senior or subordinated debt,
equity investments in a company that engages only in activities that are permissible for a bank to conduct, equity
investments in community development corporations under 12 U.S.C. 24(Eleventh) that promote the public welfare,
equity securities acquired in satisfaction of a debt previously contracted that are held and divested in accordance with
applicable law, unexercised warrants acquired by a bank as additional consideration for making a loan that are not
held under the legal authorities covered by this rule, equity investments made by an insurance underwriting affiliate,
equity investments held by a securities broker or dealer as part of an underwriting/market making/dealing activity, or
equity instruments held as a hedge of an equity derivative transaction.

2

An equity investment made under section 302(b) of the Small Business Investment Act of 1958 in an SBIC that is
not consolidated with the bank is treated as a nonfinancial equity investment.

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RC-R-8
(3-11)

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FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

10
(cont.)

These deductions are applied on a marginal basis to the portions of the adjusted carrying
value of nonfinancial equity investments that fall within the specified ranges of the parent
bank's Tier 1 capital. For example, if the adjusted carrying value of all nonfinancial equity
investments held by a bank equals 20 percent of the Tier 1 capital of the bank, then the
amount of the deduction would be 8 percent of the adjusted carrying value of all investments
up to 15 percent of the bank's Tier 1 capital, and 12 percent of the adjusted carrying value of
all investments in excess of 15 percent of the bank's Tier 1 capital.
Nonfinancial equity investments that are covered by the agencies' capital rules, but which are
not subject to any Tier 1 capital deductions, generally include the following:
•

SBIC investments. Nonfinancial equity investments held by a bank through one or more
SBICs under section 302(b) of the Small Business Investment Act are not subject to the
marginal capital charges to the extent that the aggregate adjusted carrying value of all
such investments does not exceed 15% of Tier 1 capital. The adjusted carrying value of
all SBIC investments, however, must be included in the total amount of nonfinancial
equity investments held by the bank when determining the total amount of these
investments in relation to the bank's Tier 1 capital for purposes of computing the bank's
marginal capital charge.
Nonfinancial equity investments that are held through or in SBICs and are not required to
be deducted from Tier 1 capital continue to be included in average total assets for the
leverage ratio calculation and in risk-weighted assets (at a 100% risk weight) for the riskbased capital calculations.

•

Grandfathered nonfinancial equity investments. Nonfinancial equity investments made
by a bank prior to March 13, 2000, or that were made by a bank after that date pursuant
to a binding written commitment entered into prior to March 13, 2000, are not subject to
the marginal capital charge. The adjusted carrying value of these grandfathered assets,
however, must be included in the total amount of nonfinancial equity investments held by
the bank when determining the total amount of these investments in relation to the bank's
Tier 1 capital for purposes of computing the bank's marginal capital charge.
Grandfathered nonfinancial equity investments continue to be included in average total
assets for the leverage ratio calculation and in risk-weighted assets (at a 100% risk
weight) for the risk-based capital calculations.

In addition, insured state banks with real estate subsidiaries whose continued operations
have been approved by the FDIC pursuant to Section 362.4 of the FDIC's Rules and
Regulations generally should deduct their equity investment in the subsidiary from Tier 1
capital. (Insured state banks with FDIC-approved phase-out plans for real estate subsidiaries
need not make these deductions.) Insured state banks with other subsidiaries (that are not
financial subsidiaries) whose continued operations have been approved by the FDIC
pursuant to Section 362.4 should deduct from Tier 1 capital the amount required by the
approval order.
Banks with financial subsidiaries should exclude from this item adjustments to Tier 1 capital
for the deconsolidation of such subsidiaries. Adjustments to Tier 1 capital for financial
subsidiaries should be reported in Schedule RC-R, item 28.a, below.

FFIEC 031 and 041

RC-R-8a
(6-02)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

Item No.
11

RC-R – REGULATORY CAPITAL

Caption and Instructions
Tier 1 capital. Report the sum of Schedule RC-R, items 8 and 10, less items 9.a and 9.b.
If the bank has no financial subsidiaries, the amount reported in this item is the numerator of
the bank's Tier 1 risk-based capital ratio and its Tier 1 leverage ratio.

Tier 2 Capital
12

Qualifying subordinated debt and redeemable preferred stock. Report the portion of the
bank's qualifying limited-life capital instruments that is includible in Tier 2 capital based on the
capital guidelines of the reporting bank's primary federal supervisory authority. This amount
is the sum of:
(1) the portion of qualifying subordinated debt and intermediate-term preferred stock
includible in Tier 2 capital, and
(2) the portion of qualifying other limited-life capital instruments includible in Tier 2 capital.
The portion of limited-life capital instruments that is includible in Tier 2 capital is the amount
that remains after discounting those instruments, if any, with five years or less until maturity
and then applying any applicable percentage of Tier 1 capital limit. For limited-life capital
instruments with serial maturities or with sinking fund provisions, the amount associated with
each maturity date is to be treated as a separate issue and discounted on an individual basis.
If the holder of the reporting bank's subordinated debt or intermediate-term or long-term
preferred stock has the right to require the bank to redeem, repay, or repurchase the
instrument prior to the original stated maturity, then maturity would be defined as the earliest
possible date on which the holder can put the instrument back to the issuing bank.
Qualifying term subordinated debt and intermediate-term preferred stock (including any
related surplus) must have an original weighted average maturity of at least five years.
Intermediate-term preferred stock includes those issues of preferred stock with an original
maturity of less than 20 years. Mandatory convertible debt, i.e., equity contract notes, is not
considered a limited-life capital instrument for risk-based capital purposes and should be
excluded from this item.
The portion of qualifying term subordinated debt and intermediate-term preferred stock that
remains after discounting and is includible in Tier 2 capital is limited to 50 percent of Tier 1
capital. This portion is calculated as follows:
(A1)

(A2)

(A3)

(A4)

(A5)

FFIEC 031 and 041

Amount of subordinated debt and intermediate-term
preferred stock with a remaining maturity of more than
five years

______x 100% =______

Amount of subordinated debt and intermediate-term
preferred stock with a remaining maturity of more than
four years, but less than five years

______x 80% =______

Amount of subordinated debt and intermediate-term
preferred stock with a remaining maturity of more than
three years, but less than four years

______x 60% =______

Amount of subordinated debt and intermediate-term
preferred stock with a remaining maturity of more than
two years, but less than three years

______x 40% =______

Amount of subordinated debt and intermediate-term
preferred stock with a remaining maturity of more than
one year, but less than two years

______x 20% =_____

RC-R-8b
(6-02)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

Item No.

RC-R – REGULATORY CAPITAL

Caption and Instructions

12
(cont.)

(A6)

(A7)

Amount of subordinated debt and intermediate-term
preferred stock with a remaining maturity of one year
or less

______x

0% =______

Qualifying subordinated debt and intermediate-term
preferred stock (sum of discounted amounts of lines
(A1) through (A6))

______

(A8)

Tier 1 capital (from Schedule RC-R, item 11)

______

(A9)

Multiplied by 50 percent

x 50%

(A10) Limit for qualifying subordinated debt and
intermediate-term preferred stock (line (A8) multiplied
by 50 percent)

______

(A11) Portion of qualifying subordinated debt and
intermediate-term preferred stock includible in Tier 2
capital (lesser of lines (A7) and (A10))

______

The entire amount of qualifying other limited-life capital instruments, such as long-term
preferred stock with an original maturity of 20 years or more, that remains after discounting is
includible in Tier 2 capital. This portion is calculated as follows:
(B1)
(B2)

(B3)

(B4)

(B5)

(B6)
(B7)

Amount of other limited-life capital instruments with a
remaining maturity of more than five years

______x 100% =______

Amount of other limited-life capital instruments with a
remaining maturity of more than four years, but less
than five years

______x 80% =______

Amount of other limited-life capital instruments with a
remaining maturity of more than three years, but less
than four years

______x 60% =______

Amount of other limited-life capital instruments with a
remaining maturity of more than two year, but less
than three years

______x 40% =______

Amount of other limited-life capital instruments with a
remaining maturity of more than one year, but less
than two years

______x 20% =______

Amount of other limited-life capital instruments with a
remaining maturity of one year or less

______x

Portion of qualifying other limited-life capital
instruments (sum of discounted amounts of lines (B1)
through (B6))

0% =______

______

Report the sum of the amounts from lines (A11) and (B7) above in Schedule RC-R, item 12.
13

Cumulative perpetual preferred stock includible in Tier 2 capital. Report the amount of
outstanding cumulative perpetual preferred stock, including any amounts received in excess
of its par or stated value, that is included in Schedule RC, item 23. Also include perpetual
preferred stock issues that were excluded from Tier 1 capital such as noncumulative
perpetual preferred where the dividend is reset periodically based, in whole or in part, upon
the bank's current credit standing (including, but not limited to, auction rate, money market,
and remarketable preferred stock).

FFIEC 031 and 041

RC-R-9
(3-13)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

Item No.
14

RC-R – REGULATORY CAPITAL

Caption and Instructions
Allowance for loan and lease losses includible in Tier 2 capital. Report the portion of the
bank's allowance for loan and lease losses that is includible in Tier 2 capital. (None of the
bank's allocated transfer risk reserve, if any, is includible in Tier 2 capital.) The amount
reported in this item cannot exceed 1.25 percent of the bank's gross risk-weighted assets.
For risk-based capital purposes, the allowance for loan and lease losses equals
Schedule RC, item 4.c, "Allowance for loan and lease losses," less Schedule RI-B, part II,
Memorandum item 1, "Allocated transfer risk reserve included in Schedule RI-B, part II,
item 7, above," plus Schedule RC-G, item 3, "Allowance for credit losses on off-balance sheet
credit exposures."
Gross risk-weighted assets is reported in Schedule RC-R, item 59. If the bank has any
low level exposure transactions or residual interests and chooses to use the "direct reduction
method" for reporting these transactions in Schedule RC-R, refer to the discussion of this
subject in the instructions for Schedule RC-R, item 50, "Recourse and direct credit substitutes
(other than financial standby letters of credit) subject to the low level exposure rule and
residual interests subject to a dollar-for-dollar capital requirement," for guidance on
determining the limit on the allowance for loan and lease losses for Tier 2 capital purposes.

15

Unrealized gains on available-for-sale equity securities includible in Tier 2 capital.
Report the pretax net unrealized holding gain (i.e., the excess of fair value as reported in
Schedule RC-B, item 7, column D, over historical cost as reported in Schedule RC-B, item 7,
column C), if any, on available-for-sale equity securities that is includible in Tier 2 capital
subject to the limits specified by the capital guidelines of the reporting bank's primary federal
supervisory authority. The amount reported in this item cannot exceed 45 percent of the
bank's pretax net unrealized holding gain on available-for-sale equity securities with readily
determinable fair values.

16

Other Tier 2 capital components. Report the amount of any items that qualify for inclusion
in Tier 2 capital based on the capital guidelines of the reporting bank's primary federal
supervisory authority that are not included in Schedule RC-R, items 12 through 15, above.
Include mandatory convertible debt, i.e., equity contract notes, which is a form of
subordinated debt that obligates the holder to take the common or perpetual preferred stock
of the issuer in lieu of cash for repayment of principal.

17

Tier 2 capital. Report the sum of Schedule RC-R, items 12 through 16.

18

Allowable Tier 2 capital. Report the amount of the bank's allowable Tier 2 capital. The
maximum amount of Tier 2 capital that is allowable in a bank’s qualifying total capital is
100 percent of Tier 1 capital. The amount reported in this item must be the lesser of
Schedule RC-R, item 11, “Tier 1 capital," and item 17, "Tier 2 capital," if item 11 is a positive
number. If Schedule RC-R, item 11, is a negative number, report a zero in this item.

19

Tier 3 capital allocated for market risk. Under the revised market risk capital rules that
took effect on January 1, 2013, Tier 3 capital has been eliminated. Institutions subject to
these rules should report zero in this item.

FFIEC 031 and 041

RC-R-10
(3-13)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

Item No.
20

RC-R – REGULATORY CAPITAL

Caption and Instructions
LESS: Deductions for total risk-based capital. Report the amount of the institution’s
investments in banking and finance subsidiaries that are not consolidated for regulatory
capital purposes, intentional reciprocal cross-holdings of banking organizations' capital
instruments, and any other deductions for total risk-based capital as determined by the
reporting institution's primary federal supervisory authority.
Banks with financial subsidiaries should exclude adjustments to total risk-based capital for
the deconsolidation of such subsidiaries. Adjustments to total risk-based capital for financial
subsidiaries should be reported in Schedule RC-R, item 28.b, below.
Do not report in this item (a) recourse arrangements and direct credit substitutes subject to
the low level exposure rule and (b) residual interests subject to a dollar-for-dollar capital
requirement. Report such recourse arrangements and direct credit substitutes (other than
financial standby letters of credit) and such residual interests in Schedule RC-R, item 50,
using either the "direct reduction method" or the "gross-up method" described in the
instructions for item 50. Report financial standby letters of credit that are recourse
arrangements or direct credit substitutes subject to the low level exposure rule in
Schedule RC-R, item 44. Also exclude from this item disallowed credit-enhancing interestonly strips, which should be reported as a deduction from Tier 1 capital in Schedule RC-R,
item 10, and from total assets in Schedule RC-R, item 26.

21

Total risk-based capital. Report the sum of Schedule RC-R, items 11, 18, and 19, less
item 20. The amount reported in this item is the numerator of the bank's total risk-based
capital ratio.

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(6-12)

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Total assets for leverage ratio
22

Total assets. For commercial banks and state savings and cooperative banks (including
state savings and cooperative banks that are Qualified Thrift Lenders), report the bank’s
average total assets as reported in Schedule RC-K, item 9. For savings associations,
report the association’s total assets from Schedule RC, item 12.

23

LESS: Disallowed goodwill and other disallowed intangible assets. Report the amount
of any disallowed goodwill and other disallowed intangible assets from Schedule RC-R,
item 7.a, above.

24

LESS: Disallowed servicing assets and purchased credit card relationships. Report
the amount of any disallowed servicing assets and purchased credit card relationships from
Schedule RC-R, item 9.a, above.

25

LESS: Disallowed deferred tax assets. Report the amount of any disallowed deferred tax
assets from Schedule RC-R, item 9.b, above.

26

Other additions to (deductions from) assets for leverage capital purposes. Based on
the capital guidelines of the reporting institution's primary federal supervisory authority, report
the amount of any additions to or deductions from total assets for leverage capital purposes
that are not included in Schedule RC-R, items 23 through 25, above. If the amount to be
reported in this item is a net deduction from assets, report the amount with a minus (-) sign.
Include as a deduction the amount of any other assets that are deducted in determining
Tier 1 capital in accordance with the capital standards issued by the reporting institution's
primary federal supervisory authority. Include the amount of any disallowed credit-enhancing
interest-only strips from Schedule RC-R, item 10, above. Also include the adjusted carrying
value of any nonfinancial equity investments for which a Tier 1 capital deduction is included in
Schedule RC-R, item 10, above.
If the reporting institution sponsors a single-employer defined benefit postretirement plan,
such as a pension plan or health care plan, accounted for in accordance with
ASC Subtopic 715-20, Compensation-Retirement Benefits – Defined Benefit Plans-General
(formerly FASB Statement No. 158, “Employers’ Accounting for Defined Benefit Pension and
Other Postretirement Plans” (FAS 158)), the institution should adjust total assets for leverage
capital purposes for any amounts included in Schedule RC, item 26.b, “Accumulated other
comprehensive income” (AOCI), affecting assets as a result of the initial and subsequent
application of the funded status and measurement date provisions of ASC Subtopic 715-20.
The adjustment also should take into account subsequent amortization of these amounts
from AOCI into earnings. The intent of the adjustment reported in this item (together with the
amount reported in Schedule RC-R, item 4) is to reverse the effects on AOCI of applying
ASC Subtopic 715-20 for regulatory capital purposes. Specifically, assets recognized or
derecognized as an adjustment to AOCI as part of the incremental effect of applying ASC
Subtopic 715-20 should be reported as an adjustment to total assets for leverage capital
purposes. For example, the derecognition of an asset recorded as an offset to AOCI as part
of the initial incremental effect of applying ASC Subtopic 715-20 should be added back to
total assets for leverage capital purposes by reporting the amount as a positive number in
this item. As another example, the portion of a benefit plan surplus asset that is included in
Schedule RC, item 26.b, as an increase to AOCI and in total assets should be deducted from
total assets for leverage capital purposes by reporting the amount as a negative number in
this item.

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(6-12)

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FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

26
(cont.)

Savings associations should include in this item the net unrealized gains (losses) on
available-for-sale securities reported in Schedule RC-R, item 2. If net unrealized gains are
reported in item 2, include the amount of these gains as a deduction from total assets. If net
unrealized losses are reported in item 2, include the amount of these losses as an addition to
total assets. In addition, savings associations that report a net unrealized loss on availablefor-sale equity securities in Schedule RC-R, item 3, should include the amount of this loss as
a deduction from total assets in this item. The combined effect of these adjustments is to
treat net unrealized gains (losses) on available-for-sale debt securities as a deduction from
(addition to) total assets for leverage capital purposes and net unrealized gains on availablefor-sale equity securities as a deduction from total assets for leverage capital purposes
(because such gains (losses) – which are also reported as a component of Schedule RC,
item 26.b, "Accumulated other comprehensive income" – are excluded from Tier 1 capital)
while not adjusting total assets for net unrealized losses on available-for-sale equity
securities (because such losses are deducted from Tier 1 capital).
Savings associations should include in this item the amount included in total assets for the
gains (losses) on derivative instruments with positive fair values (i.e., derivative assets)
designated and qualifying as cash flow hedges that is also reflected in Schedule RC-R,
item 4, “Accumulated net gains (losses) on cash flow hedges.” Do not include any amounts
associated with derivative instruments with negative fair values (i.e., derivative liabilities). If
the amount included in total assets represents net gains on derivative assets, include this
amount as a deduction from total assets. If the amount included in total assets represents
net losses on derivative assets, include this amount as an addition to total assets.
Savings associations with includable subsidiaries should include as an addition to total assets
the prorated assets of any includable subsidiary in which the association has a minority
ownership interest that is not consolidated under generally accepted accounting principles in
Schedule RC – Balance Sheet.
Savings associations with nonincludable subsidiaries should include as a deduction from total
assets the entire amount of the assets of these subsidiaries that are included in assets on
Schedule RC – Balance Sheet, but are deducted from assets for leverage capital purposes.
For consolidated subsidiaries, this amount should equal the total assets of the subsidiary less
any assets eliminated in consolidation. For subsidiaries accounted for under the equity
method, this amount should equal the association’s investment in the subsidiary plus all
advances to the subsidiary.
Banks with financial subsidiaries should exclude from this item adjustments to average total
assets for the deconsolidation of such subsidiaries. Adjustments to average total assets for
financial subsidiaries should be reported in Schedule RC-R, item 30, below.

27

Total assets for leverage capital purposes. Report the sum of Schedule RC-R, items 22
and 26, less items 23 through 25.

FFIEC 031 and 041

RC-R-12
(6-12)

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FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Adjustments for financial subsidiaries
NOTE: Schedule RC-R, items 28.a through 30, and column A of items 31 through 33 are applicable to
banks with “financial subsidiaries” as defined by the Gramm-Leach-Bliley Act of 1999 (the Act). The Act
effectively amends the federal banking agencies' capital guidelines to require all banks with financial
subsidiaries to deconsolidate the assets and liabilities of all financial subsidiaries and to deduct the
aggregate outstanding equity investment in the financial subsidiaries from capital and assets for purposes
of calculating the bank’s regulatory capital ratios. Banks that do not have financial subsidiaries and
savings associations, which are not authorized under the Act to have financial subsidiaries, should report
zeros in these items.
Item No.
28.a

Caption and Instructions
Adjustment to Tier 1 capital reported in item 11. Report one half of the bank's aggregate
outstanding equity investment in financial subsidiaries as of the report date, which should be
determined in the following manner.
If a financial subsidiary is not consolidated into the bank for purposes of these reports, one
half of the bank's aggregate outstanding equity investment in the subsidiary is one half of the
amount of the bank's ownership interest accounted for under the equity method of
accounting. The bank’s ownership interest will have been included in Schedule RC, item 8,
"Investments in unconsolidated subsidiaries and associated companies." However, the
bank's ownership interest in a financial subsidiary should exclude any loans and advances to
the subsidiary and any holdings of the subsidiary's bonds, notes, and debentures, which are
included in Schedule RC, item 8.
If one or more financial subsidiaries are consolidated into the bank for purposes of these
reports, the bank may use the following approach to determine one half of the bank's
aggregate outstanding equity investment in these consolidated financial subsidiaries.
One Half of the Aggregate Outstanding Equity Investments in
Consolidated Financial Subsidiaries

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(a) Enter the total assets of consolidated financial
subsidiaries included in Schedule RC, item 12

____________

(b) Enter the total liabilities of consolidated financial
subsidiaries included in Schedule RC, item 21

____________

(c) Enter the sum of the amounts included in Schedule RC-R,
items 2, 3, 4, 5, 7, 9.a, and 9.b, that are attributable to the
bank’s consolidated financial subsidiaries (e.g., goodwill
on a financial subsidiary's balance sheet that was
included in the disallowed goodwill reported on
Schedule RC-R, item 7)

____________

(d) Enter the amount of "Other additions to (deductions from)
Tier 1 capital" included in Schedule RC-R, item 10, that is
attributable to the bank's consolidated financial subsidiaries

____________

(e) Enter the amount of any minority interests in consolidated
financial subsidiaries included in Schedule RC, item 22

____________

(f) Enter the sum of (a) and (d) less (b), (c), and (e);
enter 0 if the amount is a negative number

____________

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Item No.

Caption and Instructions

28.a
(cont.)

28.b

RC-R – REGULATORY CAPITAL

(g) Adjustment to Tier 1 capital reported in Schedule RC-R,
item 11 (one half of the bank's aggregate outstanding
equity investment for the bank’s consolidated financial
subsidiaries): enter 50% of the amount in (f) above

_____________

Adjustment to total risk-based capital reported in item 21. Report the bank's aggregate
outstanding equity investment in financial subsidiaries as of the report date, which should be
determined in the following manner.

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Item No.

Caption and Instructions

28.b
(cont.)

If a financial subsidiary is not consolidated into the bank for purposes of these reports, the
bank's aggregate outstanding equity investment in the subsidiary is the amount of the bank’s
ownership interest accounted for under the equity method of accounting. The bank's
ownership interest will have been included in Schedule RC, item 8, "Investments in
unconsolidated subsidiaries and associated companies." However, the bank's ownership
interest in a financial subsidiary should exclude any loans and advances to the subsidiary
and any holdings of the subsidiary's bonds, notes, and debentures, which are included in
Schedule RC, item 8.
If one or more financial subsidiaries are consolidated into the bank for purposes of these
reports, the bank may use the following approach to determine the aggregate outstanding
equity investments in these consolidated financial subsidiaries.
Aggregate Outstanding Equity Investments in Consolidated Financial Subsidiaries
(a) Enter the amount from line (f) in the calculation of the
adjustment to Tier 1 capital for consolidated financial
subsidiaries in the instructions for Schedule RC-R,
item 28.a, above

____________

(b) Enter the sum of the amounts included in Schedule RC-R,
items 12, 13, 14, 15, 16, and 19 that are attributable
to the bank's consolidated financial subsidiaries

____________

(c) Enter the amount of "Deductions for total risk-based
capital" included in Schedule RC-R, item 20, that is
attributable to the bank's consolidated financial subsidiaries

____________

(d) Adjustment to total risk-based capital reported in
Schedule RC-R, item 21, for the bank's consolidated
financial subsidiaries:
enter the sum of (a) and (b) less (c)
29

_____________

Adjustment to risk-weighted assets reported in item 62. Report the amount of the
adjustment to risk-weighted assets for financial subsidiaries, which should be determined in
the following manner.
If a financial subsidiary is not consolidated into the bank, the adjustment to risk-weighted
assets for the subsidiary will equal the bank's ownership interest accounted for under the
equity method of accounting that is included in Schedule RC-R, item 62, "Total risk-weighted
assets."
If a financial subsidiary is consolidated into the bank, the adjustment to risk-weighted assets
for the subsidiary will be the total amount of the subsidiary's individual assets, derivatives,
and off-balance sheet items as they have been allocated by risk weight across the risk weight
categories in Schedule RC-R, item 57, less the risk-weighted amount of bank assets
representing claims on the financial subsidiary, other than the bank's ownership interest in
the subsidiary, that were eliminated in consolidation. These eliminated assets will not have
been included in the amounts reported in Schedule RC-R, item 57.

30

Adjustment to average total assets reported in item 27. Report the amount of the
adjustment to average total assets for financial subsidiaries, which should be determined in
the following manner.

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Item No.

Caption and Instructions

30
(cont.)

If a financial subsidiary is not consolidated into the bank, the adjustment to average total
assets for the subsidiary will be the quarterly average of the bank's ownership interest
accounted for under the equity method of accounting that is included in Schedule RC-R,
item 27.
If a financial subsidiary is consolidated into the bank, the adjustment to average total assets
for the subsidiary will be the quarterly average of the assets of the subsidiary that have been
included in the consolidated assets of the bank, as reported in Schedule RC-R, item 22; less
any disallowed intangible assets and deferred tax assets of the subsidiary that have been
included in Schedule RC-R, items 23, 24, and 25; less any other assets of the subsidiary that
have been included as other deductions in Schedule RC-R, item 26; and less the quarterly
average of bank assets representing claims on the financial subsidiary, other than the bank’s
ownership interest in the subsidiary, that were eliminated in consolidation. These eliminated
assets will not have been included in the amount reported in Schedule RC-R, item 22.

Capital Ratios
31

Tier 1 leverage ratio. Report the institution’s Tier 1 leverage ratio as a percentage, rounded
to two decimal places. Column B is to be completed by all institutions. The ratio for
column B is determined by dividing Schedule RC-R, item 11, by Schedule RC-R, item 27.
Banks with financial subsidiaries must also report a Tier 1 leverage ratio in column A. The
ratio for column A is determined as follows:
Schedule RC-R, item 11, minus Schedule RC-R, item 28.a
Schedule RC-R, item 27, minus Schedule RC-R, item 30
Banks that do not have financial subsidiaries and savings associations should report a zero in
column A.

32

Tier 1 risk-based capital ratio. Report the institution’s Tier 1 risk-based capital ratio as a
percentage, rounded to two decimal places. Column B is to be completed by all institutions.
The ratio for column B is determined by dividing Schedule RC-R, item 11, by Schedule RC-R,
item 62. Banks with financial subsidiaries must also report a Tier 1 risk-based capital ratio in
column A. The ratio for column A is determined as follows:
Schedule RC-R, item 11, minus Schedule RC-R, item 28.a
Schedule RC-R, item 62, minus Schedule RC-R, item 29
Banks that do not have financial subsidiaries and savings associations should report a zero in
column A.

33

Total risk-based capital ratio. Report the institution’s total risk-based capital ratio as a
percentage, rounded to two decimal places. Column B is to be completed by all institutions.
The ratio for column B is determined by dividing Schedule RC-R, item 21, by Schedule RC-R,
item 62. Banks with financial subsidiaries must also report a total risk-based capital ratio in
column A. The ratio for column A is determined as follows:
Schedule RC-R, item 21, minus Schedule RC-R, item 28.b
Schedule RC-R, item 62, minus Schedule RC-R, item 29
Banks that do not have financial subsidiaries and savings associations should report a zero in
column A.

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Risk-Weighted Assets
The instructions for Schedule RC-R, items 34 through 54 provide general directions for the allocation of bank
balance sheet assets and credit equivalent amounts of derivatives and off-balance sheet items to the risk
weight categories in columns C through F and, for items 34 through 43 only, to the items not subject to riskweighting in column B. These instructions should provide sufficient guidance for most banks for risk-weighting
their balance sheet assets and credit equivalent amounts. However, these instructions may not identify every
asset and other bank transaction that qualifies for a risk weight lower than the maximum risk weight. For
further information on allocating assets and off-balance sheet transactions to the proper risk weight category,
banks should consult the risk-based capital guidelines of their primary federal supervisory authority.
In order to save time and reduce burden, a bank may decide not to determine every asset or off-balance
sheet transaction that is accorded a risk weight lower than 100% (50% for derivative contracts).
Accordingly, at its option, a bank may risk-weight any asset or credit equivalent amount at a
higher risk weight than the risk weight that would otherwise apply to the asset or credit equivalent
amount, e.g., an asset that qualifies for a 20% risk weight may be assigned a 100% risk weight.
For items 34 through 43 of Schedule RC-R, column B should include the amount of the reporting bank's
on-balance sheet assets that are deducted or excluded (not risk weighted) in the determination of riskweighted assets. Column B should include assets that are deducted from capital such as goodwill,
disallowed deferred tax assets, disallowed servicing assets and purchased credit card relationships,
disallowed credit-enhancing interest-only strips, intentional reciprocal cross-holdings of bank capital
instruments, the adjusted carrying value of nonfinancial equity investments subject to a Tier 1 capital
deduction, and any other assets that must be deducted in accordance with the requirements of a bank's
primary federal supervisory authority. Column B should also include items that are excluded from the
calculation of risk-weighted assets such as the allowance for loan and lease losses, allocated transfer risk
reserves, and certain on-balance sheet asset amounts associated with derivative contracts that are
included in the calculation of their credit equivalent amounts. For items 34 through 43 of Schedule RC-R,
the sum of columns B through F must equal the balance sheet asset amount reported in column A.
For items 44 through 54 of Schedule RC-R, column B should include the credit equivalent amounts of the
reporting bank's derivative contracts and off-balance sheet items that are covered by the risk-based
capital standards. For off-balance sheet items, the credit equivalent amount to be reported in column B is
calculated by multiplying the face or notional amount in column A by the appropriate credit conversion
factor. The credit equivalent amounts in column B are to be risk weighted in columns C through F. For
items 44 through 54 of Schedule RC-R, the sum of columns C through F must equal the credit equivalent
amount reported in column B.
The following are some of the most common exceptions to the risk weight category assignments that are
described below in the instructions for items 34 through 54. These exceptions enable a bank, at its
option, to assign assets, derivatives, and off-balance sheet items to lower risk weight categories than
under the instructions for each of these items.
Column C – 0% column:
•
•
•

All claims (defined broadly to include securities, loans, and leases) that are direct claims on, or
the portion of claims that are directly and unconditionally guaranteed by, the U.S. Government,
other OECD central governments, or U.S. Government agencies.
For national and state member banks, claims that are collateralized by cash on deposit in the bank
or by securities issued or guaranteed by the U.S. Government, other OECD central governments, or
U.S. Government agencies (refer to the risk-based capital guidelines for the collateral criteria).
For state nonmember banks, claims on, or guaranteed by, qualifying securities firms incorporated
in the U.S. or in other OECD countries that are collateralized by cash on deposit in the bank or by
securities issued or guaranteed by the U.S. Government, other OECD central governments, or
U.S. Government agencies (refer to the risk-based capital guidelines for the collateral and
qualifying securities firm criteria).

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Risk-Weighted Assets (cont.)
Column D – 20% column:
•
•
•
•
•
•

The portion of claims that are conditionally guaranteed by the U.S. Government, other OECD
central governments, or U.S. Government agencies.
The portion of claims that are collateralized by cash on deposit in the bank or by securities issued
or guaranteed by the U.S. Government, other OECD central governments, or U.S. Government
agencies that are not included in zero percent column.
The portion of local currency securities that are conditionally guaranteed by non-OECD central
governments (to the extent that the bank has liabilities booked in that currency).
General obligation claims on, or portions of claims guaranteed by the full faith and credit of, states
or other political subdivisions of the U.S.
Claims on, and the portions of claims guaranteed by, multilateral lending institutions or regional
development banks in which the U.S. Government is a shareholder or contributing member.
Claims on, or guaranteed by, qualifying securities firms incorporated in the U.S. or in other OECD
countries provided the firm meets certain rating criteria, the claim is guaranteed by the firm's
parent company and that company meets the rating criteria, or the claim is a repurchase/resale
agreement or a securities borrowing/lending transaction that is collateralized and meets certain
criteria (refer to the risk-based capital guidelines for the rating, collateral, and qualifying securities
firm criteria).

The extent to which qualifying securities are recognized as collateral for risk-based capital purposes is
determined by their current market value. If a claim is partially secured, that is, the market value of the
pledged securities is less than the face amount of an asset or off-balance sheet item, only the portion that
is covered by the market value of the collateral is to be reported in this item. The face amount of a claim
secured by two types of qualifying collateral is to be reported in the items appropriate to the collateral
types, apportioned according to the market value of each of the two types of collateral.
If a claim is partially guaranteed or covered by two types of guarantees, then the preceding discussion on
the treatment of claims that are collateralized is applicable. A guarantee is conditional if its validity is
dependent upon some affirmative action by the bank or a third party (e.g., servicing requirements).
NOTE: Claims collateralized by deposits in other depository institutions (e.g., certificates of deposit
issued by other banks) do not qualify for a 20 percent risk weight. Such collateralized claims are to be
reported in the 50 percent or 100 percent risk weight category in columns E or F of Schedule RC-R, as
appropriate, according to the obligor or, if relevant, the guarantor or the nature of any other collateral.
These instructions contain several references to the OECD, i.e., the Organization for Economic
Cooperation and Development. The following countries are members of the OECD: Australia, Austria,
Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland,
Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland,
Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United
States. In addition, Saudi Arabia should be treated as an OECD country. All other countries should be
treated as non-OECD countries.
Ratings-Based Approach – The risk-based capital guidelines include a ratings-based approach that sets
the risk-based capital requirements for asset-backed and mortgage-backed securities and other positions
1
in securitization transactions and structured finance programs (except credit-enhancing interest-only
strips) according to their relative risk using credit ratings from nationally recognized statistical rating
organizations, i.e., rating agencies, to measure the level of risk. (The ratings-based approach does not
apply to corporate bonds, municipal bonds, or other debt securities that have been rated by a rating
agency.) In general, under the ratings-based approach, the risk-based capital requirement for a position
1

Structured finance programs include, but are not limited to, collateralized debt obligations.

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Risk-Weighted Assets (cont.)
in a securitization or structured finance program (hereafter referred to collectively as a securitization) is
computed by multiplying the face amount of the position by the risk weight appropriate for the external
credit rating of the position. The risk weights for long-term and short-term external ratings are as follows:
Long-Term Rating Category

Examples

Highest or second highest investment grade
Third highest investment grade
Lowest investment grade
One category below investment grade
More than one category below investment grade, or
unrated
Short-Term Rating Category

AAA or AA
A
BBB
BB
B or unrated

Examples

Highest investment grade
Second highest investment grade
Lowest investment grade
Below investment grade, or unrated

A-1, P-1
A-2, P-2
A-3, P-3
B or unrated

Risk Weight
20%
50%
100%
200%
Not eligible for ratingsbased approach
Risk Weight
20%
50%
100%
Not eligible for ratingsbased approach

Under the ratings-based approach, a position in a securitization that is a "traded position," as defined in
the risk-based capital guidelines, must receive at least one external rating. If a traded position receives
more than one external ratings, the lowest rating will apply. For a position in a securitization that is not a
traded position to be eligible for the ratings-based approach, the position must receive at least two
publicly available external ratings that are based on the same criteria used to rate traded positions. The
lowest external rating will determine the risk weight category for the position.
In addition, a position (other than a residual interest) in a securitization or structured finance program that
is not externally rated may use the credit rating for the position under one of three alternative standards to
determine the risk weight for the position. These alternatives are internal risk ratings for direct credit
substitutes (but not purchased credit-enhancing interest-only strips) supporting asset-backed commercial
paper programs and program ratings and credit assessment computer programs for credit enhancements
(but not residual interests) supporting structured finance programs. Under these alternatives, a position
receiving an investment grade rating is assigned a 100% risk weight and a position receiving a rating one
category below investment grade is assigned a 200% risk weight.
Banks That are Subject to the Market Risk Capital Rules – The banking agencies' risk-based capital
standards require all banks with significant market risk to measure their market risk exposure and hold
sufficient capital to protect against the risk of loss attributable to this exposure. In general, a bank is
subject to the market risk capital rules if its consolidated trading activity, defined as the sum of trading
assets and liabilities as reported in its Call Report for the previous quarter, equals: (1) 10 percent or more
of the bank's total assets as reported in its Call Report for the previous quarter, or (2) $1 billion or more.
However, the primary federal supervisory authority may exempt or include a bank if necessary or
appropriate for safe and sound banking practices.
A bank that is subject to the market risk capital rules must hold capital to support its exposure to general
market risk arising from fluctuations in interest rates, equity prices, foreign exchange rates, and
commodity prices and its exposure to specific risk associated with certain debt and equity positions.
A covered position is a trading asset or trading liability (whether on- or off-balance sheet), as reported on
Schedule RC–D, that is held for any of the following reasons:

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Risk-Weighted Assets (cont.)
(1)
(2)
(3)
(4)

For the purpose of short-term resale;
With the intent of benefiting from actual or expected short-term price movements;
To lock in arbitrage profits; or
To hedge another covered position.

Additionally, the trading asset or trading liability must be free of any restrictive covenants on its tradability
or the bank is able to hedge the material risk elements of the trading asset or trading liability in a two-way
market. A covered position also includes a foreign exchange or commodity position, regardless of
whether the position is a trading asset or trading liability (excluding structural foreign currency positions if
supervisory approval has been granted to exclude such positions).
A covered position does not include:
(1) An intangible asset (including any servicing asset);
(2) A hedge of a trading position that is outside the scope of the bank’s hedging strategy (required by the
market risk capital rules);
(3) Any position that, in form or substance, acts as a liquidity facility that provides support to assetbacked commercial paper;
(4) A credit derivative recognized as a guarantee for risk-weighted asset calculation purposes under the
risk-based capital rules for credit risk;
(5) An equity position that is not publicly traded (other than a derivative that references a publicly traded
equity);
(6) A position held with the intent to securitize; or
(7) A direct real estate holding.
Covered positions generally should not be risk-weighted as part of the bank's gross risk-weighted assets.
However, foreign exchange positions that are outside of the trading account and all over-the-counter
(OTC) derivatives continue to have a counterparty credit risk capital charge. Those positions are included
in both gross risk-weighted assets for credit risk and the bank's covered positions for market risk.
A bank subject to the market risk capital rules must maintain an overall minimum 8.0 percent ratio of total
qualifying capital (the sum of Tier 1 capital and Tier 2 capital, net of all deductions) to the sum of riskweighted assets and market risk equivalent assets. Banks should refer to the capital standards of their
primary federal supervisory authority for specific instructions on the calculation of the measure for market
risk.
Balance Sheet Asset Categories
Assets Sold with Recourse and Purchased Credit-Enhancing Interest-Only Strips – When an on-balance
sheet asset that is a position in an asset securitization or structured finance program qualifies for the
ratings-based approach, the asset should be reported in the appropriate asset category in
Schedule RC-R (items 34 to 42) and risk-weighted 20%, 50%, 100%, or 200% according to its rating.
(See the paragraph below for further information on assets subject to a 200% risk weight.)
Otherwise, in an asset sale with recourse in which a bank has retained on-balance sheet assets that act
as credit enhancements (including retained credit-enhancing interest-only strips) that do not qualify for the
ratings-based approach, these assets should be reported in column B, "Items Not Subject to
Risk-Weighting," of the appropriate Schedule RC-R asset category (items 34 to 42). Similarly, purchased
credit-enhancing interest-only strips should be reported in column B. Depending on the nature of the
individual recourse transactions, the risk-weighting of these transactions will take place in
Schedule RC-R, item 49, "Retained recourse on small business obligations sold with recourse," item 50,
"Recourse and direct credit substitutes (other than financial standby letters of credit) subject to the low

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Balance Sheet Asset Categories (cont.)
level exposure rule and residual interests subject to a dollar-for-dollar capital requirement," or item 51, "All
other financial assets sold with recourse." Purchased credit-enhancing interest-only strips are to be riskweighted in Schedule RC-R, item 50. However, exclude disallowed credit-enhancing interest-only strips
that have been deducted from Tier 1 capital and assets from Schedule RC-R, items 49, 50, and 51.
Assets Subject to a 200% Risk Weight – Asset-backed and mortgage-backed securities and other onbalance sheet positions in asset securitizations and structured finance programs that are rated one
category below investment grade (e.g., BB) by a rating agency are subject to a 200% risk weight.
Because Schedule RC-R does not have a column for the 200% risk weight, assets in this risk weight
category should be reported in the following manner in Schedule RC-R:
•

If a 200% risk-weighted asset is reported on the balance sheet (Schedule RC) at amortized cost, e.g.,
in "Held-to-maturity securities," report (1) the asset's amortized cost multiplied by 2 in column F–
100% risk weight, and (2) the asset's amortized cost as a negative number in column B.

•

If a 200% risk-weighted asset is reported on the balance sheet (Schedule RC) like an "Available-forsale debt security," i.e., at fair value with unrealized gains (losses) reported in "Other comprehensive
income," report (1) the difference between the asset's fair value and amortized cost in column B as a
positive number if fair value exceeds cost or as a negative number if cost exceeds fair value, (2) the
asset's amortized cost multiplied by 2 in column F–100% risk weight, and (3) the asset's amortized
cost as a negative number in column B.

•

If a 200% risk-weighted asset is reported on the balance sheet (Schedule RC) like a "Trading asset,"
i.e., at fair value with unrealized gains (losses) included in current earnings, report (1) the asset's fair
value multiplied by 2 in column F–100% risk weight, and (2) the asset's fair value as a negative
number in column B.

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Balance Sheet Asset Categories (cont.)
Treatment of Purchased Subordinated Securities That Are Direct Credit Substitutes Not Eligible for the
Ratings-Based Approach – A direct credit substitute is “an arrangement in which a bank assumes, in form
or in substance, credit risk associated with an on- or off-balance sheet credit exposure that was not
previously owned by the bank (third-party asset) and the risk assumed by the bank exceeds the pro rata
share of the bank’s interest in the third-party asset.” A purchased subordinated security in a securitization
or structured finance program, as defined in the agencies’ risk-based capital standards, is a direct credit
substitute. Examples of such direct credit substitutes include, but are not limited to, the mezzanine and
subordinate tranches of private-label mortgage-backed securities and collateralized debt obligations. A
so-called senior tranche of a securitization or structured finance program (hereafter referred to collectively
as a securitization) is not a direct credit substitute provided it cannot absorb credit losses prior to another
designated senior tranche.
If a purchased subordinated security is rated more than one category below investment grade (e.g.,
below BB-) or unrated, the security is not eligible for the ratings-based approach described above. In this
situation, or if a bank elects not to use the ratings-based approach for an eligible purchased subordinated
security, the risk-weighted asset calculation for the security is based on the “face amount” of the bank’s
1
purchased subordinated security plus the pro rata portion of all the more senior positions currently
outstanding in the securitization that the bank’s security supports. If the resulting risk-based capital
requirement for the purchased subordinated security, i.e., the risk-weighted asset amount for the security
multiplied by the risk weight applicable to the security multiplied by 8 percent, is greater than the face
amount of the security, the low-level exposure rule would apply to the security. The low-level exposure
rule in effect imposes a dollar-for-dollar capital requirement on the purchased subordinated security.
Banks should use the following approach to determine whether the low-level exposure rule applies to a
purchased subordinated security that is not eligible for the ratings-based approach.
Applicability of Low-Level Exposure Rule to a Purchased Subordinated Security
(a) Currently outstanding par value of the bank’s purchased
subordinated security divided by the currently outstanding
2
par value of the entire tranche (e.g., 60% )
(b) Currently outstanding par value of the more senior positions in
the securitization that are supported by the tranche in which the
bank owns a subordinated security
(c) Pro rata share of the more senior positions currently outstanding
in the securitization that are supported by the bank’s purchased
subordinated security: enter (b) multiplied by (a)
1

(d) Face amount of the bank’s purchased subordinated security
(e) Enter the sum of (c) and (d)
(f) Risk weight applicable to the assets underlying the
securitization (e.g., 100%)

1

For risk-based capital purposes, the “face amount” of an available-for-sale security and a held-to-maturity security
is its amortized cost; the “face amount” of a trading security is its fair value.
2

For example, if the currently outstanding par value of the entire tranche is $100 and the currently outstanding par
value of the bank’s purchased subordinated security is $60, then the bank would enter 60% in (a).

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Balance Sheet Asset Categories (cont.)
(g) Risk-weighted asset amount of the bank’s purchased
subordinated security: enter (e) multiplied by (f)
(h) Capital charge for the risk-weighted asset amount of the bank’s
purchased subordinated security: enter (g) multiplied by 8%
(i) Check for applicability of the low-level exposure rule:
is (h) greater than (d), enter yes or no
If yes, the low-level exposure rule applies to the bank’s purchased subordinated security.
If no, the low-level exposure rule does not apply. Instead, the pro rata gross-up treatment
applies to the bank’s purchased subordinated security.
Reporting in Schedule RC-R When the Low-Level Exposure Rule Does Not Apply (Pro Rata Gross-Up
Treatment Applies):
If the bank’s purchased subordinated security is an available-for-sale security, the fair value of this
security is included on the Report of Condition balance sheet in Schedule RC, item 2.b, “Available-forsale securities,” and on the regulatory capital schedule in column A of Schedule RC-R, item 36,
“Available-for-sale securities.” Because available-for-sale securities are risk-weighted using their
amortized cost rather than their fair value, a gross unrealized loss on the bank’s security (i.e., fair value is
less than amortized cost) should be reported as a negative number in column B of Schedule RC-R,
item 36, “Available-for-sale securities”; a gross unrealized gain (i.e., fair value is greater than amortized
cost) should be reported as a positive number in column B of Schedule RC-R, item 36. In addition,
because the bank’s security is subject to the pro rata gross-up treatment for risk-based capital purposes,
the bank’s pro rata share of the more senior positions supported by its purchased subordinated security is
also subject to risk-weighting, which is the amount from line (c) in the low-level exposure rule calculation
above. Therefore, the bank must report the amount from line (c) as a negative number in column B of
Schedule RC-R, item 36, “Available-for-sale securities.” The bank must then report the sum of the face
amount of its purchased subordinated security and the pro rata share of the more senior positions
currently outstanding that are supported by the bank’s purchased subordinated security from line (e) in
the low-level exposure rule calculation above in the appropriate risk weight category column of item 36
(e.g., column F, “100%”) based on the risk weight applicable to the assets underlying the securitization
(from line (f) in the low-level exposure rule calculation above). This will ensure that the amount reported
in item 36, column A, for the bank’s available-for-sale purchased subordinated security equals the sum of
item 36, columns B through F.
If the bank’s purchased subordinated security is a held-to-maturity security, the amortized cost of this
security is included on the Report of Condition balance sheet in Schedule RC, item 2.a, “Held-to-maturity
securities,” and on the regulatory capital schedule in column A of Schedule RC-R, item 35, “Held-tomaturity securities.” A held-to-maturity security is risk-weighted using its amortized cost. Because the
bank’s security is subject to the pro rata gross-up treatment for risk-based capital purposes, the bank’s
pro rata share of the more senior positions supported by its purchased subordinated security is also
subject to risk-weighting, which is the amount from line (c) in the low-level exposure rule calculation
above. Therefore, the bank must report the amount from line (c) as a negative number in column B of
Schedule RC-R, item 35, “Held-to-maturity securities.” The bank must then report the sum of the face
amount of its purchased subordinated security and the pro rata share of the more senior positions
currently outstanding that are supported by the bank’s purchased subordinated security from line (e) in
the low-level exposure rule calculation above in the appropriate risk weight category column of item 35
(e.g., column F, “100%”) based on the risk weight applicable to the assets underlying the securitization
(from line (f) in the low-level exposure rule calculation above). This will ensure that the amount reported
in item 35, column A, for the bank’s available-for-sale purchased subordinated security equals the sum of
item 35, columns B through F.

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Balance Sheet Asset Categories (cont.)
If the bank’s purchased subordinated security is a trading security, the fair value of this security is
included on the Report of Condition balance sheet in Schedule RC, item 5, “Trading assets,” and on the
regulatory capital schedule in column A of Schedule RC-R, item 41, “Trading assets.” A trading security
is risk-weighted using its fair value if the bank is not subject to the market risk rule. Because the bank’s
security is subject to the pro rata gross-up treatment for risk-based capital purposes, the bank’s pro rata
share of the more senior positions supported by its purchased subordinated security is also subject to
risk-weighting, which is the amount from line (c) in the low-level exposure rule calculation above.
Therefore, the bank must report the amount from line (c) as a negative number in column B of
Schedule RC-R, item 41, “Trading assets.” The bank must then report the sum of the face amount of its
purchased subordinated security and the pro rata share of the more senior positions currently outstanding
that are supported by the bank’s purchased subordinated security from line (e) in the low-level exposure
rule calculation above in the appropriate risk weight category column of item 41 (e.g., column F, “100%”)
based on the risk weight applicable to the assets underlying the securitization (from line (f) in the low-level
exposure rule calculation above). This will ensure that the amount reported in item 41, column A, for the
bank’s available-for-sale purchased subordinated security equals the sum of item 41, columns B
through F.
Reporting in Schedule RC-R When the Low-Level Exposure Rule Applies:
When the low-level exposure rule applies to the bank’s investment in a purchased subordinated security,
a dollar-for-dollar capital charge applies to the security. Regardless of whether the security is categorized
as an available-for-sale security, a held-to-maturity security, or a trading security on the Report of
Condition balance sheet (Schedule RC), it will not be risk-weighted as an on-balance sheet asset in
Schedule RC-R. Instead, as discussed in the following paragraphs, the security will be risk weighted as
an off-balance sheet item and the face amount of the bank’s security must be reported in column A of
Schedule RC-R, item 50, “Recourse and direct credit substitutes (other than financial standby letters of
credit) subject to the low-level exposure rule and residual interests subject to a dollar-for-dollar capital
requirement.” The face amount of an available-for-sale security and a held-to-maturity security is its
amortized cost; the face amount of a trading security is its fair value.
If the bank’s purchased subordinated security is an available-for-sale security, the fair value of this
security is included on the Report of Condition balance sheet in Schedule RC, item 2.b, “Available-forsale securities,” and on the regulatory capital schedule in column A of Schedule RC-R, item 36,
“Available-for-sale securities.” Because the low-level exposure rule applies to the bank’s purchased
subordinated security and the security must be risk weighted as an off-balance sheet item, the fair value
of the security must first be reported as a positive number in column B of Schedule RC-R, item 36,
“Available-for-sale securities,” and no amount should be reported for this security in columns C through F
of item 36. This will ensure that the amount reported in item 36, column A, for the bank’s available-forsale purchased subordinated security equals the sum of item 36, columns B through F. Next, because
available-for-sale securities are risk-weighted using their amortized cost rather than their fair value, the
face amount (i.e., amortized cost) of the bank’s purchased subordinated security (from line (d) in the lowlevel exposure rule calculation above) must be reported in column A of Schedule RC-R, item 50. The
bank must then apply either the “direct reduction method” or the “gross-up method” described in the
instructions for item 50 in order to determine the credit equivalent amount of its purchased subordinated
security that should be reported in column B of item 50. This credit equivalent amount must also be
assigned to the 100 percent risk weight category (regardless of the risk weight that applies to the assets
underlying the securitization) and reported in Schedule RC-R, item 50, column F, “100%.”
If the bank’s purchased subordinated security is a held-to-maturity security, the amortized cost of this
security is included on the Report of Condition balance sheet in Schedule RC, item 2.a, “Held-to-maturity
securities,” and on the regulatory capital schedule in column A of Schedule RC-R, item 35, “Held-to-

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(3-11)

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Balance Sheet Asset Categories (cont.)
maturity securities.” Because the low-level exposure rule applies to the bank’s purchased subordinated
security and the security must be risk weighted as an off-balance sheet item, the amortized cost of the
security must first be reported as a positive number in column B of Schedule RC-R, item 35, “Held-tomaturity securities,” and no amount should be reported for this security in columns C through F of item 35.
This will ensure that the amount reported in item 35, column A, for the bank’s held-to-maturity purchased
subordinated security equals the sum of item 35, columns B through F. Next, because held-to-maturity
securities are risk-weighted using their amortized cost, the face amount (i.e., amortized cost) of the bank’s
purchased subordinated security (from line (d) in the low-level exposure rule calculation above) must be
reported in column A of Schedule RC-R, item 50. The bank must then apply either the “direct reduction
method” or the “gross-up method” described in the instructions for item 50 in order to determine the credit
equivalent amount of its purchased subordinated security that should be reported in column B of item 50.
This credit equivalent amount must also be assigned to the 100 percent risk weight category (regardless
of the risk weight that applies to the assets underlying the securitization) and reported in Schedule RC-R,
item 50, column F, “100%.”
If the bank’s purchased subordinated security is a trading security, the fair value of this security is
included on the Report of Condition balance sheet in Schedule RC, item 5, “Trading assets,” and on the
regulatory capital schedule in column A of Schedule RC-R, item 41, “Trading assets.” A trading security
is risk-weighted using its fair value if the bank is not subject to the market risk rule. Because the low-level
exposure rule applies to the bank’s purchased subordinated security and the security must be risk
weighted as an off-balance sheet item, the fair value of the security must first be reported as a positive
number in column B of Schedule RC-R, item 41, “Trading assets,” and no amount should be reported for
this security in columns C through F of item 41. This will ensure that the amount reported in item 41,
column A, for the bank’s trading purchased subordinated security equals the sum of item 41, columns B
through F. Next, because trading securities are risk-weighted using their fair value, the face amount (i.e.,
fair value) of the bank’s purchased subordinated security (from line (d) in the low-level exposure rule
calculation above) must be reported in column A of Schedule RC-R, item 50. It must then apply either the
“direct reduction method” or the “gross-up method” described in the instructions for item 50 in order to
determine the credit equivalent amount of its purchased subordinated security that should be reported in
column B of item 50. This credit equivalent amount must also be assigned to the 100 percent risk weight
category (regardless of the risk weight that applies to the assets underlying the securitization) and
reported in Schedule RC-R, item 50, column F, “100%.”
Treatment of Embedded Derivatives – If a bank has a hybrid contract containing an embedded derivative
that must be separated from the host contract and accounted for as a derivative instrument under
ASC Topic 815, Derivatives and Hedging (formerly FASB Statement No. 133, “Accounting for Derivative
Instruments and Hedging Activities,” as amended), then the host contract and embedded derivative should
be treated separately for risk-based capital purposes. When the fair value of the embedded derivative has
been reported as part of the bank's assets on Schedule RC – Balance Sheet, that fair value (whether
positive or negative) should be reported (as a positive or negative number) in column B of the corresponding
asset category item in Schedule RC-R (items 34 to 42). The host contract, if an asset, should be risk
weighted according to the obligor or, if relevant, the guarantor or the nature of the collateral.
Treatment of FDIC Loss-Sharing Agreements – Loss-sharing agreements entered into by the FDIC with
acquirers of assets from failed institutions are considered conditional guarantees for risk-based capital
purposes due to contractual conditions that acquirers must meet. The guaranteed portion of assets
subject to a loss-sharing agreement may be assigned a 20 percent risk weight. Because the structural
arrangements for these agreements vary depending on the specific terms of each agreement, institutions
should consult with their primary federal regulator to determine the appropriate risk-based capital
treatment for specific loss-sharing agreements.

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Balance Sheet Asset Categories (cont.)
Allocated Transfer Risk Reserve (ATRR) – If the reporting bank is required to establish and maintain an
ATRR as specified in Section 905(a) of the International Lending Supervision Act of 1983, the ATRR
should be reported in Schedule RC-R, item 61. The ATRR is not eligible for inclusion in either Tier 1 or
Tier 2 capital.
Any ATRR related to loans and leases held for investment is included on the balance sheet in
Schedule RC, item 4.c., "Allowance for loan and lease losses," and separately disclosed in
Schedule RI-B, part II, Memorandum item 1. However, if the bank must maintain an ATRR for any asset
other than a loan or lease held for investment, the balance sheet category for that asset should be
reported net of the ATRR on Schedule RC. In this situation, the ATRR should be reported as a negative
number (i.e., with a minus (-) sign) in column B, "Items Not Subject to Risk-Weighting," of the
corresponding asset category in Schedule RC-R, items 34 through 38, 41, and 42. The amount to be
risk-weighted for this asset in column C, D, E, or F, as appropriate, would be its net carrying value plus
the ATRR. For example, a bank has a held-to-maturity security issued by a foreign commercial company
against which it has established an ATRR of $20. The security, net of the ATRR, is included in
Schedule RC, item 2.a, "Held-to-maturity securities," at $80. The security should be included in
Schedule RC-R, item 35, column A, at $80. The bank should include $-20 in Schedule RC-R, item 35,
column B, and $100 in item 35, column F.
Item No.
34

Caption and Instructions
Cash and balances due from depository institutions. Report in column A the amount of
cash and balances due from depository institutions reported in Schedule RC, sum of
items 1.a and 1.b.
•

In column C–0% risk weight, include the amount of currency and coin reported in
Schedule RC, item 1.a; any balances due from Federal Reserve Banks reported in
Schedule RC, item 1.b; any balances due from central banks in other OECD countries
reported in Schedule RC, items 1.a and 1.b; and the insured portion of deposits in
FDIC-insured depository institutions reported in Schedule RC, items 1.a and 1.b.

•

In column F–100% risk weight, include balances due from non-OECD depository
institutions with remaining maturities of over one year, all non-local currency claims on
non-OECD central banks, and local currency claims on non-OECD central banks that
exceed the local currency liability held by the bank.

•

In column D–20% risk weight, include all other amounts that are not reported in
column C or F.

If the reporting bank is the correspondent bank in a pass-through reserve balance
relationship, report in column C the amount of its own reserves as well as those reserve
balances actually passed through to a Federal Reserve Bank on behalf of its respondent
depository institutions.
If the reporting bank is the respondent bank in a pass-through reserve balance relationship,
report in column C the amount of the bank's reserve balances due from its correspondent
bank that its correspondent has actually passed through to a Federal Reserve Bank on the
reporting bank's behalf, i.e., for purposes of this item, treat these balances as balances due
from a Federal Reserve Bank. This treatment differs from that required in Schedule RC-A,
item 2, "Balances due from depository institutions in the U.S.," which treats pass-through
reserve balances held by a bank's correspondent as balances due from a depository
institution as opposed to balances due from the Federal Reserve.
If the reporting bank is a participant in an excess balance account at a Federal Reserve
Bank, report in column C the bank’s balance in this account.

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RC-R-19
(3-13)

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FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

34
(cont.)

If the reporting bank accounts for any holdings of certificates of deposit (CDs) like availablefor-sale debt securities, report in column A the fair value of such CDs and include in column B
the difference between the fair value and amortized cost of these CDs. When fair value
exceeds amortized cost, report the difference as a positive number in column B. When
amortized cost exceeds fair value, report the difference as a negative number (i.e., with a
minus (-) sign) in column B. Risk weight the amortized cost of these CDs in columns C, D,
or F, as appropriate

35

Held-to-maturity securities. Report in column A the amortized cost of held-to-maturity
(HTM) securities reported in Schedule RC, item 2.a.
•

In column B, include as a negative number the amortized cost of those mortgage-backed
securities, asset-backed securities, and structured financial products reported in
Schedule RC-B, item 4.a.(3), column A, "Other [residential mortgage] pass-through
securities"; item 4.b.(2), column A, Other residential mortgage-backed securities
"Collateralized by MBS issued or guaranteed by U.S. Government agencies or sponsored
agencies"; item 4.b.(3), column A, "All other residential MBS"; item 4.c.(1)(b), column A,
“Other [commercial mortgage] pass-through securities”; item 4.c.(2)(b), column A, “All
other commercial MBS”; item 5.a, column A, "Asset-backed securities"; and items 5.b.(1)
through (3), column A, “Structured financial products,” that are rated one category below
investment grade, e.g., BB, and to which the bank applies the ratings-based approach.

•

In column C–0% risk weight, include the amounts reported in Schedule RC-B, column A,
for item 1, "U.S. Treasury securities," item 2.a, Securities "Issued by U.S. Government
agencies," and item 4.a.(1), Residential mortgage pass-through securities "Guaranteed
by GNMA.” Also include the portions of Schedule RC-B, item 4.b.(1), column A, Other
residential mortgage-backed securities "Issued or guaranteed by U.S. Government
agencies or sponsored agencies," and items 4.c.(1)(a) and (2)(a), column A, “Commercial
MBS,” that represent the amortized cost of GNMA securities.

•

In column D–20% risk weight, include the amounts reported in Schedule RC-B,
column A, for item 2.b, Securities "Issued by U.S. Government-sponsored agencies," and
item 4.a.(2), Residential mortgage pass-through securities "Issued by FNMA and
FHLMC." Include the portion of Schedule RC-B, item 3, column A, "Securities issued by
states and political subdivisions in the U.S.," that represents the amortized cost of
general obligation securities, and the portions of Schedule RC-B, item 4.b.(1), column A,
Other residential mortgage-backed securities "Issued or guaranteed by U.S. Government
agencies or sponsored agencies," and items 4.c.(1)(a) and (2)(a), column A, “Commercial
MBS,” that represent the amortized cost of FHLMC and FNMA securities (excluding
principal-only strips, which must be assigned a 100 percent risk weight). Also include the
portion of Schedule RC-B, item 4.b.(2), column A, Other residential mortgage-backed
securities "Collateralized by MBS issued or guaranteed by U.S. Government agencies or
sponsored agencies," that represents the amortized cost of senior interests in such
securities (excluding principal-only strips, which must be assigned a 100 percent risk
weight). Also include the portions of Schedule RC-B, item 4.a.(3), column A, "Other
[residential mortgage] pass-through securities," item 4.b.(2), column A, Other residential
mortgage-backed securities "Collateralized by MBS issued or guaranteed by U.S.
Government agencies or sponsored agencies," item 4.b.(3), column A, "All other
residential MBS"; item 4.c.(1)(b), column A, “Other [commercial mortgage] pass-through
securities”; item 4.c.(2)(b), column A, “All other commercial MBS”; item 5.a, column A,
"Asset-backed securities"; and items 5.b.(1) through (3), column A, “Structured financial
products,” that represents the amortized cost of securities that are rated in the highest or
second highest investment grade, e.g., AAA or AA, in the case of long-term ratings, or in
the highest rating category, e.g., A-1 or P-1, in the case of short-term ratings (excluding
principal-only strips, which must be assigned a 100 percent risk weight).

FFIEC 031 and 041

RC-R-20
(3-13)

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FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

35
(cont.)

•

In column E–50% risk weight, include the portion of Schedule RC-B, item 3, column A,
"Securities issued by states and political subdivisions in the U.S.," that represents the
amortized cost of revenue obligation securities. Also include the portions of
Schedule RC-B, item 4.a.(3), column A, "Other [residential mortgage] pass-through
securities"; item 4.b.(2), column A, Other residential mortgage-backed securities
"Collateralized by MBS issued or guaranteed by U.S. Government agencies or sponsored
agencies," item 4.b.(3), column A, "All other residential MBS"; item 4.c.(1)(b), column A,
“Other [commercial mortgage] pass-through securities”; item 4.c.(2)(b), column A, “All
other commercial MBS”; item 5.a, column A, "Asset-backed securities"; and items 5.b.(1)
through (3), column A, “Structured financial products,” that represents the amortized cost
of securities that are rated in the third highest investment grade, e.g., A, in the case of
long-term ratings, or in the second highest rating category, e.g., A-2 or P-2, in the case of
short-term ratings (excluding principal-only strips, which must be assigned a 100 percent
risk weight).

•

In column F–100% risk weight, include the amortized cost of all other HTM securities
reported in Schedule RC, item 2.a, that are not included in columns C through E.
However, for those mortgage-backed securities, asset-backed securities, and structured
financial products reported in Schedule RC-B, item 4.a.(3), column A, "Other [residential
mortgage] pass-through securities"; item 4.b.(2), column A, Other residential mortgagebacked securities "Collateralized by MBS issued or guaranteed by U.S. Government
agencies or sponsored agencies"; item 4.b.(3), column A, "All other residential MBS";
item 4.c.(1)(b), column A, “Other [commercial mortgage] pass-through securities”;
item 4.c.(2)(b), column A, “All other commercial MBS”; item 5.a, column A, "Asset-backed
securities"; and items 5.b.(1) through (3), column A, “Structured financial products,” that
are rated one category below investment grade, e.g., BB, and to which the bank applies
the ratings-based approach, include in column F the amortized cost of these securities
multiplied by 2.

36

Available-for-sale securities. Report in column A the fair value of available-for-sale (AFS)
securities reported in Schedule RC, item 2.b. For regulatory capital purposes, however, AFS
debt securities are risk weighted at their amortized cost. In addition, when AFS equity
securities with readily determinable fair values have a net unrealized loss, they are risk
weighted at their fair value. When such equity securities have a net unrealized gain, they are
risk weighted at their historical cost plus the portion of the unrealized gain (up to 45 percent)
included in Tier 2 capital. This unrealized gain is reported in Schedule RC-R, item 15.
•

In column B, include the difference between the fair value and amortized cost of AFS
debt securities. This difference equals Schedule RC-B, items 1 through 6, column D,
minus items 1 through 6, column C. When fair value exceeds cost, report the difference
as a positive number in Schedule RC-R, item 36, column B. When cost exceeds fair
value, report the difference as a negative number (i.e., with a minus (-) sign) in
Schedule RC-R, item 36, column B. If AFS equity securities with readily determinable fair
values have a net unrealized gain (i.e., Schedule RC-B, item 7, column D, exceeds
item 7, column C), the portion of the net unrealized gain (55 percent or more) not
included in Tier 2 capital should be included in Schedule RC-R, item 36, column B. The
portion that is not included in Tier 2 capital equals Schedule RC-B, item 7, column D
minus column C, minus Schedule RC-R, item 15.

•

Also include in column B as a negative number the amortized cost of those mortgagebacked securities, asset-backed securities, and structured financial products reported in
Schedule RC-B, item 4.a.(3), column C, "Other [residential mortgage] pass-through
securities"; item 4.b.(2), column C, Other residential mortgage-backed securities

FFIEC 031 and 041

RC-R-20a
(6-12)

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FFIEC 031 and 041

Item No.

RC-R – REGULATORY CAPITAL

Caption and Instructions

36
(cont.)

"Collateralized by MBS issued or guaranteed by U.S. Government agencies or sponsored
agencies"; item 4.b.(3), column C, "All other residential MBS"; item 4.c.(1)(b), column C,
“Other [commercial mortgage] pass-through securities”; item 4.c.(2)(b), column C, “All
other commercial MBS”; item 5.a, column C, "Asset-backed securities"; and items 5.b.(1)
through (3), column C, “Structured financial products,” that are rated one category below
investment grade, e.g., BB, and to which the bank applies the ratings-based approach.
•

In column C–0% risk weight, include the amounts reported in Schedule RC-B, column C,
for item 1, "U.S. Treasury securities," item 2.a, Securities "Issued by U.S. Government
agencies," and item 4.a.(1), Residential mortgage pass-through securities "Guaranteed
by GNMA. Also include the portions of Schedule RC-B, item 4.b.(1), column C, Other
residential mortgage-backed securities "Issued or guaranteed by U.S. Government
agencies or sponsored agencies," and items 4.c.(1)(a) and (2)(a), column C,
“Commercial MBS,” that represent the amortized cost of GNMA securities.

•

In column D–20% risk weight, include the amounts reported in Schedule RC-B, column C,
for item 2.b, Securities "Issued by U.S. Government-sponsored agencies," and
item 4.a.(2), Residential mortgage pass-through securities "Issued by FNMA and FHLMC."
Include the portion of Schedule RC-B, item 3, column C, "Securities issued by states and
political subdivisions in the U.S.," that represents the amortized cost of general obligation
securities, and the portions of Schedule RC-B, item 4.b.(1), column C, Other residential
mortgage-backed securities "Issued or guaranteed by U.S. Government agencies or
sponsored agencies," and items 4.c.(1)(a) and (2)(a), column C, “Commercial MBS,” that
represent the amortized cost of FHLMC and FNMA securities (excluding interest-only strips
that are not credit-enhancing and principal-only strips, which must be assigned a 100
percent risk weight). Also include the portion of Schedule RC-B, item 4.b.(2), column C,
Other residential mortgage-backed securities "Collateralized by MBS issued or guaranteed
by U.S. Government agencies or sponsored agencies," that represents the amortized cost
of senior interests in such securities (excluding interest-only strips that are not creditenhancing and principal-only strips, which must be assigned a 100 percent risk weight).
Also include the portions of Schedule RC-B, item 4.a.(3), column C, "Other [residential
mortgage] pass-through securities"; item 4.b.(2), column C, Other residential mortgagebacked securities "Collateralized by MBS issued or guaranteed by U.S. Government
agencies or sponsored agencies"; item 4.b.(3), column C, "All other residential MBS";
item 4.c.(1)(b), column C, “Other [commercial mortgage] pass-through securities”;
item 4.c.(2)(b), column C, “All other commercial MBS”; item 5.a, column C, "Asset-backed
securities"; and items 5.b.(1) through (3), column C, “Structured financial products,” that
represents the amortized cost of securities that are rated in the highest or second highest
investment grade, e.g., AAA or AA, in the case of long-term ratings, or in the highest rating
category, e.g., A-1 or P-1, in the case of short-term ratings (excluding interest-only strips
that are not credit-enhancing and principal-only strips, which must be assigned a
100 percent risk weight).

•

In column E–50% risk weight, include the portion of Schedule RC-B, item 3, column C,
"Securities issued by states and political subdivisions in the U.S.," that represents the
amortized cost of revenue obligation securities. Also include the portions of
Schedule RC-B, item 4.a.(3), column C, "Other [residential mortgage] pass-through
securities"; item 4.b.(2), column C, Other residential mortgage-backed securities
"Collateralized by MBS issued or guaranteed by U.S. Government agencies or sponsored
agencies," item 4.b.(3), column C, "All other residential MBS"; item 4.c.(1)(b), column C,
“Other [commercial mortgage] pass-through securities”; item 4.c.(2)(b), column C, “All
other commercial MBS”; item 5.a, column C, "Asset-backed securities"; and items 5.b.(1)
through (3), column C, “Structured financial products,” that represents the amortized cost

FFIEC 031 and 041

RC-R-20b
(6-12)

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FFIEC 031 and 041

Item No.

RC-R – REGULATORY CAPITAL

Caption and Instructions

36
(cont.)

of securities that are rated in the third highest investment grade, e.g., A, in the case of
long-term ratings, or in the second highest rating category, e.g., A-2 or P-2, in the case of
short-term ratings (excluding interest-only strips that are not credit-enhancing and
principal-only strips, which must be assigned a 100 percent risk weight).
•

In column F–100% risk weight, include the amortized cost of all other AFS debt securities
reported in Schedule RC-B, column C, that are not included in columns B through E.
However, for those mortgage-backed securities, asset-backed securities, and structured
financial products reported in Schedule RC-B, item 4.a.(3), column C, "Other [residential
mortgage] pass-through securities"; item 4.b.(2), column C, Other residential mortgagebacked securities "Collateralized by MBS issued or guaranteed by U.S. Government
agencies or sponsored agencies"; item 4.b.(3), column C, "All other residential MBS";
item 4.c.(1)(b), column C, “Other [commercial mortgage] pass-through securities”;
item 4.c.(2)(b), column C, “All other commercial MBS”; item 5.a, column C, "Asset-backed
securities"; and items 5.b.(1) through (3), column C, “Structured financial products,” that
are rated one category below investment grade, e.g., BB, and to which the bank applies
the ratings-based approach, include in column F the amortized cost of these securities
multiplied by 2.
In addition, for AFS equity securities with readily determinable fair values reported in
Schedule RC-B, item 7, include the fair value of these equity securities (as reported in
Schedule RC-B, item 7, column D) if they have a net unrealized loss. If these equity
securities have a net unrealized gain, include their historical cost (as reported in
Schedule RC-B, item 7, column C) plus the portion of the unrealized gain (up to
45 percent) included in Tier 2 capital (as reported in Schedule RC-R, item 15).
(NOTE: Certain investments in mutual funds reported in Schedule RC-B, item 7, may
qualify for less than a 100 percent risk weight. For further information, refer to the riskbased capital standards of the bank's primary federal supervisory authority.)

37

38

Federal funds sold and securities purchased under agreements to resell. Report in
column A the amount of federal funds sold and securities purchased under agreements to
resell reported in Schedule RC, sum of items 3.a and 3.b.
•

In column C–0% risk weight, include the portion of Schedule RC, item 3, that is directly
and unconditionally guaranteed by U.S. Government agencies or OECD central
governments.

•

In column F–100% risk weight, include claims on nondepository institution counterparties
that lack qualifying collateral (refer to the risk based capital guidelines for specific criteria)
and claims on non-OECD depository institutions with maturities of over one year

•

In column D–20% risk weight, include the amount of federal funds sold and securities
resale agreements reported in Schedule RC, item 3, that are not included in columns C
and F.

Loans and leases held for sale. Report in column A the carrying value of loans and leases
held for sale (HFS) reported in Schedule RC, item 4.a.
•

FFIEC 031 and 041

In column C–0% risk weight, include the carrying value of the guaranteed portion of HFS
SBA loans purchased in the secondary market that are included in Schedule RC-C,
part I, items 3, "Loans to finance agricultural production and other loans to farmers,"
and 4, "Commercial and industrial loans."

RC-R-21
(9-11)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

Item No.
38

39

RC-R – REGULATORY CAPITAL

Caption and Instructions

•

In column D–20% risk weight, include the carrying value of HFS loans to and
acceptances of other depository institutions that are reported in Schedule RC-C, part I,
item 2, (excluding the carrying value of any long-term claims on non-OECD banks that
are HFS), plus the carrying value of the guaranteed portion of HFS FHA and VA
mortgage loans included in Schedule RC-C, part I, item 1.c.(2)(a), the carrying value of
the guaranteed portion of HFS SBA loans originated and held by the reporting bank
included in Schedule RC-C, part I, items 3 and 4, and the carrying value of the portion of
HFS student loans reinsured by the U.S. Department of Education included in
Schedule RC-C, part I, item 6.d, "Other consumer loans."

•

In column E–50% risk weight, include the carrying value of HFS loans secured by 1-4
family residential properties and by multifamily residential properties included in
Schedule RC-C, part I, items 1.c.(2)(a) and 1.d, respectively, that are prudently
underwritten, are fully secured by first liens on 1-4 family or multifamily residential
properties, are not 90 days or more past due or in nonaccrual status, and meet other
requirements specified in the risk-based capital guidelines.

•

In column F–100% risk weight, include the carrying value of HFS loans reported in
Schedule RC, item 4.a, that is not included in columns B through E.

Loans and leases, net of unearned income. Report in column A the amount of loans and
leases, net of unearned income, reported in Schedule RC, item 4.b.
•

In column C–0% risk weight, include the carrying value of the guaranteed portion of SBA
loans purchased in the secondary market that are included in Schedule RC-C, part I,
items 3, "Loans to finance agricultural production and other loans to farmers," and 4,
"Commercial and industrial loans."

•

In column D–20% risk weight, include the carrying value of loans to and acceptances of
other depository institutions that are reported in Schedule RC-C, part I, item 2, (excluding
the carrying value of any long-term claims on non-OECD banks), plus the carrying value
of the guaranteed portion of FHA and VA mortgage loans included in Schedule RC-C,
part I, item 1.c.(2)(a), the carrying value of the guaranteed portion of SBA loans
originated and held by the reporting bank included in Schedule RC-C, part I, items 3 and
4, and the carrying value of the portion of student loans reinsured by the U.S. Department
of Education included in Schedule RC-C, part I, item 6.d, "Other consumer loans."

•

In column E–50% risk weight, include the carrying value of loans secured by 1-4 family
residential properties and by multifamily residential properties included in
Schedule RC-C, part I, items 1.c.(2)(a) and 1.d, respectively, that are prudently
underwritten, are fully secured by first liens on 1-4 family or multifamily residential
properties, are not 90 days or more past due or in nonaccrual status, and meet other
requirements specified in the risk-based capital guidelines.

•

In column F–100% risk weight, include the carrying value of loans reported in
Schedule RC, item 4.b, that is not included in columns B through E.

40

LESS: Allowance for loan and lease losses. Report in columns A and B the balance of
the allowance for loan and lease losses reported in Schedule RC, item 4.c.

41

Trading assets. Report in column A the fair value of trading assets reported in
Schedule RC, item 5.

FFIEC 031 and 041

RC-R-22
(9-11)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

41
(cont.)

If the bank is subject to the market risk capital requirement, also include the fair value of all
trading assets reported in Schedule RC, item 5, in column B. The bank will report its market
risk equivalent assets in Schedule RC-R, item 58.
For banks not subject to the market risk capital requirement:
•

In column B, if the bank completes Schedule RC-D, include the fair value of derivative
contracts that are reported as assets in Schedule RC-D, item 11 (column A on the
FFIEC 031). If the bank does not complete Schedule RC-D, include the portion of the
amount reported in Schedule RC, item 5, that represents the fair value of derivative
contracts that are assets.
Also include in column B as a negative number the fair value of those mortgage-backed
securities, asset-backed securities, and structured financial products reported in
Schedule RC-D, item 4, "Mortgage-backed securities," (column A on the FFIEC 031), and
item 5, "Other debt securities," (column A on the FFIEC 031), that are rated one category
below investment grade, e.g., BB, and to which the bank applies the ratings-based
approach. If the bank does not complete Schedule RC-D, include the portion of the
amount reported in Schedule RC, item 5, that represents the fair value of mortgagebacked securities, asset-backed securities, and structured financial products that are
rated one category below investment grade, e.g., BB, and to which the bank applies the
ratings-based approach.

•

In column C–0% risk weight, if the bank completes Schedule RC-D, include amount
reported in Schedule RC-D, item 1, "U.S. Treasury securities," (column A on the
FFIEC 031); the portion of the amount reported in Schedule RC-D, item 2, (column A on
the FFIEC 031) that represents the fair value of securities issued by U.S. Government
agencies; and the portion of the amounts reported in Schedule RC-D, item 4, (column A
on the FFIEC 031) that represents the fair value of mortgage-backed securities
guaranteed by GNMA. If the bank does not complete Schedule RC-D, include the portion
of the amount reported in Schedule RC, item 5, that represents the fair value of these
types of securities.

•

In column D–20% risk weight, if the bank completes Schedule RC-D, include the portion
of the amount reported in Schedule RC-D, item 2, (column A on the FFIEC 031) that
represents the fair value of securities issued by U.S. Government-sponsored agencies;
the portion of the amount reported in Schedule RC-D, item 3, (column A on the
FFIEC 031) that represents the fair value of general obligations issued by states and
political subdivisions in the U.S.; the portion of the amount reported in Schedule RC-D,
item 4, (column A on the FFIEC 031) that represents the fair value of mortgage-backed
securities issued by FNMA and FHLMC (excluding interest-only strips that are not creditenhancing and principal-only strips, which must be assigned a 100 percent risk weight);
and the portion of the amount reported in Schedule RC-D, item 9, "Other trading assets,"
(column A on the FFIEC 031) that represents the fair value of certificates of deposit and
bankers acceptances (excluding the fair of any long-term claims on non-OECD banks).
Also include the fair value of those mortgage-backed securities, asset-backed securities,
and structured financial products reported in Schedule RC-D, item 4, "Mortgage-backed
securities," (column A on the FFIEC 031), and item 5, "Other debt securities," (column A
on the FFIEC 031), that are rated in the highest or second highest investment grade, e.g.,
AAA or AA, in the case of long-term ratings, or in the highest rating category, e.g., A-1 or
P-1, in the case of short-term ratings (excluding interest-only strips that are not creditenhancing and principal-only strips, which must be assigned a 100 percent risk weight).
If the bank does not complete Schedule RC-D, include the portion of the amount reported
in Schedule RC, item 5, that represents the fair value of these types of trading assets.

FFIEC 031 and 041

RC-R-22a
(6-12)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

41
(cont.)

•

In column E–50% risk weight, if the bank completes Schedule RC-D, include the portion
of the amount reported in RC-D, item 3, (column A on the FFIEC 031) that represents the
fair value of revenue obligations issued by states and political subdivisions in the U.S.
Also include the fair value of those mortgage-backed securities, asset-backed securities,
and structured financial products reported in Schedule RC-D, item 4, "Mortgage-backed
securities," (column A on the FFIEC 031), and item 5, "Other debt securities," (column A
on the FFIEC 031), that are rated in the third highest investment grade category, e.g., A,
in the case of long-term ratings, or in the second highest rating category, e.g. A-2 or P-2,
in the case of short-term ratings (excluding interest-only strips that are not creditenhancing and principal-only strips, which must be assigned a 100 percent risk weight).
If the bank does not complete Schedule RC-D, include the portion of the amount reported
in Schedule RC, item 5, that represents the fair value of these types of securities.

•

In column F–100% risk weight, include the fair value of trading assets reported in
Schedule RC, item 5, that is not included in columns B through E. However, for those
mortgage-backed securities, asset-backed securities, and structured financial products
reported in Schedule RC, item 5, that are rated one category below investment grade,
e.g., BB, and to which the bank applies the ratings-based approach, include in column F
the fair value of these securities multiplied by 2.

42

All other assets. Report in column A the sum of the amounts reported in Schedule RC,
item 6, "Premises and fixed assets”; item 7, "Other real estate owned”; item 8, "Investments
in unconsolidated subsidiaries and associated companies”; item 9, “Direct and indirect
investments in real estate ventures”; item 10.a, "Goodwill"; item 10.b, "Other intangible
assets;" and item 11, "Other assets."
The carrying value of any bank-owned general account insurance product included in
Schedule RC, item 11, should be risk weighted 100 percent. If the bank owns a separate
account insurance product that qualifies for the "look-through" approach, the qualifying
portion of the carrying value of this product included in Schedule RC, item 11, may be eligible
for a risk weight less than 100 percent, but in no case less than 20 percent. Any general
account and stable value protection (SVP) portions of the carrying value of a separate
account insurance product should be risk weighted at the risk weights applicable to claims on
the insurer (100 percent) and the SVP provider (100 percent or, if appropriate, 20 percent),
respectively. A separate account insurance product that does not qualify for the
"look-through" approach should receive a 100 percent risk weight. For further information,
see the Interagency Statement on the Purchase and Risk Management of Life Insurance,
issued December 7, 2004.
If the reporting institution sponsors a single-employer defined benefit postretirement plan,
such as a pension plan or health care plan, accounted for in accordance with ASC
Subtopic 715-20, Compensation-Retirement Benefits – Defined Benefit Plans-General
(formerly FASB Statement No. 158, “Employers’ Accounting for Defined Benefit Pension and
Other Postretirement Plans” (FAS 158)), the institution should adjust the asset amount
reported in column A of this item for any amounts included in Schedule RC, item 26.b,
“Accumulated other comprehensive income” (AOCI), affecting assets as a result of the initial
and subsequent application of the funded status and measurement date provisions of ASC
Subtopic 715-20. The adjustment also should take into account subsequent amortization of
these amounts from AOCI into earnings. The intent of the adjustment reported in this item
(together with the amount reported in Schedule RC-R, item 4) is to reverse the effects on
AOCI of applying ASC Subtopic 715-20 for regulatory capital purposes. Specifically, assets
recognized or derecognized as an adjustment to AOCI as part of the incremental effect of

FFIEC 031 and 041

RC-R-22b
(6-12)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

42
(cont.)

applying ASC Subtopic 715-20 should be reported as an adjustment to assets in column B of
this item. For example, the derecognition of an asset recorded as an offset to AOCI as part
of the initial incremental effect of applying ASC Subtopic 715-20 should be reported in this
item as a negative amount in column B and as a positive amount in column F. As another
example, the portion of a benefit plan surplus asset that is included in Schedule RC,
item 26.b, as an increase to AOCI and in column A of this item should be excluded from
risk-weighted assets by reporting the amount as a positive number in column B of this item.
•

In column B, include the amount of any disallowed goodwill and other intangible assets
reported in Schedule RC-R, item 7.a; disallowed servicing assets and purchased credit
card relationships reported in Schedule RC-R, item 9.a; disallowed deferred tax assets
reported in Schedule RC-R, item 9.b; all credit-enhancing interest-only strips reported in
Schedule RC, item 11; all residual interests (as defined in the instructions for
Schedule RC-R, item 50) not eligible for the ratings-based approach; the fair value of
derivative contracts that are reported as assets in Schedule RC, item 11; and the carrying
value of other assets reported in Schedule RC, item 11, that act as credit enhancements
for those recourse transactions that must be reported in Schedule RC-R, items 49
and 51. Also include the amount of the bank’s investments in unconsolidated banking
and finance subsidiaries that are reported in Schedule RC, item 8, and are deducted for
risk-based capital purposes in Schedule RC-R, item 20.
If the bank has residual interests in asset securitizations that are eligible for the ratingsbased approach, report the difference between these residuals' fair value carrying
amount and their amortized cost in column B as a positive number if fair value exceeds
cost and as a negative number (i.e., with a minus (-) sign) if cost exceeds fair value.
Also, include in column B as a negative number the amortized cost of any residual
interests in asset securitizations (other than credit-enhancing interest-only strips)
included in Schedule RC, item 11, that are rated one category below investment grade,
e.g., BB.

•

In column C–0% risk weight, include the carrying value of Federal Reserve Bank stock
included in Schedule RC-F, item 4; accrued interest receivable on assets included in the
zero percent risk weight category (column C of Schedule RC-R, items 34 through 41);
prepaid deposit insurance assessments included in Schedule RC-F, item 6; and the
carrying value of gold bullion not held for trading that is held in the bank's own vault or in
another bank's vault on an allocated basis.

•

In column D–20% risk weight, include the carrying value of Federal Home Loan Bank
stock included in Schedule RC-F, item 4; accrued interest receivable on assets included
in the 20 percent risk weight category (column D of Schedule RC-R, items 34
through 41); and the portion of customers' acceptance liability reported in Schedule RC,
item 11, that has been participated to other depository institutions. Also include the
amortized cost of residual interests in asset securitizations (other than credit-enhancing
interest-only strips) included in Schedule RC, item 11, that are rated in the highest or
second highest investment grade, e.g., AAA or AA, in the case of long-term ratings, or in
the highest rating category, e.g., A-1 or P-1, in the case of short-term ratings.

•

In column E–50% risk weight, include accrued interest receivable on assets included in
the 50 percent risk weight category (column E of Schedule RC-R, items 34 through 41).
Also include the amortized cost of residual interests in asset securitizations (other than
credit-enhancing interest-only strips) included in Schedule RC, item 11, that are rated in
the third highest investment grade, e.g., A, in the case of long-term ratings, or in the
second highest rating category, e.g., A-2 or P-2, in the case of short-term ratings.

FFIEC 031 and 041

RC-R-22c
(6-12)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

Item No.

RC-R – REGULATORY CAPITAL

Caption and Instructions

42

•

43

Total assets. For columns A through F, report the sum of items 34 through 42. The sum of
columns B through F must equal column A.

FFIEC 031 and 041

In column F–100% risk weight, include the amount of all other assets reported in
column A that is not included in columns B through E. However, for residual interests in
asset securitizations (other than credit-enhancing interest-only strips) included in
Schedule RC, item 11, include the amortized cost of those that are rated in the lowest
investment grade category, e.g., BBB, and the amortized cost multiplied by 2 of those
that are rated one category below investment grade, e.g., BB.

RC-R-22d
(6-12)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Derivatives and Off-Balance Sheet Items
Banks should refer to the supervisory guidance issued by their primary federal supervisory authority for
information on how they should treat credit derivatives for risk-based capital purposes and, as a
consequence, for purposes of completing the section of Schedule RC-R for derivatives and off-balance
sheet items.
Treatment of Liquidity Facilities for Asset-Backed Commercial Paper Programs – Banks that provide
liquidity facilities to asset-backed commercial paper (ABCP) programs, whether or not they are the
program sponsor, must report these facilities in the following manner in Schedule RC-R (unless the
1
bank is a sponsor and consolidates the sponsored ABCP program assets onto its balance sheet).
The full amount of the unused portion of an eligible liquidity facility with an original maturity exceeding
one year should be reported in item 53.a, column A. The full amount of the unused portion of an eligible
liquidity facility with an original maturity of one year or less should be reported in item 53.b, column A.
For ineligible liquidity facilities (both direct credit substitutes and recourse obligations), banks should
report the full amount of the unused portion of the facility in Schedule RC-R, item 51, column A.
Item No.
44

Caption and Instructions
Financial standby letters of credit. For financial standby letters of credit reported in
Schedule RC-L, item 2, that act as credit enhancements for asset-backed or mortgagebacked securities and to which the ratings-based approach applies, report in column A:
(1) the amount outstanding and unused of those letters of credit subject to a risk weight of
100% or less and
(2) two times the amount outstanding and unused of those letters of credit subject to a
200% risk weight.
For these financial standby letters of credit, report in column B 100% of the amount reported
in column A.
For all other financial standby letters of credit reported in Schedule RC-L, item 2, report in
column A:
(1) the amount outstanding and unused of those letters of credit for which this amount is less
than the effective risk-based capital requirement for the assets that are credit-enhanced
by the letter of credit. These financial standby letters of credit are subject to the low-level
exposure rule. For these financial standby letters of credit, report as the credit equivalent
amount in column B their amount outstanding and unused multiplied by either 12.5 or by
the institution-specific factor determined in the manner described in the instructions for
Schedule RC-R, item 50.
(2) the full amount of the assets that are credit-enhanced by those letters of credit that are
not subject to the low-level exposure rule. For these financial standby letters of credit,
report in column B 100% of the amount reported in column A.
•

In column D–20% risk weight, include the credit equivalent amount of the portion of
financial standby letters of credit reported in Schedule RC-L, item 2, that has been

1

For further guidance on eligible and ineligible liquidity facilities, banks should refer to the “Interagency Guidance
on the Eligibility of Asset-Backed Commercial Paper Liquidity Facilities and the Resulting Risk-Based Capital
Treatment“ issued August 4, 2005 (FDIC Financial Institution Letter 74-2005, Federal Reserve Supervision and
Regulation Letter 05-13, and OCC Bulletin 2005-26).

FFIEC 031 and 041

RC-R-22e
(6-12)

RC-R – REGULATORY CAPITAL

This page intentionally left blank.

FFIEC 031 and 041

Item No.

Caption and Instructions
conveyed to U.S. and other OECD depository institutions (and to non-OECD depository
institutions for letters of credit with remaining maturities of one year or less). Also include
in column D the credit equivalent amount of financial standby letters of credit to which the
ratings-based approach applies that are rated in the highest or second highest
investment grade category, e.g., AAA or AA, in the case of long-term ratings, or in the
highest rating category, e.g., A-1 or P-1, in the case of short-term ratings.

44
(cont.)

45

46

47

RC-R – REGULATORY CAPITAL

•

In column E–50% risk weight, include the credit equivalent amount of financial standby
letters of credit to which the ratings-based approach applies that are rated in the third
highest investment grade category, e.g., A, in the case of long-term ratings, or in the
second highest rating category, e.g., A-2 or P-2, in the case of short-term ratings.

•

In column F–100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through E.

Performance standby letters of credit. Report in column A the face amount of
performance standby letters of credit reported in Schedule RC-L, item 3.
•

In column B, report 50 percent of the face amount reported in column A.

•

In column D–20% risk weight, include the credit equivalent amount of the portion of
performance standby letters of credit reported in Schedule RC-L, item 3, that has been
conveyed to U.S. and other OECD depository institutions (and to non-OECD depository
institutions for letters of credit with remaining maturities of one year or less).

•

In column F–100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through E.

Commercial and similar letters of credit. Report in column A the face amount of
commercial and similar letters of credit reported in Schedule RC-L, item 4.
•

In column B, report 20 percent of the face amount reported in column A.

•

In column F–100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through E.

Risk participations in bankers acceptances acquired by the reporting institution.
Report in column A the face amount of risk participations in bankers acceptances that have
been acquired by the reporting institution and are outstanding.
•

In column B, report 100 percent of the face amount reported in column A.

•

In column D–20% risk weight, include the credit equivalent amount of the portion of
risk participations in bankers acceptances that the reporting bank has acquired and
subsequently conveyed to U.S. and other OECD depository institutions (and to
non-OECD depository institutions for bankers acceptances with remaining maturities
of one year or less).

•

In column F–100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C and D.

FFIEC 031 and 041

RC-R-23
(9-11)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

Item No.
48

RC-R – REGULATORY CAPITAL

Caption and Instructions
Securities lent. Report in column A the amount of securities lent reported in Schedule RC-L,
item 6.
•

In column B, report 100 percent of the face amount reported in column A.

•

In column C–0% risk weight, include the credit equivalent amount of securities lent that is
supported by the appropriate amount of collateral that qualifies for the zero percent risk
weight under the risk based capital guidelines of the reporting bank’s primary federal
supervisory authority (refer to these guidelines for the specific qualifying criteria).

•

In column D–20% risk weight, include the credit equivalent amount of securities lent that
is supported by the appropriate amount of collateral that qualifies for the 20 percent risk
weight under the risk based capital guidelines of the reporting bank’s primary federal
supervisory authority (refer to these guidelines for specific qualifying criteria). Also
include the credit equivalent amount of securities lent that represents claims on U.S. and
other OECD depository institutions (and claims on non-OECD depository institutions for
securities lent with remaining maturities of one year or less).

FFIEC 031 and 041

RC-R-24
(9-11)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

48
(cont.)

•

49

In column F--100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through E.

Retained recourse on small business obligations sold with recourse. Report in
column A the amount of retained recourse on small business obligations reported in
Schedule RC-S, Memorandum item 1.b.
Under Section 208 of the Riegle Community Development and Regulatory Improvement Act
of 1994, a "qualifying institution" that transfers small business loans and leases on personal
property (small business obligations) with recourse in a transaction that qualifies as a sale
under generally accepted accounting principles (GAAP) must maintain risk-based capital only
against the amount of recourse retained, provided the institution establishes a recourse
liability account that is sufficient under GAAP. Only loans and leases to businesses that meet
the criteria for a small business concern established by the Small Business Administration
under Section 3(c) of the Small Business Act (12 U.S.C. 631) are eligible for this favorable
risk-based capital treatment.
In general, a "qualifying institution" is one that is well capitalized without regard to the
Section 208 provisions. If a bank ceases to be a qualifying institution or exceeds the retained
recourse limit set forth in banking agency regulations implementing Section 208, all new
transfers of small business obligations with recourse would not be treated as sales.
However, the reporting and risk-based capital treatment described above will continue to
apply to any transfers of small business obligations with recourse that were consummated
during the time the bank was a "qualifying institution" and did not exceed the limit.

50

•

In column B, report 100 percent of the amount reported in column A.

•

In column F--100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through E.

Recourse and direct credit substitutes (other than financial standby letters of credit)
subject to the low level exposure rule and residual interests subject to a dollar-fordollar capital requirement. As defined in the agencies' risk-based capital standards,
•

"Recourse" means an arrangement in which a bank retains, in form or in substance, any
credit risk directly or indirectly associated with an asset it has sold (in accordance with
generally accepted accounting principles) that exceeds a pro rata share of the bank's
claim on the asset.

•

"Direct credit substitute" means an arrangement in which a bank assumes, in form or in
substance, credit risk directly or indirectly associated with an on- or off-balance sheet
asset or exposure that was not previously owned by the bank (third-party asset) and the
risk assumed by the bank exceeds the pro rata share of the bank's interest in the third
party asset.

•

"Residual interest" means any on-balance sheet asset that represents an interest
(including a beneficial interest) created by a transfer that qualifies as a sale (in
accordance with generally accepted accounting principles) of financial assets, whether
through a securitization or otherwise, and that exposes a bank to credit risk directly or
indirectly associated with the transferred asset that exceeds a pro rata share of the
bank's claim on the asset, whether through subordination provisions or other credit
enhancement techniques. In general, residual interests include credit-enhancing interestonly strips (both retained and purchased), spread accounts, cash collateral accounts,

FFIEC 031 and 041

RC-R-24a
(3-02)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

50
(cont.)

retained subordinated interests, other forms of overcollateralization, accrued but
uncollected interest on transferred assets that (when collected) will be available to serve
in a credit-enhancing capacity, and similar on-balance sheet assets that function as a
credit enhancement.
Under these definitions, all recourse arrangements in the form of on-balance sheet assets are
residual interests. The only type of residual interest that is not a recourse arrangement is a
purchased credit-enhancing interest-only strip. Purchased credit-enhancing interest-only
strips are a type of direct credit substitute. Recourse arrangements not in the form of onbalance sheet assets (e.g., off-balance sheet recourse obligations, which may have an
associated on-balance sheet recourse liability) are not residual interests.
The banking agencies' risk-based capital standards include a low-level exposure rule, which
states that if the maximum exposure to loss retained or assumed by a bank in connection
with a recourse arrangement, a direct credit substitute, or a residual interest is less than the
effective risk-based capital requirement for the credit-enhanced assets (generally, four
percent for qualifying first lien 1-4 family residential mortgages and eight percent for most
other assets), the risk-based capital requirement is limited to the bank's maximum contractual
exposure, less any recourse liability account established in accordance with generally
accepted accounting principles.
However, for residual interests (other than credit-enhancing interest-only strips that have
been deducted from Tier 1 capital and assets) not eligible for the ratings-based approach, a
bank must maintain risk-based capital equal to the face amount of the residual interest (net of
any existing associated deferred tax liability recorded on the balance sheet), even if the
amount of risk-based capital required to be maintained exceeds the full risk-based capital
requirement for the assets transferred. The effect of this requirement is that, notwithstanding
the low level exposure rule, a bank must hold one dollar in total risk-based capital against
every dollar of the face amount of its residual interests that are not eligible for the ratingsbased approach (a dollar-for-dollar capital requirement), except for any credit-enhancing
interest-only strips that are required to be deducted from Tier 1 capital and assets.
Because all residual interests (including all retained and purchased credit-enhancing interestonly strips) are on-balance sheet assets, the on-balance sheet amount of a bank's residual
interests not eligible for the ratings-based approach should be reported in column B of the
Balance Sheet Asset Category section of Schedule RC-R. Similarly, when a direct credit
substitute is carried as an asset on the bank's Call Report balance sheet and the low level
exposure rule applies, the on-balance sheet asset amount should be reported in column B of
the Balance Sheet Asset Category section of Schedule RC-R.
For purposes of this item, the "maximum contractual dollar amount of exposure" of a residual
interest and a direct credit substitute that is an on-balance sheet asset is its "face amount" as
of the report date, i.e., its amortized cost if it is not held for trading purposes and its fair value
if it is held for trading purposes. In determining the "maximum contractual dollar amount of
exposure" for a residual interest, a bank is permitted, but not required, to reduce the face
1
amount by the amount of any existing associated deferred tax liability. The "maximum
contractual dollar amount of exposure" of a recourse arrangement and a direct credit
substitute that is not in the form of an on-balance sheet asset is the maximum contractual
amount of the bank's exposure as of the report date, less the balance of any associated
recourse liability account established in accordance with generally accepted accounting
principles and reported in Schedule RC-G, item 4, "Other" liabilities.

1

Any deferred tax liability used in this manner would not be available for the bank to use in determining the amount
of disallowed deferred tax assets in Schedule RC-R, item 9.b, above.
FFIEC 031 and 041

RC-R-24b
(3-02)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

50
(cont.)

Banks that have entered into (a) recourse arrangements and direct credit substitutes (other
than financial standby letters of credit) that are subject to the low level exposure rule and (b)
residual interests subject to a dollar-for-dollar capital requirement should report these
transactions in this item using either the "direct reduction method" or the "gross-up method" in
accordance with the following guidance. Exclude from this item disallowed credit-enhancing
interest-only strips that have been deducted from Tier 1 capital and assets. When using the
"gross-up method," a bank includes an amount in its risk-weighted assets (the denominator of
its risk-based capital ratios) for its "maximum contractual dollar amount of exposure" that is
calculated under the assumption that the bank's total risk-based capital ratio equals the
8 percent minimum requirement. In contrast, when using the "direct reduction method," a
bank includes an institution-specific amount in its risk-weighted assets for its "maximum
contractual dollar amount of exposure" that is calculated using the actual amount of the
bank's total risk-based capital. This institution-specific calculation produces the effect of
directly reducing Tier 1 and total risk-based capital by the "maximum contractual dollar
amount of exposure" without lowering the bank's Tier 1 leverage capital ratio. For a bank
whose risk-based capital ratios exceed the required minimums, it is normally preferable to
use the "direct reduction method."
•

If the bank chooses to use the "direct reduction method," the bank should report as the
credit equivalent amount in Schedule RC-R, item 50, column B, an "institution-specific
add-on factor" for its low-level exposure or residual interest. This credit equivalent
amount should then be assigned to the 100 percent risk weight category in column F of
this item. The "institution-specific add-on factor," which is independent of the risk weight
category of the assets to which the exposure relates, is calculated as follows:
F=

CxA

– A

C-R
where F = institution-specific add-on factor;
C = total risk-based capital (as reported in Schedule RC-R, item 21);
A = net risk-weighted assets excluding low-level exposures and residual
interests; and
R = maximum contractual dollar amount of exposure in low-level
exposure transactions or of residual interests (as reported in
column A of this item)
For purposes of calculating the amount of the bank's total risk-based capital to be used in
the preceding formula (C in the formula) and to be reported in Schedule RC-R, item 21,
the bank should determine the Tier 2 capital limit on the allowance for loan and lease
losses by multiplying its "maximum contractual dollar amount of exposure" (R in the
preceding formula, as defined in these instructions) by 12.5 and adding this product to its
gross risk-weighted assets excluding low level exposures and residual interests. This
adjusted gross risk-weighted-assets figure multiplied by 1.25 percent is the bank's Tier 2
capital limit on the allowance for loan and lease losses. Once this limit on the allowance
has been calculated, the limit is fixed at this amount. This limit should not be changed
after the bank calculates the actual amount of its net risk-weighted assets excluding low
level exposures and residual interests (A in the preceding formula) or its institutionspecific add-on factor for low level exposures and residual interests under the "direct
reduction method" (F in the preceding formula). This means that a bank will measure its
Tier 2 capital and its total risk-based capital prior to its application of the "direct reduction
method" and will not recalculate these two amounts once the add-on factor is known.
•

FFIEC 031 and 041

If the bank chooses to use the "gross-up method," the "maximum contractual dollar
amount of exposure" for the bank's low level exposure transactions and its residual
interests, as reported in column A of this item, should be multiplied by a factor of 12.5.
The resulting dollar amount should be reported as the credit equivalent amount in
column B of this item and assigned to the 100 percent risk weight category in column F.
RC-R-25
(6-02)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

50
(cont.)

For example, a bank has sold $2 million in first lien residential mortgages subject to two
percent recourse. The bank has removed the $2 million in mortgages from its Call Report
balance sheet and, in accordance with GAAP, has also established a recourse liability
account with a balance of $10,000. The maximum amount for which the bank is liable is
$40,000. The mortgages qualify for a 50 percent risk weight and the bank's recourse
exposure is less than the $80,000 minimum risk-based capital requirement for these assets
sold with recourse. Thus, the low level exposure rule applies. The "maximum contractual
dollar amount of exposure" for this transaction is $30,000, the $40,000 maximum contractual
amount of the bank's recourse exposure as of the report date, less the $10,000 balance of
the recourse liability account for this transaction. The bank has no other transactions that
would qualify for the low level exposure rule. It has gross risk-weighted assets excluding
low level exposures and residual interests of $100 million, Tier 1 capital of $8 million, an
allowance for loan and lease losses of $1.1 million, and other qualifying Tier 2 capital
components of $1.4 million.

51

•

If the bank chooses to use the "direct reduction method," the bank would report $30,000
– its "maximum contractual dollar amount of exposure" – as the "face value or notional
amount" in column A of this item and would use this amount to calculate its institutionspecific add-on factor using the formula provided above. To determine the Tier 2 capital
limit for the bank's allowance for loan and lease losses, the bank would first add
$375,000 ($30,000 -- its "maximum contractual dollar amount of exposure" -- multiplied
by 12.5) to its $100 million of gross risk-weighted assets excluding low level exposures
and residual interests. Its Tier 2 capital limit for the allowance would be $1,254,688
($100,375,000 – its adjusted gross risk-weighted assets -- multiplied by 1.25 percent -the limit for the allowance). Since the bank's $1.1 million allowance is less than its Tier 2
capital limit for the allowance, the bank would report an "excess allowance for loan and
lease losses" of $0 in Schedule RC-R, item 60, column F. The bank's total risk-based
capital is $10.5 million and its net risk-weighted assets excluding low level exposures and
residual interests are $100 million. Based on the facts in the example, the bank
calculates that its institution-specific add-on factor is $286,533. The bank would report
the amount of this add-on factor as the credit equivalent amount in column B of this item
and assign this amount to the 100 percent risk weight category in column F.

•

If the bank chooses to use the "gross-up method," the bank would report $30,000 (its
"maximum contractual dollar amount of exposure") as the "face value or notional amount"
in column A of this item. The bank would report $375,000 as the credit equivalent
amount in column B ($30,000 -- its "maximum contractual dollar amount of exposure" -multiplied by 12.5). It would also assign this amount to the 100 percent risk weight
category in column F of this item. Because the $2 million in mortgages sold have been
removed from the balance sheet, the difference between the $375,000 credit equivalent
amount and the $2 million is not reported in Schedule RC-R. In addition, the bank would
include the $375,000 in its gross risk-weighted assets for purposes of determining the
Tier 2 capital limit for the allowance for loan and lease losses.

All other financial assets sold with recourse. Include in this item all recourse
arrangements (as defined in Schedule RC-R, item 50, above) in which the bank's exposure
has not already been included in Schedule RC-R, item 44, "Financial standby letters of
credit," item 49, "Retained recourse on small business obligations sold with recourse," or
item 50, "Recourse and direct credit substitutes (other than financial standby letters of credit)
subject to the low level exposure rule and residual interests subject to a dollar-for-dollar
capital requirement." For example, include in this item recourse arrangements where the
bank is obligated to repurchase a loan or otherwise compensate the purchaser of a loan in
the event of the borrower's failure to pay when due (unless the loan is a small business
obligation sold with recourse that has been reported in Schedule RC-R, item 49, above).
Exclude from this item disallowed credit-enhancing interest-only strips that have been
deducted from Tier 1 capital and assets.

FFIEC 031 and 041

RC-R-26
(6-02)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

51
(cont.)

For those recourse arrangements that must be included in this item that are not eligible for
the ratings-based approach, report in column A the outstanding principal balance of the loans
or other financial assets that were sold with recourse, minus the amount of any recourse
liability account associated with these transactions that is included in Schedule RC-G, item 4,
"Other" liabilities. For those recourse arrangements that must be included in this item that act
as credit enhancements for asset-backed or mortgage-backed securities and to which the
ratings-based approach applies, report in column A:
(1) the maximum contractual remaining amount of the bank's recourse exposures that are
subject to a risk weight of 100% or less, minus the amount of any recourse liability
account associated with these exposures that is included in Schedule RC-G, item 4, and
(2) two times the maximum contractual remaining amount of the bank's recourse exposures
that are subject to a 200% risk weight, minus the amount of any recourse liability account
associated with these exposures that is included in Schedule RC-G, item 4.

52

•

In column B, report 100 percent of the amount reported in column A.

•

In column C—0% risk weight, include the credit equivalent amount of financial assets
sold with recourse (not eligible for the ratings-based approach) that, if they were
carried as assets on the balance sheet, would meet the criteria for the zero percent risk
weight category as described in the instructions for Risk-Weighted Assets and for
Schedule RC-R, items 34 through 42, above.

•

In column D—20% risk weight, include the credit equivalent amount of financial assets
sold with recourse (not eligible for the ratings-based approach) that, if they were
carried as assets on the balance sheet, would meet the criteria for the 20 percent risk
weight category as described in the instructions for Risk-Weighted Assets and for
Schedule RC-R, items 34 through 42, above. Also include in column D the credit
equivalent amount of those recourse arrangements to which the ratings-based approach
applies that are rated in the highest or second highest investment grade category,
e.g., AAA or AA, in the case of long-term ratings, or in the highest rating category,
e.g., A-1 or P-1, in the case of short-term ratings.

•

In column E—50% risk weight, include the credit equivalent amount of financial assets
sold with recourse (not eligible for the ratings-based approach) that, if they were
carried as assets on the balance sheet, would meet the criteria for the 50 percent risk
weight category as described in the instructions for Risk-Weighted Assets and for
Schedule RC-R, items 34 through 42, above. Also include in column E the credit
equivalent amount of those recourse arrangements to which the ratings-based approach
applies that are rated in the third highest investment grade category, e.g., A, in the case
of long-term ratings, or in the second highest rating category, e.g., A-2 or P-2, in the case
of short-term ratings.

•

In column F—100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through E.

All other off-balance sheet liabilities. Report in column A the notional amount of all other
off-balance sheet liabilities reported in Schedule RC-L, item 9, that are covered by the risk
based capital guidelines. Also include in column A the notional amount of written option
contracts that act as financial guarantees, which have been reported as derivatives in
Schedule RC-L, item 12, but are treated as direct credit substitutes rather than derivatives for

FFIEC 031 and 041

RC-R-26a
(3-13)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

52
(cont.)

risk-based capital purposes. Also include in column A the amount of those credit derivatives
reported in Schedule RC-L, item 7, that – under the supervisory guidance issued by the
bank's primary federal supervisory authority – are covered by the risk-based capital
standards, but have not been included in any of the preceding items in the Derivatives and
Off-Balance Sheet Items section of Schedule RC-R. However, exclude from column A the
amount of credit derivatives classified as trading that are subject to the market risk capital
guidelines (report in Schedule RC-R, item 54) and credit derivatives purchased by the bank
that are recognized as guarantees of an asset or off-balance sheet exposure under the risk
based capital guidelines, i.e., credit derivatives on which the bank is the beneficiary (report
the guaranteed asset or exposure in Schedule RC-R in the appropriate balance sheet or
off-balance sheet category – e.g., item 39, “Loans and leases, net of unearned income” – and
in the risk weight category applicable to the derivative counterparty – e.g., column D,
20 percent – rather than the risk weight category applicable to the obligor of the guaranteed
asset). Also exclude from column A the notional amount of standby letters of credit issued by
another depository institution, a Federal Home Loan Bank, or any other entity on behalf of the
reporting bank that are reported in Schedule RC-L, item 9, because these letters of credit are
not covered by the risk-based capital guidelines.
•

In column B, report 100 percent of the notional amount reported in column A.

•

In column C–0% risk weight, include the credit equivalent amount of liabilities to
counterparties who meet, or that have guarantees or collateral that meets, the criteria for
the zero percent risk weight category as described in the instructions for Risk-Weighted
Assets and for Schedule RC-R, items 34 through 42, above.

•

In column D–20% risk weight, include the credit equivalent amount of liabilities to
counterparties who meet, or that have guarantees or collateral that meets, the criteria for
the 20 percent risk weight category as described in the instructions for Risk-Weighted
Assets and for Schedule RC-R, items 34 through 42, above.

•

In column E–50% risk weight, include the credit equivalent amount of liabilities to
counterparties who meet, or that have guarantees or collateral that meets, the criteria for
the 50 percent risk weight category as described in the instructions for Risk-Weighted
Assets and for Schedule RC-R, items 34 through 42, above.

•

In column F–100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through E.

53

Unused commitments:

53.a

With an original maturity exceeding one year. Report in column A the unused portion of
commitments to make or purchase extensions of credit in the form of loans or participations
in loans, lease financing receivables, or similar transactions as reflected in Schedule RC-L,
item 1, that have an original maturity exceeding one year and are subject to the risk-based
capital guidelines. Under the risk-based capital guidelines, the unused portion of
commitments (facilities) with an original maturity of one year or less (other than eligible assetbacked commercial paper liquidity facilities) or which are unconditionally cancelable (without
cause) at any time by the bank, provided a separate credit decision is made before each
drawing, have a zero percent conversion factor. The unused portion of such commitments
should be excluded from this item and from item 53.b. "Original maturity" is defined as the
length of time between the date a commitment is issued and the date of maturity, or the
earliest date on which the bank (1) is scheduled to (and as a normal practice actually does)

FFIEC 031 and 041

RC-R-26b
(3-13)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

53.a
(cont.)

review the facility to determine whether or not it should be extended and (2) can
unconditionally cancel the commitment. Also include in column A all revolving underwriting
facilities (RUFs) and note issuance facilities (NIFs), regardless of maturity.
In the case of consumer home equity or mortgage lines of credit secured by liens on
1-4 family residential properties, a bank is deemed able to unconditionally cancel the
commitment if, at its option, it can prohibit additional extensions of credit, reduce the credit
line, and terminate the commitment to the full extent permitted by relevant federal law. Retail
credit cards and related plans, including overdraft checking plans and overdraft protection
programs, are defined to be short-term commitments that should be converted at zero
percent and excluded from this item 53.a if the bank has the unconditional right to cancel the
line of credit at any time in accordance with applicable law.
For commitments providing for increases in the dollar amount of the commitment, the amount
to be converted to an on-balance sheet credit equivalent amount and risk weighted is the
maximum dollar amount that the bank is obligated to advance at any time during the life of
the commitment. This includes seasonal commitments where the dollar amount of the
commitment increases during the customer's peak business period. In addition, this riskbased capital treatment applies to long-term commitments that contain short-term options
which, for a fee, allow the customer to increase the dollar amount of the commitment. Until
the short-term option has expired, the reporting bank must convert and risk weight the
amount which it is obligated to lend if the option is exercised. After the expiration of a
short-term option which has not been exercised, the unused portion of the original amount of
the commitment is to be used in the credit conversion process.

53.b

•

In column B, report 50 percent of the amount of unused commitments reported in
column A.

•

In column C–0% risk weight, include the credit equivalent amount of unused
commitments for extensions of credit to counterparties who meet, or that have
guarantees or collateral that meets, the criteria for the zero percent risk weight category
as described in the instructions for Risk-Weighted Assets and for Schedule RC-R,
items 34 through 42, above.

•

In column D–20% risk weight, include the credit equivalent amount of unused
commitments for extensions of credit to counterparties who meet, or that have
guarantees or collateral that meets, the criteria for the 20 percent risk weight category as
described in the instructions for Risk-Weighted Assets and for Schedule RC-R, items 34
through 42, above. Include commitments that have been conveyed to U.S. and other
OECD depository institutions.

•

In column E–50% risk weight, include the credit equivalent amount of unused
commitments for extensions of credit to counterparties who meet, or that have
guarantees or collateral that meets, the criteria for the 50 percent risk weight category as
described in the instructions for Risk-Weighted Assets and for Schedule RC-R, items 34
through 42, above.

•

In column F–100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through E.

With an original maturity of one year or less to asset-backed commercial paper
conduits. Report in column A the unused portion of eligible asset-backed commercial
paper (ABCP) liquidity facilities with an original maturity of one year or less.

FFIEC 031 and 041

RC-R-26c
(6-09)

RC-R – REGULATORY CAPITAL

This page intentionally left blank.

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

53.b
(cont.)

Under the risk-based capital guidelines, the unused portion of commitments (facilities) with an
original maturity of one year or less (other than eligible ACBP liquidity facilities) or which are
unconditionally cancelable (without cause) at any time by the bank, provided a separate
credit decision is made before each drawing, have a zero percent conversion factor. The
unused portion of such commitments should be excluded from this item.

54

•

In column B, report 10 percent of the amount of unused commitments reported in
column A.

•

In column C–0% risk weight, include the credit equivalent amount of unused eligible
ABCP liquidity facilities to counterparties who meet, or that have guarantees or collateral
that meets, the criteria for the zero percent risk weight category as described in the
instructions for Risk-Weighted Assets and for Schedule RC-R, items 34 through 42,
above.

•

In column D–20% risk weight, include the credit equivalent amount of unused eligible
ABCP liquidity facilities to counterparties who meet, or that have guarantees or collateral
that meets, the criteria for the 20 percent risk weight category as described in the
instructions for Risk-Weighted Assets and for Schedule RC-R, items 34 through 42,
above.

•

In column E–50% risk weight, include the credit equivalent amount of unused eligible
ABCP liquidity facilities to counterparties who meet, or that have guarantees or collateral
that meets, the criteria for the 50 percent risk weight category as described in the
instructions for Risk-Weighted Assets and for Schedule RC-R, items 34 through 42,
above.

•

In column F–100% risk weight, include the portion of the credit equivalent amount
reported in column B that is not included in columns C through E.

Derivative contracts. Report in column B the credit equivalent amount of derivative
contracts covered by the risk-based capital guidelines. Under these guidelines, the maximum
risk weight to be applied to the credit equivalent amount of any derivative contract is
50 percent. Include credit derivative contracts held for trading purposes and subject to the
market risk capital guidelines. However, exclude all other credit derivative contracts, which, if
covered by the risk-based capital standards in accordance with the supervisory guidance
issued by the bank's primary federal supervisory authority, should be reported in one of the
preceding items in the Derivatives and Off-Balance Sheet Items section of Schedule RC-R.
The credit equivalent amount of a derivative contract is the sum of its current credit exposure
(as reported in Schedule RC-R, Memorandum item 1) plus the potential future exposure over
the remaining life of the derivative contract (regardless of its current credit exposure, if any).
The current credit exposure of a derivative contract is (1) the fair value of the contract when
that fair value is positive and (2) zero when the fair value of the contract is negative or zero.
The potential future credit exposure of a contract, which is based on the type of contract and
the contract's remaining maturity, is determined by multiplying the notional principal amount
of the contract by the appropriate credit conversion factor from the following chart. The
notional principal amounts of the reporting bank's derivatives that are subject to the
risk-based capital requirements are reported in Schedule RC-R, Memorandum items 2.a
through 2.g.(2).

FFIEC 031 and 041

RC-R-27
(3-13)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

Item No.

RC-R – REGULATORY CAPITAL

Caption and Instructions

54
(cont.)
Remaining maturity
One year or less
More than one year
through five years
More than five years

Interest
rate
contracts
0.0%

Foreign
exchange
and gold
contracts
1.0%

Equity
contracts
6.0%

0.5%
1.5%

5.0%
7.5%

8.0%
10.0%

Precious
metals
contracts
(except gold)
7.0%

Other
commodity
contracts
10.0%

7.0%
8.0%

12.0%
15.0%

Under the banking agencies' risk-based capital standards and for purposes of
Schedule RC-R, the existence of a legally enforceable bilateral netting agreement between
the reporting bank and a counterparty may be taken into consideration when determining
both the current credit exposure and the potential future exposure of derivative contracts.
For further information on the treatment of bilateral netting agreements covering derivative
contracts, refer to the instructions for Schedule RC-R, Memorandum item 1, and the riskbased capital standards issued by the reporting bank's primary federal supervisory authority.
•

In column C–0% risk weight, include the credit equivalent amount of derivative contracts.
with counterparties who meet, or that have guarantees or collateral that meets, the
criteria for the zero percent risk weight category as described in the instructions for
Risk-Weighted Assets and for Schedule RC-R, items 34 through 42, above.

•

In column D–20% risk weight, include the credit equivalent amount of derivative contracts
with counterparties who meet, or that have guarantees or collateral that meets, the
criteria for the 20 percent risk weight category as described in the instructions for
Risk-Weighted Assets and for Schedule RC-R, items 34 through 42, above.

•

In column E–50% risk weight, include the portion of the credit equivalent amount reported
in column B that is not included in columns C and D.

Totals
55

Total assets, derivatives, and off-balance sheet items by risk weight category. Report
the sum of items 43 through 54 for each column (columns C through F).

56

Risk weight factor.

57

Risk-weighted assets by risk weight category. For each of columns C through F, multiply
the amount in item 55 by the risk weight factor specified for that column in item 56.

NOTE: Item 58 is applicable only to banks that are subject to the market risk capital rules.
58

Market risk equivalent assets. Report the amount of the bank's market risk equivalent
assets. For further background information, banks should refer to the discussion of "Banks
That are Subject to the Market Risk Capital Rules” in the Risk-Weighted Assets section of
these instructions and the capital standards of their primary federal supervisory authority for
specific instructions on the calculation of the measure for market risk.
A bank’s measure for market risk for its covered positions is the sum of its value-at-risk
(VAR)-based, stressed VaR-based, incremental risk, and comprehensive risk capital
requirements plus its specific risk add-ons and any capital requirement for de minimis
exposures. A bank's market risk equivalent assets equal its measure for market risk
multiplied by 12.5 (the reciprocal of the minimum 8.0 percent capital ratio).

FFIEC 031 and 041

RC-R-28
(3-13)

RC-R – REGULATORY CAPITAL

FFIEC 031 and 041

RC-R – REGULATORY CAPITAL

Item No.

Caption and Instructions

58
(cont.)

A covered position is a trading asset or trading liability (whether on- or off-balance sheet), as
reported on Schedule RC–D, that is held for any of the following reasons:
(1)
(2)
(3)
(4)

For the purpose of short-term resale;
With the intent of benefiting from actual or expected short-term price movements;
To lock in arbitrage profits; or
To hedge another covered position.

Additionally, the trading asset or trading liability must be free of any restrictive covenants on
its tradability or the bank is able to hedge the material risk elements of the trading asset or
trading liability in a two-way market. A covered position also includes a foreign exchange or
commodity position, regardless of whether the position is a trading asset or trading liability
(excluding structural foreign currency positions if supervisory approval has been granted to
exclude such positions).
A covered position does not include:
(1) An intangible asset (including any servicing asset);
(2) A hedge of a trading position that is outside the scope of the bank’s hedging strategy
(required by the market risk capital rules);
(3) Any position that, in form or substance, acts as a liquidity facility that provides support to
asset-backed commercial paper;
(4) A credit derivative recognized as a guarantee for risk-weighted asset calculation
purposes under the risk-based capital rules for credit risk;
(5) An equity position that is not publicly traded (other than a derivative that references a
publicly traded equity);
(6) A position held with the intent to securitize; or
(7) A direct real estate holding.
59

Risk-weighted assets before deductions for excess allowance for loan and lease
losses and allocated transfer risk reserve. Report the sum of item 57, columns C
through F, and item 58.

60

LESS: Excess allowance for loan and lease losses. Report the amount, if any, by which
the bank's allowance for loan and lease losses exceeds 1.25 percent of the bank's gross
risk-weighted assets. The amount to be reported in this item equals Schedule RC, item 4.c,
"Allowance for loan and lease losses," less Schedule RI-B, part II, Memorandum item 1,
"Allocated transfer risk reserve included in Schedule RI-B, part II, item 7, above," plus
Schedule RC-G, item 3, "Allowance for credit losses on off-balance sheet credit exposures,"
less Schedule RC-R, item 14, "Allowance for loan and lease losses includible in Tier 2
capital."

61

LESS: Allocated transfer risk reserve. Report the entire amount of any allocated transfer
risk reserve (ATRR) the reporting bank is required to establish and maintain as specified in
Section 905(a) of the International Lending Supervision Act of 1983, in the agency
regulations implementing the Act (Subpart D of Federal Reserve Regulation K, Part 347 of
the FDIC's Rules and Regulations, and Part 20 of the Comptroller of the Currency's
Regulations), and in any guidelines, letters, or instructions issued by the agencies. The
entire amount of the ATRR equals the ATRR related to loans and leases held for investment
(which is reported in Schedule RI-B, part II, Memorandum item 1) plus the ATRR for assets
other than loans and leases held for investment.

62

Total risk-weighted assets. Report the amount derived by subtracting items 60 and 61 from
item 59.

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RC-R – REGULATORY CAPITAL

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RC-R – REGULATORY CAPITAL

Memoranda
Item No.
1

Caption and Instructions
Current credit exposure across all derivative contracts covered by the risk-based
capital standards. Report the total current credit exposure amount for all interest rate,
foreign exchange, commodity, and equity derivative contracts covered by the risk-based
capital standards after considering applicable legally enforceable bilateral netting
agreements. Banks that are subject to the market risk capital guidelines should exclude all
covered positions subject to these guidelines, except for foreign exchange derivatives that
are outside of the trading account and all over-the-counter (OTC) derivatives. Foreign
exchange derivatives that are outside of the trading account and all OTC derivatives continue
to have a counterparty credit risk capital charge and, therefore, a current credit exposure
amount for these derivatives should be reported in this item.
Include the current credit exposure arising from credit derivative contracts where the bank is
the protection purchaser (beneficiary) and the credit derivative contract is either (a) defined
as a covered position under the market risk rule or (b) not defined as a covered position
under the market risk rule and is not recognized as a guarantee for risk-based capital
purposes.
The following types of derivative contracts are not covered by the risk-based capital
standards:
(1) interest rate, foreign exchange, equity, commodity and other derivative contracts traded
on exchanges that require daily payment of variation margin,
(2) foreign exchange contracts with an original maturity of fourteen calendar days or less,
and
(3) all written option contracts except for those that are, in substance, financial guarantees.
Purchased options held by the reporting bank that are traded on an exchange are covered by
the risk-based capital standards unless such options are subject to a daily variation margin.
Variation margin is defined as the gain or loss on open positions, calculated by marking to
market at the end of each trading day. Such gain or loss is credited or debited by the
clearing house to each clearing member's account, and by members to their customers'
accounts.
If a written option contract acts as a financial guarantee, then it will be treated as a direct
credit substitute for risk-based capital purposes and the notional amount of the option should
be included in Schedule RC-R, item 52, column A, as an "other off-balance sheet liability."
An example of such a contract occurs when the reporting bank writes a put option to a
second bank which has a loan to a third party. The strike price would be the equivalent of the
par value of the loan. If the credit quality of the loan deteriorates, thereby reducing the value
of the loan to the second bank, the reporting bank would be required by the second bank to
take the loan onto its books.
Current credit exposure (sometimes referred to as the replacement cost) is the fair value of a
contract when that fair value is positive. The current credit exposure is zero when the fair
value is negative or zero. Current credit exposure should be derived as follows: Determine
whether a legally enforceable bilateral netting agreement is in place between the reporting
bank and a counterparty. If such an agreement is in place, the fair values of all applicable
derivative contracts with that counterparty that are included in the netting agreement are

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RC-R – REGULATORY CAPITAL

Memoranda
Item No.

Caption and Instructions

1
(cont.)

netted to a single amount. Next, for all other contracts covered by the risk-based capital
standards that have positive fair values, the total of the positive fair values is determined.
Then, report in this item the sum of (i) the net positive fair values of applicable derivative
contracts subject to legally enforceable bilateral netting agreements and (ii) the total positive
fair values of all other contracts covered by the risk-based capital standards. The current
credit exposure reported in this item is a component of the credit equivalent amount of
derivative contracts that is to be reported in Schedule RC-R, item 54, column B.
Consistent with the risk-based capital guidelines, if a bilateral netting agreement covers
off-balance sheet derivative contracts that are normally not covered by the risk-based capital
standards (e.g., foreign exchange contracts with an original maturity of 14 calendar days or
less and contracts traded on exchanges that require daily payment of variation margin), the
reporting bank may elect to consistently either include or exclude the fair values of all such
derivative contracts when determining the net current credit exposure for that agreement.
The definition of a legally enforceable bilateral netting agreement for purposes of this item is
the same as that set forth in the risk-based capital rules. These rules require a written
bilateral netting contract that creates a single legal obligation covering all included individual
contracts and that does not contain a walkaway clause. The bilateral netting agreement must
be supported by a written and reasoned legal opinion representing that an organization's
claim or obligation, in the event of a legal challenge, including one resulting from default,
insolvency, bankruptcy, or similar circumstances, would be found by the court and
administrative authorities of all relevant jurisdictions to be the net sum of all positive and
negative fair values of contracts included in the bilateral netting contract.

2

Notional principal amounts of derivative contracts. Report in the appropriate subitem
and column the notional amount or par value of all derivative contracts, including credit
derivatives, that are subject to risk-based capital requirements. Such contracts include
swaps, forwards, and purchased options. Report notional amounts and par values in the
column corresponding to the contract's remaining term to maturity from the report date.
Remaining maturities are to be reported as (1) one year or less in column A, (2) over one
year through five years in column B, or (3) over five years in column C.
Do not report the notional amount for single currency interest rate swaps in which payments
are made based upon two floating rate indices, so-called floating/floating or basis swaps;
foreign exchange contracts with an original maturity of 14 days or less; and futures contracts.
The notional amount or par value to be reported for an off-balance-sheet derivative contract
with a multiplier component is the contract's effective notional amount or par value. (For
example, a swap contract with a stated notional amount of $1,000,000 whose terms call for
quarterly settlement of the difference between 5% and LIBOR multiplied by 10 has an
effective notional amount of $10,000,000.)
The notional amount to be reported for an amortizing derivative contract is the contract's
current (or, if appropriate, effective) notional amount. This notional amount should be
reported in the column corresponding to the contract's remaining term to final maturity.
For descriptions of "interest rate contracts," "foreign exchange contracts," "commodity
and other contracts," and "equity derivative contracts," refer to the instructions for
Schedule RC-L, item 12. For a description of “credit derivative contracts,” refer to the
instructions for Schedule RC-L, item 7.

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RC-R-31
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RC-R – REGULATORY CAPITAL

Memoranda
Item No.

Caption and Instructions

2.a

Interest rate contracts. Report the remaining maturities of interest rate contracts that are
subject to risk-based capital requirements.

2.b

Foreign exchange contracts. Report the remaining maturities of foreign exchange
contracts that are subject to risk-based capital requirements.

2.c

Gold contracts. Report the remaining maturities of gold contracts that are subject to riskbased capital requirements.

2.d

Other precious metals contracts. Report the remaining maturities of other precious metals
contracts that are subject to risk-based capital requirements. Report all silver, platinum, and
palladium contracts.

2.e

Other commodity contracts. Report the remaining maturities of other commodity contracts
that are subject to risk-based capital requirements. For contracts with multiple exchanges of
principal, notional amount is determined by multiplying the contractual amount by the number
of remaining payments (i.e., exchanges of principal) in the derivative contract.

2.f

Equity derivative contracts. Report the remaining maturities of equity derivative contracts
that are subject to risk-based capital requirements.

2.g

Credit derivative contracts: Purchased credit protection that (a) is a covered position
under the market risk rule or (b) is not a covered position under the market risk rule
and is not recognized as a guarantee for risk-based capital purposes. Report in the
appropriate subitem the remaining maturities of credit derivative contracts where the bank is
the protection purchaser (beneficiary) and the credit derivative contract is either (a) defined
as a covered position under the market risk rule or (b) not defined as a covered position
under the market risk rule and is not recognized as a guarantee for risk-based capital
purposes. Banks should report the full gross notional amount of all such credit derivative
contracts in the appropriate subitem.

2.g.(1)

Investment grade. Report the remaining maturities of those credit derivative contracts
described in Schedule RC-R, Memorandum item 2.g, above, where the underlying reference
asset is rated investment grade or, if not rated, is the equivalent of investment grade under
the bank’s internal credit rating system.

2.g.(2)

Subinvestment grade. Report the remaining maturities of those credit derivative contracts
described in Schedule RC-R, Memorandum item 2.g, above, where the underlying reference
asset is rated below investment grade, i.e., subinvestment grade, or, if not rated, is the
equivalent of below investment grade under the bank’s internal credit rating system.

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RC-R-32
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RC-S – SERVICING, SECURITIZATION, ASSET SALES

SCHEDULE RC-S – SERVICING, SECURITIZATION, AND ASSET SALE
ACTIVITIES
General Instructions
Schedule RC-S should be completed on a fully consolidated basis. Schedule RC-S includes information
on 1-4 family residential mortgages and other financial assets serviced for others (in Memorandum
items 2.a, 2.b, and 2.c). Schedule RC-S also includes information on assets that have been securitized
or sold and are not reportable on the balance sheet of the Report of Condition, except for
credit-enhancing interest-only strips (which are reported in item 2.a of this schedule), subordinated
securities and other enhancements (which are reported in items 2.b, 2.c, and 9 and Memorandum
items 3.a.(1) and (2)), and seller’s interests (which are reported in items 6.a and 6.b).
Column Instructions
Column A, 1-4 Family Residential Loans: 1-4 family residential loans are permanent closed-end loans
secured by first or junior liens on 1-to-4 family residential properties as defined for Schedule RC-C, part I,
items 1.c.(2)(a) and 1.c.(2)(b).
Column B, Home Equity Lines: Home equity lines are revolving, open-end lines of credit secured by
1-to-4 family residential properties as defined for Schedule RC-C, part I, item 1.c.(1).
Column C, Credit Card Receivables: Credit card receivables are extensions of credit to individuals for
household, family, and other personal expenditures arising from credit cards as defined for
Schedule RC-C, part I, item 6.a.
Column D, Auto Loans: Auto loans are loans to individuals for the purpose of purchasing private
passenger vehicles, including minivans, vans, sport-utility vehicles, pickup trucks, and similar light trucks
for personal use as defined for Schedule RC-C, part I, item 6.c.
Column E, Other Consumer Loans: Other consumer loans are loans to individuals for household,
family, and other personal expenditures as defined for Schedule RC-C, part I, items 6.b and 6.d.
Column F, Commercial and Industrial Loans: Commercial and industrial loans are loans for
commercial and industrial purposes to sole proprietorships, partnerships, corporations, and other
business enterprises, whether secured (other than by real estate) or unsecured, single-payment or
installment, as defined for Schedule RC-C, part I, item 4.
Column G, All Other Loans, All Leases, and All Other Assets: All other loans are loans that cannot
properly be reported in Columns A through F of this schedule as defined for Schedule RC-C, part I,
items 1.a, 1.b, 1.d, 1.e, 2, 3, and 7 through 9. All leases are all lease financing receivables as defined
for Schedule RC-C, part I, item 10. All other assets are all assets other than loans and leases,
e.g., securities.
For purposes of items 1 through 10 of Schedule RC-S on bank securitization activities and other
securitization facilities, information about each separate securitization should be included in only one of
the seven columns of this schedule. The appropriate column for a particular securitization should be
based on the predominant type of loan, lease, or other asset included in the securitization and this
column should be used consistently over time. For example, a securitization may include auto loans to
individuals and to business enterprises. If these auto loans are predominantly loans to individuals, all of
the requested information about this securitization should be included in Column D, Auto Loans.

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RC-S – SERVICING, SECURITIZATION, ASSET SALES

Definitions
For purposes of this schedule, the following definitions of terms are applicable.
Recourse or other seller-provided credit enhancement means an arrangement in which the reporting
bank retains, in form or in substance, any risk of credit loss directly or indirectly associated with a
transferred (sold) asset that exceeds its pro rata claim on the asset. It also includes a representation or
warranty extended by the reporting bank when it transfers an asset, or assumed by the bank when it
services a transferred asset, that obligates the bank to absorb credit losses on the transferred asset.
Such an arrangement typically exists when a bank transfers assets and agrees to protect purchasers or
some other party, e.g., investors in securitized assets, from losses due to default by or nonperformance
of the obligor on the transferred assets or some other party. The bank provides this protection by
retaining:
(a) an interest in the transferred assets, e.g., credit-enhancing interest-only strips, “spread” accounts,
subordinated interests or securities, collateral invested amounts, and cash collateral accounts, that
absorbs losses, or
(b) an obligation to repurchase the transferred assets
in the event of a default of principal or interest on the transferred assets or any other deficiency in the
performance of the underlying obligor or some other party. Subordinated interests and subordinated
securities retained by a bank when it securitizes assets expose the bank to more than its pro rata share
of loss and thus are considered a form of credit enhancement to the securitization structure.
Credit-enhancing interest-only strip, as defined in the banking agencies' regulatory capital standards,
means an on-balance sheet asset that, in form or in substance: (i) represents the contractual right to
receive some or all of the interest due on transferred assets; and (ii) exposes the bank to credit risk
directly or indirectly associated with the transferred assets that exceeds a pro rata share of the bank’s
claim on the assets, whether through subordination provisions or other credit enhancement techniques.
Credit-enhancing interest-only strips include other similar "spread" assets and can be either retained or
purchased.
Liquidity facility means any arrangement, including servicer cash advances, in which the reporting bank
is obligated to provide funding to a securitization structure to ensure investors of timely payments on
issued securities, e.g., by smoothing timing differences in the receipt of interest and principal payments
on the underlying securitized assets, or to ensure investors of payments in the event of market
disruptions. Advances under such a facility are typically reimbursed from subsequent collections by the
securitization structure and are not subordinated to other claims on the cash flows from the underlying
assets and, therefore, should generally not be construed to be a form of credit enhancement. However, if
the advances under such a facility are subordinated to other claims on the cash flows, the facility should
be treated as a credit enhancement for purposes of this schedule.
Seller’s interest means the reporting bank’s ownership interest in loans that have been securitized,
except an interest that is a form of recourse or other seller-provided credit enhancement. Seller’s
interests should be reported on Schedule RC – Balance Sheet – as securities or as loans depending on
the form in which the interest is held. However, seller’s interests differ from the securities issued to
investors by the securitization structure. The principal amount of a seller’s interest is generally equal to
the total principal amount of the pool of assets included in the securitization structure less the principal
amount of those assets attributable to investors, i.e., in the form of securities issued to investors.

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RC-S – SERVICING, SECURITIZATION, ASSET SALES

Item Instructions
Bank Securitization Activities
NOTE: After the effective date of the amendments to ASC Topic 860, Transfers and Servicing, and ASC
Subtopic 810-10, Consolidation – Overall, resulting from Accounting Standards Update (ASU) No. 2009-16
(formerly FASB Statement No. 166, “Accounting for Transfers of Financial Assets”) and ASU No. 2009-17
(formerly FASB Statement No. 167, “Amendments to FASB Interpretation No. 46(R)”), respectively, a bank
should report information in Schedule RC-S, items 1 through 8, only for those securitizations for which the
transferred assets qualify for sale accounting or are otherwise not carried as assets on the bank’s
consolidated balance sheet. Thus, if a securitization transaction that qualified for sale accounting prior to
the effective date of the amendments to ASC Topic 860 and ASC Subtopic 810-10 must be brought back
onto the reporting bank’s consolidated balance sheet upon adoption of these statements, the bank would
no longer report information about the securitization in Schedule RC-S, items 1 through 8.
Item No.
1

Caption and Instructions
Outstanding principal balance of assets sold and securitized by the reporting bank
with servicing retained or with recourse or other seller-provided credit enhancements.
Report in the appropriate column the principal balance outstanding as of the report date of
loans, leases, and other assets which the reporting bank has sold and securitized while:
(1) retaining the right to service these assets or
(2) when servicing has not been retained, retaining recourse or providing other
seller-provided credit enhancements to the securitization structure.
Include in column C the amount outstanding of any credit card fees and finance charges that
the reporting bank has securitized and sold in connection with its securitization and sale of
credit card receivable balances.
Exclude the principal balance of loans underlying seller's interests owned by the reporting
bank; report the amount of seller's interests in Schedule RC-S, item 6. Also exclude small
business obligations transferred with recourse under Section 208 of the Riegle Community
Development and Regulatory Improvement Act of 1994, which are to be reported in
Schedule RC-S, Memorandum item 1, below.
Do not report in this item the outstanding balance of 1-4 family residential mortgages sold to
the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan
Mortgage Corporation (Freddie Mac) that the government-sponsored agency in turn
securitizes. Report 1-4 family residential mortgages sold to Fannie Mae or Freddie Mac with
recourse or other seller-provided credit enhancements in Schedule RC-S, item 11, column A,
and report the maximum credit exposure arising from the enhancements in item 12,
column A. If servicing has been retained on the 1-4 family residential mortgages, report the
outstanding principal balance of the mortgages in Schedule RC-S, Memorandum item 2.a
or 2.b depending on whether the servicing is performed with or without recourse or other
servicer-provided credit enhancements. If the bank has both retained the servicing and
provided credit enhancements, report the principal balance of the 1-4 family residential
mortgages in Schedule RC-S, item 11, column A, and in Memorandum item 2.a.
Exclude securitizations that the reporting bank has accounted for as secured borrowings
because the transactions do not meet the criteria for sale accounting under generally
accepted accounting principles. The securitized loans, leases, and other assets should
continue to be carried as assets on the reporting bank's balance sheet.

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FFIEC 031 and 041

Item No.
2

RC-S – SERVICING, SECURITIZATION, ASSET SALES

Caption and Instructions
Maximum amount of credit exposure arising from recourse or other seller-provided
credit enhancements provided to structures reported in item 1. Report in the
appropriate subitem the maximum contractual credit exposure remaining as of the report date
under recourse arrangements and other seller-provided credit enhancements provided by the
reporting bank to securitization structures reported in Schedule RC-S, item 1, above. Do not
report as the remaining maximum contractual exposure a reasonable estimate of the
probable loss under the recourse arrangements or credit enhancement provisions or the fair
value of any liability incurred under such provisions. Furthermore, do not reduce the
remaining maximum contractual exposure by the amount of any associated recourse liability
account. Report exposure amounts gross rather than net of any tax effects, e.g., any
associated deferred tax liability.
Do not include unused portions of commitments that function as liquidity facilities (report such
unused commitments in Schedule RC-S, item 3).

2.a

Credit-enhancing interest-only strips. Report in the appropriate column the carrying value
of credit-enhancing interest-only strips included as securities in Schedules RC-B, as other
assets in Schedule RC-F, or as trading assets in Schedule RC, item 5, that the reporting
bank has retained as credit enhancements in connection with the securitization structures
reported in Schedule RC-S, item 1, above.

2.b

Subordinated securities and other residual interests. Report in the appropriate column
the carrying value of subordinated securities and other residual interests carried as
on-balance sheet assets that the reporting bank has retained in connection with the
securitization structures reported in Schedule RC-S, item 1, above. Exclude retained creditenhancing interest-only strips, which are to be reported in Schedule RC-S, item 2.a, above.

2.c

Standby letters of credit and other enhancements. Report in the appropriate column the
unused portion of standby letters of credit and the maximum contractual amount of recourse
or other credit exposure not in the form of an on-balance sheet asset that the reporting bank
has provided or retained in connection with the securitization structures reported in
Schedule RC-S, item 1, above.

3

Reporting bank’s unused commitments to provide liquidity to structures reported in
item 1. Report in the appropriate column the unused portions of commitments provided by
the reporting bank to the securitization structures reported in Schedule RC-S, item 1, above
that function as liquidity facilities.

4

Past due loan amounts included in item 1. Report in the appropriate subitem the
outstanding principal balance of loans, leases, and other assets reported in Schedule RC-S,
item 1, above that are 30 days or more past due as of the report date. For purposes of
determining whether a loan, lease, or other asset reported in item 1 above is past due, the
reporting criteria to be used are the same as those for columns A and B of Schedule RC-N.

4.a

30-89 days past due. Report in the appropriate column the outstanding principal balance of
loans, leases, and other assets reported in Schedule RC-S, item 1, above that are 30 to 89
days past due as of the report date.

4.b

90 days or more past due. Report in the appropriate column the outstanding principal
balance of loans, leases, and other assets reported in Schedule RC-S, item 1, above that are
90 days or more past due as of the report date.

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Item No.

RC-S – SERVICING, SECURITIZATION, ASSET SALES

Caption and Instructions

5

Charge-offs and recoveries on assets sold and securitized with servicing retained or
with recourse or other seller-provided credit enhancements (calendar year-to-date).
Report in the appropriate subitem the amount of charge-offs and recoveries during the
calendar year to date on loans, leases, and other assets that have been sold and securitized
in the securitization structures reported in Schedule RC-S, item 1, above. If a securitization
is no longer outstanding as of the report date, i.e., no amount is reported for the securitization
in Schedule RC-S, item 1, do not report any year-to-date charge-offs and recoveries for the
securitization in Schedule RC-S, items 5.a and 5.b.

5.a

Charge-offs. Report in the appropriate column the amount of loans, leases, and other
assets that have been sold and securitized by the reporting bank in the securitization
structures reported in Schedule RC-S, item 1, above that have been charged off or otherwise
designated as losses by the trustees of the securitizations, or other designated parties,
during the calendar year-to-date.
Include in column C charge-offs or reversals of uncollectible credit card fees and finance
charges that had been capitalized into the credit card receivable balances that had been
securitized and sold.

5.b

Recoveries. Report in the appropriate column the amount of recoveries of previously
charged-off loans, leases, and other assets in the securitization structures reported in
Schedule RC-S, item 1, above during the calendar year-to-date.
Include in column C recoveries of previously charged-off or reversed credit card fees and
finance charges that had been capitalized into the credit card receivable balances that had
been securitized and sold.

6

Amount of ownership (or seller’s) interests carried as. Report in the appropriate subitem
the carrying value of the reporting bank’s ownership (or seller’s) interests associated with the
securitization structures reported in Schedule RC-S, item 1, above.

6.a

Securities. Report in the appropriate column the carrying value of seller’s interests in the
form of a security that are included as available-for-sale or held-to-maturity securities in
Schedule RC-B – Securities – or as trading securities in Schedule RC, item 5, “Trading
assets.” A seller's interest is in the form of a security only if the seller's interest meets the
definition of a security in ASC Topic 320, Investments-Debt and Equity Securities (formerly
FASB Statement No. 115, "Accounting for Certain Investments in Debt and Equity
Securities").

6.b

Loans. Report in the appropriate column the carrying value of seller’s interests not in the
form of a security. Such seller’s interests are to be reported as loans and included in
Schedule RC-C – Loans and Lease Financing Receivables.

7

Past due loan amounts included in interests reported in item 6.a. Report in the
appropriate subitem the outstanding principal balance of loans underlying the reporting
bank’s seller’s interests reported in Schedule RC-S, item 6.a, above that are 30 days or more
past due as of the report date. For purposes of determining whether a loan underlying a
seller’s interest reported in item 6.a is past due, the reporting criteria to be used are the same
as those for columns A and B of Schedule RC-N.

7.a

30-89 days past due. Report in the appropriate column the outstanding principal balance of
loans underlying the seller’s interests reported in Schedule RC-S, item 6.a, above that are
30-89 days past due as of the report date.

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Item No.

RC-S – SERVICING, SECURITIZATION, ASSET SALES

Caption and Instructions

7.b

90 days or more past due. Report in the appropriate column the outstanding principal
balance of loans underlying the seller’s interests reported in Schedule RC-S, item 6.a, above
that are 90 or more days past due as of the report date.

8

Charge-offs and recoveries on loan amounts included in interests reported in item 6.a
(calendar year-to-date). Report in the appropriate subitem the amount of charge-offs and
recoveries during the calendar year to date on loans that had been underlying the seller’s
interests reported in Schedule RC-S, item 6.a, above.

8.a

Charge-offs. Report in the appropriate column the amount of loans that had been
underlying the seller’s interests reported in Schedule RC-S, item 6.a, above that have been
charged off or otherwise designated as losses by the trustees of the securitizations, or other
designated parties, during the calendar year-to-date.
Include in column C the amount of credit card fees and finance charges written off as
uncollectible that were attributable to the credit card receivables included in ownership
interests reported as securities in item 6.a, column C.

8.b

Recoveries. Report in the appropriate column the amount of recoveries of previously
charged-off loans that had been underlying the seller’s interests reported in Schedule RC-S,
item 6.a, above during the calendar year-to-date.
Include in column C recoveries of previously charged-off or reversed credit card fees and
finance charges that had been capitalized into the credit card receivable balances that had
been securitized and sold.

For Securitization Facilities Sponsored By or Otherwise Established By Other Institutions
9

Maximum amount of credit exposure arising from credit enhancements provided by
the reporting bank to other institutions’ securitization structures in the form of
standby letters of credit, purchased subordinated securities, and other enhancements.
Report in the appropriate column the maximum contractual credit exposure remaining as of
the report date under credit enhancements provided by the reporting bank to securitization
structures sponsored by or otherwise established by other institutions or entities,
i.e., securitizations not reported in Schedule RC-S, item 1, above. Report the unused portion
of standby letters of credit, the carrying value of purchased subordinated securities and
purchased credit-enhancing interest-only strips, and the maximum contractual amount of
credit exposure arising from other on- and off-balance sheet credit enhancements that
provide credit support to these securitization structures. Do not report as the remaining
maximum contractual exposure a reasonable estimate of the probable loss under credit
enhancement provisions or the fair value of any liability incurred under such provisions.
Furthermore, do not reduce the remaining maximum contractual exposure by the amount of
any associated recourse liability account. Report exposure amounts gross rather than net of
any tax effects, e.g., any associated deferred tax liability.
Exclude the amount of credit exposure arising from loans, leases, and other assets that the
reporting bank has sold with recourse or other seller-provided credit enhancements to other
institutions or entities, which then securitized the loans, leases, and other assets purchased
from the bank (report this exposure in Schedule RC-S, item 12, below). Also exclude the
amount of credit exposure arising from credit enhancements provided to asset-backed
commercial paper conduits (report this exposure in Schedule RC-S, Memorandum item 3.a).

FFIEC 031 and 041

RC-S-6
(3-11)

RC-S – SERVICING, SECURITIZATION, ASSET SALES

FFIEC 031 and 041

Item No.
10

RC-S – SERVICING, SECURITIZATION, ASSET SALES

Caption and Instructions
Reporting bank’s unused commitments to provide liquidity to other institutions’
securitization structures. Report in the appropriate column the unused portions of
commitments provided by the reporting bank that function as liquidity facilities to
securitization structures sponsored by or otherwise established by other institutions or
entities, i.e., securitizations not reported in Schedule RC-S, item 1, above. Exclude the
amount of unused commitments to provide liquidity to asset-backed commercial paper
conduits (report this amount in Schedule RC-S, Memorandum item 3.b).

Bank Asset Sales
11

Assets sold with recourse or other seller-provided credit enhancements and not
securitized by the reporting bank. Report in the appropriate column the unpaid principal
balance as of the report date of loans, leases, and other assets, which the reporting bank has
sold with recourse or other seller-provided credit enhancements, but which were not
securitized by the reporting bank. Include loans, leases, and other assets that the reporting
bank has sold with recourse or other seller-provided credit enhancements to other institutions
or entities, whether or not the purchaser has securitized the loans and leases purchased
from the bank. Include 1-4 family residential mortgages that the reporting bank has sold to
the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan
Mortgage Corporation (Freddie Mac) with recourse or other seller-provided credit
enhancements.
Exclude small business obligations transferred with recourse under Section 208 of the Riegle
Community Development and Regulatory Improvement Act of 1994, which are to be reported
in Schedule RC-S, Memorandum item 1, below.

12

Maximum amount of credit exposure arising from recourse or other seller-provided
credit enhancements provided to assets reported in item 11. Report in the appropriate
column the maximum contractual credit exposure remaining as of the report date under
recourse arrangements or other seller-provided credit enhancements provided by the
reporting bank in connection with its sales of the loans, leases, and other assets reported in
Schedule RC-S, item 11, above. Report the unused portion of standby letters of credit, the
carrying value of retained interests, and the maximum contractual amount of recourse or
other credit exposure arising from other on- and off-balance sheet credit enhancements that
the reporting bank has provided. Do not report as the remaining maximum contractual
exposure a reasonable estimate of the probable loss under the recourse arrangements or
credit enhancement provisions or the fair value of any liability incurred under such provisions.
Furthermore, do not reduce the remaining maximum contractual exposure by the amount of
any associated recourse liability account. Report exposure amounts gross rather than net of
any tax effects, e.g., any associated deferred tax liability.

FFIEC 031 and 041

RC-S-7
(3-11)

RC-S – SERVICING, SECURITIZATION, ASSET SALES

FFIEC 031 and 041

RC-S – SERVICING, SECURITIZATION, ASSET SALES

Memoranda
Item No.

Caption and Instructions

1

Small business obligations transferred with recourse under Section 208 of the Riegle
Community Development and Regulatory Improvement Act of 1994. Report in the
appropriate subitem the outstanding principal balance of and recourse exposure on small
business loans and leases on personal property (small business obligations) which the bank
has transferred with recourse during the time the bank was a "qualifying institution" and did
not exceed the retained recourse limit set forth in banking agency regulations implementing
Section 208. Transfers of small business obligations with recourse that were consummated
during such a time should be reported as sales for Call Report purposes if the transactions
are treated as sales under generally accepted accounting principles (GAAP) and the
institution establishes a recourse liability account that is sufficient under GAAP.

1.a

Outstanding principal balance. Report the principal balance outstanding as of the report
date for small business obligations which the bank has transferred with recourse while it was
a “qualifying institution” and did not exceed the retained recourse limit.

1.b

Amount of retained recourse on these obligations as of the report date. Report the
maximum contractual amount of recourse the bank has retained on the small business
obligations whose outstanding principal balance was reported in Schedule RC-S,
Memorandum item 1.a, above, not a reasonable estimate of the probable loss under the
recourse provision and not the fair value of the liability incurred under this provision.
Furthermore, the remaining maximum contractual exposure should not be reduced by the
amount of any associated recourse liability account. The amount of recourse exposure to be
reported should not include interest payments the bank has advanced on delinquent
obligations. For small business obligations transferred with full (unlimited) recourse, the
amount of recourse exposure to be reported is the outstanding principal balance of the
obligations as of the report date. For small business obligations transferred with limited
recourse, the amount of recourse exposure to be reported is the maximum amount of principal
the transferring bank would be obligated to pay the holder of the obligations in the event the
entire outstanding principal balance of the obligations transferred becomes uncollectible.

2

Outstanding principal balance of assets serviced for others. Report in the appropriate
subitem the outstanding principal balance of loans and other financial assets the bank
services for others, regardless of whether the servicing involves whole loans and other
financial assets or only portions thereof, as is typically the case with loan participations.
Include (1) the principal balance of loans and other financial assets owned by others for
which the reporting bank has purchased the servicing (i.e., purchased servicing) and
(2) the principal balance of loans and other financial assets that the reporting bank has either
originated or purchased and subsequently sold, whether or not securitized, but for which it
has retained the servicing duties and responsibilities (i.e., retained servicing). If the bank
services a portion of a loan or other financial asset for one or more other parties and owns
the remaining portion of the loan or other financial asset, report only the principal balance of
the portion of the asset serviced for others.
NOTE: After the effective date of the amendments to ASC Topic 860, Transfers and Servicing,
and ASC Subtopic 810-10, Consolidation – Overall, resulting from Accounting Standards
Update (ASU) No. 2009-16 (formerly FASB Statement No. 166, “Accounting for Transfers of
Financial Assets”) and ASU No. 2009-17 (formerly FASB Statement No. 167, “Amendments to
FASB Interpretation No. 46(R)”), respectively, a bank should report in Memorandum items 2.a
through 2.d retained servicing only for those transferred assets or portions of transferred
assets properly reported as sold in accordance with applicable generally accepted
accounting principles as well as purchased servicing.

FFIEC 031 and 041

RC-S-8
(3-11)

RC-S – SERVICING, SECURITIZATION, ASSET SALES

FFIEC 031 and 041

RC-S – SERVICING, SECURITIZATION, ASSET SALES

Memoranda
Item No.

Caption and Instructions

2.a

Closed-end 1–4 family residential mortgages serviced with recourse or other servicerprovided credit enhancements. Report the outstanding principal balance of closed-end
1-to-4 family residential mortgage loans (as defined for Schedule RC-C, part I, item 1.c.(2))
that the reporting bank services for others under servicing arrangements in which the
reporting bank also provides recourse or other servicer-provided credit enhancements.
Include closed-end 1-to-4 family residential mortgages serviced under regular option
contracts (i.e., with recourse) with the Federal National Mortgage Association, serviced with
recourse for the Federal Home Loan Mortgage Corporation, and serviced with recourse
under other servicing contracts.

2.b

Closed-end 1–4 family residential mortgages serviced with no recourse or other
servicer-provided credit enhancements. Report the outstanding principal balance of
closed-end 1-to-4 family residential mortgage loans (as defined for Schedule RC-C, part I,
item 1.c.(2)) that the reporting bank services for others under servicing arrangements in
which the reporting bank does not provide recourse or other servicer-provided credit
enhancements.

2.c

Other financial assets. NOTE: Memorandum item 2.c is to be completed if the principal
balance of loans and other financial assets serviced for others is more than $10 million.
Report the outstanding principal balance of loans and other financial assets, other than
closed-end 1-to-4 family residential mortgage loans, that the reporting bank services for
others. These serviced financial assets may include, but are not limited to, home equity
lines, credit cards, automobile loans, and loans guaranteed by the Small Business
Administration.

2.d

1-4 family residential mortgages serviced for others that are in process of foreclosure
at quarter-end. Report the total unpaid principal balance of loans secured by 1-4 family
residential properties (as defined for Schedule RC-C, part I, item 1.c) serviced for others for
which formal foreclosure proceedings to seize the real estate collateral have started and are
ongoing as of quarter-end, regardless of the date the foreclosure procedure was initiated.
Loans should be classified as in process of foreclosure according to the investor’s or local
requirements. Include loans where the servicing has been suspended in accordance with
any of the investor’s foreclosure requirements. If a loan is already in process of foreclosure
and the mortgagor files a bankruptcy petition, the loan should continue to be reported as in
process of foreclosure until the bankruptcy is resolved. Exclude loans where the foreclosure
process has been completed to the extent that (a) the investor has acquired title to the real
estate, an entitling certificate, title subject to redemption, or title awaiting transfer to the
Federal Housing Administration or the Veterans Administration or (b) the bank reports the
real estate as “Other real estate owned” in Schedule RC, item 7.
This item should include both closed-end and open-end 1-4 family residential mortgage loans
that are in process of foreclosure. The closed-end 1-4 family residential mortgage loans
serviced for others that are in process of foreclosure and reported in this item will have also
been included in Schedule RC-S, Memorandum items 2.a and 2.b. The open-end 1-4 family
residential mortgage loans serviced for others that are in process of foreclosure and reported
in this item will also have been included in Schedule RC-S, Memorandum item 2.c, if the
principal balance of such open-end mortgages and other financial assets serviced for others
is more than $10 million.

FFIEC 031 and 041

RC-S-9
(3-11)

RC-S – SERVICING, SECURITIZATION, ASSET SALES

FFIEC 031 and 041

RC-S – SERVICING, SECURITIZATION, ASSET SALES

Memoranda
Item No.

Caption and Instructions

3

Asset-backed commercial paper conduits. Report the requested information on credit
enhancements and liquidity facilities provided to asset-backed commercial paper conduits in
Memorandum items 3.a and 3.b, respectively, regardless of whether the reporting bank must
consolidate the conduit for reporting purposes in accordance with ASC Subtopic 810-10,
Consolidation – Overall (formerly FASB Statement No. 167, “Amendments to FASB
Interpretation No.46(R)”).

3.a

Maximum amount of credit exposure arising from credit enhancements provided to
conduit structures in the form of standby letters of credit, subordinated securities, and
other enhancements. Report in the appropriate subitem the maximum contractual credit
exposure remaining as of the report date under standby letters of credit, subordinated
securities, and other credit enhancements provided by the reporting bank to asset-backed
commercial paper conduit structures. Do not report in these subitems a reasonable estimate
of the probable loss under the credit enhancement provisions or the fair value of any liability
incurred under such provisions.

3.a.(1)

Conduits sponsored by the bank, a bank affiliate, or the bank’s holding company.
Report the unused portion of standby letters of credit, the carrying value of subordinated
securities, and the maximum contractual amount of credit exposure arising from other credit
enhancements that the reporting bank has provided to asset-backed commercial paper
conduit structures sponsored by the reporting bank, an affiliate of the reporting bank, or the
reporting bank’s holding company.

3.a.(2)

Conduits sponsored by other unrelated institutions. Report the unused portion of
standby letters of credit, the carrying value of subordinated securities, and the maximum
contractual amount of credit exposure arising from other credit enhancements that the
reporting bank has provided to asset-backed commercial paper conduit structures other than
those sponsored by the reporting bank, an affiliate of the reporting bank, or the reporting
bank’s holding company.

3.b

Unused commitments to provide liquidity to conduit structures. Report in the
appropriate subitem the unused portions of commitments provided by the reporting bank that
function as liquidity facilities to asset-backed commercial paper conduit structures. Typically,
these facilities take the form of a Backstop Line (Loan Agreement) or an Asset Purchase
Agreement. Under a backstop line, the reporting bank advances funds to the conduit when a
draw is required under the liquidity facility. The advance is secured by the cash flow of the
underlying asset pools. Under an asset purchase agreement, the reporting bank purchases
a specific pool of assets from the conduit when a draw is required under the liquidity facility.
Typically, the reporting bank is repaid from the cash flow on the purchased assets or from the
sale of the purchased pool of assets.

3.b.(1)

Conduits sponsored by the bank, a bank affiliate, or the bank’s holding company.
Report the unused portions of commitments provided by the reporting bank that function as
liquidity facilities to asset-backed commercial paper conduit structures sponsored by the
reporting bank, an affiliate of the reporting bank, or the reporting bank’s holding company.

3.b.(2)

Conduits sponsored by other unrelated institutions. Report the unused portions of
commitments provided by the reporting bank that function as liquidity facilities to
asset-backed commercial paper conduit structures other than those sponsored by the
reporting bank, an affiliate of the reporting bank, or the reporting bank’s holding company.

FFIEC 031 and 041

RC-S-10
(3-11)

RC-S – SERVICING, SECURITIZATION, ASSET SALES

FFIEC 031 and 041

RC-S – SERVICING, SECURITIZATION, ASSET SALES

Memoranda
Item No.

Caption and Instructions

NOTE: Memorandum item 4 is to be completed only by those banks that:
(1) either individually or on a combined basis with their affiliated depository institutions, report
outstanding credit card receivables that exceed, in the aggregate, $500 million as of the
report date. Outstanding credit card receivables are the sum of:
(a) Schedule RC-C, part I, item 6.a (column B on the FFIEC 041, column A on the
FFIEC 031);
(b) Schedule RC-S, item 1, column C; and
(c) Schedule RC-S, item 6.a, column C.
(Include comparable data on managed credit card receivables for any affiliated savings
association.)
OR
(2) are credit card specialty banks as defined for purposes of the Uniform Bank Performance
Report (UBPR). According to the UBPR Users Guide, credit card specialty banks are
currently defined as those banks that exceed 50% for the following two criteria:
(a) Credit Cards plus Securitized and Sold Credit Cards divided by Total Loans plus
Securitized and Sold Credit Cards.
(b) Total Loans plus Securitized and Sold Credit Cards divided by Total Assets plus
Securitized and Sold Credit Cards.
4

Outstanding credit card fees and finance charges. Report the amount outstanding of
credit card fees and finance charges that the bank has securitized and sold in connection
with its securitization and sale of the credit card receivables reported in Schedule RC-S,
item 1, column C.

FFIEC 031 and 041

RC-S-11
(3-08)

RC-S – SERVICING, SECURITIZATION, ASSET SALES

This page intentionally left blank.

FFIEC 031 and 041

RC-T – FIDUCIARY AND RELATED SERVICES

SCHEDULE RC-T – FIDUCIARY AND RELATED SERVICES
General Instructions
This schedule should be completed on a fully consolidated basis, i.e., including any trust company
subsidiary (or subsidiaries) of the reporting institution. For report dates through December 31, 2008, the
information reported in Schedule RC-T on fiduciary and related services income (except total gross
fiduciary and related services income) and on fiduciary settlements, surcharges, and other losses will not
be made available to the public on an individual institution basis. Beginning with the March 31, 2009,
report date, all of the information reported in Schedule RC-T for each bank will be publicly available.
Item No.

Caption and Instructions

1

Does the institution have fiduciary powers? Federally-chartered institutions granted trust
powers by the OCC to administer accounts in a fiduciary capacity should answer "Yes."
State-chartered institutions should answer "Yes" if (a) the state has granted trust powers to
the institution to offer fiduciary services as defined by the state and (b) the institution's federal
supervisory agency (the FDIC or the Federal Reserve) has granted consent to exercise the
trust powers (see Sections 333.2 and 333.101 of the FDIC's regulations and Federal Reserve
Regulation H). Institutions with trust company subsidiaries should also answer “Yes.”
Institutions responding "No" should not complete the remainder of this schedule. Fiduciary
capacity generally means trustee, executor, administrator, registrar of stocks and bonds,
transfer agent, guardian, assignee, receiver, custodian under a uniform gifts to minors act,
investment adviser (if the institution receives a fee for its investment advice), any capacity in
which the institution possesses investment discretion on behalf of another, or any other
similar capacity.

2

Does the institution exercise the fiduciary powers it has been granted? Institutions
exercising their fiduciary powers should respond "Yes." Exercising fiduciary powers means
that an institution, or a trust company subsidiary of the institution, serves in a fiduciary
capacity as defined in the instructions for item 1 of this schedule.

3

Does the institution have fiduciary or related activity (in the form of assets or
accounts) to report in this schedule? Institutions (including their trust company
subsidiaries) with fiduciary assets, accounts, income, or other reportable fiduciary related
services should respond "Yes." Institutions responding "No" should not complete the
remainder of this schedule.
Reportable fiduciary and related services include activities that do not require trust powers
but are incidental to fiduciary services. Specifically, this includes custodial services for
assets held by the institution in a fiduciary capacity. An institution should report custodial
activities that are offered through the fiduciary business unit or through another distinct
business unit that is devoted to institutional custodial services. Institutions should exclude
those custodial and escrow activities related to commercial bank services such as hold-incustody repurchase assets, escrow assets held for the benefit of third parties, safety deposit
box assets, and any other similar commercial arrangement.
Institutions with fiduciary activities that are limited to only land trusts and/or custodial activity
for mortgage-backed securities (such as GNMA or FNMA) should respond "No."
If the answer to item 3 is "Yes," complete the applicable items of Schedule RC-T, as follows:
Institutions with total fiduciary assets (item 10, sum of columns A and B) greater than
$250 million (as of the preceding December 31) or with gross fiduciary and related services

FFIEC 031 and 041

RC-T-1
(3-11)

RC-T – FIDUCIARY AND RELATED SERVICES

FFIEC 031 and 041

RC-T – FIDUCIARY AND RELATED SERVICES

Item No.

Caption and Instructions

3
(cont.)

income greater than 10 percent of revenue (net interest income plus noninterest income) for
the preceding calendar year must complete:





Items 4 through 22 on the FFIEC 041 quarterly; items 4 through 22.a on the FFIEC 031
quarterly;
Items 23 through 26 annually with the December report;
Memorandum item 3 quarterly; and
Memorandum items 1, 2, and 4 annually with the December report.

Institutions with total fiduciary assets (item 10, sum of columns A and B) greater than
$100 million but less than $250 million (as of the preceding December 31) that do not meet
the fiduciary income test for quarterly reporting must complete:



Items 4 through 26 annually with the December report; and
Memorandum items 1 through 4 annually with the December report.

Institutions with total fiduciary assets (item 10, sum of columns A and B) of $100 million or
less (as of the preceding December 31) that do not meet the fiduciary income test for
quarterly reporting must complete:



Items 4 through 13 annually with the December report; and
Memorandum items 1 through 3 annually with the December report.

Fiduciary and Related Assets
Institutions should generally report fiduciary and related assets using their market value as of the report
date. While market value quotations are readily available for marketable securities, many financial and
physical assets held in fiduciary accounts are not widely traded or easily valued. If the methodology for
determining market values is not set or governed by applicable law (including the terms of the prevailing
fiduciary agreement), the institution may use any reasonable method to establish values for fiduciary and
related assets for purposes of reporting on this schedule. Reasonable methods include appraised
values, book values, or reliable estimates. Valuation methods should be consistent from reporting period
to reporting period. This "reasonable method" approach to reporting market values applies both to
financial assets that are not marketable and to physical assets. Common physical assets held in fiduciary
accounts include real estate, equipment, collectibles, and household goods.
Only those Individual Retirement Accounts, Keogh Plan accounts, Health Savings Accounts, and similar
accounts offered through a fiduciary business unit of the reporting institution should be reported in
Schedule RC-T. When such accounts are not offered through an institution’s fiduciary business unit, they
should not be reported in Schedule RC-T. Accounts that consist solely of deposits in the bank itself should
not be reported in Schedule RC-T.
If two institutions are named co-fiduciary in the governing instrument, both institutions should report the
account. In addition, where one institution contracts with another for fiduciary or related services
(i.e., Bank A provides custody services to the trust accounts of Bank B, or Bank A provides investment
management services to the trust accounts of Bank B), both institutions should report the accounts in
their respective capacities.
Exclude unfunded insurance trusts, testamentary executor appointments, and any other arrangements
representing potential future fiduciary accounts.
Asset values reported on this schedule should generally exclude liabilities. For example, an employee
benefit account with associated loans against account assets should be reported gross of the outstanding

FFIEC 031 and 041

RC-T-2
(3-11)

RC-T – FIDUCIARY AND RELATED SERVICES

FFIEC 031 and 041

RC-T – FIDUCIARY AND RELATED SERVICES

Fiduciary and Related Assets (cont.)
loan balances. As another example, an account with a real estate asset and corresponding mortgage
loan should be reported gross of the mortgage liability. However, there are two exceptions. First, for
purposes of this schedule, overdrafts should be netted against gross fiduciary assets. Second, the fair
value of derivative instruments, as defined in ASC Topic 815, Derivatives and Hedging (formerly FASB
Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended), should
be included in (i.e., netted against) gross assets even if the fair value is negative.
Securities borrowing/lending transactions should be reflected as sales or as secured borrowings
according to ASC Topic 860, Transfers and Servicing (formerly FASB Statement No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," as amended). A
transferee ("borrower") of securities generally is required to provide "collateral" to the transferor ("lender")
of securities. When such transactions do not qualify as sales, securities "lenders" and "borrowers" should
account for the transactions as secured borrowings in which cash (or securities that the holder is
permitted by contract or custom to sell or repledge) received as "collateral" by the securities "lender" is
considered the amount borrowed and the securities "loaned" are considered pledged against the amount
borrowed. For purposes of this schedule, securities held in fiduciary accounts that are "loaned" in
securities lending transactions (that are accounted for as secured borrowings) should be reported as an
asset of the fiduciary account that “loaned” the securities, but the “collateral” received should not also be
reported as an asset of this fiduciary account.
In the Fiduciary and Related Assets section, the market value of Collective Investment Fund (CIF) units
should be reported along with individual participant accounts in the Column and Item that corresponds to
each participant. The aggregate amount of a CIF that is operated by an institution should NOT also be
reported as a separate, additional account in the Fiduciary and Related Assets section of this schedule.
Managed Assets – Column A
Report the total market value of assets held in managed fiduciary accounts. An account should be
categorized as managed if the institution has investment discretion over the assets of the account.
Investment discretion is defined as the sole or shared authority (whether or not that authority is exercised)
to determine what securities or other assets to purchase or sell on behalf of the fiduciary related account.
An institution that delegates its authority over investments and an institution that receives delegated
authority over investments are BOTH deemed to have investment discretion.
Therefore, whether an account where investment discretion has been delegated to a registered
investment adviser, whether affiliated or unaffiliated with the reporting institution, should be reported as a
managed account depends on whether the delegation of investment authority to the registered
investment adviser was made pursuant to the exercise of investment discretion by the reporting
institution. If so, the account is deemed to be a managed account by the reporting institution. Otherwise,
the account would be a non-managed account for purposes of Schedule RC-T.
An entire account should be reported as either managed or non-managed based on the predominant
responsibility of the reporting institution.
Non-Managed Assets – Column B
Report the total market value of assets held in non-managed fiduciary accounts. An account should be
categorized as non-managed if the institution does not have investment discretion. Those accounts for
which the institution provides a menu of investment options but the ultimate selection authority remains
with the account holder or an external manager should be categorized as non-managed. For example,
an institution that offers a choice of sweep vehicles is not necessarily exercising investment discretion.
The process of narrowing investment options from a range of alternatives does not create a managed
fiduciary account for the purposes of this schedule. For example, a 401(k) employee benefit plan where
the participants select investments from a list of investment options should be reported as non-managed
for the purposes of this schedule.
FFIEC 031 and 041

RC-T-3
(3-11)

RC-T – FIDUCIARY AND RELATED SERVICES

FFIEC 031 and 041

RC-T – FIDUCIARY AND RELATED SERVICES

Fiduciary and Related Assets (cont.)
Number of Managed Accounts – Column C
Report the total number of managed fiduciary accounts.
Number of Non-Managed Accounts – Column D
Report the total number of non-managed fiduciary accounts.

Item No.

Caption and Instructions

4

Personal trust and agency accounts. Report the market value and number of accounts for
all testamentary trusts, revocable and irrevocable living trusts, other personal trusts, and
non-managed personal agency accounts. Include accounts in which the institution serves as
executor, administrator, guardian, or conservator. Exclude personal investment management
and investment advisory agency accounts, which should be reported in Schedule RC-T,
item 7. Also exclude Keogh Plan accounts, Individual Retirement Accounts (IRAs), Health
Savings Accounts, and other pension or profit-sharing plans for self-employed individuals,
which should be reported in Schedule RC-T, item 5. Personal accounts that are solely
custody or safekeeping should be reported in item 11 of this schedule.

5

Employee benefit and retirement-related trust and agency accounts:

5.a

Employee benefit – defined contribution. Report the market value and number of
accounts for all employee benefit defined contribution accounts in which the institution serves
as either trustee or agent. Include 401(k) plans, 403(b) plans, profit-sharing plans, money
purchase plans, target benefit plans, stock bonus plans, employee stock ownership plans,
and thrift savings plans. Employee benefit accounts for which the institution serves as a
directed trustee should be reported as non-managed. The number of accounts reported
should reflect the total number of plans administered rather than the number of plan
participants. Employee benefit accounts that are solely custody and safekeeping accounts
should be reported in Schedule RC-T, item 11.

5.b

Employee benefit – defined benefit. Report the market value and number of accounts for
all employee benefit defined benefit plans in which the institution serves as either trustee or
agent. Employee benefit accounts for which the institution serves as a directed trustee
should be reported as non-managed. The number of accounts reported should reflect the
total number of plans administered rather than the number of plan participants. Employee
benefit accounts that are solely custody and safekeeping accounts should be reported in
Schedule RC-T, item 11.

5.c

Other employee benefit and retirement-related accounts. Report the market value and
number of accounts for all other employee benefit and retirement-related fiduciary accounts
in which the institution serves as trustee or agent. Include Keogh Plan accounts, Individual
Retirement Accounts, Health Savings Accounts, Medical Savings Accounts, and other
pension or profit-sharing plans for self-employed individuals. Also report the market value of
assets and the number of accounts for employee welfare benefit trusts and agencies.
Employee welfare benefit plans include plans, funds, or programs that provide medical,
surgical, or hospital care benefits; benefits in the event of sickness, accident, disability,
death, or unemployment; vacation benefits; apprenticeship or other training programs; day
care centers; scholarship funds; or prepaid legal services. Employee benefit accounts for
which the institution serves as a directed trustee should be reported as non-managed.
Exclude accounts, originated by fiduciary or non-fiduciary personnel, that are only permitted

FFIEC 031 and 041

RC-T-4
(3-11)

RC-T – FIDUCIARY AND RELATED SERVICES

FFIEC 031 and 041

RC-T – FIDUCIARY AND RELATED SERVICES

Item No.

Caption and Instructions

5.c
(cont.)

to be invested in own-bank deposits. The number of accounts reported should reflect the
total number of plans or accounts administered rather than the number of plan participants.
Other retirement accounts that are solely custody and safekeeping accounts should be
reported in Schedule RC-T, item 11. Individual Retirement Accounts, Health Savings
Accounts, and other similar accounts should also be reported in Schedule RC-T, item 13.

6

Corporate trust and agency accounts. Report the market value of assets held by the
institution for all corporate trust and agency accounts. Report assets that are the
responsibility of the institution to manage or administer in accordance with the corporate trust
agreement. Include assets relating to unpresented bonds or coupons relating to issues that
have been called or matured. Do NOT report the entire market value of the associated
securities or the outstanding principal of associated debt issues. Include accounts for which
the institution is trustee for corporate securities, tax-exempt and other municipal securities,
and other debt securities including unit investment trusts. Also include accounts for which
the institution is dividend or interest paying agent, and any other type of corporate trustee or
agent appointment. Accounts that are solely custodial or safekeeping should be reported in
Schedule RC-T, item 11.

7

Investment management and investment advisory agency accounts. Report the market
value and number of accounts for all individual and institutional investment management and
investment advisory agency accounts that are administered within the fiduciary area of the
institution. Investment management accounts are those agency accounts for which the
institution has investment discretion; however, title to the assets remains with the client.
Include accounts for which the institution serves as a sub-advisor. Investment advisory
accounts are those agency accounts for which the institution provides investment advice for a
fee, but for which some other person is responsible for investment decisions. Investment
management agency accounts should be reported as managed. Investment advisory agency
accounts should be reported as non-managed. Investment management and investment
advisory agency accounts maintained for foundations and endowments should be reported in
Schedule RC-T, item 8. Exclude investment management and investment advisory agency
accounts that are administered in SEC-registered investment advisory subsidiaries of the
bank. Include those mutual funds that are advised by the fiduciary area that is a separately
identifiable department or division (as defined in Section 217 of the Gramm-Leach-Bliley Act).
Classes of the same mutual fund should be combined and reported as a single account.

8

Foundation and endowment trust and agency accounts. Report the market value and
number of accounts for all foundations and endowments (whether established by individuals,
families, corporations, or other entities) that file any version of Form 990 with the Internal
Revenue Service and for which the institution serves as either trustee or agent. Also include
those foundations and endowments that do not file Form 990, 990EZ, or 990PF solely
because the organization’s gross receipts or total assets fall below reporting thresholds, but
would otherwise be required to file. Foundations and endowments established by churches,
which are exempt from filing Form 990, should also be included in this item. Employee
benefit accounts maintained for a foundation’s or endowment’s employees should be
reported in Schedule RC-T, item 5. Accounts that are solely custodial or safekeeping should
be reported in Schedule RC-T, item 11.

9

Other fiduciary accounts. Report the market value and number of accounts for all other
trusts and agencies not reported in Schedule RC-T, items 4 through 8. Custody and
safekeeping accounts should be reported in Schedule RC-T, item 11.

10

Total fiduciary accounts. Report the sum of items 4 through 9.

FFIEC 031 and 041

RC-T-5
(12-09)

RC-T – FIDUCIARY AND RELATED SERVICES

FFIEC 031 and 041

Item No.
11

RC-T – FIDUCIARY AND RELATED SERVICES

Caption and Instructions
Custody and safekeeping accounts. Report the market value and number of accounts for
all personal and institutional custody and safekeeping accounts held by the institution.
Safekeeping and custody accounts are a type of agency account in which the reporting
institution performs one or more specified agency functions but the institution is not a trustee
and also is not responsible for managing the asset selection for account assets. These
agency services may include holding assets, processing income and redemptions, and other
recordkeeping and customer reporting services. For employee benefit custody or
safekeeping accounts, the number of accounts reported should reflect the total number of
plans administered rather than the number of plan participants. Include accounts in which
the institution serves in a sub-custodian capacity. For example, where one institution
contracts with another for custody services, both institutions should report the accounts in
their respective capacity. Individual Retirement Accounts, Health Savings Accounts, and
other similar accounts should also be reported in Schedule RC-T, item 13.
Accounts in which the institution serves as trustee or in an agency capacity in addition to
being custodian should be reported in the category of the primary relationship. For example,
personal trust accounts in which the institution also serves as custodian should be reported
as personal trust accounts and not as custodian accounts. An institution should report an
account only once in Schedule RC-T, items 4 through 9 and 11.
Report custodian accounts that are incidental to fiduciary services. Include those custody
and safekeeping accounts that are administered by the trust department, and those that are
administered in other areas of the institution through an identifiable business unit that focuses
on offering fiduciary related custodial services to institutional clients. Exclude those custodial
and escrow activities related to commercial bank services such as hold-in-custody
repurchase assets, securities safekeeping services for correspondent banks, escrow assets
held for the benefit of third parties, safety deposit box assets, and any other similar
commercial arrangement.

NOTE: Item 12 is applicable only to banks filing the FFIEC 031 report form.
12

Fiduciary accounts held in foreign offices. Report the market value and number of
accounts included in Schedule RC-T, items 10 and 11, above that are attributable to
accounts held in foreign offices.

13

Individual Retirement Accounts, Health Savings Accounts, and other similar accounts.
Report the market value and number of Individual Retirement Accounts, Health Savings
Accounts, and other similar accounts included in Schedule RC-T, items 5.c and 11. Other
similar accounts include Roth IRAs, Coverdell Education Savings Accounts, and Archer
Medical Savings Accounts. Exclude Keogh Plan accounts.

Fiduciary and Related Services Income
The following income categories correspond to the fiduciary asset categories described in
Schedule RC-T, items 4 through 11, above. For a detailed definition of the categories, please refer to the
corresponding account descriptions. Income and expenses should be reported on an accrual basis.
Institutions may report income and expense accounts on a cash basis if the results would not materially
differ from those obtained using an accrual basis. For report dates through December 31, 2008, the
information reported in Schedule RC-T on fiduciary and related services income (except total gross
fiduciary and related services income) will not be made available to the public on an individual institution
basis. Beginning with the March 31, 2009, report date, all of the information reported in Schedule RC-T
for each bank will be publicly available.

FFIEC 031 and 041

RC-T-6
(12-09)

RC-T – FIDUCIARY AND RELATED SERVICES

FFIEC 031 and 041

Item No.

RC-T – FIDUCIARY AND RELATED SERVICES

Caption and Instructions

14

Personal trust and agency accounts. Report gross income generated from personal trust
and agency accounts as defined for item 4 of this schedule.

15

Employee benefit and retirement-related trust and agency accounts:

15.a

Employee benefit – defined contribution. Report gross income generated from defined
contribution employee benefit trust and agency accounts as defined for item 5.a of this
schedule.

15.b

Employee benefit – defined benefit. Report gross income generated from defined benefit
employee benefit trust and agency accounts as defined for item 5.b of this schedule.

15.c

Other employee benefit and retirement-related accounts. Report gross income
generated from other employee benefit and retirement-related accounts as defined for
item 5.c of this schedule.

16

Corporate trust and agency accounts. Report gross income generated from corporate
trust and agency relationships as defined for item 6 of this schedule.

17

Investment management and investment advisory agency accounts. Report gross
income generated from investment management and investment advisory agency accounts
as defined for item 7 of this schedule. Also include income generated from investment
advisory activities when the assets are not held by the institution.

18

Foundation and endowment trust and agency accounts. Report gross income generated
from foundation and endowment trust and agency accounts as defined for item 8 of this
schedule.

19

Other fiduciary accounts. Report gross income generated from other trust and agency
accounts as defined for item 9 of this schedule.

20

Custody and safekeeping accounts. Report gross income generated from custody and
safekeeping agency accounts as defined for item 11 of this schedule.

21

Other fiduciary and related services income. Report all other gross fiduciary related
income that cannot properly be reported in Schedule RC-T, items 14 through item 20, above.
Include income received from others (including affiliates) for fiduciary and related services
provided by the institution. Income received from investment advisory services in which the
account assets are held in a custody or safekeeping account at the reporting institution
should be reported in item 17 of this schedule. Also include net income generated from
securities lending activities (i.e., after broker rebates and income paid to lending accounts).
Include income from custodial activities for land trusts and mortgage-backed securities.
Exclude allocations of income to the trust department from other areas of the institution such
as credits for fiduciary cash held as a deposit in the commercial bank.

22

Total gross fiduciary and related services income. Report the sum of items 14
through 21. This item must equal Schedule RI, item 5.a, “Income from fiduciary activities.”

FFIEC 031 and 041

RC-T-7
(12-09)

RC-T – FIDUCIARY AND RELATED SERVICES

FFIEC 031 and 041

Item No.

RC-T – FIDUCIARY AND RELATED SERVICES

Caption and Instructions

NOTE: Item 22.a is applicable only to banks filing the FFIEC 031 report form.
22.a

Fiduciary and related services income – foreign offices. Report the total amount of
fiduciary and related services income included in Schedule RC-T, item 22, above that is
attributable to fiduciary accounts held in foreign offices.

23

Less: Expenses. Report total direct and indirect expenses attributable to the fiduciary and
related services reported in this schedule. Include salaries, wages, bonuses, incentive pay,
and employee benefits for employees assigned to reportable activities. If only a portion of
their time is allocated to reportable activities, report that proportional share of their salaries
and employee benefits. Include direct expenses related to the use of premises, furniture,
fixtures, and equipment, as well as depreciation/amortization, ordinary repairs and
maintenance, service or maintenance contracts, utilities, lease or rental payments, insurance
coverage, and real estate and other property taxes if they are directly chargeable to the
reportable activities. Income taxes attributable to reportable activity earnings should not be
included. Also exclude settlements, surcharges, and other losses, which are to be reported
in Schedule RC-T, item 24.
Include indirect expenses charged to the department or function offering reportable activities
by other departments or functions of the institution as reflected in the institution's internal
management accounting system. Include proportional shares of corporate expenses that
cannot be directly charged to particular departments or functions. Examples of indirect
expenses include such items as audit and examination fees, marketing, charitable
contributions, customer parking, holding company overhead, proportional share of building
rent or depreciation, utilities, real estate taxes, insurance, human resources, corporate
planning, and corporate financial staff. Reporting methods for indirect expenses should
remain consistent from period to period.

24

Less: Net losses from fiduciary and related services. Report net losses resulting from
fiduciary and related services. Net losses are gross losses less recoveries. Gross losses
include settlements, surcharges, and other losses that are realized in the reporting period
attributable to the fiduciary and related services. Recoveries should include those that are
attributable to prior and current period losses. This item must equal Schedule RC-T,
Memorandum item 4.e, sum of columns A and B minus column C. For further information,
see the instruction to Schedule RC-T, Memorandum item 4.

25

Plus: Intracompany income credits for fiduciary and related services. If applicable to
the reporting institution, report credits from other areas of the institution for activities
reportable in this schedule. Include intracompany income credit made available to the
fiduciary area for fiduciary account holdings of own-bank deposits. Also include credits for
other intracompany services and transactions.

26

Net fiduciary and related services income. Report the total from item 22 less the amounts
reported in item 23 and item 24 plus the amount reported in item 25.

FFIEC 031 and 041

RC-T-8
(12-09)

RC-T – FIDUCIARY AND RELATED SERVICES

FFIEC 031 and 041

RC-T – FIDUCIARY AND RELATED SERVICES

Memoranda
Item No.
1

Caption and Instructions
Managed assets held in fiduciary accounts.
Column Instructions for Memorandum items 1.a through 1.p:
Column A, Personal Trust and Agency and Investment Management Agency Accounts:
Report the market value of managed assets held in (a) personal trust and agency accounts
as defined for item 4 of this schedule and (b) investment management agency accounts as
defined for item 7 of this schedule.
Column B, Employee Benefit and Retirement-Related Trust and Agency Accounts:
Report the market value of managed assets held in employee benefit and retirement-related
trust and agency accounts as defined for items 5.a, 5.b, and 5.c of this schedule.
Column C, All Other Accounts: Report the market value of managed assets held in
(a) corporate trust and agency accounts as defined for item 6 of this schedule, (b) foundation
and endowment trust and agency accounts as defined for item 8 of this schedule, and
(c) other fiduciary accounts as defined for item 9 of this schedule.
Report in the appropriate column and in the appropriate subitem the market value of all
managed assets held in the fiduciary accounts included in Schedule RC-T, items 4 through 9,
column A. For units in common trust funds and collective investment funds that are held by a
managed fiduciary account, report the market value of the units in Schedule RC-T,
Memorandum item 1.h. Do not allocate the underlying assets of each common trust fund and
collective investment fund attributable to managed accounts to the individual subitems for the
various types of assets reported in Schedule RC-T, Memorandum item 1.
Securities held in fiduciary accounts that are "loaned" in securities lending transactions (that
are accounted for as secured borrowings) should be reported as an asset of the fiduciary
account that “loaned” the securities, but the “collateral” received should not also be reported
as an asset of this fiduciary account.

1.a

Noninterest-bearing deposits. Report all noninterest-bearing deposits. Report
noninterest-bearing deposits of both principal and income cash.

1.b

Interest-bearing deposits. Report all interest-bearing savings and time deposits. Include
NOW accounts, MMDA accounts, "BICs" (bank investment contracts) that are insured by the
FDIC, and certificates of deposit. Report interest-bearing deposits of both principal and
income cash.

1.c

U.S. Treasury and U.S. Government agency obligations. Report all securities of and/or
loans to the U.S. Government and U.S. Government corporations and agencies. Include
certificates or other obligations, however named, that represent pass-through participations in
pools of real estate loans when the participation instruments: (1) are issued by FHAapproved mortgagees and guaranteed by the Government National Mortgage Association, or
(2) are issued, insured, or guaranteed by a U.S. Government agency or corporation (e.g., the
Federal Home Loan Mortgage Corporation's Mortgage Participation Certificates).
Collateralized mortgage obligations (CMOs) and real estate mortgage investment conduits
(REMICs) issued by the Federal National Mortgage Association (FNMA) ("Fannie Mae") and
the Federal Home Loan Mortgage Corporation (FHLMC) ("Freddie Mac") should be included.

FFIEC 031 and 041

RC-T-9
(12-09)

RC-T – FIDUCIARY AND RELATED SERVICES

FFIEC 031 and 041

RC-T – FIDUCIARY AND RELATED SERVICES

Memoranda
Item No.

Caption and Instructions

1.d

State, county, and municipal obligations. Report all short- and long-term obligations of
state and local governments, and political subdivisions of the United States. Include
obligations of U.S. territories and insular possessions and their political subdivisions and all
Federal income tax-exempt obligations of authorities such as local housing and industrial
development authorities that derive their tax-exempt status from relationships with State or
local governments. Tax-exempt money market mutual funds should be reported with money
market mutual funds in Schedule RC-T, Memorandum item 1.e.

1.e

Money market mutual funds. Report all holdings of mutual funds registered under the
Investment Company Act of 1940 that attempt to maintain net asset values at $1.00 per
share. Include taxable and tax-exempt money market mutual funds. Exclude short-term
collective investment funds.

1.f

Equity mutual funds. Report all holdings of mutual funds registered under the Investment
Company Act of 1940, exchange traded funds (ETFs), and unit investment trusts (UITs) that
invest primarily in equity securities. For purposes of Memorandum item 1, institutions should
categorize these investments on the basis of either the fund’s investment objective as stated
in its prospectus or the fund’s classification by a company that tracks information on these
funds such as Morningstar and Lipper. An institution’s methodology for categorizing mutual
fund, ETF, and UIT investments should be consistently applied.

1.g

Other mutual funds. Report all holdings of all other mutual funds registered under the
Investment Company Act of 1940, ETFs, and UITs. For purposes of Memorandum item 1,
institutions should categorize these investments on the basis of either the fund’s investment
objective as stated in its prospectus or the fund’s classification by a company that tracks
information on these funds such as Morningstar and Lipper. An institution’s methodology for
categorizing mutual fund, ETF, and UIT investments should be consistently applied.

1.h

Common trust funds and collective investment funds. Report all holdings of all common
trust funds and collective investment funds. Common trust funds and collective investment
funds are funds that banks are authorized to administer by Section 9.18 of the Office of the
Comptroller of the Currency’s regulations or comparable state regulations.

1.i

Other short-term obligations. Report all other short-term obligations (i.e., original
maturities of less than 1 year, or 13 months in the case of the time portion of master notes).
In addition to short-term notes, include in this item such money market instruments as master
note arrangements, commercial paper, bankers acceptances, securities repurchase
agreements, and other short-term liquidity investments. Exclude state, county, and municipal
obligations.

1.j

Other notes and bonds. Report all other bonds, notes (except personal notes), and
debentures. Include corporate debt, insurance annuity contracts, "GICs" (guaranteed
investment contracts), "BICs" (bank investment contracts) that are not insured by the FDIC,
and obligations of foreign governments. Also include certificates or other obligations,
however named, representing pass-through participations in pools of real estate loans when
the participation instruments are issued by financial institutions and guaranteed in whole or in
part by private guarantors. Collateralized mortgage obligations (CMOs) and real estate
mortgage investment conduits (REMICs) that are not issued by the Federal National
Mortgage Association (FNMA) ("Fannie Mae") and the Federal Home Loan Mortgage

FFIEC 031 and 041

RC-T-10
(12-09)

RC-T – FIDUCIARY AND RELATED SERVICES

FFIEC 031 and 041

RC-T – FIDUCIARY AND RELATED SERVICES

Memoranda
Item No.

Caption and Instructions

1.j
(cont.)

Corporation (FHLMC) ("Freddie Mac") should be reported here, even if the collateral consists
of GNMA ("Ginnie Mae") or FNMA pass-throughs or FHLMC participation certificates.
Exclude short-term obligations (which should be reported in Schedule RC-T, Memorandum
item 1.i, above).

1.k

Investments in unregistered funds and private equity investments. Report all holdings
of funds exempt from registration under Sections 3(c)(1) or 3(c)(7) of the Investment
Company Act of 1940, for example, “hedge funds.” Report all holdings of private equity
investments exempt from registration under Securities Act of 1933 Regulation D. Private
equity investments is an asset class consisting of purchased equity securities in operating
companies that are not publicly traded on a stock exchange or otherwise registered with the
SEC under federal securities laws. Private equity-related funds are funds that invest
primarily in private equity investments. Unregistered private equity funds should be reported
in this item.
Investments in family businesses that are associated with the grantors or beneficiaries of a
fiduciary account should not be reported in this Memorandum item as a “private equity
investment.” Such investments may arise, for example, from an in-kind transfer to a fiduciary
account of securities in a closely-held family business or an increase in a fiduciary account’s
percentage ownership of an existing closely-held family business whose securities are held
in the account. Such investments should be reported in Schedule RC-T, Memorandum
item 1.o, “Miscellaneous assets.”

1.l

Other common and preferred stocks. Report all holdings of domestic and foreign
common and preferred equities, including warrants and options, but excluding investments
in unregistered funds and private equity investments (which should be reported in
Schedule RC-T, Memorandum item 1.k, above).

1.m

Real estate mortgages. Report real estate mortgages, real estate contracts, land trust
certificates, and ground rents. These assets may be reported at their unpaid balance if that
figure is a fair approximation of market value.

1.n

Real estate. Report real estate, mineral interests, royalty interests, leaseholds, and other
similar assets. Land and buildings associated with farm management accounts should be
reported in this item. Also include investments in limited partnerships that are solely or
primarily invested in real estate.

1.o

Miscellaneous assets. Report personal notes, tangible personal property, and other
miscellaneous assets that cannot properly be reported in Schedule RC-T, Memorandum
items 1.a through 1.n, above. Crops, equipment, and livestock associated with farm
management accounts should be reported in this Memorandum item. Also include
investments in closely-held family businesses if such investments represent in-kind transfers
to a fiduciary account of securities in a closely-held family business or an increase in a
fiduciary account’s percentage ownership of an existing closely-held family business whose
securities are held in the account.

1.p

Total managed assets held in fiduciary accounts. Report the sum of Memorandum
items 1.a. through 1.o. The total reported in column A must equal the sum of
Schedule RC-T, items 4 and 7, column A. The total reported in column B must equal the
sum of Schedule RC-T, items 5.a, 5.b, and 5.c, column A. The total reported in column C
must equal the sum of Schedule RC-T, items 6, 8, and 9, column A.

FFIEC 031 and 041

RC-T-11
(12-09)

RC-T – FIDUCIARY AND RELATED SERVICES

FFIEC 031 and 041

RC-T – FIDUCIARY AND RELATED SERVICES

Memoranda
Item No.

Caption and Instructions

1.q

Investments of managed fiduciary accounts in advised or sponsored mutual funds.
Report in column A the market value of all managed fiduciary assets invested in mutual funds
that are sponsored by the institution or a subsidiary or affiliate of the institution or where the
institution or a subsidiary or affiliate of the institution serves as investment advisor to the
fund. Report the number of managed fiduciary accounts with assets invested in advised or
sponsored mutual funds in column B. The term "affiliate" means any company that controls,
is controlled by, or is under common control with another company, as set forth in the Bank
Holding Company Act of 1956.

2

Corporate trust and agency accounts:

2.a

Corporate and municipal trusteeships. Report in column A the total number of corporate
and municipal issues, including equities such as trust preferred securities, and asset-backed
securities for which the institution serves as trustee. Also report other debt issues, such as
unit investment trusts and private placement leases, for which the institution serves as
trustee. If more than one institution is trustee for an issue, each institution should report the
issue. Securities with different CUSIP numbers should be considered separate issues;
however, serial bond issues should be considered as a single issue. When an institution
serves as trustee of a bond issue, it may also perform agency functions for the issue such as
registrar (transfer agent) or interest and principal paying agent. In those cases, report the
issue only in Memorandum item 2.a, “Corporate and municipal trusteeships,” as the trustee
appointment is considered the primary function. Consider the primary function of the
appointment when selecting the item in which to report the appointment. Exclude issues that
have been called in their entirety or have matured even if there are unpresented bonds or
coupons for which funds are being held.
Report in column B the unpaid principal balance of the outstanding securities for the issues
reported in column A for which the institution serves as trustee. For zero coupon bonds,
report the final maturity amount. For trust preferred securities, report the redemption price.
Exclude assets (i.e., cash, deposits, and investments) that are being held for corporate trust
purposes; they should be reported in Schedule RC-T, item 6, above.

2.a.(1)

Issues reported in Memorandum item 2.a that are in default. Report the total number and
unpaid principal balance (final maturity amount for zero coupon bonds; redemption price for
trust preferred securities) of the issues reported in Schedule RC-T, Memorandum item 2.a,
above, that are in substantive default. A substantive default occurs when the issuer (a) fails
to make a required payment of principal or interest, defaults on a required payment into a
sinking fund, files for bankruptcy, or is declared bankrupt or insolvent, and (b) default has
been declared by the trustee. Issues should not be reported as being in substantive default
during a cure period, provided the indenture for the issue provides for a cure period. Private
placement leases where the trustee is required to delay or waive the declaration of an event
of default, unless requested in writing to make such declaration, should not be reported as
being in substantive default, provided such written request has not been made. Once a
trustee’s duties with respect to an issue in substantive default have been completed, the
issue should no longer be reported as being in default.
Do not report issues that are in technical default, for instance, if the obligor failed to provide
information or documentation to the trustee within specified time periods.

FFIEC 031 and 041

RC-T-12
(12-09)

RC-T – FIDUCIARY AND RELATED SERVICES

FFIEC 031 and 041

RC-T – FIDUCIARY AND RELATED SERVICES

Memoranda
Item No.

Caption and Instructions

2.b

Transfer agent, registrar, paying agent, and other corporate agency. Report in column A
the total number of issues for which the institution acts in a corporate agency capacity.
Include the total number of equity, debt, and mutual fund issues for which the institution acts
as transfer agent or registrar, regardless of whether the transfer agent is registered with its
appropriate regulatory agency. Separate classes of a mutual fund should be consolidated
and reflected as a single issue. Include the total number of stock or bond issues for which
the institution disburses dividend or interest payments. Also include the total number of
issues of any other corporate appointments that are performed by the institution through its
fiduciary capacity. Issues for which the institution serves in a dual capacity should be
reported once. Corporate and municipal trusteeships reported in Schedule RC-T,
Memorandum item 2.a, above, in which the institution also serves as transfer agent, registrar,
paying agent, or other corporate agency capacity should not be included in Memorandum
item 2.b. Include only those agency appointments that do not relate to issues reported in
Schedule RC-T, Memorandum item 2.a, above.

3

Collective investment funds and common trust funds. Report in the appropriate subitem
the number of funds and the market value of the assets held in Collective Investment Funds
(CIFs) and Common Trust Funds (CTFs) administered by the reporting institution. CIFs and
CTFs are funds that banks are authorized to administer by Section 9.18 of the Office of the
Comptroller of the Currency’s regulations or comparable state regulations. If an institution
operates a CIF that is used by more than one institution, the entire CIF should be reported in
this section only by the institution that operates the CIF. Exclude mutual funds from this
section. Each CIF and CTF should be reported in the subitem that best fits the fund type.

3.a

Domestic equity. Report funds investing primarily in U.S. equities. Include funds seeking
growth, income, growth and income; U.S. index funds; and funds concentrating on small,
mid, or large cap domestic stocks. Exclude funds specializing in a particular sector
(e.g., technology, health care, financial, and real estate), which should be reported in
Schedule RC-T, Memorandum item 3.g, “Specialty/Other.”

3.b

International/Global equity. Report funds investing exclusively in equities of issuers located
outside the U.S. and those funds representing a combination of U.S. and foreign issuers.
Include funds that specialize in a particular country, region, or emerging market.

3.c

Stock/Bond blend. Report funds investing in a combination of equity and bond investments.
Include funds with a fixed allocation along with those having the flexibility to shift assets
between stocks, bonds, and cash.

3.d

Taxable bond. Report funds investing in taxable debt securities. Include funds that
specialize in U.S. Treasury and U.S. Government agency debt, investment grade corporate
bonds, high-yield debt securities, mortgage-related securities, and global, international, and
emerging market debt funds. Exclude funds that invest in municipal bonds, which should be
reported in Schedule RC-T, Memorandum item 3.e, and funds that qualify as short-term
investments, which should be reported in Schedule RC-T, Memorandum item 3.f.

3.e

Municipal bond. Report funds investing in debt securities issued by states and political
subdivisions in the U.S. Such securities may be taxable or tax-exempt. Include funds that
invest in municipal debt issues from a single state. Exclude funds that qualify as short-term
investments, which should be reported in Schedule RC-T, Memorandum item 3.f.

FFIEC 031 and 041

RC-T-13
(3-11)

RC-T – FIDUCIARY AND RELATED SERVICES

FFIEC 031 and 041

RC-T – FIDUCIARY AND RELATED SERVICES

Memoranda
Item No.

Caption and Instructions

3.f

Short-term investments/Money market. Report funds subject to the provisions of
Section 9.18(b)(4)(ii)(B) of the Office of the Comptroller of the Currency’s regulations or
comparable state regulations that invest in short-term money market instruments. Money
market instruments may include U.S. Treasury bills, commercial paper, bankers
acceptances, and repurchase agreements. Include taxable and nontaxable funds.

3.g

Specialty/Other. Include funds that specialize in equity securities of particular sectors
(e.g., technology, health care, financial, and real estate). Also include funds that do not fit
into any of the above categories.

3.h

Total collective investment funds. Report the sum of Memorandum items 3.a. through 3.g.

4

Fiduciary settlements, surcharges, and other losses. Report aggregate gross
settlements, surcharges, and other losses arising from errors, misfeasance, or malfeasance
on managed accounts in column A and on non-managed accounts in column B. For the
definitions of managed and non-managed accounts, refer to the instructions for the Fiduciary
and Related Assets section of this schedule. Gross losses should reflect losses recognized
on an accrual basis before recoveries or insurance payments. Exclude contingent liabilities
for fiduciary-related loss contingencies, including pending or threatened litigation, for which a
loss has not yet been recognized in accordance with ASC Subtopic 450-20, Contingencies –
Loss Contingencies (formerly FASB Statement No. 5, “Accounting for Contingencies”).
Report recoveries in column C. Recoveries may be for current or prior years’ losses and
should be reported when payment is actually realized. The filing of an insurance claim does
not serve as support for a recovery.
For report dates through December 31, 2008, the information reported on fiduciary
settlements, surcharges, and other losses will not be made available to the public on an
individual institution basis. Beginning with the March 31, 2009, report date, all of the
information reported in Schedule RC-T for each bank will be publicly available.

4.a

Personal trust and agency accounts. Report gross losses and recoveries for personal
trust and agency accounts as defined for item 4 of this schedule.

4.b

Employee benefit and retirement-related trust and agency accounts. Report gross
losses and recoveries for employee benefit and retirement-related trust and agency accounts
as defined for item 5 of this schedule.

4.c

Investment management and investment advisory agency accounts. Report gross
losses and recoveries for investment management and investment advisory agency accounts
as defined for item 7 of this schedule.

4.d

Other fiduciary accounts and related services. Report gross losses and recoveries for all
other fiduciary accounts and related services that are not included in Schedule RC-T,
Memorandum items 4.a, 4.b, and 4.c, above. Include losses and recoveries from corporate
trust and agency accounts, foundation and endowment trust and agency accounts, other
fiduciary accounts, custody and safekeeping accounts, and other fiduciary related services.

4.e

Total fiduciary settlements, surcharges, and other losses. Report the sum of
Memorandum items 4.a through 4.d. The sum of columns A and B minus column C must
equal Schedule RC-T, item 24, above.

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RC-V - VARIABLE INTEREST ENTITIES

SCHEDULE RC-V – VARIABLE INTEREST ENTITIES
General Instructions
A variable interest entity (VIE), as described in ASC Topic 810, Consolidation (formerly FASB
Interpretation No.46 (revised December 2003), “Consolidation of Variable Interest Entities,” as amended
by FASB Statement No. 167, "Amendments to FASB Interpretation No. 46(R)”), is an entity in which equity
investors do not have sufficient equity at risk for that entity to finance its activities without additional
subordinated financial support or, as a group, the holders of the equity investment at risk lack one or
more of the following three characteristics: (a) the power, through voting rights or similar rights, to direct
the activities of an entity that most significantly impact the entity’s economic performance, (b) the
obligation to absorb the expected losses of the entity, or (c) the right to receive the expected residual
returns of the entity.
Variable interests in a VIE are contractual, ownership, or other pecuniary interests in an entity that
change with changes in the fair value of the entity’s net assets exclusive of variable interests. When a
bank or other company has a variable interest or interests in a VIE, ASC Topic 810 provides guidance for
determining whether the bank or other company must consolidate the VIE. If a bank or other company has
a controlling financial interest in a VIE, it is deemed to be the primary beneficiary of the VIE and, therefore,
must consolidate the VIE. For further information, see the Glossary entry for “variable interest entity.”
Schedule RC-V collects information on VIEs that have been consolidated by the reporting bank for purposes
of the Consolidated Reports of Condition and Income because the bank or a consolidated subsidiary is the
primary beneficiary of the VIE. Schedule RC-V should be completed on a fully consolidated basis, i.e.,
after eliminating intercompany transactions. The asset and liability amounts to be reported in
Schedule RC-V should be the same amounts at which these assets and liabilities are reported on
Schedule RC, Balance Sheet, e.g., held-to-maturity securities should be reported at amortized cost and
available-for-sale securities should be reported at fair value.

Column Instructions
Column A, Securitization Vehicles: Securitization vehicles include VIEs that have been created to pool
and repackage mortgages, other assets, or other credit exposures into securities that can be transferred
to investors.
Column B, ABCP Conduits: Asset-backed commercial paper (ABCP) conduits include VIEs that
primarily issue externally rated commercial paper backed by assets or other exposures.
Column C, Other VIEs: Other VIEs include VIEs other than securitization vehicles and ABCP conduits.
For purposes of Schedule RC-V, information about each consolidated VIE should be included in only one
of the three columns of the schedule. The column selected for a particular consolidated VIE should be
based on the purpose and design of the VIE and this column should be used consistently over time.

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Item Instructions
Item No.

Caption and Instructions

1

Assets of consolidated variable interest entities (VIEs) that can be used only to settle
obligations of the consolidated VIEs. Report in the appropriate subitem and column those
assets of consolidated VIEs reported in Schedule RC, Balance Sheet, that can be used only
to settle obligations of the same consolidated VIEs and any related allowance for loan and
lease losses. Exclude assets of consolidated VIEs that cannot be used only to settle
obligations of the same consolidated VIEs (report such assets in Schedule RC-V, item 3,
below).

1.a

Cash and balances due from depository institutions. Report in the appropriate column
the amount of cash and balances due from depository institutions held by consolidated VIEs
included in Schedule RC, item 1.a, “Noninterest-bearing balances and currency and coin,”
and item 1.b, “Interest-bearing balances,” that can be used only to settle obligations of the
same consolidated VIEs.

1.b

Held-to-maturity securities. Report in the appropriate column the amount of held-tomaturity securities held by consolidated VIEs included in Schedule RC, item 2.a, “Held-tomaturity securities,” that can be used only to settle obligations of the same consolidated
VIEs.

1.c.

Available-for-sale securities. Report in the appropriate column the amount of available-forsale securities held by consolidated VIEs included in Schedule RC, item 2.b, “Available-forsale securities,” that can be used only to settle obligations of the same consolidated VIEs.

1.d

Securities purchased under agreements to resell. Report in the appropriate column the
amount of securities purchased under agreements to resell held by consolidated VIEs
included in Schedule RC, item 3.b, “Securities purchased under agreements to resell,” that
can be used only to settle obligations of the same consolidated VIEs.

1.e

Loans and leases held for sale. Report in the appropriate column the amount of loans and
leases held for sale by consolidated VIEs included in Schedule RC, item 4.a, “Loans and
leases held for sale,” that can be used only to settle obligations of the same consolidated
VIEs.

1.f.

Loans and leases, net of unearned income. Report in the appropriate column the amount
of loans and leases held for investment by consolidated VIEs included in Schedule RC,
item 4.b, “Loans and leases, net of unearned income,” that can be used only to settle
obligations of the same consolidated VIEs.

1.g

Less: Allowance for loan and lease losses. Report in the appropriate column the amount
of the allowance for loan and lease losses held by consolidated VIEs included in
Schedule RC, item 4.c, “LESS: Allowance for loan and lease losses,” that is allocated to
these consolidated VIEs’ loans and leases held for investment that can be used only to settle
obligations of the same consolidated VIEs and are reported in Schedule RC-V, item 1.f,
above.

1.h

Trading assets (other than derivatives). Report in the appropriate column the amount of
trading assets (other than derivatives) held by consolidated VIEs included in Schedule RC,
item 5, “Trading assets,” that can be used only to settle obligations of the same consolidated
VIEs.

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Item No.

RC-V - VARIABLE INTEREST ENTITIES

Caption and Instructions

1.i

Derivative trading assets. Report in the appropriate column the amount of derivative
trading assets held by consolidated VIEs included in Schedule RC, item 5, “Trading assets,”
that can be used only to settle obligations of the same consolidated VIEs.

1.j

Other real estate owned. Report in the appropriate column the amount of other real estate
owned held by consolidated VIEs included in Schedule RC, item 7, “Other real estate
owned,” that can be used only to settle obligations of the same consolidated VIEs.

1.k

Other assets. Report in the appropriate column the amount of all other assets held by
consolidated VIEs included in Schedule RC, item 12, “Total assets,” and not reported in
Schedule RC-V, items 1.a through 1.j, above, that can be used only to settle obligations of
the same consolidated VIEs.

2

Liabilities of consolidated VIEs for which creditors do not have recourse to the general
credit of the reporting bank. Report in the appropriate subitem and column those liabilities
of consolidated VIEs reported in Schedule RC, Balance Sheet, for which creditors do not
have recourse to the general credit of the reporting bank. Exclude liabilities of consolidated
VIEs for which creditors have recourse to the general credit of the reporting bank (report such
liabilities in Schedule RC-V, item 4, below).

2.a

Securities sold under agreements to repurchase. Report in the appropriate column the
amount of securities sold under agreements to repurchase by consolidated VIEs reported in
Schedule RC, item 14.b, “Securities sold under agreements to repurchase,” for which the
holders of these repurchase agreements do not have recourse to the general credit of the
reporting bank.

2.b

Derivative trading liabilities. Report in the appropriate column the amount of derivative
trading liabilities of consolidated VIEs reported in Schedule RC, item 15, “Trading liabilities,”
for which the derivative counterparties do not have recourse to the general credit of the
reporting bank.

2.c

Commercial paper. Report in the appropriate column the amount of commercial paper
issued by consolidated VIEs reported in Schedule RC, item 16, “Other borrowed money,” for
which the holders of this commercial paper do not have recourse to the general credit of the
reporting bank.

2.d

Other borrowed money (exclude commercial paper). Report in the appropriate column
the amount of other borrowed money (other than commercial paper) of consolidated VIEs
reported in Schedule RC, item 16, “Other borrowed money,” for which the creditors on these
borrowings do not have recourse to the general credit of the reporting bank.

2.e

Other liabilities. Report in the appropriate column the amount of all other liabilities of
consolidated VIEs included in Schedule RC, item 21, “Total liabilities,” and not reported in
Schedule RC-V, items 2.a through 2.d, above, for which the creditors on these liabilities do
not have recourse to the general credit of the reporting bank.

3

All other assets of consolidated VIEs. Report in the appropriate column the amount of
assets of consolidated VIEs reported in Schedule RC, items 1 through 11, that have not been
included in Schedule RC-V, items 1.a through 1.k, above. Loans and leases held for
investment that are included in this item should be reported net of any allowance for loan and
lease losses allocated to these loans and leases.

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Item No.
4

RC-V - VARIABLE INTEREST ENTITIES

Caption and Instructions
All other liabilities of consolidated VIEs. Report in the appropriate column the amount of
liabilities of consolidated VIEs reported in Schedule RC, items 14 through 20, that have not
been included in Schedule RC-V, items 2.a through 2.e, above.

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NARRATIVE

OPTIONAL NARRATIVE STATEMENT CONCERNING THE AMOUNTS
REPORTED IN THE REPORTS OF CONDITION AND INCOME
The management of the reporting bank may, if it wishes, submit a brief narrative statement on the
amounts reported in the Reports of Condition and Income. This optional statement will be made available
to the public, along with the publicly available data in the Reports of Condition and Income, in response
to any request for individual bank report data. However, the information reported in Schedule RI-E,
item 2.g; Schedule RC-F, item 6.f; Schedule RC-O, Memorandum items 6 through 9, 14, and 15; and
Schedule RC-P, items 7.a and 7.b, is regarded as confidential and will not be released to the public.
BANKS CHOOSING TO SUBMIT THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE
STATEMENT DOES NOT CONTAIN THE NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL
BANK CUSTOMERS, REFERENCES TO THE AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS
IDENTIFIED ABOVE, OR ANY OTHER INFORMATION THAT THEY ARE NOT WILLING TO HAVE
MADE PUBLIC OR THAT WOULD COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks
choosing not to make a statement may check the "No comment" box and should make no entries of any
kind in the space provided for the narrative statement; i.e., DO NOT enter in this space such phrases as
"No statement," "Not applicable," "N/A," "No comment," and "None."
The optional statement must be entered on the sheet provided by the agencies. The statement should
not exceed 100 words. Further, regardless of the number of words, the statement must not exceed 750
characters, including punctuation, indentation, and standard spacing between words and sentences. If
any submission should exceed 750 characters, as defined, it will be truncated at 750 characters with no
notice to the submitting bank and the truncated statement will appear as the bank's statement both on
agency computerized records and in computer-file releases to the public.
All information furnished by the bank in the narrative statement must be accurate and not misleading.
Appropriate efforts shall be taken by the submitting bank to ensure the statement's accuracy.
If, subsequent to the original submission, material changes are submitted for the data reported in the
Reports of Condition and Income, the existing narrative statement will be deleted from the files, and from
disclosure; the bank, at its option, may replace it with a statement appropriate to the amended data.
The optional narrative statement will appear in agency records and in release to the public exactly as
submitted (or amended as described in the preceding paragraph) by the management of the bank (except
for the truncation of statements exceeding the 750-character limit described above). THE STATEMENT
WILL NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY AGENCIES FOR
ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT SIGNIFY THAT ANY
FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE ACCURACY OF THE
INFORMATION CONTAINED THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY
PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE
REPORTING BANK.

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GLOSSARY

GLOSSARY
The definitions in this Glossary apply to the Reports of Condition and Income and are not necessarily
applicable for other regulatory or legal purposes. Similarly, the accounting discussions in this Glossary
are those relevant to the preparation of these reports and are not intended to constitute a comprehensive
presentation on bank accounting. For purposes of this Glossary, the FASB Accounting Standards
Codification is referred to as “ASC.”
Acceptances: See "bankers acceptances."
Accounting Changes: Changes in accounting principles – The accounting principles that banks have
adopted for the preparation of their Reports of Condition and Income should be changed only if
(a) the change is required by a newly issued accounting pronouncement or (b) the bank can justify
the use of an allowable alternative accounting principle on the basis that it is preferable when there are
two or more generally accepted accounting principles for a type of event or transaction. If a bank
changes from the use of one acceptable accounting principle to one that is more preferable at any time
during the calendar year, it must report the income or expense item(s) affected by the change for the
entire year on the basis of the newly adopted accounting principle regardless of the date when the
change is actually made. However, a change from an accounting principle that is neither accepted nor
sanctioned by bank supervisors to one that is acceptable to supervisors is to be reported as a
correction of an error as discussed below.
New accounting pronouncements that are adopted by the Financial Accounting Standards Board
(or such other body officially designated to establish accounting principles) generally include transition
guidance on how to initially apply the pronouncement. In general, the pronouncements require
(or allow) a bank to use one of the following approaches, collectively referred to as “retrospective
application”:
•
•

Apply a different accounting principle to one or more previously issued financial statements; or
Make a cumulative-effect adjustment to retained earnings, assets, and/or liabilities at the beginning
of the period as if that principle had always been used.

Because each Report of Income covers a single discrete period, only the second approach under
retrospective application is permitted in the Reports of Condition and Income. Therefore, when an
accounting pronouncement requires the application of either of the approaches under retrospective
application, banks must report the effect on the amount of retained earnings at the beginning of the
year in which the new pronouncement is first adopted for purposes of the Reports of Condition and
Income (net of applicable income taxes, if any) as a direct adjustment to equity capital in
Schedule RI-A, item 2, and describe the adjustment in Schedule RI-E, item 4.
In the Reports of Condition and Income in which a change in accounting principle is first reflected, the
bank is encouraged to include an explanation of the nature and reason for the change in accounting
principle in Schedule RI-E, item 7, “Other explanations,” or in the “Optional Narrative Statement
Concerning the Amounts Reported in the Reports of Condition and Income.”
Changes in accounting estimates – Accounting and the preparation of financial statements involve the
use of estimates. As more current information becomes known, estimates may be changed. In
particular, accruals are derived from estimates based on judgments about the outcome of future events
and changes in these estimates are an inherent part of accrual accounting.
Reasonable changes in accounting estimates do not require the restatement of amounts of income and
expenses and assets, liabilities, and capital reported in previously submitted Reports of Condition and
Income. Computation of the cumulative effect of these changes is also not ordinarily necessary.
Rather, the effect of such changes is handled on a prospective basis. That is, beginning in the period

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GLOSSARY

Accounting Changes (cont.):
when an accounting estimate is revised, the related item of income or expense for that period is
adjusted accordingly. For example, if the bank's estimate of the remaining useful life of certain bank
equipment is increased, the remaining undepreciated cost of the equipment would be spread over its
revised remaining useful life. Similarly, immaterial accrual adjustments to items of income and
expenses, including provisions for loan and lease losses and income taxes, are considered changes in
accounting estimates and would be taken into account by adjusting the affected income and expense
accounts for the year in which the adjustments were found to be appropriate.
However, large and unusual changes in accounting estimates may be more properly treated as
constituting accounting errors, and if so, must be reported accordingly as described below.
Corrections of accounting errors – A bank may become aware of an error in a Report of Condition or
Report of Income after it has been submitted to the appropriate federal bank regulatory agency through
either its own or its regulator's discovery of the error. An error in the recognition, measurement, or
presentation of an event or transaction included in a report for a prior period may result from:
•
•
•

A mathematical mistake;
A mistake in applying accounting principles; or
The oversight or misuse of facts that existed when the Reports of Condition and Income for prior
periods were prepared.

According to SEC Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB 108)
(Topic 1.N. in the Codification of Staff Accounting Bulletins), the effects of prior year errors or
misstatements (“carryover effects”) should be considered when quantifying misstatements identified in
current year financial statements. SAB 108 describes two methods for accumulating and quantifying
misstatements. These methods are referred to as the “rollover” and “iron curtain” approaches:
•

The rollover approach “quantifies a misstatement based on the amount of the error originating in
the current year income statement” only and ignores the “carryover effects” of any related prior
year misstatements. The primary weakness of the rollover approach is that it fails to consider the
effects of correcting the portion of the current year balance sheet misstatement that originated in
prior years.

•

The iron curtain approach “quantifies a misstatement based on the effects of correcting the
misstatement existing in the balance sheet at the end of the current year, irrespective of the
misstatement’s year(s) of origination.” The primary weakness of the iron curtain approach is that it
does not consider the correction of prior year misstatements in the current year financial
statements to be errors because the prior year misstatements were considered immaterial in the
year(s) of origination. Thus, there could be a material misstatement in the current year income
statement because the correction of the accumulated immaterial amounts from prior years is not
evaluated as an error.

Because of the weaknesses in these two approaches, SAB 108 states that the impact of correcting all
misstatements on current year financial statements should be accomplished by quantifying an error
under both the rollover and iron curtain approaches and by evaluating the error measured under each
approach. When either approach results in a misstatement that is material, after considering all
relevant quantitative and qualitative factors, an adjustment to the financial statements would be
required. Guidance on the consideration of all relevant factors when assessing the materiality of
misstatements is provided in SEC Staff Accounting Bulletin No. 99, Materiality (SAB 99) (Topic 1.M. in
the Codification of Staff Accounting Bulletins).

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Accounting Changes (cont.):
For purposes of the Reports of Condition and Income, all banks should follow the sound accounting
practices described in SAB 108 and SAB 99. Accordingly, banks should quantify the impact of
correcting misstatements, including both the carryover and reversing effects of prior year
misstatements, on their current year reports by applying both the “rollover” and “iron curtain”
approaches and evaluating the impact of the error measured under each approach. When the
misstatement that exists after recording the adjustment in the current year Reports of Condition and
Income is material (considering all relevant quantitative and qualitative factors), the appropriate prior
year report(s) should be amended, even though such revision previously was and continues to be
immaterial to the prior year report(s). If the misstatement that exists after recording the adjustment in
the current year Reports of Condition and Income is not material, then amending the immaterial errors
in prior year reports would not be necessary.
When a bank's primary federal bank regulatory agency determines that the bank's Reports of Condition
and Income contain a material accounting error, the bank may be directed to file amended condition
and/or income report data for each prior period that was significantly affected by the error. Normally,
such refilings will not result in restatements of reports for periods exceeding five years. If amended
reports are not required, the bank should report the effect of such corrections on retained earnings at
the beginning of the year, net of applicable income taxes, in Schedule RI-A, item 2, "Cumulative effect
of changes in accounting principles and corrections of material accounting errors," and in
Schedule RI-E, item 4. The effect of such corrections on income and expenses since the beginning of
the year in which the error is discovered should be reflected in each affected income and expense
account on a year-to-date basis in the next quarterly Report of Income to be filed and not as a direct
adjustment to retained earnings.
In addition, a change from an accounting principle that is neither accepted nor sanctioned by bank
supervisors to one that is acceptable to supervisors is to be reported as a correction of an error. When
such a change is implemented, the cumulative effect that applies to prior periods, calculated in the
same manner as described above for other changes in accounting principles, should be reported in
Schedule RI-A, item 2, "Cumulative effect of changes in accounting principles and corrections of
material accounting errors," and in Schedule RI-E, item 4. In most cases of this kind undertaken
voluntarily by the reporting bank in order to adopt more acceptable accounting practices, such a
change will not result in a request for amended reports for prior periods unless substantial distortions in
the bank's previously reported results are in evidence.
In the Reports of Condition and Income in which the correction of an error is first reflected, the bank is
encouraged to include an explanation of the nature and reason for the correction in Schedule RI-E,
item 7, “Other explanations,” or in the “Optional Narrative Statement Concerning the Amounts
Reported in the Reports of Condition and Income.”
For further information on these three topics, see ASC Topic 250, Accounting Changes and Error
Corrections (formerly FASB Statement No. 154, "Accounting Changes and Error Corrections").
Accounting Errors, Corrections of: See "accounting changes."
Accounting Estimates, Changes in: See "accounting changes."
Accounting Principles, Changes in: See "accounting changes."

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Accrued Interest Receivable Related to Credit Card Securitizations: In a typical credit card
securitization, an institution transfers a pool of receivables and the right to receive the future collections
of principal (credit card purchases and cash advances), finance charges, and fees on the receivables
to a trust. If a securitization transaction qualifies as a sale under ASC Topic 860, Transfers and
Servicing (formerly FASB Statement No. 140, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities," as amended), the selling institution removes the receivables
that were sold from its reported assets and continues to carry any retained interests in the transferred
receivables on its balance sheet. The “accrued interest receivable” (AIR) asset typically consists of
the seller’s retained interest in the investor’s portion of (1) the accrued fees and finance charges that
have been billed to customer accounts, but have not yet been collected (“billed but uncollected”), and
(2) the right to finance charges that have been accrued on cardholder accounts, but have not yet been
billed (“accrued but unbilled”).
While the selling institution retains a right to the excess cash flows generated from the fees and
finance charges collected on the transferred receivables, the institution generally subordinates its right
to these cash flows to the investors in the securitization. If and when cash payments on the accrued
fees and finance charges are collected, they flow through the trust, where they are available to satisfy
more senior obligations before any excess amount is remitted to the seller. Only after trust expenses
(such as servicing fees, investor certificate interest, and investor principal charge-offs) have been paid
will the trustee distribute any excess fee and finance charge cash flow back to the seller. Since
investors are paid from these cash collections before the selling institution receives the amount of AIR
that is due, the seller may or may not realize the full amount of its AIR asset.
Accounting at Inception of the Securitization Transaction – Generally, if a securitization transaction
meets the criteria for sale treatment and the AIR is subordinated either because the asset has been
1
isolated from the transferor or because of the operation of the cash flow distribution (or “waterfall”)
through the securitization trust, the total AIR asset (both the “billed and uncollected” and “accrued and
unbilled”) should be considered one of the components of the sale transaction. Thus, when accounting
for a credit card securitization, an institution should allocate the previous carrying amount of the AIR
(net of any related allowance for uncollectible amounts) and the other transferred assets between the
assets that are sold and the retained interests, based on their relative fair values at the date of transfer.
As a result, after a securitization, the allocated carrying amount of the AIR asset will typically be lower
than its face amount.
Subsequent Accounting – After securitization, the AIR asset should be accounted for at its allocated
cost basis (as discussed above). In addition, an institution should treat the AIR asset as a retained
(subordinated) beneficial interest. Accordingly, it should be reported as an “All other asset” in
Schedule RC-F, item 6, and in Schedule RC-S, item 2.b, column C, (if reported as a stand-alone asset)
and not as a loan receivable.
Although the AIR asset is a retained beneficial interest in transferred assets, it is not required to be
subsequently measured like an investment in debt securities classified as available for sale or trading
under ASC Topic 320, Investments-Debt and Equity Securities (formerly FASB Statement No. 115,
"Accounting for Certain Investments in Debt and Equity Securities") and ASC Topic 860 because the
AIR asset cannot be contractually prepaid or settled in such a way that the holder would not recover
substantially all of its recorded investment. Rather, institutions should follow existing applicable
accounting standards, including ASC Subtopic 450-20, Contingencies – Loss Contingencies (formerly
FASB Statement No. 5, Accounting for Contingencies), in subsequent accounting for the AIR asset.
ASC Subtopic 450-20 addresses the accounting for various loss contingencies, including the
collectibility of receivables.
For further guidance, banks should refer to the Interagency Advisory on the Accounting Treatment of
Accrued Interest Receivable Related to Credit Card Securitizations dated December 4, 2002. See also
the Glossary entry for “Transfers of Financial Assets.”

1

See ASC Subtopic 860-10.

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Acquisition, Development, or Construction (ADC) Arrangements: An ADC arrangement is an
arrangement in which a bank provides financing for real estate acquisition, development, or
construction purposes and participates in the expected residual profit resulting from the ultimate sale or
other use of the property. ADC arrangements should be reported as loans, real estate joint ventures,
or direct investments in real estate in accordance with ASC Subtopic 310-10, Receivables – Overall
(formerly AICPA Practice Bulletin 1, Appendix, Exhibit I, “ADC Arrangements”).
12 USC 29 limits the authority of national banks to hold real estate. National banks should review real
estate ADC arrangements carefully for compliance. State member banks are not authorized to invest
in real estate except with the prior approval of the Federal Reserve Board under Federal Reserve
Regulation H (12 CFR Part 208). In certain states, nonmember banks may invest in real estate.
Agreement Corporation: See "Edge and Agreement corporation."

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Allowance for Loan and Lease Losses: Each bank must maintain an allowance for loan and lease
losses (allowance) at a level that is appropriate to cover estimated credit losses associated with its
loan and lease portfolio, i.e., loans and leases that the bank has intent and ability to hold for the
foreseeable future or until maturity or payoff. Each bank should also maintain, as a separate liability
account, an allowance at a level that is appropriate to cover estimated credit losses associated with
off-balance sheet credit instruments such as off-balance sheet loan commitments, standby letters of
credit, and guarantees. This separate allowance should be reported in Schedule RC-G, item 3,
"Allowance for credit losses on off-balance sheet credit exposures," not as part of the "Allowance for
loan and lease losses" in Schedule RC, item 4.c.
With respect to the loan and lease portfolio, the term "estimated credit losses" means an estimate of
the current amount of loans and leases that it is probable the bank will be unable to collect given facts
and circumstances as of the evaluation date. Thus, estimated credit losses represent net charge-offs
that are likely to be realized for a loan or pool of loans. These estimated credit losses should meet the
criteria for accrual of a loss contingency (i.e., through a provision to the allowance) set forth in
generally accepted accounting principles (GAAP).
As of the end of each quarter, or more frequently if warranted, the management of each bank must
evaluate, subject to examiner review, the collectibility of the loan and lease portfolio, including any
recorded accrued and unpaid interest (i.e., not already reversed or charged off), and make entries to
maintain the balance of the allowance for loan and lease losses on the balance sheet at an appropriate
level. Management must maintain reasonable records in support of their evaluations and entries.
Furthermore, each bank is responsible for ensuring that controls are in place to consistently determine
the allowance for loan and lease losses in accordance with GAAP (including ASC Subtopic 450-20,
Contingencies – Loss Contingencies (formerly FASB Statement No. 5, "Accounting for Contingencies")
and ASC Topic 310, Receivables (formerly FASB Statement No. 114, "Accounting by Creditors for
Impairment of a Loan"), the bank's stated policies and procedures, management’s best judgment and
relevant supervisory guidance.
Additions to, or reductions of, the allowance account resulting from such evaluations are to be made
through charges or credits to the "provision for loan and lease losses" (provision) in the Report of
Income. When available information confirms that specific loans and leases, or portions thereof, are
uncollectible, these amounts should be promptly charged off against the allowance. All charge-offs of
loans and leases shall be charged directly to the allowance. Under no circumstances can loan or
lease losses be charged directly to "Retained earnings." Recoveries on loans and leases represent
collections on amounts that were previously charged off against the allowance. Recoveries shall be
credited to the allowance, provided, however, that the total amount credited to the allowance as
recoveries on an individual loan (which may include amounts representing principal, interest, and fees)
is limited to the amount previously charged off against the allowance on that loan. Any amounts
collected in excess of this limit should be recognized as income.
ASC Subtopic 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit
Quality (formerly AICPA Statement of Position 03-3, "Accounting for Certain Loans or Debt Securities
Acquired in a Transfer") prohibits a bank from "carrying over" or creating loan loss allowances in the
initial accounting for "purchased credit-impaired loans," i.e., loans that a bank has purchased where
there is evidence of deterioration of credit quality since the origination of the loan and it is probable, at
the purchase date, that the bank will be unable to collect all contractually required payments
receivable. This prohibition applies to the purchase of an individual impaired loan, a pool or group of
impaired loans, and impaired loans acquired in a purchase business combination. However, if, upon
evaluation subsequent to acquisition, based on current information and events, it is probable that the
bank is unable to collect all cash flows expected at acquisition (plus additional cash flows expected to
be collected arising from changes in estimate after acquisition) on a purchased credit-impaired loan
(not accounted for as a debt security), the loan should be considered impaired for purposes of
establishing an allowance pursuant to ASC Subtopic 450-20 or ASC Topic 310, as appropriate. For
further information, see the Glossary entry for “purchased credit-impaired loans and debt securities.”
When a bank makes a full or partial direct write-down of a loan or lease that is uncollectible, the bank
establishes a new cost basis for the asset. Consequently, once a new cost basis has been established

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Allowance for Loan and Lease Losses (cont.):
for a loan or lease through a direct write-down, this cost basis may not be "written up" at a later date.
Reversing the previous write-down and "re-booking" the charged-off asset after the bank concludes that
the prospects for recovering the charge-off have improved, regardless of whether the bank assigns a
new account number to the asset or the borrower signs a new note, is not an acceptable accounting
practice.
The allowance account must never have a debit balance. If losses charged off exceed the amount of
the allowance, a provision sufficient to restore the allowance to an appropriate level must be charged to
expense on the income statement immediately. A bank shall not increase the allowance account by
transferring an amount from undivided profits or any segregation thereof to the allowance for loan and
lease losses.
To the extent that a bank's reserve for bad debts for tax purposes is greater than or less than its
"allowance for loan and lease losses" on the balance sheet of the Report of Condition, the difference is
referred to as a temporary difference. See the Glossary entry for "income taxes" for guidance on how to
report the tax effect of such a temporary difference.
Recourse liability accounts that arise from recourse obligations for any transfers of loans that are
reported as sales for purposes of these reports should not be included in the allowance for loan and
lease losses. These accounts are considered separate and distinct from the allowance account and
from the allowance for credit losses on off-balance sheet credit exposures. Recourse liability accounts
should be reported in Schedule RC-G, item 4, "All other liabilities."
For comprehensive guidance on the maintenance of an appropriate allowance for loan and lease losses,
banks should refer to the Interagency Policy Statement on the Allowance for Loan and Lease Losses
dated December 13, 2006. For guidance on the design and implementation of allowance methodologies
and supporting documentation practices, banks should refer to the interagency Policy Statement on
Allowance for Loan and Lease Losses Methodologies and Documentation for Banks and Savings
Associations, which was published on July 6, 2001. National banks should also refer to the Office of the
Comptroller of the Currency's Handbook for National Bank Examiners discussing the allowance for loan
and lease losses. Information on the application of ASC Topic 310, Receivables, to the determination of
an allowance for loan and lease losses on those loans covered by that accounting standard is provided
in the Glossary entry for "loan impairment."
For information on reporting on foreclosed and repossessed assets, see the Glossary entry for
"foreclosed assets."
Applicable Income Taxes: See "income taxes."
Associated Company: See "subsidiaries."
ATS Account: See "deposits."
Bankers Acceptances: A banker's acceptance, for purposes of these reports, is a draft or bill of exchange
that has been drawn on and accepted by a banking institution (the "accepting bank") or its agent for
payment by that institution at a future date that is specified in the instrument. Funds are advanced to the
drawer of the acceptance by the discounting of the accepted draft either by the accepting bank or by
others; the accepted draft is negotiable and may be sold and resold subsequent to its original discounting.
At the maturity date specified, the holder or owner of the acceptance at that date, who has advanced
funds either by initial discount or subsequent purchase, presents the accepted draft to the accepting bank
for payment.
The accepting bank has an unconditional obligation to put the holder in funds (to pay the holder the
face amount of the draft) on presentation on the specified date. The account party (customer) has an
unconditional obligation to put the accepting bank in funds at or before the maturity date specified in
the instrument.

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Bankers Acceptances (cont.):
The following description covers the treatment in the Report of Condition of (1) acceptances that have
been executed by the reporting bank, that is, those drafts that have been drawn on and accepted by it;
(2) "participations" in acceptances, that is, "participations" in the accepting bank's obligation to put the
holder of the acceptance in funds at maturity, or participations in the accepting bank's risk of loss in the
event of default by the account party; and (3) acceptances owned by the reporting bank, that is, those
acceptances – whether executed by the reporting bank or by others – that the bank has discounted or
purchased.
(1) Acceptances executed by the reporting bank – With the exceptions described below, the accepting
bank must report on its balance sheet the full amount of the acceptance in both (1) the liability
item, "Other liabilities" (Schedule RC, item 20), reflecting the accepting bank's obligation to put the
holder of the acceptance in funds at maturity, and (2) the asset item, "Other assets" (Schedule RC,
item 11), reflecting the account party's liability to put the accepting bank in funds at or before
maturity. The acceptance liability and acceptance asset must also be reported in both
Schedule RC-G, item 4, “All other liabilities,” and Schedule RC-F, item 6, “All other assets,”
respectively.
Exceptions to the mandatory reporting by the accepting bank of the full amount of all outstanding
drafts accepted by the reporting bank in both “Other liabilities” (Schedule RC, item 20) and
“Other assets” (Schedule RC, item 11) on the balance sheet of the Consolidated Report of
Condition occur in the following situations:
(a) One exception occurs in situations where the accepting bank acquires – through initial
discounting or subsequent purchase – and holds its own acceptance (i.e., a draft that it has
itself accepted). In this case, the reporting bank's own acceptances that are held by it should
not be reported in the ”Other liabilities” and “Other assets” items noted above. The bank's
holdings of its own acceptances should be reported in "Loans and leases held for sale"
(Schedule RC, item 4.a), "Loans and leases, net of unearned income" (Schedule RC,
item 4.b), or "Trading assets" (Schedule RC, item 5), as appropriate.
(b) Another exception occurs in situations where the account party anticipates its liability to the
reporting bank on an acceptance outstanding by making a payment to the bank that reduces
the customer's liability in advance of the maturity of the acceptance. In this case, the reporting
bank should decrease ”Other assets” (Schedule RC, item 11) by the amount of such
prepayment; the prepayment will not affect the bank’s “Other liabilities” (Schedule RC,
item 20), which would continue to reflect the full amount of the acceptance until the bank has
repaid the holder of the acceptance at the maturity date specified in the instrument. If the
account party's payment to the accepting bank before the maturity date is not for the purpose
of immediate reduction of its indebtedness to the reporting bank or if receipt of the payment
does not immediately reduce or extinguish that indebtedness, such advance payment will not
reduce item 11 of Schedule RC but should be reflected in the bank's deposit liabilities.
In all situations other than these two exceptions just described, the accepting bank must report the
full amount of its acceptances in “Other liabilities” (Schedule RC, item 20) and in ”Other assets”
(Schedule RC, item 11). There are no other circumstances in which the accepting bank can report
as a balance sheet liability anything less than the full amount of the obligation to put the holder of
the acceptance in funds at maturity. Moreover, there are no circumstances in which the reporting
bank can net its acceptance assets against its acceptance liabilities.
NOTE: The amount of a reporting member (both national and state) bank's acceptances that are
subject to statutory limitations on eligible acceptances as set forth in federal statute 12 USC 372
and in Federal Reserve regulation 12 CFR Part 250 may differ from the required reporting of

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Bankers Acceptances (cont.):
acceptances on the balance sheet of the Consolidated Report of Condition, as described above.
These differences are mainly attributable to ineligible acceptances, to participations in the reporting
bank's acceptances conveyed to others, to participations acquired by the reporting bank in other
banks' acceptances, and to the effect of the consolidation of subsidiaries in the Report of
Condition.
(2) "Participations" in acceptances – The general requirement for the accepting bank to report on its
balance sheet the full amount of the total obligation to put the holder of the acceptance in funds
applies also, in particular, to any situation in which the accepting bank enters into any kind of
arrangement with others for the purpose of having the latter share, or participate, in the obligation
to put the holder of the acceptance in funds at maturity or in the risk of loss in the event of default
1
on the part of the account party. In any such sharing arrangement or participation agreement -regardless of its form or its contract provisions, regardless of the terminology (e.g., "funded," "risk,"
"unconditional," or "contingent") used to describe it and the relationships under it, regardless of
whether it is described as a participation in the customer's liability or in the accepting bank's
obligation or in the risk of default by the account party, and regardless of the system of debits and
credits used by the accepting bank to reflect the participation arrangement -- the existence of the
participation or other agreement does not reduce the accepting bank's obligation to honor the full
amount of the acceptance at maturity nor change the requirement for the accepting bank to report
the full amount of the acceptance in the liability and asset items described above.
The existence of such participations is not to be recorded on the balance sheet (Schedule RC) of
the accepting bank that conveys shares in its obligation to put the holder of the acceptance in
funds or shares in its risk of loss in the event of default on the part of the account party, and
similarly is not to be recorded on the balance sheets (Schedule RC) of the other banks that are
party to, or acquire, such participations. However, in such cases of agreements to participate, the
nonaccepting bank acquiring the participation will report the participation in Schedule RC-R,
item 47, “Risk participations in bankers acceptances acquired by the reporting institution.” This
same reporting treatment applies to a bank that acquires a participation in an acceptance of
another (accepting) bank and subsequently conveys the participation to others and to a bank that
acquires such a participation. Moreover, the bank that both acquires and conveys a participation
in another bank's acceptance must report the amount of the participation in the acceptance
participation item in Schedule RC-R.
(3) Acceptances owned by the reporting bank – The treatment of acceptances owned or held by the
reporting bank (whether acquired by initial discount or subsequent purchase) depends upon
whether the acceptances are held for trading, for sale, or in portfolio and upon whether the
acceptances held have been accepted by the reporting bank or by other banks.
All acceptances held for trading by the reporting bank (whether acceptances of the reporting bank
or of other banks) are to be reported in Schedule RC, item 5, "Trading assets." Banks that must
complete Schedule RC-D, Trading Assets and Liabilities, should report other banks’ acceptances
held for trading in item 6.d, "Other loans,” and its own acceptances held for trading according to
the account party of the draft, generally in item 6.b, “Commercial and industrial loans,” or item 6.d,
“Other loans,” as appropriate.
The reporting bank's holdings of acceptances other than those held for trading (whether
acceptances of the reporting bank or of other banks) are to be reported in Schedule RC, item 4.a,
"Loans and leases held for sale," or in item 4.b, "Loans and leases, net of unearned income," as
appropriate, and in Schedule RC-C, part I, “Loans and Lease financing receivables.”

1

This discussion does not deal with participations in holdings of bankers acceptances, which are reportable as
loans. Such participations are treated like any participations in loans as described in the Glossary entry for "transfers
of financial assets."

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Bankers Acceptances (cont.):
In Schedule RC-C, part I, the reporting bank's holdings of other banks' acceptances, other than
those held for trading, are to be reported in "Loans to depository institutions and acceptances of
other banks" (item 2). On the other hand, the bank's holdings of its own acceptances, other than
those held for trading, are to be reported in Schedule RC-C, part I, according to the account party
of the draft. Thus, holdings of own acceptances for which the account parties are commercial or
industrial enterprises are to be reported in Schedule RC-C, part I, in "Commercial and industrial
loans" (item 4); holdings of own acceptances for which the account parties are other banks (e.g., in
connection with the refinancing of another acceptance or for the financing of dollar exchange) are
to be reported in Schedule RC-C, part I, in "Loans to depository institutions and acceptances of
other banks" (item 2); and holdings of own acceptances for which the account parties are foreign
governments or official institutions (e.g., for the financing of dollar exchange) are to be reported in
Schedule RC-C, part I, "Loans to foreign governments and official institutions" (item 7).
The difference in treatment between holdings of own acceptances and holdings of other banks'
acceptances reflects the fact that, for other banks' acceptances, the holding bank's immediate
claim is on the accepting bank, regardless of the account party or of the purpose of the loan.
On the other hand, for its holdings of its own acceptances, the bank's immediate claim is on the
account party named in the accepted draft.
If the account party prepays its acceptance liability on an acceptance of the reporting bank that is
held by the reporting bank (in the held-for-sale account, in the loan portfolio, or as trading assets)
so as to immediately reduce its indebtedness to the reporting bank, the recording of the holding –
in "Commercial and industrial loans," "Loans to depository institutions and acceptances of other
banks," or "Trading assets," as appropriate – is reduced by the prepayment.
Bank-Owned Life Insurance: ASC Subtopic 325-30, Investments-Other – Investments in Insurance
Contracts (formerly FASB Technical Bulletin No. 85-4, Accounting for Purchases of Life Insurance, and
Emerging Issues Task Force (EITF) Issue No. 06-5, Accounting for Purchases of Life Insurance–
Determining the Amount That Could Be Realized in Accordance with FASB Technical Bulletin
No. 85-4) addresses the accounting for bank-owned life insurance. According to ASC Subtopic
325-30, only the amount that could be realized under the insurance contract as of the balance sheet
date should be reported as an asset. In general, this amount is the cash surrender value reported to
the institution by the insurance carrier less any applicable surrender charges not reflected by the
insurance carrier in the reported cash surrender value, i.e., the net cash surrender value. An institution
should also consider any additional amounts included in the contractual terms of the policy in
determining the amount that could be realized under the insurance contract in accordance with
ASC Subtopic 325-30.
Because there is no right of offset, an investment in bank-owned life insurance should be reported as
an asset separately from any related deferred compensation liability.
Banks that have entered into split-dollar life insurance arrangements should follow the guidance on the
accounting for the deferred compensation and postretirement benefit aspects of such arrangements in
ASC Subtopic 715-60, Compensation-Retirement Benefits – Defined Benefit Plans-Other Postretirement
(formerly EITF Issue No. 06-4, “Accounting for Deferred Compensation and Postretirement Benefit
Aspects of Endorsement Split-Dollar Life Insurance Arrangements,” and EITF Issue No. 06-10,
“Accounting for Deferred Compensation and Postretirement Benefit Aspects of Collateral Assignment
Split-Dollar Life Insurance Arrangements”). In general, in an endorsement split-dollar arrangement, a
bank owns and controls the insurance policy on the employee, whereas in a collateral assignment splitdollar arrangement, the employee owns and controls the insurance policy. According to ASC Subtopic
715-60, a bank should recognize a liability for the postretirement benefit related to a split-dollar life
insurance arrangement if, based on the substantive agreement with the employee, the bank has agreed
to maintain a life insurance policy during the employee's retirement or provide the employee with a death

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Bank-Owned Life Insurance (cont.):
benefit. This liability should be measured in accordance with either ASC Topic 715, CompensationRetirement Benefits (formerly FASB Statement No. 106, “Employers’ Accounting for Postretirement
Benefits Other Than Pensions”) (if, in substance, a postretirement benefit plan exists) or ASC Subtopic
710-10, Compensation-General – Overall (formerly Accounting Principles Board Opinion No. 12,
“Omnibus Opinion – 1967,” as amended by FASB Statement No. 106, “Employers’ Accounting for
Postretirement Benefits Other Than Pensions”) (if the arrangement is, in substance, an individual
deferred compensation contract), and reported on the balance sheet in Schedule RC, item 20, “Other
liabilities,” and in Schedule RC-G, item 4, "All other liabilities." In addition, for a collateral assignment
split-dollar arrangement, ASC Subtopic 715-60 states that an employer such as a bank should
recognize and measure an insurance asset based on the nature and substance of the arrangement.
The amount that could be realized under bank-owned life insurance policies as of the report date
should be reported on the balance sheet in Schedule RC, item 11, “Other assets,” and in
Schedule RC-F, item 5, “Life insurance assets.” The net earnings (losses) on or the net increases
(decreases) in the bank’s life insurance assets should be reported in the income statement in
Schedule RI, item 5.l, "Other noninterest income." Alternatively, the gross earnings (losses) on or
increases (decreases) in these life insurance assets may be reported in Schedule RI, item 5.l, and the
life insurance policy expenses may be reported in Schedule RI, Item 7.d, "Other noninterest expense."
If the absolute value of the earnings (losses) on or the increases (decreases) in the bank’s life
insurance assets are reported in Schedule RI, item 5.l, “Other noninterest income,” are greater than
$25,000 and exceed 3 percent of “Other noninterest income,” this amount should be reported in
Schedule RI-E, item 1.b.
Banks, U.S. and Foreign: In the classification of banks as customers of the reporting bank, distinctions
are drawn for purposes of the Reports of Condition and Income between "U.S. banks" and "commercial
banks in the U.S." and between "foreign banks" and "banks in foreign countries." Some report items
call for one set of these categories and other items call for the other set. The distinctions center
around the inclusion or exclusion of foreign branches of U.S. banks and U.S. branches and agencies of
foreign banks. For purposes of describing the office location of banks as customers of the reporting
bank, the term "United States" covers the 50 states of the United States, the District of Columbia,
Puerto Rico, and U.S. territories and possessions. (This is in contrast to the usage with respect to the
offices of the reporting bank, where U.S.-domiciled Edge and Agreement subsidiaries and IBFs are
included in "foreign" offices. Furthermore, for banks chartered and headquartered in the 50 states of
the United States and the District of Columbia, offices of the reporting bank in Puerto Rico and U.S.
territories and possessions are also included in “foreign” offices, but, for banks chartered and
headquartered in Puerto Rico and U.S. territories and possessions, offices of the reporting bank in
Puerto Rico and U.S. territories and possessions are included in “domestic” offices.)
U.S. banks – The term "U.S. banks" covers both the U.S. and foreign branches of banks chartered and
headquartered in the U.S. (including U.S.-chartered banks owned by foreigners), but excluding U.S.
branches and agencies of foreign banks. On the other hand, the term "banks in the U.S." or
"commercial banks in the U.S." (the institutional coverage of which is described in detail later in this
entry) covers the U.S. offices of U.S. banks (including their IBFs) and the U.S. branches and agencies
of foreign banks, but excludes the foreign branches of U.S. banks.
Foreign banks – Similarly, the term "foreign banks" covers all branches of banks chartered and
headquartered in foreign countries (including foreign banks owned by U.S. nationals and institutions),
including their U.S.-domiciled branches and agencies, but excluding the foreign branches of U.S.
banks. In contrast, the term "banks in foreign countries" covers foreign-domiciled branches of banks,
including the foreign branches of U.S. banks, but excluding the U.S. branches and agencies of foreign
banks.

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Banks, U.S. and Foreign (cont.):
The following table summarizes these contrasting categories of banks considered as customers as
used in the Reports of Condition and Income ("X" indicates inclusion; no entry indicates exclusion.)

"U.S.
banks"

U.S. branches
of U.S. banks
(including IBFs)

X

Foreign branches
of U.S. banks

X

"Commercial
banks in
the U.S."

"Banks in
foreign
countries"

X

X

Foreign branches
of foreign banks
U.S. branches and
agencies of foreign
banks

"Foreign
banks"

X

X

X

X

Commercial banks in the U.S. – The detailed institutional composition of "commercial banks in the
U.S." includes:
(1)

the U.S.-domiciled head offices and branches of:
(a)
(b)
(c)
(d)
(e)
(f)
(g)

(2)

national banks;
state-chartered commercial banks;
trust companies that perform a commercial banking business;
industrial banks;
private or unincorporated banks;
International Banking Facilities (IBFs) of U.S. banks;
Edge and Agreement corporations; and

the U.S.-domiciled branches and agencies of foreign banks (as defined below).

This coverage includes the U.S. institutions listed above that are owned by foreigners. Excluded from
commercial banks in the U.S. are branches located in foreign countries of U.S. banks.
U.S. savings and loan associations and savings banks are treated as "other depository institutions in
the U.S." for purposes of the Reports of Condition and Income.
U.S. branches and agencies of foreign banks – U.S. branches of foreign banks include any offices or
places of business of foreign banks that are located in the United States at which deposits are
accepted. U.S. agencies of foreign banks include any offices or places of business of foreign banks
that are located in the United States at which credit balances are maintained incidental to or arising out
of the exercise of banking powers but at which deposits may not be accepted from citizens or residents
of the United States.

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Banks, U.S. and Foreign (cont.):
For purposes of the Reports of Condition and Income, the term "U.S. branches and agencies of foreign
banks" covers:
(1) the U.S. branches and agencies of foreign banks;
(2) the U.S. branches and agencies of foreign official banking institutions, including central banks,
nationalized banks, and other banking institutions owned by foreign governments; and
(3) investment companies that are chartered under Article XII of the New York State banking law and
that are majority-owned by one or more foreign banks.
Banks in foreign countries –The institutional composition of "banks in foreign countries" includes:
(1) the foreign-domiciled head offices and branches of:
(a) foreign commercial banks (including foreign-domiciled banking subsidiaries of U.S. banks and
Edge and Agreement corporations);
(b) foreign savings banks or discount houses;
(c) nationalized banks not functioning either as central banks, as foreign development banks, or
as banks of issue;
(d) other similar foreign institutions that accept short-term deposits; and
(2) the foreign-domiciled branches of U.S. banks.
See also "International Banking Facility (IBF)."
Banks in Foreign Countries: See "banks, U.S. and foreign."
Bill-of-Lading Draft: See "commodity or bill-of-lading draft."
Borrowings and Deposits in Foreign Offices: Borrowings in foreign offices include assets
rediscounted with central banks, certain participations sold in loans and securities, government
fundings of loans, borrowings from the Export-Import Bank, and rediscounted trade acceptances.
Federal funds sold and repurchase agreements in foreign offices should be reported in accordance
with the Glossary entries for "federal funds transactions" and "repurchase/resale agreements." Liability
accounts such as accruals and allocated capital shall not be reported as borrowings. Deposits consist
of such other short-term and long-term liabilities issued or undertaken as a means of obtaining funds to
be used in the banking business and include those liabilities generally characterized as placements
and takings, call money, and deposit substitutes.
Brokered Deposits: Brokered deposits represent funds which the reporting bank obtains, directly or
indirectly, by or through any deposit broker for deposit into one or more deposit accounts. Thus,
brokered deposits include both those in which the entire beneficial interest in a given bank deposit
account or instrument is held by a single depositor and those in which the deposit broker sells
participations in a given bank deposit account or instrument to one or more investors.
Fully insured brokered deposits are brokered deposits (including brokered deposits that represent
retirement deposit accounts as defined in Schedule RC-O, Memorandum item 1) with balances of
$250,000 or less or with balances of more than $250,000 that have been participated out by the
deposit broker in shares of $250,000 or less. As more fully described in the instructions for
Schedule RC-E, (part I), Memorandum item 1.c, fully insured brokered deposits also include (a) certain
brokered certificates of deposit issued in $1,000 amounts under a master certificate of deposit issued
by a bank to a deposit broker in an amount that exceeds $250,000 and (b) certain brokered transaction
accounts and money market deposit accounts denominated in amounts of $0.01 and established and
maintained by the deposit broker (or its agent) as agent, custodian, or other fiduciary for the broker’s
customers.

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Brokered Deposits (cont.):
For purposes of these reports, the term deposit broker includes:
(1) any person engaged in the business of placing deposits, or facilitating the placement of deposits,
of third parties with insured depository institutions or the business of placing deposits with insured
depository institutions for the purpose of selling interests in those deposits to third parties, and
(2) an agent or trustee who establishes a deposit account to facilitate a business arrangement with an
insured depository institution to use the proceeds of the account to fund a prearranged loan.
The term deposit broker does not include:
(1) an insured depository institution, with respect to funds placed with that depository institution;
(2) an employee of an insured depository institution, with respect to funds placed with the employing
depository institution;
(3) a trust department of an insured depository institution, if the trust or other fiduciary relationship in
question has not been established for the primary purpose of placing funds with insured
depository institutions;
(4) the trustee of a pension or other employee benefit plan, with respect to funds of the plan;
(5) a person acting as a plan administrator or an investment adviser in connection with a pension plan
or other employee benefit plan provided that that person is performing managerial functions with
respect to the plan;
(6) the trustee of a testamentary account;
(7) the trustee of an irrevocable trust (other than a trustee who establishes a deposit account to
facilitate a business arrangement with an insured depository institution to use the proceeds of the
account to fund a prearranged loan), as long as the trust in question has not been established for
the primary purpose of placing funds with insured depository institutions;
(8) a trustee or custodian of a pension or profit-sharing plan qualified under Section 401(d) or 430(a)
of the Internal Revenue Code of 1986;
(9) an agent or nominee whose primary purpose is not the placement of funds with depository
institutions;1 or
(10) an insured depository institution acting as an intermediary or agent of a U.S. government
department or agency for a government sponsored minority or women-owned depository
institution deposit program.
Notwithstanding these ten exclusions, the term deposit broker (as amended on September 23, 1994,
by the Riegle Community Development and Regulatory Improvement Act of 1994) includes any insured
depository institution that is not well capitalized (as defined in Section 38 of the Federal Deposit
Insurance Act, Prompt Corrective Action), and any employee of such institution, which engages,
directly or indirectly, in the solicitation of deposits by offering rates of interest which are significantly
higher than the prevailing rates of interest on deposits offered by other insured depository institutions in
2
such depository institution's normal market area. For purposes of these reports, only those deposits
accepted, renewed, or rolled over on or after June 16, 1992, in connection with this form of deposit
solicitation are to be reported as brokered deposits. For further information, see Section 337.6(b) of
the FDIC's Rules and Regulations.

1

For purposes of applying this ninth exclusion from the definition of deposit broker, "primary purpose" does not mean
"primary activity," but should be construed as "primary intent."

2

Any deposit accepted, renewed, or rolled over by a well capitalized institution before September 23, 1994, in
connection with this form of deposit solicitation should continue to be reported as a brokered deposit as long as the
deposit remains outstanding under the terms in effect before September 23, 1994. Notwithstanding the amendment
to the "deposit broker" definition, all institutions that obtain deposits, directly or indirectly, by or through any other
deposit broker must report such funds as brokered deposits in the Report of Condition.

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Brokered Deposits (cont.):
In addition, deposit instruments of the reporting bank that are sold to brokers, dealers, or underwriters
(including both bank affiliates of the reporting bank and nonbank subsidiaries of the reporting bank's
parent holding company) who then reoffer and/or resell these deposit instruments to one or more
investors, regardless of the minimum denomination which the investor must purchase, are considered
brokered deposits.
In some cases, brokered deposits are issued in the name of the depositor whose funds have been
placed in a bank by a deposit broker. In other cases, a bank’s deposit account records may indicate
that the funds have been deposited in the name of a third party custodian for the benefit of others
(e.g., “XYZ Corporation as custodian for the benefit of others,” or “Custodial account of XYZ
Corporation”). Unless the custodian meets one of the specific exemptions from the “deposit broker”
definition in Section 29 of the Federal Deposit Insurance Act and this Glossary entry, these custodial
accounts should be reported as brokered deposits in Schedule RC-E, Deposit Liabilities.
A deposit listing service whose only function is to provide information on the availability and terms of
accounts is not facilitating the placement of deposits and therefore is not a deposit broker per se.
However, if a deposit broker uses a deposit listing service to identify an institution offering a high rate on
deposits and then places its customers’ funds at that institution, the deposits would be brokered deposits
and the institution should report them as such in Schedule RC-E. The designation of these deposits as
brokered deposits is based not on the broker’s use of the listing service but on the placement of the
deposits in the institution by the deposit broker.
Broker's Security Draft: A broker's security draft is a draft with securities or title to securities attached
that is drawn to obtain payment for the securities. This draft is sent to a bank for collection with
instructions to release the securities only on payment of the draft.

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Business Combinations: The accounting and reporting standards for business combinations are set
forth in ASC Topic 805, Business Combinations (formerly FASB Statement No. 141 (revised 2007),
"Business Combinations"). ASC Topic 805 requires that all business combinations for which the
acquisition date is on or after the beginning of the first annual reporting period beginning on or after
December 15, 2008, must be accounted for using the acquisition method. The use of the pooling-ofinterests method to account for business combinations is prohibited. ASC Topic 805 applies to all
business entities, including mutual entities that previously used the pooling-of-interests method of
accounting for some business combinations. It does not apply to the formation of a joint venture, the
acquisition of assets that do not constitute a business, or a combination between entities under
common control. Except for some business combinations between two or more mutual institutions,
business combinations for which the acquisition date was before the beginning of the first annual
reporting period beginning on or after December 15, 2008, were accounted for using the purchase
method as specified in former FASB Statement No. 141, “Business Combinations,” which has been
superseded by ASC Topic 805.
Acquisition method – Under the acquisition method, the acquirer in a business combination shall
measure the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in
the acquiree at their acquisition-date fair values (with limited exceptions specified in ASC Topic 805)
using the definition of fair value in ASC Topic 820, Fair Value Measurements and Disclosures (formerly
FASB Statement No. 157, “Fair Value Measurements”). The acquisition date is generally the date on
which the acquirer legally transfers the consideration, acquires the assets, and assumes the liabilities
of the acquiree, i.e., the closing date. ASC Topic 805 requires the acquirer to measure acquired
receivables, including loans, at their acquisition-date fair values and the acquirer may not recognize a
separate valuation allowance (e.g., allowance for loan and lease losses) for the contractual cash flows
that are deemed to be uncollectible at that date. The consideration transferred in a business
combination shall be calculated as the sum of the acquisition-date fair values of the assets (including
any cash) transferred by the acquirer, the liabilities incurred by the acquirer to former owners of the
acquiree, and the equity interests issued by the acquirer. Acquisition-related costs are costs the
acquirer incurs to effect a business combination such as finder’s fees; advisory, legal, accounting,
valuation, and other professional or consulting fees; and general administrative costs. The acquirer
shall account for acquisition-related costs as expenses in the periods in which the costs are incurred
and the services received. The cost to register and issue debt or equity securities shall be recognized
in accordance with other applicable generally accepted accounting principles.
ASC Topic 805 provides guidance for recognizing particular assets acquired and liabilities assumed.
Acquired assets may be tangible (such as securities or fixed assets) or intangible (as discussed in the
following paragraph). An acquiring entity must not recognize the goodwill, if any, or the deferred
income taxes recorded by an acquired entity before its acquisition. However, a deferred tax liability or
asset must be recognized for differences between the assigned values and the tax bases of the
recognized assets acquired and liabilities assumed in a business combination in accordance with
ASC Topic 740, Income Taxes (formerly FASB Statement No. 109, "Accounting for Income Taxes,"
and FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”). (For further
information, see the Glossary entry for "income taxes.")
Under ASC Topic 805, an intangible asset must be recognized as an asset separately from goodwill if it
arises from contractual or other legal rights (regardless of transferability or separability). Otherwise, an
intangible asset must be recognized as an asset separately from goodwill only if it is separable, that is,
it is capable of being separated or divided from the entity and sold, transferred, licensed, rented, or
exchanged either individually or together with a related contract, identifiable asset, or liability.
Examples of intangible assets that must be recognized as an asset separately from goodwill are core
deposit intangibles, purchased credit card relationships, servicing assets, favorable leasehold rights,
trademarks, trade names, internet domain names, and noncompetition agreements. These intangible
assets must be reported in Schedule RC, item 10.b, "Other intangible assets," and in Schedule RC-M,
item 2.

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Business Combinations (cont.):
In general, the excess of the sum of the consideration transferred in a business combination plus the
fair value of any noncontrolling interest in the acquiree over the net of the acquisition-date amounts
of the identifiable assets acquired and the liabilities assumed measured in accordance with ASC
Topic 805 must be recognized as goodwill, which is reported in Schedule RC, item 10.a. An acquired
intangible asset that does not meet the criteria described in the preceding paragraph must be included
in the amount recognized as goodwill. After initial recognition, goodwill must be accounted for in
accordance with ASC Topic 350, Intangibles-Goodwill and Other (formerly FASB Statement No. 142,
"Goodwill and Other Intangible Assets") and the Glossary entry for “goodwill.”
In contrast, if the total acquisition-date amount of the identifiable net assets acquired exceeds the
consideration transferred plus the fair value of any noncontrolling interest in the acquiree (i.e., a
bargain purchase), the acquirer shall reassess whether it has correctly identified all of the assets
acquired and all the liabilities assumed and shall recognize any additional assets or liabilities that are
identified in that review. If that excess remains after the review, the acquirer shall recognize that
excess in earnings as a gain attributable to the acquirer on the acquisition date and report the amount
in Schedule RI, item 5.l, "Other noninterest income."
Under the acquisition method, the historical equity capital balances of the acquired business are not to
be carried forward to the balance sheet of the combined bank. The operating results of the acquired
bank or business are to be included in the income and expenses of the reporting bank only from the
acquisition date.
Push down accounting – Push down accounting is the establishment of a new accounting basis for a
bank in its separate financial statements as a result of it becoming substantially wholly owned via a
purchase transaction or a series of purchase transactions. Under push down accounting, when a bank
becomes substantially wholly owned, yet retains its separate corporate existence, the bank's
identifiable assets, liabilities, and any noncontrolling interests are restated to their acquisition-date
fair values (with limited exceptions specified in ASC Topic 805) using the definition of fair value in
ASC Topic 820. If the ownership interests in the bank were acquired in a series of purchase
transactions, the previously held equity interest in the bank by the parent is remeasured at its
acquisition-date fair value and any resulting gain or loss is recognized in the parent’s earnings. These
values, including any goodwill, are reflected in the separate financial statements of the acquired bank
as well as in any consolidated financial statements of the bank's parent.
Push down accounting is required for purposes of the Reports of Condition and Income if a bank's
voting stock becomes at least 95 percent owned, directly or indirectly, by an investor (which may be a
holding company) or a group of investors working collaboratively, and the bank does not have
outstanding publicly traded debt or preferred stock that may impact the investor's or group of investors'
ability to control the form of ownership. Push down accounting also is required if the bank's separate
financial statements are presented on a push down basis in reports filed with the Securities and
Exchange Commission. Push down accounting may also be used when a bank's voting stock
becomes at least 80 percent, but less than 95 percent, owned by an investor or a group of investors
working collaboratively. When determining whether a bank has become substantially wholly owned, it
is appropriate to aggregate the holdings of those investors who both "mutually promote" the acquisition
and "collaborate" on the subsequent control of the acquired bank (the collaborative group).
In all cases, the bank's primary federal supervisory authority reserves the right to determine whether or
not a bank must use push down accounting for purposes of the Reports of Condition and Income.

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Business Combinations (cont.):
When push down accounting is used by a bank in the preparation of its Reports of Condition and
Income, both of the following conditions should be met:
(1) An arm's-length purchase acquisition or series of purchase transactions resulting in the bank
becoming substantially wholly owned (at least 80 percent) must have occurred, and
(2) The push down adjusting entries must eliminate the retained earnings account (therefore, the
entire retained earnings of the bank before it became substantially wholly owned will not be
available for the payment of dividends after it became substantially wholly owned).
In the Reports of Condition and Income for the remainder of the year in which a bank applies push
down accounting after becoming substantially wholly owned, the bank shall report the initial increase or
decrease in its equity capital that results from the application of push down accounting in item 7,
"Changes incident to business combinations, net," of Schedule RI-A, Changes in Bank Equity Capital.
In addition, when push down accounting is used, no income or expense for the period of the calendar
year prior to the date the bank became substantially wholly owned should be included in subsequent
Reports of Income.
For further information, see ASC Subtopic 805-50, Business Combinations – Related Issues (formerly
EITF Topic D-97, Push-Down Accounting).
Pooling-of-interests method – Under the pooling-of-interests method, the assets, liabilities, and capital
of the bank and the business being acquired are added together on a line-by-line basis without any
adjustments for fair value. The historical cost-based amount (cost adjusted for amortization of
premiums and discounts or depreciation) of each asset, liability, and capital account of the acquiring
bank is added to the corresponding account of the business being acquired to arrive at the balance
sheet for the combined bank. However, the capital stock outstanding of the combined bank must be
equal to the number of shares issued and outstanding (including the shares issued in connection with
the acquisition) multiplied by par or stated value.
If the sum of the capital stock accounts of the entities being combined does not equal this amount (and
it rarely, if ever, will), adjustment is required. If the sum of the capital stock accounts is less than the
number of shares outstanding of the combined bank multiplied by par or stated value, "Surplus,"
Schedule RC, item 25, must be debited for the amount of the difference and "Common stock,"
Schedule RC, item 24, is credited. If the surplus account is insufficient to absorb such an adjustment,
the remainder must be debited to "Retained earnings," Schedule RC, item 26.a. If the sum of the
capital stock accounts is more than the amount of the outstanding stock of the combined bank,
"Surplus" must be credited and "Common stock" debited.
Any adjustments necessary to conform the accounting methods of the acquired entity to those of the
reporting bank must be made, net of related tax effects, to "Retained earnings."
For the year in which a pooling of interests occurs, income and expenses must be reported in
Schedule RI, Income Statement, as though the companies had combined at the beginning of the year.
The portion of the adjustment necessary to conform the accounting methods applicable to the current
period must also be allocated to income and expenses for the period.
Reorganization – A combination of two or more entities or businesses involving related parties, i.e.,
entities under common control, is considered a reorganization and not a business combination. For
example, two subsidiary banks of a bank holding company may combine into one bank, which is a
change in legal organization but not a change in the entity. The assets and liabilities transferred in the
combination are accounted for at historical cost in a manner similar to that described above under

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Business Combinations (cont.):
"pooling-of-interests method." For the year in which a reorganization occurs, income and expenses
must be reported in Schedule RI, Income Statement, as though the entities had combined at the
beginning of the year.
A bank holding company's investment in a bank or other business that was acquired in a business
combination accounted for under the acquisition method may differ from the book value of the net
assets in that bank's or business's financial statements because push down accounting was not
applied. This situation will generally exist with respect to acquisitions that occurred prior to the
September 30, 1989, effective date of the push down accounting instructions set forth above in this
Glossary entry.
A bank holding company may transfer its ownership interest in an acquired bank or other business to
another one of its subsidiary banks subsequent to its acquisition of the bank or other business. When
this occurs, the financial statements of the surviving bank must be adjusted, as set forth in ASC
Subtopic 852-10, Reorganizations – Overall (formerly EITF Issue No. 90-5, “Exchanges of Ownership
Interests between Entities under Common Control”) to reflect the assets and liabilities of the acquired
bank or other business at the historical cost included in the holding company's financial statements.
The necessity and extent of such adjustments should be determined in consultation with the bank's
primary federal supervisory authority.
For further information on the accounting for business combinations, see ASC Topic 805.
Call Option: See "derivative contracts."

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Capital Contributions of Cash and Notes Receivable: An institution may receive cash or a note
receivable as a contribution to its equity capital. The transaction may be a sale of capital stock or
a contribution to paid-in capital (surplus), both of which are referred to hereafter as capital
contributions. The accounting for capital contributions in the form of notes receivable is set forth in
ASC Subtopic 505-10, Equity – Overall (formerly EITF Issue No. 85-1, “Classifying Notes Received
for Capital Stock”) and SEC Staff Accounting Bulletin No. 107 (Topic 4.E., Receivables from Sale
of Stock, in the Codification of Staff Accounting Bulletins). This Glossary entry does not address
other forms of capital contributions, for example, nonmonetary contributions to equity capital such
as a building.
A capital contribution of cash should be recorded in an institution’s financial statements and
Consolidated Reports of Condition and Income when received. Therefore, a capital contribution of
cash prior to a quarter-end report date should be reported as an increase in equity capital in the
institution’s reports for that quarter (in Schedule RI-A, item 5 or 11, as appropriate). A contribution of
cash after quarter-end should not be reflected as an increase in the equity capital of an earlier reporting
period.
When an institution receives a note receivable rather than cash as a capital contribution, ASC
Subtopic 505-10 states that it is generally not appropriate to report the note as an asset. As a
consequence, the predominant practice is to offset the note and the capital contribution in the equity
capital section of the balance sheet, i.e., the note receivable is reported as a reduction of equity capital.
In this situation, the capital stock issued or the contribution to paid-in capital should be reported in
Schedule RC, item 23, 24, or 25, as appropriate, and the note receivable should be reported as a
deduction from equity capital in Schedule RC, item 26.c, “Other equity capital components.” No net
increase in equity capital should be reported in Schedule RI-A, Changes in Bank Equity Capital. In
addition, when a note receivable is offset in the equity capital section of the balance sheet, accrued
interest receivable on the note also should be offset in equity (and reported as a deduction from equity
capital in Schedule RC, item 26.c), consistent with the guidance in ASC Subtopic 505-10. Because a
nonreciprocal transfer from an owner or another party to an institution does not typically result in the
recognition of income or expense, the accrual of interest on a note receivable that has been reported
as a deduction from equity capital should be reported as additional paid-in capital rather than interest
income.
However, ASC Subtopic 505-10 provides that an institution may record a note received as a capital
contribution as an asset, rather than a reduction of equity capital, only if the note is collected in cash
“before the financial statements are issued.” The note receivable must also satisfy the existence
1
criteria described below, along with any applicable laws and regulations. When these conditions are
met, the note receivable should be reported separately from an institution’s other loans and receivables
in Schedule RC-F, item 6, “All other assets,” and individually itemized and described in accordance
with the instructions for item 6, if appropriate.
For purposes of these reports, the financial statements are considered issued at the earliest of the
following dates:
(1) The submission deadline for the Consolidated Reports of Condition and Income (30 calendar days
after the quarter-end report date, except for an institution that has more than one foreign office,
other than a “shell” branch or an International Banking Facility, for which the deadline is 35
calendar days after quarter-end);
(2) Any other public financial statement filing deadline to which the institution or its parent holding
company is subject; or
(3) The actual filing date of the institution’s public financial reports, including the filing of its
Consolidated Reports of Condition and Income or a public securities filing by the institution or its
parent holding company.
1

For example, for national banks, 12 U.S.C. § 57 and 12 CFR § 5.46.

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Capital Contributions of Cash and Notes Receivable (cont.):
To be reported as an asset, rather than a reduction of equity capital, as of a quarter-end report date,
a note received as a capital contribution (that is collected in cash as described above) must meet the
definition of an asset under generally accepted accounting principles by satisfying all of the following
existence criteria:
(1) There must be written documentation providing evidence that the note was contributed to the
institution prior to the quarter-end report date by those with authority to make such a capital
contribution on behalf of the issuer of the note (e.g., if the contribution is by the institution’s parent
holding company, those in authority would be the holding company’s board of directors or its chief
executive officer or chief financial officer);
(2) The note must be a legally binding obligation of the issuer to fund a fixed and stated dollar amount
by a specified date; and
(3) The note must be executed and enforceable before quarter-end.
Although an institution’s parent holding company may have a general intent to, or may have entered
into a capital maintenance agreement with the institution that calls for it to, maintain the institution’s
capital at a specified level, this general intent or agreement alone would not constitute evidence that a
note receivable existed at quarter-end. Furthermore, if a note receivable for a capital contribution
obligates the note issuer to pay an amount that is variable or otherwise not specifically stated, the
institution must offset the note and equity capital. Similarly, an obligor’s issuance of several notes
having fixed face amounts, taken together, would be considered a single note receivable having a
variable payment amount, which would require all the notes to be offset in equity capital as of the
quarter-end report date.
Capitalization of Interest Costs: Interest costs associated with the construction of a building shall, if
material, be capitalized as part of the cost of the building. Such interest costs include both the actual
interest incurred when the construction funds are borrowed and the interest costs imputed to internal
financing of a construction project.
The interest rate utilized to capitalize interest on internally financed projects in a reporting period shall
be the rate(s) applicable to the bank's borrowings outstanding during the period. For this purpose, a
bank's borrowings include interest-bearing deposits and other interest-bearing liabilities.
The interest capitalized shall not exceed the total amount of interest cost incurred by the bank during
the reporting period.
For further information, see ASC Subtopic 835-20, Interest – Capitalization of Interest (formerly FASB
Statement No. 34, "Capitalization of Interest Costs," as amended).
Carrybacks and Carryforwards: See "income taxes."
Cash Management Arrangements: A cash management arrangement is a group of related transaction
accounts of a single type maintained in the same right and capacity by a customer (a single legal
entity), whereby the customer and the financial institution understand that payments from one account
will be honored so long as a net credit balance exists in the group of related transaction accounts taken
as a whole. Such accounts function as, and will be regarded for reporting and deposit insurance
assessment purposes as, one account rather than separate accounts, provided adequate
documentation of the arrangement is maintained as discussed below. (Note: For reporting and
deposit insurance assessment purposes, transaction accounts of affiliates and subsidiaries of a parent
company that are separate legal entities may not be offset because accounts of separate legal entities
are not permitted within a bona fide cash management arrangement.)

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Cash Management Arrangements (cont.):
"Transaction accounts of a single type" means demand deposit accounts or NOW accounts, but not a
combination thereof. For purposes of cash management arrangements, the terms "right" and
"capacity" relate to the form of legal ownership such as being held in an agency or trust capacity, as a
joint tenant, or as an individual. "Single legal entity" means a natural person, partnership, corporation,
trust, or estate.
The reporting bank must maintain readily available records that will allow for the verification of cash
management arrangements. Such documentation must provide account numbers, account titles,
ownership of accounts, and the terms and conditions surrounding the management of the accounts,
and must also clearly show that both the customer and the reporting bank have agreed to such terms
and conditions. These terms and conditions must clearly indicate the understanding that payments
from one account will be honored as long as a net credit balance exists within the group of related
transaction accounts taken as a whole and maintained in the same right and capacity. A written cash
management agreement, signed by both the customer (a single legal entity) and the reporting bank,
accurately maintained and incorporating the above information, will be acceptable evidence of a bona
fide cash management arrangement. In addition, the reporting bank must maintain readily available
records that will allow for the verification of account balances within cash management arrangements.
See "deposits" for the definitions of transaction account, demand deposit, and NOW account. See also
"overdraft."
Certificate of Deposit: See "deposits."
Changes in Accounting Estimates: See "accounting changes."
Changes in Accounting Principles: See "accounting changes."
Clearing Accounts: See "suspense accounts."
Commercial Banks in the U.S.: See "banks, U.S. and foreign."
Commercial Letter of Credit: See "letter of credit."
Commercial Paper: Commercial paper consists of short-term negotiable promissory notes issued in the
United States by commercial businesses, including finance companies and banks. Commercial paper
usually matures in 270 days or less and is not collateralized. Commercial paper may be backed by a
standby letter of credit from a bank, as in the case of documented discounted notes. Holdings of
commercial paper are to be reported as "securities" in Schedule RC-B, normally in item 6, "Other debt
securities," unless held for trading and therefore reportable in Schedule RC, item 5, "Trading assets."
Commodity or Bill-of-Lading Draft: A commodity or bill-of-lading draft is a draft that is issued in
connection with the shipment of goods. If the commodity or bill-of-lading draft becomes payable only
when the shipment of goods against which it is payable arrives, it is an arrival draft. Arrival drafts are
usually forwarded by the shipper to the collecting depository institution with instructions to release the
shipping documents (e.g., bill of lading) conveying title to the goods only upon payment of the draft.
Payment, however, cannot be demanded until the goods have arrived at the drawee's destination.
Arrival drafts provide a means of insuring payment of shipped goods at the time that the goods are
released.
Common Stock of Unconsolidated Subsidiaries, Investments in: See “equity method of accounting”
and "subsidiaries."
Continuing Contract: See "federal funds transactions."

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Corporate Joint Venture: See "subsidiaries."
Corrections of Accounting Errors: See "accounting changes."
Coupon Stripping, Treasury Receipts, and STRIPS: Coupon stripping occurs when a security holder
physically detaches unmatured coupons from the principal portion of a security and sells either the
detached coupons or the ex-coupon security separately. (Such transactions are generally considered
by federal bank supervisory agencies to represent "improper investment practices" for banks.) In
accounting for such transactions, the carrying amount of the security must be allocated between the
ex-coupon security and the detached coupons based on their relative fair values at the date of the sale
in accordance with ASC Topic 860, Transfers and Servicing (formerly FASB Statement No. 140,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," as
amended). (See the Glossary entry for "transfers of financial assets.")
Detached U.S. Government security coupons and ex-coupon U.S. Government securities that are held
for purposes other than trading, whether resulting from the coupon stripping activities of the reporting
bank or from its purchase of stripped securities, shall be reported as "Other domestic debt securities" in
Schedule RC-B, item 6.a. The amount of any discount or premium relating to the detached coupons or
ex-coupon securities must be amortized. (See the Glossary entry for "premiums and discounts.")
A variation of coupon stripping has been developed by several securities firms which have marketed
instruments with such names as CATS (Certificates of Accrual on Treasury Securities),
TIGR (Treasury Investment Growth Receipts), COUGAR (Certificates on Government Receipts),
LION (Lehman Investment Opportunity Notes), and ETR (East Treasury Receipts). A securities dealer
purchases U.S. Treasury securities, delivers them to a trustee, and sells receipts representing the
rights to future interest and/or principal payments on the U.S. Treasury securities held by the trustee.
Such Treasury receipts are not an obligation of the U.S. Government and, when held for purposes
other than trading, shall be reported as "Other domestic debt securities" in Schedule RC-B, item 6.a.
The discount on these Treasury receipts must be accreted.
Under a program called Separate Trading of Registered Interest and Principal of Securities (STRIPS),
the U.S. Treasury has issued certain long-term note and bond issues that are maintained in the
book-entry system operated by the Federal Reserve Banks in a manner that permits separate trading
and ownership of the interest and principal payments on these issues. Even after the interest or
principal portions of U.S. Treasury STRIPS have been separately traded, they remain obligations of the
U.S. Government. STRIPS held for purposes other than trading shall be reported as U.S. Treasury
securities in Schedule RC-B, item 1. The discount on separately traded portions of STRIPS must be
accreted.
Detached coupons, ex-coupon securities, Treasury receipts, and U.S. Treasury STRIPS held for
trading purposes shall be reported at fair value in Schedule RC, item 5.
Custody Account: A custody account is one in which securities or other assets are held by a bank on
behalf of a customer under a safekeeping arrangement. Assets held in such capacity are not to be
reported in the balance sheet of the reporting bank nor are such accounts to be reflected as a liability.
Assets of the reporting bank held in custody accounts at other banks are to be reported on the reporting
bank's balance sheet in the appropriate asset categories as if held in the physical custody of the
reporting bank.
Dealer Reserve Account: A dealer reserve account arises when a bank purchases at full face value a
dealer's installment note receivables, but credits less than the full face value directly to the dealer's
account. The remaining amount is credited to a separate dealer reserve account. That account is held
by the bank as collateral for the installment notes and, for reporting purposes, is treated as a deposit in
the appropriate items of Schedule RC-E. The bank will subsequently disburse to the dealer
predetermined portions of the reserve as the purchased notes are paid in a timely manner.

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FFIEC 031 and 041

GLOSSARY

Dealer Reserve Account (cont.):
For example, if a bank purchases $100,000 in notes from a dealer for the full face amount ($100,000)
and pays to the dealer $90,000 in cash or credits to his/her deposit account, the remaining $10,000,
which is held as collateral security, would be credited to the dealer reserve account.
See also "deposits."
Deferred Compensation Agreements: Institutions often enter into deferred compensation agreements
with selected employees as part of executive compensation and retention programs. These
agreements are generally structured as nonqualified retirement plans for federal income tax purposes
and are based upon individual agreements with selected employees. Institutions purchase life
insurance in connection with many of these agreements. Bank-owned life insurance may produce
attractive tax-equivalent yields that offset some or all of the costs of the agreements.
Deferred compensation agreements with select employees under individual contracts generally do not
constitute postretirement income plans (i.e., pension plans) or postretirement health and welfare
benefit plans. The accounting for individual contracts that, when taken together, do not represent a
postretirement plan should follow ASC Subtopic 710-10, Compensation-General – Overall (formerly
Accounting Principles Board Opinion No. 12, “Omnibus Opinion – 1967,” as amended by FASB
Statement No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions”). If the
individual contracts, taken together, are equivalent to a plan, the plan should be accounted for under
ASC Topic 715, Compensation-Retirement Benefits (formerly FASB Statement No. 87, "Employers’
Accounting for Pensions," or Statement No. 106).
ASC Subtopic 710-10 requires that an employer’s obligation under a deferred compensation
agreement be accrued according to the terms of the individual contract over the required service period
to the date the employee is fully eligible to receive the benefits, i.e., the “full eligibility date.” Depending
on the individual contract, the full eligibility date may be the employee’s expected retirement date, the
date the employee entered into the contract, or a date between these two dates. ASC Subtopic 710-10
does not prescribe a specific accrual method for the benefits under deferred compensation contracts,
stating only that the “cost of those benefits shall be accrued over that period of the employee’s service
in a systematic and rational manner.” The amounts to be accrued each period should result in a
deferred compensation liability at the full eligibility date that equals the then present value of the
estimated benefit payments to be made under the individual contract.
ASC Subtopic 710-10 does not specify how to select the discount rate to measure the present value of
the estimated benefit payments. Therefore, other relevant accounting literature must be considered in
determining an appropriate discount rate. For purposes of these reports, an institution’s incremental
1
2
borrowing rate and the current rate of return on high-quality fixed-income debt securities are
acceptable discount rates to measure deferred compensation agreement obligations. An institution
must select and consistently apply a discount rate policy that conforms with generally accepted
accounting principles.
For each deferred compensation agreement to be accounted for in accordance with ASC Subtopic
710-10, an institution should calculate the present value of the expected future benefit payments under
the agreement at the employee’s full eligibility date. The expected future benefit payments can be

1

ASC Subtopic 835-30, Interest – Imputation of Interest (formerly APB Opinion No. 21, "Interest on Receivables and
Payables," paragraph 13), states in part that “the rate used for valuation purposes will normally be at least equal to
the rate at which the debtor can obtain financing of a similar nature from other sources at the date of the transaction.”

2

Paragraph 186 in the Basis for Conclusions of former FASB Statement No. 106 states that “[t]he objective of
selecting assumed discount rates is to measure the single amount that, if invested at the measurement date in a
portfolio of high-quality debt instruments, would provide the necessary future cash flows to pay the accumulated
benefits when due.”

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A-15
(9-10)

GLOSSARY

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GLOSSARY

Deferred Compensation Agreements (cont.):
reasonably estimated and should be based on reasonable and supportable assumptions. The
estimated amount of these benefit payments should be discounted because the benefits will be paid in
periodic installments after the employee retires.
For deferred compensation agreements commonly referred to as revenue neutral or indexed retirement
3
plans, the expected future benefits should include both the "primary benefit" and, if the employee is
entitled to "excess earnings" that are earned after retirement, the "secondary benefit." The number of
periods the primary and any secondary benefit payments should be discounted may differ because the
discount period for each type of benefit payment should be based upon the length of time during which
each type of benefit will be paid as specified in the deferred compensation agreement.
After the present value of the expected future benefit payments has been determined, an institution
should accrue an amount of compensation expense and a liability each year from the date the
employee enters into the deferred compensation agreement until the full eligibility date. The amount of
these annual accruals should be sufficient to ensure that a deferred compensation liability equal to the
present value of the expected benefit payments is recorded by the full eligibility date. Any method of
deferred compensation accounting that does not recognize some expense in each year from the date
the employee enters into the agreement until the full eligibility date is not systematic and rational. (For
indexed retirement plans, some expense should be recognized for the primary benefit and any
secondary benefit in each of these years.)
Vesting provisions should be reviewed to ensure that the full eligibility date is properly determined
because this date is critical to the measurement of the liability estimate. Because ASC Subtopic
710-10 requires that the present value of the expected benefit payments be recorded by the full
eligibility date, institutions also need to consider changes in market interest rates to appropriately
measure deferred compensation liabilities. Therefore, institutions should periodically review their
estimates of the expected future benefits under deferred compensation agreements and the discount
rates used to compute the present value of the expected benefit payments and revise the estimates
and rates, when appropriate.
Deferred compensation agreements may include noncompete provisions or provisions requiring
employees to perform consulting services during postretirement years. If the value of the noncompete
provisions cannot be reasonably and reliably estimated, no value should be assigned to the
noncompete provisions in recognizing the deferred compensation liability. Institutions should allocate a
portion of the future benefit payments to consulting services to be performed in postretirement years
only if the consulting services are determined to be substantive. Factors to consider in determining
whether postretirement consulting services are substantive include, but are not limited to, whether the
services are required to be performed, whether there is an economic benefit to the institution, and
whether the employee forfeits the benefits under the agreement for failure to perform such services.

3

Revenue neutral and indexed retirement plans are deferred compensation agreements that are typically designed
so that the spread each year, if any, between the tax-equivalent earnings on bank-owned life insurance covering an
individual employee and a hypothetical earnings calculation is deferred and paid to the employee as a postretirement
benefit. This spread is commonly referred to as “excess earnings.” The hypothetical earnings are computed based
on a pre-defined variable index rate (e.g., cost of funds or federal funds rate) times a notional amount. The
agreement for this type of plan typically requires the excess earnings that accrue before an employee’s retirement to
be recorded in a separate liability account. Once the employee retires, the balance in the liability account is generally
paid to the employee in equal annual installments over a set number of years (e.g., 10 or 15 years). These payments
are commonly referred to as the “primary benefit” or “preretirement benefit.” The employee may also receive the
excess earnings that are earned after retirement. This benefit may continue until his or her death and is commonly
referred to as the “secondary benefit” or “postretirement benefit.” The secondary benefit is paid annually, once the
employee has retired, in addition to the primary benefit.

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A-16
(9-10)

GLOSSARY

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GLOSSARY

Deferred Compensation Agreements (cont.):
Deferred compensation liabilities should be reported on the balance sheet in Schedule RC, item 20,
“Other liabilities,” and in Schedule RC-G, item 4, “All other liabilities.” If this amount is greater than
$25,000 and exceeds 25 percent of the amount reported in Schedule RC-G, item 4, it should be
reported in Schedule RC-G, item 4.b. The annual compensation expense (service component and
interest component) related to deferred compensation agreements should be reported in the income
statement in Schedule RI, item 7.a, "Salaries and employee benefits."
See also "bank-owned life insurance."
Deferred Income Taxes: See "income taxes."
Defined Benefit Postretirement Plans: The accounting and reporting standards for defined benefit
postretirement plans, such as pension plans and health care plans, are set forth in ASC Topic 715,
Compensation-Retirement Benefits (formerly FASB Statement No. 87, “Employers’ Accounting for
Pensions”; FASB Statement No. 106, “Employers’ Accounting for Postretirement Benefits Other Than
Pensions”; and FASB Statement No. 158, “Employers’ Accounting for Defined Benefit Pension and
Other Postretirement Plans”). ASC Topic 715 requires an institution that sponsors a single-employer
defined benefit postretirement plan to recognize the funded status of each such plan on its balance
sheet. The funded status of a benefit plan is measured as of the end of an institution’s fiscal year as
the difference between plan assets at fair value (with limited exceptions) and the benefit obligation. An
overfunded plan is recognized as an asset, which should be reported in Schedule RC-F, item 6, “All
other assets,” while an underfunded plan is recognized as a liability, which should be reported in
Schedule RC-G, item 4, “All other liabilities.”
An institution should measure the net period benefit cost of a defined benefit plan for a reporting period
in accordance with ASC Subtopic 715-30 (formerly FASB Statement No. 87) for pension plans and
ASC Subtopic 715-60 (formerly FASB Statement No. 106) for other postretirement benefit plans. This
cost should be reported in Schedule RI, item 7.a, “Salaries and employee benefits.” However, an
institution must recognize certain gains and losses and prior service costs or credits that arise on a
defined benefit plan during each reporting period, net of tax, as a component of other comprehensive
income (Schedule RI-A, item 10) and, hence, accumulated other comprehensive income (AOCI)
(Schedule RC, item 26.b). Postretirement plan amounts carried in AOCI are adjusted as they are
subsequently recognized in earnings as components of a plan’s net periodic benefit cost.
For further information on accounting for defined benefit postretirement plans, institutions should refer
to ASC Topic 715.
Impact on Regulatory Capital – Institutions should reverse the effects on AOCI of ASC Subtopic 715-20
(formerly FASB Statement No. 158) for purposes of reporting and measuring the numerators and
denominators for the leverage and risk-based capital ratios. The intent of the reversal is to neutralize
for regulatory capital purposes the effects on AOCI of the application of ASC Subtopic 715-20. The
instructions for Schedule RC-R, Regulatory Capital, items 4, 26, and 42, provide guidance on how to
report adjustments to Tier 1 capital and risk-weighted and total assets to reverse the effects of applying
ASC Subtopic 715-20 for regulatory capital purposes.
Demand Deposits: See "deposits."

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A-16a
(3-13)

GLOSSARY

FFIEC 031 and 041

GLOSSARY

Depository Institutions in the U.S.: Depository institutions in the U.S. consist of:
(1) U.S. branches and agencies of foreign banks;
(2) U.S.-domiciled head offices and branches of U.S. banks, i.e.,
(a) national banks,
(b) state-chartered commercial banks,
(c) trust companies that perform a commercial banking business,
(d) industrial banks,
(e) private or unincorporated banks,
(f) Edge and Agreement corporations, and
(g) International Banking Facilities (IBFs) of U.S. banks; and

FFIEC 031 and 041

A-16b
(3-13)

GLOSSARY

FFIEC 031 and 041

GLOSSARY

Depository Institutions in the U.S. (cont.):
(3) U.S.-domiciled head offices and branches of other depository institutions in the U.S., i.e.,
(a) mutual or stock savings banks,
(b) savings or building and loan associations,
(c) cooperative banks,
(d) credit unions,
(e) homestead associations,
(f) other similar depository institutions in the U.S., and
(g) International Banking Facilities (IBFs) of other depository institutions in the U.S.
Deposits: The basic statutory and regulatory definitions of "deposits" are contained in Section 3() of the
Federal Deposit Insurance Act (FDI Act) and in Federal Reserve Regulation D. The definitions in these
two legal sources differ in certain respects. Furthermore, for purposes of these reports, the reporting
standards for deposits specified in these instructions do not strictly follow the precise legal definitions in
these two sources. The definitions of deposits to be reported in the deposit items of the Reports of
Condition and Income are discussed below under the following headings:
(I) FDI Act definition of deposits.
(II) Transaction-nontransaction deposit distinction.
(III) Interest-bearing-noninterest-bearing deposit distinction.
(I)

FDI Act definition of deposits – Section 3() states that the term “deposit” means –
(1) the unpaid balance of money or its equivalent received or held by a bank or savings
association in the usual course of business and for which it has given or is obligated to give
credit, either conditionally or unconditionally, to a commercial, checking, savings, time, or
thrift account, or which is evidenced by its certificate of deposit, thrift certificate, investment
certificate, certificate of indebtedness, or other similar name, or a check or draft drawn
against a deposit account and certified by the bank or savings association, or a letter of credit
or a traveler's check on which the bank or savings association is primarily liable: Provided,
That, without limiting the generality of the term "money or its equivalent", any such account or
instrument must be regarded as evidencing the receipt of the equivalent of money when
credited or issued in exchange for checks or drafts or for a promissory note upon which the
person obtaining any such credit or instrument is primarily or secondarily liable, or for a
charge against a deposit account, or in settlement of checks, drafts, or other instruments
forwarded to such bank or savings association for collection,
(2) trust funds as defined in this Act received or held by such bank or savings association,
whether held in the trust department or held or deposited in any other department of such
bank or savings association,
(3) money received or held by a bank or savings association, or the credit given for money or its
equivalent received or held by a bank or savings association, in the usual course of business
for a special or specific purpose, regardless of the legal relationship thereby established,
including without being limited to, escrow funds, funds held as security for an obligation due
to the bank or savings association or others (including funds held as dealers reserves) or for
securities loaned by the bank or savings association, funds deposited by a debtor to meet
maturing obligations, funds deposited as advance payment on subscriptions to United States
Government securities, funds held for distribution or purchase of securities, funds held to
meet its acceptances or letters of credit, and withheld taxes: Provided, That there shall not
be included funds which are received by the bank or savings association for immediate
application to the reduction of an indebtedness to the receiving bank or savings association,
or under condition that the receipt thereof immediately reduces or extinguishes such an
indebtedness,

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A-17
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GLOSSARY

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Deposits (cont.):
(4) outstanding draft (including advice or authorization to charge a bank's or a savings
association's balance in another bank or savings association), cashier's check, money order,
or other officer's check issued in the usual course of business for any purpose, including
without being limited to those issued in payment for services, dividends, or purchases, and
(5) such other obligations of a bank or savings association as the Board of Directors [of the
Federal Deposit Insurance Corporation], after consultation with the Comptroller of the
Currency and the Board of Governors of the Federal Reserve System, shall find and
prescribe by regulation to be deposit liabilities by general usage, except that the following
shall not be a deposit for any of the purposes of this Act or be included as part of the total
deposits or of an insured deposit:
(A) any obligation of a depository institution which is carried on the books and records of an
office of such bank or savings association located outside of any State, unless –
(i) such obligation would be a deposit if it were carried on the books and records of the
depository institution, and would be payable at, an office located in any State; and
(ii) the contract evidencing the obligation provides by express terms, and not by
implication, for payment at an office of the depository institution located in any State;
and
(B) any international banking facility deposit, including an international banking facility time
deposit, as such term is from time to time defined by the Board of Governors of the
Federal Reserve System in regulation D or any successor regulation issued by the
Board of Governors of the Federal Reserve System; and
(C) any liability of an insured depository institution that arises under an annuity contract, the
income of which is tax deferred under section 72 of the Internal Revenue Code of 1986.
(II) Transaction-nontransaction deposit distinction – The Monetary Control Act of 1980 and the current
Federal Reserve Regulation D, "Reserve Requirements of Depository Institutions," establish, for
purposes of federal reserve requirements on deposit liabilities, a category of deposits designated
as "transaction accounts." All deposits that are not transaction accounts are "nontransaction
accounts."
(1) Transaction accounts – With the exceptions noted below, a "transaction account," as defined
in Regulation D and in these instructions, is a deposit or account from which the depositor or
account holder is permitted to make transfers or withdrawals by negotiable or transferable
instruments, payment orders of withdrawal, telephone transfers, or other similar devices for
the purpose of making payments or transfers to third persons or others or from which the
depositor may make third party payments at an automated teller machine (ATM), a remote
service unit (RSU), or another electronic device, including by debit card.
Excluded from transaction accounts are savings deposits (both money market deposit
accounts (MMDAs) and other savings deposits) as defined below in the nontransaction
account category, even though such deposits permit some third-party transfers. However, an
account that otherwise meets the definition of a savings deposit but that authorizes or permits
the depositor to exceed the transfer limitations specified for that account shall be reported as
a transaction account. (Please refer to the definition of savings deposits for further detail.)

FFIEC 031 and 041

A-18
(9-11)

GLOSSARY

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GLOSSARY

Deposits (cont.):
NOTE: Under the Federal Reserve's current Regulation D, no transaction account,
regardless of its other characteristics, is classified either as a savings deposit or as a time
deposit. Thus, those transaction accounts that are not demand deposits – NOW accounts,
ATS (Automatic Transfer Service) accounts, and telephone and preauthorized transfer
accounts – are excluded from Regulation D time and savings deposits. For all items in the
Reports of Condition and Income involving time or savings deposits, a strict distinction, based
on Regulation D definitions, is to be maintained between transaction accounts and time and
savings accounts.
Transaction accounts consist of the following types of deposits: (a) demand deposits;
(b) NOW accounts; (c) ATS accounts; and (d) telephone and preauthorized transfer
accounts, all as defined below. Interest that is paid by the crediting of transaction accounts is
also included in transaction accounts.
(a) Demand deposits are deposits that are payable immediately on demand, or that are
issued with an original maturity or required notice period of less than seven days, or that
represent funds for which the depository institution does not reserve the right to require
at least seven days' written notice of an intended withdrawal. Demand deposits include
any matured time deposits without automatic renewal provisions, unless the deposit
agreement provides for the funds to be transferred at maturity to another type of
account. Effective July 21, 2011, demand deposits may be interest-bearing or
noninterest-bearing. Demand deposits do not include: (i) money market deposit
accounts (MMDAs) or (ii) NOW accounts, as defined below in this entry.
(b) NOW accounts are interest-bearing deposits (i) on which the depository institution has
reserved the right to require at least seven days' written notice prior to withdrawal or
transfer of any funds in the account and (ii) that can be withdrawn or transferred to third
parties by issuance of a negotiable or transferable instrument.
NOW accounts, as authorized by federal law, are limited to accounts held by:
(i)

Individuals or sole proprietorships;

(ii)

Organizations that are operated primarily for religious, philanthropic, charitable,
educational, or other similar purposes and that are not operated for profit. These
include organizations, partnerships, corporations, or associations that are not
organized for profit and are described in section 501(c)(3) through (13) and (19)
and section 528 of the Internal Revenue Code, such as church organizations;
professional associations; trade associations; labor unions; fraternities, sororities
and similar social organizations; and nonprofit recreational clubs; or

(iii) Governmental units including the federal government and its agencies and
instrumentalities; state governments; county and municipal governments and their
political subdivisions; the District of Columbia; the Commonwealth of Puerto Rico,
American Samoa, Guam, and any territory or possession of the United States and
their political subdivisions.
Also included are the balances of all NOW accounts of certain other nonprofit
organizations that may not fall within the above description but that had established
NOW accounts with the reporting institution prior to September 1, 1981.

FFIEC 031 and 041

A-19
(9-11)

GLOSSARY

FFIEC 031 and 041

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Deposits (cont.):
NOTE: There are no regulatory requirements with respect to minimum balances to be
maintained in a NOW account or to the amount of interest that may be paid on a NOW
account.
(c) ATS accounts are deposits or accounts of individuals or sole proprietorships on which
the depository institution has reserved the right to require at least seven days' written
notice prior to withdrawal or transfer of any funds in the account and from which,
pursuant to written agreement arranged in advance between the reporting institution and
the depositor, withdrawals may be made automatically through payment to the
depository institution itself or through transfer of credit to a demand deposit or other
account in order to cover checks or drafts drawn upon the institution or to maintain a
specified balance in, or to make periodic transfers to, such other accounts.
Some institutions may have entered into agreements with their customers providing that
in the event the customer should overdraw a demand deposit (checking) or
NOW account, the institution will transfer from that customer's savings account an
amount sufficient to cover the overdraft. The availability of the overdraft protection plan
would not in and of itself require that such a savings account be regarded as a
transaction account provided that the overall transfer and withdrawal restrictions of a
savings deposit are not exceeded. Please refer to the definition of savings deposit for
further detail.
(d) Telephone or preauthorized transfer accounts consist of deposits or accounts, other
than savings deposits, (1) in which the entire beneficial interest is held by a party eligible
to hold a NOW account, (2) on which the reporting institution has reserved the right to
require at least seven days' written notice prior to withdrawal or transfer of any funds in
the account, and (3) under the terms of which, or by practice of the reporting institution,
the depositor is permitted or authorized to make more than six withdrawals per month or
statement cycle (or similar period) of at least four weeks for purposes of transferring
funds to another account of the depositor at the same institution (including a transaction
account) or for making payment to a third party by means of preauthorized transfer, or
telephonic (including data transmission) agreement, order or instruction. An account
that permits or authorizes more than six such withdrawals in a "month" (a calendar
month or any period approximating a month that is at least four weeks long, such as a
statement cycle) is a transaction account whether or not more than six such withdrawals
actually are made in the "month."
A "preauthorized transfer" includes any arrangement by the reporting institution to pay a
third party from the account of a depositor (1) upon written or oral instruction (including
an order received through an automated clearing house (ACH)), or (2) at a
predetermined time or on a fixed schedule.
Telephone and preauthorized transfer accounts also include:
(i)

FFIEC 031 and 041

Deposits or accounts maintained in connection with an arrangement that permits
the depositor to obtain credit directly or indirectly through the drawing of a
negotiable or nonnegotiable check, draft, order or instruction or other similar
device (including telephone or electronic order or instruction) on the issuing
institution that can be used for the purpose of making payments or transfers to third
parties or others, or to another deposit account of the depositor.

A-20
(9-11)

GLOSSARY

FFIEC 031 and 041

GLOSSARY

Deposits (cont.):
(ii)

The balance of deposits or accounts that otherwise meet the definition of time
deposits, but from which payments may be made to third parties by means of a
debit card, an automated teller machine, remote service unit or other electronic
device, regardless of the number of payments made.

However, an account is not a transaction account merely by virtue of arrangements that
permit the following types of transfers or withdrawals, regardless of the number:
(i)

Transfers for the purpose of repaying loans and associated expenses at the same
depository institution (as originator or servicer).

(ii)

Transfers of funds from this account to another account of the same depositor at
the same depository institution when made by mail, messenger, automated teller
machine, or in person.

(iii) Withdrawals for payment directly to the depositor when made by mail, messenger,
automated teller machine, in person, or by telephone (via check mailed to the
depositor).
(2) Nontransaction accounts – All deposits that are not transaction accounts (as defined above)
are nontransaction accounts. Nontransaction accounts include: (a) savings deposits ((i)
money market deposit accounts (MMDAs) and (ii) other savings deposits) and (b) time
deposits ((i) time certificates of deposit and (ii) time deposits, open account). Regulation D
no longer distinguishes between money market deposit accounts (MMDAs) and other
savings deposits. However, these two types of accounts are defined below for purposes of
these reports, which call for separate data on each in Schedule RC-E, (part I,) Memorandum
items 2.a.(1) and (2).
NOTE: Under the Federal Reserve's current Regulation D, no transaction accounts,
regardless of other characteristics, are defined as savings or time deposits. Thus, savings
deposits as defined here, under the heading nontransaction accounts, constitute the entire
savings deposit category. Likewise, time deposits, also defined here under nontransaction
accounts, constitute the entire time deposits category.
(a) Savings deposits are deposits with respect to which the depositor is not required by the
deposit contract but may at any time be required by the depository institution to give
written notice of an intended withdrawal not less than seven days before withdrawal is
made, and that is not payable on a specified date or at the expiration of a specified time
after the date of deposit.
The term savings deposit also means a deposit or account, such as an account
commonly known as a passbook savings account, a statement savings account, or a
money market deposit account (MMDA), that otherwise meets the requirements of the
preceding paragraph and from which, under the terms of the deposit contract or by
practice of the depository institution, the depositor is permitted or authorized to make no
more than six transfers and withdrawals, or a combination of such transfers and
withdrawals, per calendar month or statement cycle (or similar period) of at least four
weeks, to another account (including a transaction account) of the depositor at the same
institution or to a third party by means of a preauthorized or automatic transfer, or

FFIEC 031 and 041

A-21
(3-12)

GLOSSARY

FFIEC 031 and 041

GLOSSARY

Deposits (cont.):
telephonic (including data transmission) agreement, order, or instruction; or by check,
draft, debit card, or similar order made by the depositor and payable to third parties.
Transfers from savings deposits for purposes of covering overdrafts (overdraft protection
plans) are included under the withdrawal limits specified for savings deposits.
There are no regulatory restrictions on the following types of transfers or withdrawals
from a savings deposit account, regardless of the number:
(1) Transfers for the purpose of repaying loans and associated expenses at the same
depository institution (as originator or servicer).
(2) Transfers of funds from this account to another account of the same depositor at
the same institution when made by mail, messenger, automated teller machine, or
in person.
(3) Withdrawals for payment directly to the depositor when made by mail, messenger,
automated teller machine, in person, or by telephone (via check mailed to the
depositor).
Further, for a savings deposit account, no minimum balance is required by regulation,
there is no regulatory limitation on the amount of interest that may be paid, and no
minimum maturity is required (although depository institutions must reserve the right to
require at least seven days' written notice prior to withdrawal as stipulated above for a
savings deposit).
Any depository institution may place restrictions and requirements on savings deposits
in addition to those stipulated above. In the case of such further restrictions, the
account would still be reported as a savings deposit.
On the other hand, an account that otherwise meets the definition of a savings deposit
but that authorizes or permits the depositor to exceed the six-transfer/withdrawal rule
shall be reported as a transaction account, as follows:
(1) If the depositor is ineligible to hold a NOW account, such an account is considered
a demand deposit.
(2) If the depositor is eligible to hold a NOW account, the account will be considered
either a NOW account, a telephone or preauthorized transfer account, or an ATS
account:
(a) If withdrawals or transfers by check, draft, or similar instrument are permitted
or authorized, the account is considered a NOW account.
(b) If withdrawals or transfers by check, draft, or similar instrument are not
permitted or authorized, the account is considered either an ATS account or a
telephone or preauthorized transfer account.
Regulation D no longer distinguishes between money market deposit accounts
(MMDAs) and other savings deposits. However, these two types of accounts are
defined as follows for purposes of these reports, which call for separate data on each.

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A-22
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GLOSSARY

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Deposits (cont.):
(1) Money market deposit accounts (MMDAs) are deposits or accounts that meet the
above definition of a savings deposit and that permit up to (but no more than) six
allowable transfers to be made by check, draft, debit card or similar order made by
the depositor and payable to third parties.
(2) Other savings deposits are deposits or accounts that meet the above definition of a
savings deposit but that permit no transfers by check, draft, debit card, or similar
order made by the depositor and payable to third parties. Other savings deposits
are commonly known as passbook savings or statement savings accounts.
Examples illustrating distinctions between MMDAs and other savings deposits for
purposes of these reports are provided at the end of this Glossary entry.
(b) Time deposits are deposits that the depositor does not have a right, and is not
permitted, to make withdrawals from within six days after the date of deposit unless the
deposit is subject to an early withdrawal penalty of at least seven days' simple interest
on amounts withdrawn within the first six days after deposit. A time deposit from which
partial early withdrawals are permitted must impose additional early withdrawal penalties
of at least seven days' simple interest on amounts withdrawn within six days after each
partial withdrawal. If such additional early withdrawal penalties are not imposed, the
account ceases to be a time deposit. The account may become a savings deposit if it
meets the requirements for a savings deposit; otherwise it becomes a demand deposit.
NOTE: The above prescribed penalties are the minimum required by Federal Reserve
Regulation D. Institutions may choose to require penalties for early withdrawal in
excess of the regulatory minimums.
Time deposits take two forms:
(i)

Time certificates of deposit (including rollover certificates of deposit) are deposits
evidenced by a negotiable or nonnegotiable instrument, or a deposit in book entry
form evidenced by a receipt or similar acknowledgement issued by the bank, that
provides, on its face, that the amount of such deposit is payable to the bearer, to
any specified person, or to the order of a specified person, as follows:
(1) on a certain date not less than seven days after the date of deposit,
(2) at the expiration of a specified period not less than seven days after the date
of the deposit, or
(3) upon written notice to the bank which is to be given not less than seven days
before the date of withdrawal.

(ii)

Time deposits, open account are deposits (other than time certificates of deposit)
for which there is in force a written contract with the depositor that neither the whole
nor any part of such deposit may be withdrawn prior to:
(1) the date of maturity which shall be not less than seven days after the date of
the deposit, or
(2) the expiration of a specified period of written notice of not less than seven
days.

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Deposits (cont.):
These deposits include those club accounts, such as Christmas club and vacation
club accounts, that are made under written contracts that provide that no withdrawal
shall be made until a certain number of periodic deposits has been made during a
period of not less than three months, even though some of the deposits are made
within six days of the end of such period.
Time deposits do not include the following categories of liabilities even if they have an
original maturity of seven days or more:
(1) Any deposit or account that otherwise meets the definition of a time deposit but that
allows withdrawals within the first six days after deposit and that does not require an
early withdrawal penalty of at least seven days' simple interest on amounts
withdrawn within those first six days. Such deposits or accounts that meet the
definition of a savings deposit shall be reported as savings deposits; otherwise they
shall be reported as demand deposits.
(2) The remaining balance of a time deposit if a partial early withdrawal is made and the
remaining balance is not subject to additional early withdrawal penalties of at least
seven days' simple interest on amounts withdrawn within six days after each partial
withdrawal. Such time deposits that meet the definition of a savings deposit shall be
reported as savings deposits; otherwise they shall be reported as demand deposits.
Reporting of Retail Sweep Arrangements Affecting Transaction and Nontransaction Accounts –
In an effort to reduce their reserve requirements, some banks have established “retail sweep
arrangements” or “retail sweep programs.” In a retail sweep arrangement, a depository
institution transfers funds between a customer’s transaction account(s) and that customer’s
nontransaction account(s) (usually savings deposit account(s)) by means of preauthorized or
automatic transfers, typically in order to reduce transaction account reserve requirements
while providing the customer with unlimited access to the funds.
There are three key criteria for retail sweep programs to comply with the Federal Reserve
Regulation D definitions of “transaction account” and “savings deposit:”
(1) A depository institution must establish by agreement with its transaction account
customer two legally separate accounts: a transaction account (a NOW account or
demand deposit account) and a savings deposit account, including those sometimes
called a “money market deposit account” or “MMDA”;
(2) The swept funds must actually be moved from the customer’s transaction account to the
customer’s savings deposit account on the official books and records of the depository
institution as of the close of the business on the day(s) on which the depository
institution intends to report the funds in question as savings deposits and not transaction
accounts, and vice versa. In addition to actually moving the customer’s funds between
accounts and reflecting this movement at the account level:
(a) If the depository institution’s general ledger is sufficiently disaggregated to
distinguish between transaction and savings deposit accounts, the aforementioned
movement of funds between the customer’s transaction account and savings
deposit account must be reflected on the general ledger.

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Deposits (cont.):
(b) If the depository institution’s general ledger is not sufficiently disaggregated, the
distinction may be reflected in supplemental records or systems, but only if such
supplemental records or systems constitute official books and records of the
institution and are subject to the same prudent managerial oversight and controls as
the general ledger.
A retail sweep program may not exist solely in records or on systems that do not
constitute official books and records of the depository institution and that are not used
for any purpose other than generating its Report of Transaction Accounts, Other
Deposits and Vault Cash (FR 2900) for submission to the Federal Reserve; and
(3) The maximum number of preauthorized or automatic funds transfers (“sweeps”) out of a
savings deposit account and into a transaction account in a retail sweep program is
limited to not more than six per month. Transfers out of the transaction account and into
the savings deposit account may be unlimited in number.
If any of the three criteria is not met, all swept funds must continue to be reported as
transaction accounts, both for purposes of these reports and of FR 2900 deposit reports. All
three criteria must be met in order to report the nontransaction account component of a retail
sweep program as a nonreservable savings deposit account.
Further, for purposes of the Reports of Condition and Income, if all three of the criteria above
are met, a bank must report the transaction account and nontransaction account components
of a retail sweep program separately when it reports its quarter-end deposit information in
Schedules RC, RC-E, and RC-O; its quarterly averages in Schedule RC-K; and its interest
expense (if any) in Schedule RI. Thus, when reporting quarterly averages in Schedule RC-K,
a bank should include the amounts held in the transaction account (if interest-bearing) and
the nontransaction savings account components of retail sweep arrangements each day or
each week in the appropriate separate items for average deposits. In addition, if the bank
pays interest on accounts involved in retail sweep arrangements, the interest expense
reported in Schedule RI should be allocated between the transaction account and the
nontransaction (savings) account based on the balances in these accounts during the
reporting period.
For additional information, refer to the Federal Reserve Board staff guidance relating to the
requirements for a retail sweep program under Regulation D at
http://www.federalreserve.gov/boarddocs/legalint/FederalReserveAct/2007/20070501/200705
01.pdf.
(III) Interest-bearing-noninterest-bearing deposit distinction –
(a) Interest-bearing deposit accounts consist of deposit accounts on which the issuing depository
institution makes any payment to or for the account of any depositor as compensation for the
use of funds constituting a deposit. Such compensation may be in the form of cash,
merchandise, or property or as a credit to an account. An institution’s absorption of
expenses incident to providing a normal banking function or its forbearance from charging a
fee in connection with such a service is not considered a payment of interest.
Deposits with a zero percent interest rate that are issued on a discount basis are to be
treated as interest-bearing. Deposit accounts on which the interest rate is periodically
adjusted in response to changes in market interest rates and other factors should be reported
as interest-bearing even if the rate has been reduced to zero, provided the interest rate on
these accounts can be increased as market conditions change.

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Deposits (cont.):
(b) Noninterest-bearing deposit accounts consist of deposit accounts on which the issuing
depository institution makes no payment to or for the account of any depositor as
compensation for the use of funds constituting a deposit. An institution’s absorption of
expenses incident to providing a normal banking function or its forbearance from charging a
fee in connection with such a service is not considered a payment of interest.
Noninterest-bearing deposit accounts include (i) matured time deposits that are not
automatically renewable (unless the deposit agreement provides for the funds to be
transferred at maturity to another type of account) and (ii) deposits with a zero percent stated
interest rate that are issued at face value.
See also "brokered deposits" and "hypothecated deposits."

Examples Illustrating Distinctions Between
MONEY MARKET DEPOSIT ACCOUNTS (MMDAs) and OTHER SAVINGS DEPOSITS
Example 1
A savings deposit account permits no transfers of any type to other accounts or to third parties.
Report this account as an other savings deposit.
Example 2
A savings deposit permits up to six, but no more than six, "preauthorized, automatic, or
telephonic" transfers to other accounts or to third parties. None of the third-party payments may be
made by check, draft, or similar order (including debit card).
Report this account as an other savings deposit.
Example 3
A savings deposit permits no more than six "preauthorized, automatic, or telephonic" transfers to
other accounts or to third parties, any or all which may be by check, draft, debit card or similar order
made by the depositor and payable to third parties.
Report this account as an MMDA.

Derivative Contracts: Banks commonly use derivative instruments for managing (positioning or
hedging) their exposure to market risk (including interest rate risk and foreign exchange risk), cash flow
risk, and other risks in their operations and for trading. The accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in other contracts, and for
hedging activities are set forth in ASC Topic 815, Derivatives and Hedging (formerly FASB Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended), which banks
must follow for purposes of these reports. ASC Topic 815 requires all derivatives to be recognized on
the balance sheet as either assets or liabilities at their fair value. A summary of the principal provisions
of ASC Topic 815 follows. For further information, see ASC Topic 815, which includes the
implementation guidance issued by the FASB's Derivatives Implementation Group.

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Derivative Contracts (cont.):
Definition of Derivative
ASC Topic 815 defines a "derivative instrument" as a financial instrument or other contract with all
three of the following characteristics:
(1) It has one or more underlyings (i.e., specified interest rate, security price, commodity price, foreign
exchange rate, index of prices or rates, or other variable) and one or more notional amounts
(i.e., number of currency units, shares, bushels, pounds, or other units specified in the contract) or
payment provisions or both. These terms determine the amount of the settlement or settlements,
and in some cases, whether or not a settlement is required.
(2) It requires no initial net investment or an initial net investment that is smaller than would be
required for other types of contracts that would be expected to have similar response to changes in
market factors.
(3) Its terms require or permit net settlement, it can be readily settled net by a means outside the
contract, or it provides for delivery of an asset that puts the recipient in a position not substantially
different from net settlement.
Certain contracts that may meet the definition of a derivative are specifically excluded from the scope
of ASC Topic 815, including:
•
•
•
•

"regular-way" securities trades, which are trades that are completed within the time period
generally established by regulations and conventions in the marketplace or by the exchange on
which the trade is executed;
normal purchases and sales of an item other than a financial instrument or derivative instrument
(e.g., a commodity) that will be delivered in quantities expected to be used or sold by the reporting
entity over a reasonable period in the normal course of business;
traditional life insurance and property and casualty contracts; and
certain financial guarantee contracts.

ASC Topic 815 has special criteria for determining whether commitments to originate loans meet the
definition of a derivative. Commitments to originate mortgage loans that will be held for sale are
accounted for as derivatives. Commitments to originate mortgage loans that will be held for investment
are not accounted for as derivatives. Also, all commitments to originate loans other than mortgage
loans are not accounted for as derivatives. Commitments to purchase loans must be evaluated to
determine whether the commitment meets the definition of a derivative under ASC Topic 815.
Types of Derivatives
The most common types of freestanding derivatives are forwards, futures, swaps, options, caps, floors,
and collars.
Forward contracts are agreements that obligate two parties to purchase (long) and sell (short) a
specific financial instrument, foreign currency, or commodity at a specified price with delivery and
settlement at a specified future date.

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Derivative Contracts (cont.):
Futures contracts are standardized forward contracts that are traded on organized exchanges.
Exchanges in the U.S. are registered with and regulated by the Commodity Futures Trading
Commission. The deliverable financial instruments underlying interest-rate future contracts are
specified investment-grade financial instruments, such as U.S. Treasury securities or mortgage-backed
securities. Foreign currency futures contracts involve specified deliverable amounts of a particular
foreign currency. The deliverable products under commodity futures contracts are specified amounts
and grades of commodities such as gold bullion. Equity futures contracts are derivatives that have a
portion of their return linked to the price of a particular equity or to an index of equity prices, such as the
Standard and Poor's 500.
Other forward contracts are traded over the counter and their terms are not standardized. Such
contracts can only be terminated, other than by receipt of the underlying asset, by agreement of both
buyer and seller. A forward rate agreement is a forward contract that specifies a reference interest rate
and an agreed on interest rate (one to be paid and one to be received), an assumed principal amount
(the notional amount), and a specific maturity and settlement date.
Swap contracts are forward-based contracts in which two parties agree to swap streams of payments
over a specified period. The payments are based on an agreed upon notional principal amount. An
interest rate swap generally involves no exchange of principal at inception or maturity. Rather, the
notional amount is used to calculate the payment streams to be exchanged. However, foreign
exchange swaps often involve the exchange of principal.
Option contracts (standby contracts) are traded on exchanges and over the counter. Option contracts
grant the right, but do not obligate, the purchaser (holder) to buy (call) or sell (put) a specific or
standard commodity, financial, or equity instrument at a specified price during a specified period or at a
specified date. A purchased option is a contract in which the buyer has paid compensation (such as a
fee or premium) to acquire the right to sell or purchase an instrument at a stated price on a specified
future date. A written option obligates the option seller to purchase or sell the instrument at the option
of the buyer of the contract. Option contracts may relate to purchases or sales of securities, money
market instruments, futures contracts, other financial instruments, or commodities.
Interest rate caps are option contracts in which the cap seller, in return for a premium, agrees to limit
the cap holder's risk associated with an increase in interest rates. If rates go above a specified
interest-rate level (the strike price or cap rate), the cap holder is entitled to receive cash payments
equal to the excess of the market rate over the strike price multiplied by the notional principal amount.
For example, an issuer of floating-rate debt may purchase a cap to protect against rising interest rates,
while retaining the ability to benefit from a decline in rates.
Interest rate floors are option contracts in which the floor seller, in return for a premium, agrees to limit
the risk associated with a decline in interest rates based on a notional amount. If rates fall below an
agreed rate, the floor holder will receive cash payments from the floor writer equal to the difference
between the market rate and an agreed rate, multiplied by the notional principal amount.
Interest rate collars are option contracts that combine a cap and a floor (one held and one written).
Interest rate collars enable a user with a floating rate contract to lock into a predetermined interest-rate
range often at a lower cost than a cap or a floor.
Embedded Derivatives
Contracts that do not in their entirety meet the definition of a derivative instrument, such as bonds,
insurance policies, and leases, may contain “embedded” derivative instruments. Embedded
derivatives are implicit or explicit terms within a contract that affect some or all of the cash flows or

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Derivative Contracts (cont.):
the value of other exchanges required by the contract in a manner similar to a derivative instrument.
The effect of embedding a derivative instrument in another type of contract (“the host contract”) is that
some or all of the cash flows or other exchanges that otherwise would be required by the host contract,
whether unconditional or contingent upon the occurrence of a specified event, will be modified based
on one or more of the underlyings.
An embedded derivative instrument shall be separated from the host contract and accounted for as a
derivative instrument, i.e., bifurcated, if and only if all three of the following conditions are met:
(1) The economic characteristics and risks of the embedded derivative instrument are not clearly and
closely related to the economic characteristics and risks of the host contract,
(2) The contract (“the hybrid instrument”) that embodies the embedded derivative and the host
contract is not remeasured at fair value under otherwise applicable generally accepted accounting
principles with changes in fair value reported in earnings as they occur, and
(3) A separate instrument with the same terms as the embedded derivative instrument would be a
considered a derivative.
An embedded derivative instrument in which the underlying is an interest rate or interest rate index that
alters net interest payments that otherwise would be paid or received on an interest-bearing host
contract is considered to be clearly and closely related to the host contract unless either of the
following conditions exist:
(1) The hybrid instrument can contractually be settled in such a way that the investor (holder) would
not recover substantially all of its initial recorded investment, or
(2) The embedded derivative could at least double the investor’s initial rate of return on the host
contract and could also result in a rate of return that is at least twice what otherwise would be the
market return for a contract that has the same terms as the host contract and that involves a
debtor with a similar credit quality.
Examples of hybrid instruments (not held for trading purposes) with embedded derivatives which meet
the three conditions listed above and must be accounted for separately include debt instruments
(including deposit liabilities) whose return or yield is indexed to: changes in an equity securities index
(e.g., the Standard & Poor's 500); changes in the price of a specific equity security; or changes in the
price of gold, crude oil, or some other commodity. For purposes of these reports, when an embedded
derivative must be accounted for separately from the host contract under ASC Topic 815, the carrying
value of the host contract and the fair value of the embedded derivative may be combined and
presented together on the balance sheet in the asset or liability category appropriate to the host
contract.
Under ASC Subtopic 815-15, Derivatives and Hedging – Embedded Derivatives (formerly FASB
Statement No. 155, “Accounting for Certain Hybrid Financial Instruments”), a bank with a hybrid
instrument for which bifurcation would otherwise be required is permitted to irrevocably elect to initially
and subsequently measure the hybrid instrument in its entirety at fair value with changes in fair value
recognized in earnings. In addition, ASC Subtopic 815-15 subjects all but the simplest forms of
interest-only and principal-only strips and all forms of beneficial interests in securitized financial assets
to the requirements of ASC Topic 815. Thus, a bank must evaluate such instruments to identify those
that are freestanding derivatives or that are hybrid financial instruments that contain an embedded
derivative requiring bifurcation. However, a beneficial interest that contains a concentration of credit
risk in the form of subordination to another financial instrument and certain securitized interests in
prepayable financial assets are not considered to contain embedded derivatives that must be

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Derivative Contracts (cont.):
accounted for separately from the host contract. For further information, see ASC Subtopic 815-15,
Derivatives and Hedging – Embedded Derivatives (formerly Derivatives Implementation Group Issue
No. B40, “Application of Paragraph 13(b) to Securitized Interests in Prepayable Financial Assets”).
Except in limited circumstances, interest-only and principal-only strips and beneficial interests in
securitized assets that were recognized prior to the effective date (or early adoption date) of
ASC Subtopic 815-15 are not subject to evaluation for embedded derivatives under ASC Topic 815.
Recognition of Derivatives and Measurement of Derivatives and Hedged Items
A bank should recognize all of its derivative instruments on its balance sheet as either assets or
liabilities at fair value. As defined in ASC Topic 820, Fair Value Measurements and Disclosures
(formerly FASB Statement No. 157, “Fair Value Measurements”), fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. For further information, see the Glossary entry for “fair value.”
The accounting for changes in the fair value (that is, gains and losses) of a derivative depends on
whether it has been designated and qualifies as part of a hedging relationship and, if so, on the reason
for holding it. Either all or a proportion of a derivative may be designated as a hedging instrument.
The proportion must be expressed as a percentage of the entire derivative. Gains and losses on
derivative instruments are accounted for as follows:
(1) No hedging designation – The gain or loss on a derivative instrument not designated as a hedging
instrument, including all derivatives held for trading purposes, is recognized currently in earnings.

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Derivative Contracts (cont.):
(2) Fair value hedge – For a derivative designated as hedging the exposure to changes in the fair
value of a recognized asset or liability or a firm commitment, which is referred to as a fair value
hedge, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item
attributable to the risk being hedged should be recognized currently in earnings.
(3) Cash flow hedge – For a derivative designated as hedging the exposure to variable cash flows of
an existing recognized asset or liability or a forecasted transaction, which is referred to as a cash
flow hedge, the effective portion of the gain or loss on the derivative should initially be reported
outside of earnings as a component of other comprehensive income and subsequently reclassified
into earnings in the same period or periods during which the hedged transaction affects earnings.
The remaining gain or loss on the derivative instrument, if any, (i.e., the ineffective portion of the
gain or loss and any component of the gain or loss excluded from the assessment of hedge
effectiveness) should be recognized currently in earnings.
(4) Foreign currency hedge – For a derivative designated as hedging the foreign currency exposure of
a net investment in a foreign operation, the gain or loss is reported outside of earnings in other
comprehensive income as part of the cumulative translation adjustment. For a derivative
designated as a hedge of the foreign currency exposure of an unrecognized firm commitment or an
available-for-sale security, the accounting for a fair value hedge should be applied. Similarly, for a
derivative designated as a hedge of the foreign currency exposure of a foreign-currency
denominated forecasted transaction, the accounting for a cash flow hedge should be applied.
To qualify for hedge accounting, the risk being hedged must represent an exposure to an institution’s
earnings. In general, if the hedged item is a financial asset or liability, the designated risk being hedged
can be (1) all risks, i.e., the risk of changes in the overall fair value of the hedged item or the risk of
overall changes in the hedged cash flows; (2) the risk of changes in the fair value or cash flows of the
1
hedged item attributable to changes in the benchmark interest rate; (3) the risk of changes in the fair
value or cash flows of the hedged item attributable to changes in foreign exchange rates; or (4) the risk
of changes in the fair value or cash flows of the hedged item attributable to changes in the obligor's
creditworthiness. For held-to-maturity securities, only credit risk, foreign exchange risk, or both may be
hedged.
Designated hedging instruments and hedged items qualify for fair value or cash flow hedge accounting
if all of the criteria specified in ASC Topic 815 are met. These criteria include:
(1) At inception of the hedge, there is formal documentation of the hedging relationship and the
institution’s risk management objective and strategy for undertaking the hedge, including
identification of the hedging instrument, the hedged item or transaction, the nature of the risk
being hedged, and how the hedging instrument’s effectiveness will be assessed. There must be a
reasonable basis for how the institution plans to assess the hedging instrument’s effectiveness.
(2) Both at inception of the hedge and on an ongoing basis, the hedging relationship is expected to be
highly effective in achieving offsetting changes in fair value or offsetting cash flows attributable to
the hedged risk during the period that the hedge is designated or the term of the hedge. An
assessment of effectiveness is required whenever financial statements or earnings are reported,
and at least every three months. All assessments of effectiveness shall be consistent with the risk
management strategy documented for that particular hedging relationship.

1

The benchmark interest rate is a widely recognized and quoted rate in an active financial market that is broadly
indicative of the overall level of interest rates attributable to high-credit-quality obligors in that market. In theory, this
should be a risk-free rate. In the U.S., interest rates on U.S. Treasury securities and the LIBOR swap rate are
considered benchmark interest rates.

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Derivative Contracts (cont.):
In a fair value hedge, an asset or a liability is eligible for designation as a hedged item if the hedged
item is specifically identified as either all or a specific portion of a recognized asset or liability or of an
unrecognized firm commitment, the hedged item is a single asset or liability (or a specific portion
thereof) or is a portfolio of similar assets or a portfolio of similar liabilities (or a specific portion thereof),
and certain other criteria specified in ASC Topic 815 are met. If similar assets or similar liabilities are
aggregated and hedged as a portfolio, the individual assets or individual liabilities must share the risk
exposure for which they are designated as being hedged. The change in fair value attributable to the
hedged risk for each individual item in a hedged portfolio must be expected to respond in a generally
proportionate manner to the overall change in fair value of the aggregate portfolio attributable to the
hedged risk.
In a cash flow hedge, the individual cash flows related to a recognized asset or liability and the cash
flows related to a forecasted transaction are both referred to as a forecasted transaction. Thus, a
forecasted transaction is eligible for designation as a hedged transaction if the forecasted transaction is
specifically identified as a single transaction or a group of individual transactions, the occurrence of the
forecasted transaction is probable, and certain other criteria specified in ASC Topic 815 are met. If the
hedged transaction is a group of individual transactions, those individual transactions must share the
same risk exposure for which they are designated as being hedged.
An institution should discontinue prospectively its use of fair value or cash flow hedge accounting for an
existing hedge if any of the qualifying criteria for hedge accounting is no longer met; the derivative
expires or is sold, terminated, or exercised; or the institution removes the designation of the hedge.
When this occurs for a cash flow hedge, the net gain or loss on the derivative should remain in
“Accumulated other comprehensive income” and be reclassified into earnings in the periods during
which the hedged forecasted transaction affects earnings. However, if it is probable that the forecasted
transaction will not occur by the end of the originally specified time period (as documented at the
inception of the hedging relationship) or within an additional two-month period of time thereafter
(except as noted in ASC Topic 815), the derivative gain or loss reported in “Accumulated other
comprehensive income” should be reclassified into earnings immediately.
For a fair value hedge, in general, if a periodic assessment of hedge effectiveness indicates
noncompliance with the highly effective criterion that must be met in order to qualify for hedge
accounting, an institution should not recognize adjustment of the carrying amount of the hedged item
for the change in the item’s fair value attributable to the hedged risk after the last date on which
compliance with the effectiveness criterion was established.
With certain limited exceptions, a nonderivative instrument, such as a U.S. Treasury security, may not
be designated as a hedging instrument.
Reporting Derivative Contracts
When an institution enters into a derivative contract, it should classify the derivative as either held for
trading or held for purposes other than trading (end-user derivatives) based on the reasons for entering
into the contract. All derivatives must be reported at fair value on the balance sheet (Schedule RC).
Trading derivatives with positive fair values should be reported as trading assets in Schedule RC,
item 5. Trading derivatives with negative fair values should be reported as trading liabilities in
Schedule RC, item 15. Changes in the fair value (that is, gains and losses) of trading derivatives
should be recognized currently in earnings and included in Schedule RI, item 5.c, “Trading revenue.”

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Derivative Contracts (cont.):
Freestanding derivatives held for purposes other than trading (and embedded derivatives that are
accounted for separately under ASC Topic 815, which the bank has chosen to present separately from
the host contract on the balance sheet) that have positive fair values should be included in
Schedule RC-F, item 6, "All other assets." If the total fair value of these derivatives exceeds 25 percent
of "All other assets," this amount should be disclosed in Schedule RC-F, item 6.c. Freestanding
derivatives held for purposes other than trading (and embedded derivatives that are accounted for
separately under ASC Topic 815, which the bank has chosen to present separately from the host
contract on the balance sheet) that have negative fair values should be included in Schedule RC-G,
item 4, "All other liabilities." If the total fair value of these derivatives exceeds 25 percent of "All other
liabilities," this amount should be disclosed in Schedule RC-G, item 4.d. Net gains (losses) on derivatives
held for purposes other than trading that are not designated as hedging instruments should be
recognized currently in earnings and reported consistently as either “Other noninterest income” or “Other
noninterest expense” in Schedule RI, item 5.l or item 7.d, respectively.
Netting of derivative assets and liabilities is prohibited on the balance sheet except as permitted under
ASC Subtopic 210-20, Balance Sheet – Offsetting (formerly FASB Interpretation No. 39, “Offsetting of
Amounts Related to Certain Contracts”). See the Glossary entry for "offsetting."
Banks must report the notional amounts of their derivative contracts (both freestanding derivatives
and embedded derivatives that are accounted for separately from their host contract under ASC
Topic 815) by risk exposure in Schedule RC-L, first by type of contract in Schedule RC-L, item 12, and
then by purpose of contract (i.e., trading, other than trading) in Schedule RC-L, items 13 and 14.
Banks must then report the gross fair values of their derivatives, both positive and negative, by risk
exposure and purpose of contract in Schedule RC-L, item 15. However, these items exclude credit
derivatives, the notional amounts and gross fair values of which must be reported in Schedule RC-L,
item 7.
Discounts: See "premiums and discounts."
Dividends: Cash dividends are payments of cash to stockholders in proportion to the number of shares
they own. Cash dividends on preferred and common stock are to be reported on the date they are
declared by the bank's board of directors (the declaration date) by debiting "retained earnings" and
crediting "dividends declared not yet payable," which is to be reported in other liabilities. Upon
payment of the dividend, "dividends declared not yet payable" is debited for the amount of the cash
dividend with an offsetting credit, normally in an equal amount, to "dividend checks outstanding" which
is reportable in the "demand deposits" category of the bank's deposit liabilities.
A liability for dividends payable may not be accrued in advance of the formal declaration of a dividend
by the board of directors. However, the bank may segregate a portion of retained earnings in the form
of a net worth reserve in anticipation of the declaration of a dividend.
Stock dividends are distributions of additional shares to stockholders in proportion to the number of
shares they own. Stock dividends are to be reported by transferring an amount equal to the fair value
of the additional shares issued from retained earnings to a category of permanent capitalization
(common stock and surplus). However, the amount transferred from retained earnings must be
reduced by the amount of any mandatory and discretionary transfers previously made (such as those
from retained earnings to surplus for increasing the bank's legal lending limit) provided such transfers
have not already been used to record a stock dividend. In any event, the amount transferred from
retained earnings may not be less than the par or stated value of the additional shares being issued.
Property dividends, also known as dividends in kind, are distributions to stockholders of assets other
than cash. The transfer of securities of other companies, real property, or any other asset owned by
the reporting bank to a stockholder or related party is to be recorded at the fair value of the asset on

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Dividends (cont.):
the declaration date of the dividend. A gain or loss on the transferred asset must be recognized in the
same manner as if the property had been disposed of in an outright sale at or near the declaration
date. In those instances where a bank transfers bank premises to a parent holding company in the
form of a property dividend and the parent immediately enters into a sale-leaseback transaction with a
third party, the gain must be deferred by the bank and amortized over the life of the lease.
Domestic Office: For purposes of these reports, a domestic office of the reporting bank is a branch or
consolidated subsidiary (other than an Edge or Agreement subsidiary) located in the 50 states of the
United States or the District of Columbia or a branch on a U.S. military facility wherever located.
However, if the reporting bank is chartered and headquartered in Puerto Rico or a U.S. territory or
possession, a branch or consolidated subsidiary located in the 50 states of the United States, the
District of Columbia, Puerto Rico, or a U.S. territory or possession is a domestic office. The domestic
offices of the reporting bank exclude all International Banking Facilities (IBFs); all offices of Edge and
Agreement subsidiaries, including their U.S. offices; and all branches and other consolidated
subsidiaries of the bank located in foreign countries.
Domicile: Domicile is used to determine the foreign (non-U.S. addressee) or domestic (U.S. addressee)
status of a customer of the reporting bank for the purposes of these reports. Domicile is determined
by the principal residence address of an individual or the principal business address of a corporation,
partnership, or sole proprietorship. If other addresses are used for correspondence or other purposes,
only the principal address, insofar as it is known to the reporting bank, should be used in determining
whether a customer should be regarded as a U.S. or non-U.S. addressee.
For purposes of defining customers of the reporting bank, U.S. addressees include residents of
the 50 states of the United States, the District of Columbia, Puerto Rico, and U.S. territories and
possessions. Non-U.S. addressees includes residents of any foreign country. The term
non-U.S. addressee generally includes foreign-based subsidiaries of other U.S. banks.
For customer identification purposes, the IBFs of other U.S. depository institutions are
U.S. addressees. (This is in contrast to the treatment of the IBFs of the reporting bank, which
are treated as foreign offices of the reporting bank.)
Due Bills: A due bill is an obligation that results when a bank sells an asset and receives payment, but
does not deliver the security or other asset. A due bill can also result from a promise to deliver an
asset in exchange for value received. In both cases, the receipt of the payment creates an obligation
regardless of whether the due bill is issued in written form. Outstanding due bill obligations shall be
reported as borrowings in Schedule RC, item 16, "Other borrowed money," by the issuing bank.
Conversely, when the reporting bank is the holder of a due bill, the outstanding due bill obligation of the
seller shall be reported as a loan to that party.
Edge and Agreement Corporation: An Edge corporation is a federally-chartered corporation organized
under Section 25(a) of the Federal Reserve Act and subject to Federal Reserve Regulation K. Edge
corporations are allowed to engage only in international banking or other financial transactions related
to international business.
An Agreement corporation is a state-chartered corporation that has agreed to operate as if it were
organized under Section 25 of the Federal Reserve Act and has agreed to be subject to Federal
Reserve Regulation K. Agreement corporations are restricted, in general, to international banking
operations. Banks must apply to the Federal Reserve for permission to acquire stock in an Agreement
corporation.
A reporting bank's Edge or Agreement subsidiary, i.e., the bank's majority-owned Edge or Agreement
corporation, is treated for purposes of these reports as a "foreign" office of the reporting bank.

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Equity-Indexed Certificates of Deposit: Under ASC Topic 815, Derivatives and Hedging (formerly
FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities," as
amended), a certificate of deposit that pays "interest" based on changes in an equity securities index is
a hybrid instrument with an embedded derivative that must be accounted for separately from the host
contract, i.e., the certificate of deposit. For further information, see the Glossary entry for "Derivative
Contracts." Examples of equity-indexed certificates of deposit include the "Index Powered® CD" and
the “Dow Jones Industrials Indexed Certificate of Deposit.”
At the maturity date of a typical equity-indexed certificate of deposit, the holder of the certificate of
deposit receives the original amount invested in the deposit plus some or all of the appreciation, if any,
in an index of stock prices over the term of the certificate of deposit. Thus, the equity-indexed
certificate of deposit contains an embedded equity call option. To manage the market risk of its equityindexed certificates of deposit, a bank that issues these deposits normally enters into one or more
separate freestanding equity derivative contracts with an overall term that matches the term of the
certificates of deposit. At maturity, these separate derivatives are expected to provide the bank with a
cash payment in an amount equal to the amount of appreciation, if any, in the same stock price index
that is embedded in the certificates of deposit, thereby providing the bank with the funds to pay the
"interest" on the equity-indexed certificates of deposit. During the term of the separate freestanding
equity derivative contracts, the bank will periodically make either fixed or variable payments to the
counterparty on these contracts.
When a bank issues an equity-indexed certificate of deposit, it must either account for the written
equity call option embedded in the deposit separately from the certificate of deposit host contract or
irrevocably elect to account for the hybrid instrument (the equity-indexed certificate of deposit) in its
entirety at fair value.
•

If the bank accounts for the written equity call option separately from the certificate of deposit, the
fair value of this embedded derivative on the date the certificate of deposit is issued must be
deducted from the amount the purchaser invested in the deposit, creating a discount on the
certificate of deposit that must be amortized to interest expense over the term of the deposit using
the effective interest method. This interest expense should be reported in the income statement in
the appropriate subitem of Schedule RI, item 2.a, "Interest on deposits." The equity call option
must be "marked to market" at least quarterly with any changes in the fair value of the option
recognized in earnings. On the balance sheet, the carrying value of the certificate of deposit host
contract and the fair value of the embedded equity derivative may be combined and reported
together as a deposit liability on the balance sheet (Schedule RC) and in the deposit schedule
(Schedule RC-E).

•

If the bank elects to account for the equity-indexed certificate of deposit in its entirety at fair value,
no discount is to be recorded on the certificate of deposit. Rather, the equity-indexed certificate of
deposit must be “marked to market” at least quarterly, with changes in the instrument’s fair value
reported in the income statement consistently in either item 5.l, "Other noninterest income," or
item 7.d, "Other noninterest expense”, excluding interest expense incurred that is reported in the
appropriate subitem of Schedule RI, item 2.a, "Interest on deposits."

As for the separate freestanding derivative contracts the bank enters into to manage its market risk,
these derivatives must be carried on the balance sheet as assets or liabilities at fair value and "marked
to market" at least quarterly with changes in their fair value recognized in earnings. The fair value of
the freestanding derivatives should not be netted against the fair value of the embedded equity
derivatives for balance sheet purposes because these two derivatives have different counterparties.
The periodic payments to the counterparty on these freestanding derivatives must be accrued with the
expense reported in earnings along with the change in the derivative's fair value. In the income
statement (Schedule RI), the changes in the fair value of the embedded and freestanding derivatives,
including the effect of the accruals for the payments to the counterparty on the freestanding derivatives,
should be netted and reported consistently in either item 5.l, "Other noninterest income," or item 7.d,
"Other noninterest expense."

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Equity-Indexed Certificates of Deposit (cont.):
Unless the bank elects to account for the equity-indexed certificate of deposit in its entirety at fair value,
the notional amount of the embedded equity call option must be reported in Schedule RC-L,
item 12.d.(1), column C, and item 14, column C, and its fair value (which will always be negative or zero,
but not positive) must be reported in Schedule RC-L, item 15.b.(2), column C. The notional amount of
the freestanding equity derivative must be reported in the appropriate subitem of Schedule RC-L,
item 12, column C (e.g., item 12.e, column C, if it is an equity swap), and in Schedule RC-L, item 14,
column C. The fair value of the freestanding equity derivative must be included in the appropriate
subitem of Schedule RC-L, item 15.b, column C. The equity derivative embedded in the equity-indexed
certificate of deposit is a written option, which is not covered by the agencies' risk-based capital
standards. However, the freestanding equity derivative is covered by these standards.
For deposit insurance assessment purposes, if the carrying value of the certificate of deposit host
contract and the fair value of the embedded equity derivative are combined and reported together as a
deposit liability on the balance sheet, the difference between these combined amounts and the face
amount of the certificate of deposit should be treated as an unamortized premium or discount, as
appropriate, for purposes of reporting total deposit liabilities in Schedule RC-O, item 1. If these two
amounts are not combined and only the carrying value of the certificate of deposit host contract is
reported as a deposit liability on the balance sheet, the difference between the carrying value and the
face amount of the certificate of deposit should be treated as an unamortized discount in
Schedule RC-O, item 1. If the bank elects to account for the equity-indexed certificate of deposit in its
entirety at fair value, the difference between the fair value and the face amount of the certificate of
deposit should be treated as an unamortized premium or discount, as appropriate, in Schedule RC-O,
item 1.
A bank that purchases an equity-indexed certificate of deposit for investment purposes must either
account for the embedded purchased equity call option separately from the certificate of deposit host
contract or irrevocably elect to account for the hybrid instrument (the equity-indexed certificate of
deposit) in its entirety at fair value.
•

If the bank accounts for the purchased equity call option separately from the certificate of deposit,
the fair value of this embedded derivative on the date of purchase must be deducted from the
purchase price of the certificate, creating a discount on the deposit that must be accreted into
income over the term of the deposit using the effective interest method. This accretion should be
reported in the income statement in Schedule RI, item 1.c. The embedded equity derivative must
be "marked to market" at least quarterly with any changes in its fair value recognized in earnings.
These fair value changes should be reported consistently in Schedule RI in either item 5.l, "Other
noninterest income," or item 7.d, "Other noninterest expense." The carrying value of the certificate
of deposit host contract and the fair value of the embedded equity derivative may be combined and
reported together as interest-bearing balances due from other depository institutions on the
balance sheet in Schedule RC, item 1.b.

•

If the bank elects to account for the equity-indexed certificate of deposit in its entirety at fair value,
no discount is to be recorded on the certificate of deposit. Rather, the equity-indexed certificate of
deposit must be “marked to market” at least quarterly, with changes in the instrument’s fair value
reported in the income statement consistently in either item 5.l, "Other noninterest income," or
item 7.d, "Other noninterest expense,” excluding interest income that is reported in Schedule RI,
item 1.c.

Unless the bank elects to account for the equity-indexed certificate of deposit in its entirety at fair value,
the notional amount of the embedded derivative must be reported in Schedule RC-L, item 12.d.(2),
column C, and item 14, column C, and its fair value (which will always be positive or zero, but not
negative) must be reported in Schedule RC-L, item 15.b.(1), column C. The embedded equity
derivative in the equity-indexed certificate of deposit is a purchased option, which is subject to the
agencies' risk-based capital standards unless the fair value election has been made.

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Equity Method of Accounting: The equity method of accounting shall be used to account for:
(1) Investments in subsidiaries that have not been consolidated; associated companies; and corporate
joint ventures, unincorporated joint ventures, and general partnerships over which the bank
exercises significant influence; and
(2) Noncontrolling investments in:
(a) Limited partnerships; and
(b) Limited liability companies that maintain “specific ownership accounts” for each investor and
are within the scope of ASC Subtopic 323-30, Investments-Equity Method and Joint Ventures –
Partnerships, Joint Ventures, and Limited Liability Entities (formerly EITF Issue No. 03-16,
“Accounting for Investments in Limited Liability Companies”)
unless the investment in the limited partnership or limited liability company is so minor that the
limited partner or investor may have virtually no influence over the operating and financial policies
of the partnership or company. Consistent with guidance in ASC Subtopic 323-30,
Investments-Equity Method and Joint Ventures – Partnerships, Joint Ventures, and Limited Liability
Entities (formerly EITF Topic D-46, “Accounting for Limited Partnership Investments”),
noncontrolling investments of more than 3 to 5 percent are considered to be more than minor.
The entities in which these investments have been made are collectively referred to as “investees.”
Under the equity method, the carrying value of a bank’s investment in an investee is originally recorded
at cost but is adjusted periodically to record as income the bank’s proportionate share of the investee’s
earnings or losses and decreased by the amount of cash dividends or similar distributions received
from the investee. For purposes of these reports, the date through which the carrying value of the
bank’s investment in an investee has been adjusted should, to the extent practicable, match the report
date of the Report of Condition, but in no case differ by more than 93 days from the report.
See also "subsidiaries."
Excess Balance Account: An excess balance account (EBA) is a limited-purpose account at a Federal
Reserve Bank established for maintaining the excess balances of one or more depository institutions
(participants) that are eligible to earn interest on balances held at the Federal Reserve Banks. An EBA
is managed by another depository institution that has its own account at a Federal Reserve Bank (such
as a participant’s pass-through correspondent) and acts as an agent on behalf of the participants.
Balances in an EBA represent a liability of a Federal Reserve Bank directly to the EBA participants and
not to the agent. The Federal Reserve Banks pay interest on the average balance in the EBA over a
7-day maintenance period and the agent disburses that interest to each participant in accordance with
the instructions of the participant. Only a participant’s excess balances may be placed in an EBA; the
account balance cannot be used to satisfy the participant’s reserve balance requirement.
The reporting of an EBA by participants and agents differs from the required reporting of a passthrough reserve relationship, which is described in the Glossary entry for “pass-through reserve
balances.”

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Excess Balance Account (cont.):
A participant’s balance in an EBA is to be treated as a claim on a Federal Reserve Bank (not as a
claim on the agent) and, as such, should be reported on the balance sheet in Schedule RC, item 1.b,
“Interest-bearing balances” due from depository institutions, and, for a participant with foreign offices or
with $300 million or more in total assets, in Schedule RC-A, item 4, “Balances due from Federal
Reserve Banks.” For risk-based capital purposes, the participant’s balance in an EBA is accorded a
zero percent risk weight and should be reported in Schedule RC-R, item 34, “Cash and balances due
from depository institutions,” column C. A participant should not include its balance in an EBA in
Schedule RC, item 3.a, “Federal funds sold.”
The balances in an EBA should not be reflected as an asset or a liability on the balance sheet of
the depository institution that acts as the agent for the EBA. Thus, the agent should not include the
balances in the EBA in Schedule RC, item 1.b, “Interest-bearing balances” due from depository
institutions; Schedule RC, item 13.a.(2), “Interest-bearing” deposits (in domestic offices);
Schedule RC-A, item 4, “Balances due from Federal Reserve Banks”; or Schedule RC-R, item 34,
“Cash and balances due from depository institutions.”
Extinguishments of Liabilities: The accounting and reporting standards for extinguishments of
liabilities are set forth in ASC Subtopic 405-20, Liabilities – Extinguishments of Liabilities (formerly
FASB Statement No. 140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities"). Under ASC Subtopic 405-20, a bank should remove a previously
recognized liability from its balance sheet if and only if the liability has been extinguished. A liability
has been extinguished if either of the following conditions is met:
(1) The bank pays the creditor and is relieved of its obligation for the liability. Paying the creditor
includes delivering cash, other financial assets, goods, or services or the bank's reacquiring its
outstanding debt.
(2) The bank is legally released from being the primary obligor under the liability, either judicially or by
the creditor.
Except for those unusual and infrequent gains and losses that qualify as extraordinary under
the criteria in ASC Subtopic 225-20, Income Statement – Extraordinary and Unusual Items (formerly
APB Opinion No. 30, “Reporting the Results of Operations”), banks should aggregate their gains and
losses from the extinguishment of liabilities (debt), including losses resulting from the payment of
prepayment penalties on borrowings such as Federal Home Loan Bank advances, and consistently
report the net amount in item 7.d, "Other noninterest expense," of the income statement (Schedule RI).
Only if a bank's debt extinguishments normally result in net gains over time should the bank
consistently report its net gains (losses) in Schedule RI, item 5.l, "Other noninterest income."
In addition, under ASC Subtopic 470-50, Debt – Modifications and Extinguishments (formerly FASB
EITF Issue No. 96-19, “Debtor’s Accounting for a Modification or Exchange of Debt Instruments”), the
accounting for the gain or loss on the modification or exchange of debt depends on whether the original
and the new debt instruments are substantially different. If they are substantially different, the
transaction is treated as an extinguishment of debt and the gain or loss on the modification or
exchange is reported immediately in earnings as discussed in the preceding paragraph. If the original
and new debt instruments are not substantially different, the gain or loss on the modification or
replacement of the debt is deferred and recognized over time as an adjustment to the interest expense
on the new borrowing. ASC Subtopic 470-50 provides guidance on how to determine whether the
original and the new debt instruments are substantially different.

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Extraordinary Items: Extraordinary items are material events and transactions that are (1) unusual and
(2) infrequent. Both of those conditions must exist in order for an event or transaction to be reported as
an extraordinary item.
To be unusual, an event or transaction must be highly abnormal or clearly unrelated to the ordinary
and typical activities of banks. An event or transaction that is beyond bank management's control is
not automatically considered to be unusual.
To be infrequent, an event or transaction should not reasonably be expected to recur in the
foreseeable future. Although the past occurrence of an event or transaction provides a basis for
estimating the likelihood of its future occurrence, the absence of a past occurrence does not
automatically imply that an event or transaction is infrequent.
Only a limited number of events or transactions qualify for treatment as extraordinary items. Among
these are losses which result directly from a major disaster such as an earthquake (except in areas
where earthquakes are expected to recur in the foreseeable future), an expropriation, or a prohibition
under a newly enacted law or regulation.
For further information, see ASC Subtopic 225-20, Income Statement – Extraordinary and Unusual
Items (formerly APB Opinion No. 30, “Reporting the Results of Operations”).
Fails: When a bank has sold an asset and, on settlement date, does not deliver the security or other
asset and does not receive payment, a sales fail exists. When a bank has purchased a security or
other asset and, on settlement date, does not receive the asset and does not pay for it, a purchase fail
exists. Fails do not affect the way securities are reported in the Reports of Condition and Income.
Fair Value: ASC Topic 820, Fair Value Measurements and Disclosures (formerly FASB Statement
No. 157, “Fair Value Measurements”), defines fair value and establishes a framework for measuring
fair value. ASC Topic 820 should be applied when other accounting topics require or permit fair value
measurements. For further information, refer to ASC Topic 820.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants in the asset’s or liability’s principal (or most
advantageous) market at the measurement date. This value is often referred to as an “exit” price.
An orderly transaction is a transaction that assumes exposure to the market for a period prior to the
measurement date to allow for marketing activities that are usual and customary for transactions
involving such assets or liabilities; it is not a forced liquidation or distressed sale.
ASC Topic 820 establishes a three level fair value hierarchy that prioritizes inputs used to measure
fair value based on observability. The highest priority is given to Level 1 (observable, unadjusted) and
the lowest priority to Level 3 (unobservable). The broad principles for the hierarchy follow.

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Fair Value (cont.):
Level 1 fair value measurement inputs are quoted prices (unadjusted) in active markets for identical
assets or liabilities that a bank has the ability to access at the measurement date. In addition, a
Level 1 fair value measurement of a liability can also include the quoted price for an identical liability
when traded as an asset in an active market when no adjustments to the quoted price of the asset are
required.
Level 2 fair value measurement inputs are inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly or indirectly. If the asset or liability has a
specified (contractual) term, a Level 2 input must be observable for substantially the full term of the
asset or liability. Depending on the specific factors related to an asset or a liability, certain adjustments
to Level 2 inputs may be necessary to determine the fair value of the asset or liability. If those
adjustments are significant to the asset or liability’s fair value in its entirety, the adjustments may render
the fair value measurement to a Level 3 measurement.
Level 3 fair value measurement inputs are unobservable inputs for the asset or liability. Although these
inputs may not be readily observable in the market, the fair value measurement objective is,
nonetheless, to develop an exit price for the asset or liability from the perspective of a market
participant. Therefore, Level 3 fair value measurement inputs should reflect the bank’s own
assumptions about the assumptions that a market participant would use in pricing an asset or liability
and should be based on the best information available in the circumstances.
Refer to ASC Topic 820 for additional fair value measurement guidance, including considerations
related to holding large positions (blocks), the existence of multiple active markets, and the use of
practical expedients.
Measurement of Fair Values in Stressed Market Conditions – The measurement of various assets and
liabilities on the balance sheet – including trading assets and liabilities, available-for-sale securities,
loans held for sale, assets and liabilities accounted for under the fair value option, and foreclosed
assets – involves the use of fair values. During periods of market stress, the fair values of some
financial instruments and nonfinancial assets may be difficult to determine. Institutions are reminded
that, under such conditions, fair value measurements should be determined consistent with the
objective of fair value set forth in ASC Topic 820.
ASC Topic 820 provides guidance on determining fair value when the volume and level of activity for
an asset or liability have significantly decreased when compared with normal market activity for the
asset or liability (or similar assets or liabilities). According to ASC Topic 820, if there has been such a
significant decrease, transactions or quoted prices may not be determinative of fair value because, for
example, there may be increased instances of transactions that are not orderly. In those
circumstances, further analysis of transactions or quoted prices is needed, and a significant adjustment
to the transactions or quoted prices may be necessary to estimate fair value in accordance with ASC
Topic 820.
Federal Funds Transactions: For purposes of the Reports of Condition and Income, federal funds
transactions involve the reporting bank's lending (federal funds sold) or borrowing (federal funds
purchased) in domestic offices of immediately available funds under agreements or contracts that have
an original maturity of one business day or roll over under a continuing contract. However, funds lent
or borrowed in the form of securities resale or repurchase agreements, due bills, borrowings from the
Discount and Credit Department of a Federal Reserve Bank, deposits with and advances from a
Federal Home Loan Bank, and overnight loans for commercial and industrial purposes are excluded
from federal funds. Transactions that are to be reported as federal funds transactions may be secured
or unsecured or may involve an agreement to resell loans or other instruments that are not securities.

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Federal Funds Transactions (cont.):
Immediately available funds are funds that the purchasing bank can either use or dispose of on the
same business day that the transaction giving rise to the receipt or disposal of the funds is executed.
The borrowing and lending of immediately available funds has an original maturity of one business day
if the funds borrowed on one business day are to be repaid or the transaction reversed on the next
business day, that is, if immediately available funds borrowed today are to be repaid tomorrow (in
tomorrow's immediately available funds). Such transactions include those made on a Friday to mature
or be reversed the following Monday and those made on the last business day prior to a holiday (for
either or both of the parties to the transaction) to mature or be reversed on the first business day
following the holiday.
A continuing contract is a contract or agreement that remains in effect for more than one business day,
but has no specified maturity and does not require advance notice of either party to terminate. Such
contracts may also be known as rollovers or as open-ended agreements.
Federal funds may take the form of the following two types of transactions in domestic offices provided
that the transactions meet the above criteria (i.e., immediately available funds with an original maturity
of one business day or under a continuing contract):
(1) Unsecured loans (federal funds sold) or borrowings (federal funds purchased). (In some market
usage, the term "fed funds" or "pure fed funds" is confined to unsecured loans of immediately
available balances.)
(2) Purchases (sales) of financial assets (other than securities) under agreements to resell
(repurchase) that have original maturities of one business day (or are under continuing contracts)
and are in immediately available funds.
Any borrowing or lending of immediately available funds in domestic offices that has an original
maturity of more than one business day, other than securities repurchase or resale agreements, is to
be treated as a borrowing or as a loan, not as federal funds. Such transactions are sometimes referred
to as "term federal funds."
Federally-Sponsored Lending Agency: A federally-sponsored lending agency is an agency or
corporation that has been chartered, authorized, or organized as a result of federal legislation for the
purpose of providing credit services to a designated sector of the economy. These agencies include
Banks for Cooperatives, Federal Home Loan Banks, the Federal Home Loan Mortgage Corporation,
Federal Intermediate Credit Banks, Federal Land Banks, the Federal National Mortgage Association,
and the Student Loan Marketing Association.
Fees, Loan: See "loan fees."
Foreclosed Assets: The accounting and reporting standards for foreclosed assets are set forth in
ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors (formerly
FASB Statement No. 15, "Accounting by Debtors and Creditors for Troubled Debt Restructurings"), and
ASC Topic 360, Property, Plant, and Equipment (formerly FASB Statement No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets"). Subsequent to the issuance of Statement No. 144,
AICPA Statement of Position (SOP) No. 92-3, "Accounting for Foreclosed Assets," was rescinded.
Certain provisions of SOP 92-3 are not present in Statement No. 144, but the application of these
provisions represents prevalent practice in the banking industry and is consistent with safe and sound
banking practices and the accounting objectives set forth in Section 37(a) of the Federal Deposit
Insurance Act. These provisions of SOP 92-3 have been incorporated into this Glossary entry, which
banks must follow for purposes of preparing their Reports of Condition and Income.

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Foreclosed Assets (cont.):
A bank that receives from a borrower in full satisfaction of a loan either receivables from a third party,
an equity interest in the borrower, or another type of asset (except a long-lived asset that will be sold)
shall initially measure the asset received at its fair value at the time of the restructuring. When a bank
receives a long-lived asset, such as real estate, from a borrower in full satisfaction of a loan, the
long-lived asset is rebuttably presumed to be held for sale and the bank shall initially measure this
asset at its fair value less cost to sell. The fair value (less cost to sell, if applicable) of the asset
received in full satisfaction of the loan becomes the "cost" of the asset. The amount, if any, by which
1
the recorded amount of the loan exceeds the fair value (less cost to sell, if applicable) of the asset is a
loss which must be charged to the allowance for loan and lease losses at the time of restructuring,
foreclosure, or repossession. In those cases where property is received in full satisfaction of an asset
other than a loan (e.g., a debt security), the loss should be reported on the income statement in a
manner consistent with the balance sheet classification of the asset satisfied.
If an asset is sold shortly after it is received in a restructuring, foreclosure, or repossession, it would
generally be appropriate to substitute the value received in the sale (net of the cost to sell for a longlived asset, such as real estate, that has been sold) for the fair value (less cost to sell for a long-lived
asset, such as real estate, that will be sold) that had been estimated at the time of restructuring,
foreclosure, or repossession. Any adjustments should be made to the loss charged against the
allowance.
An asset received in partial satisfaction of a loan should be initially measured as described above and
the recorded amount of the loan should be reduced by the fair value (less cost to sell, if applicable) of
the asset at the time of restructuring, foreclosure, or repossession.
The measurement and accounting subsequent to acquisition for real estate received in full or partial
satisfaction of a loan, including through foreclosure or repossession, is discussed below in this
Glossary entry. For other types of assets that a bank receives in full or partial satisfaction of a loan,
the bank generally should subsequently measure and account for such assets in accordance with other
applicable generally accepted accounting principles and regulatory reporting instructions for such
assets.
For purposes of these reports, foreclosed assets include loans where the bank, as creditor, has
received physical possession of a borrower's assets, regardless of whether formal foreclosure
proceedings take place. In such situations, the secured loan should be recategorized on the balance
sheet in the asset category appropriate to the underlying collateral (e.g., as other real estate owned for
real estate collateral) and accounted for as described above.
The amount of any senior debt (principal and accrued interest) to which foreclosed real estate is
subject at the time of foreclosure must be reported as a liability in Schedule RC-M, item 5.b, "Other
borrowings."
After foreclosure, each foreclosed real estate asset (including any real estate for which the bank
receives physical possession, regardless of whether formal foreclosure proceedings take place) must
be carried at the lower of (1) the fair value of the asset minus the estimated costs to sell the asset or
(2) the cost of the asset (as defined in the preceding paragraphs). This determination must be made
on an asset-by-asset basis. If the fair value of a foreclosed real estate asset minus the estimated costs
to sell the asset is less than the asset's cost, the deficiency must be recognized as a valuation
allowance against the asset which is created through a charge to expense. The valuation allowance
should thereafter be increased or decreased (but not below zero) through charges or credits to
expense for changes in the asset's fair value or estimated selling costs.

1

The recorded amount of the loan is the loan balance adjusted for any unamortized premium or discount and
unamortized loan fees or costs, less any amount previously charged off, plus recorded accrued interest.

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Foreclosed Assets (cont.):
If a foreclosed real estate asset is held for more than a short period of time, any declines in value after
foreclosure and any gain or loss from the sale or disposition of the asset shall not be reported as a loan
or lease loss or recovery and shall not be debited or credited to the allowance for loan and lease
losses. Such additional declines in value and the gain or loss from the sale or disposition shall be
reported net on the income statement in Schedule RI, item 5.j, “Net gains (losses) on sales of other
real estate owned.”
Dispositions of Foreclosed Real Estate – The primary accounting guidance for sales of foreclosed real
estate is ASC Subtopic 360-20, Property, Plant, and Equipment – Real Estate Sales (formerly FASB
Statement No. 66, "Accounting for Sales of Real Estate"). This standard, which applies to all
transactions in which the seller provides financing to the buyer of the real estate, establishes the
following methods to account for dispositions of real estate. If a profit is involved in the sale of real
estate, each method sets forth the manner in which the profit is to be recognized. Regardless of which
method is used, however, any losses on the disposition of real estate should be recognized
immediately.
Full Accrual Method – Under the full accrual method, the disposition is recorded as a sale. Any profit
resulting from the sale is recognized in full and the asset resulting from the seller's financing of the
transaction is reported as a loan. This method may be used when the following conditions have been
met:
(1) A sale has been consummated;
(2) The buyer's initial investment (down payment) and continuing investment (periodic payments) are
adequate to demonstrate a commitment to pay for the property;
(3) The receivable is not subject to future subordination; and
(4) The usual risks and rewards of ownership have been transferred.
Guidelines for the minimum down payment that must be made in order for a transaction to qualify for
the full accrual method are set forth in the Appendix A to ASC Subtopic 360-20. These vary from
five percent to 25 percent of the property's sales value. These guideline percentages vary by type of
property and are primarily based on the inherent risk assumed for the type and characteristics of the
property. To meet the continuing investment criteria, the contractual loan payments must be sufficient
to repay the loan over the customary loan term for the type of property involved. Such periods may
range up to 30 years for loans on single family residential property.
Installment Method – Dispositions of foreclosed real estate that do not qualify for the full accrual
method may qualify for the installment method. This method recognizes a sale and the corresponding
loan. Any profits on the sale are only recognized as the bank receives payments from the
purchaser/borrower. Interest income is recognized on an accrual basis, when appropriate.
The installment method is used when the buyer's down payment is not adequate to allow use of the full
accrual method but recovery of the cost of the property is reasonably assured if the buyer defaults.
Assurance of recovery requires careful judgment on a case-by-case basis. Factors which should be
considered include: the size of the down payment, loan-to-value ratios, projected cash flows from the
property, recourse provisions, and guarantees.
Since default on the loan usually results in the seller's reacquisition of the real estate, reasonable
assurance of cost recovery may often be achieved with a relatively small down payment. This is
especially true in situations involving loans with recourse to borrowers who have verifiable net worth,
liquid assets, and income levels. Reasonable assurance of cost recovery may also be achieved when
the purchaser/borrower pledges additional collateral.

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Foreclosed Assets (cont.):
Cost Recovery Method – Dispositions of foreclosed real estate that do not qualify for either the full
accrual or installment methods are sometimes accounted for using the cost recovery method. This
method recognizes a sale and the corresponding loan, but all income recognition is deferred. Principal
payments are applied as a reduction of the loan balance and interest increases the unrecognized gross
profit. No profit or interest income is recognized until either the aggregate payments by the borrower
exceed the recorded amount of the loan or a change to another accounting method is appropriate
(e.g., installment method). Consequently, the loan is maintained in nonaccrual status while this
method is being used.
Reduced-Profit Method – This method is used in certain situations where the bank receives an
adequate down payment, but the loan amortization schedule does not meet the requirements for use of
the full accrual method. The method recognizes a sale and the corresponding loan. However, like the
installment method, any profit is apportioned over the life of the loan as payments are received. The
method of apportionment differs from the installment method in that profit recognition is based on the
present value of the lowest level of periodic payments required under the loan agreement.
Since sales with adequate down payments are generally not structured with inadequate loan
amortization requirements, this method is seldom used in practice.
Deposit Method – The deposit method is used in situations where a sale of the foreclosed real estate
has not been consummated. It may also be used for dispositions that could be accounted for under
the cost recovery method. Under this method a sale is not recorded and the asset continues to be
reported as foreclosed real estate. Further, no profit or interest income is recognized. Payments
received from the borrower are reported as a liability until sufficient payments or other events have
occurred which allow the use of one of the other methods.
The preceding discussion represents a brief summary of the methods included in ASC Subtopic 360-20
for accounting for sales of real estate. Refer to ASC Subtopic 360-20 for a more complete description
of the accounting principles that apply to sales of real estate, including the determination of the down
payment percentage.
Foreign Banks: See "banks, U.S. and foreign."
Foreign Currency Transactions and Translation: Foreign currency transactions are transactions
occurring in the ordinary course of business (e.g., purchases, sales, borrowings, and lendings)
denominated in a currency other than the office's functional currency (as described below).
Foreign currency translation, on the other hand, is the process of translating financial statements from
the foreign office's functional currency into the reporting currency. Such translation normally is
performed only at reporting dates.
A functional currency is the currency of the primary economic environment in which an office operates.
For most banks, the functional currency will be the U.S. dollar. However, if a bank has foreign offices,
one or more foreign offices may have a functional currency other than the U.S. dollar.
Accounting for foreign currency transactions – A change in exchange rates between the functional
currency and the currency in which a transaction is denominated will increase or decrease the amount
of the functional currency expected to be received or paid. These increases or decreases in the
expected functional currency cash flow are foreign currency transaction gains and losses and are to be
included in the determination of the income of the period in which the transaction takes place, or if the
transaction has not yet settled, the period in which the rate change takes place.

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Foreign Currency Transactions and Translation (cont.):
Except for foreign currency derivatives and transactions described in the following section, banks
should consistently report net gains (losses) from foreign currency transactions other than trading
transactions in Schedule RI, item 5.l, "Other noninterest income," or item 7.d, "Other noninterest
expense." Net gains (losses) from foreign currency trading transactions should be reported in
Schedule RI, item 5.c, "Trading revenue."
Foreign currency transaction gains or losses to be excluded from the determination of net income –
Gains and losses on the following foreign currency transactions shall not be included in "Noninterest
income" or "Noninterest expense," but shall be reported in the same manner as translation adjustments
(as described below):
(1) Foreign currency transactions that are designated as, and are effective as, economic hedges of a
net investment in a foreign office.
(2) Intercompany foreign currency transactions that are of a long-term investment nature (i.e.,
settlement is not planned or anticipated in the foreseeable future), when the parties to the
transaction are consolidated, combined, or accounted for by the equity method in the bank's
Reports of Condition and Income.
In addition, the entire change in the fair value of foreign-currency-denominated available-for-sale debt
securities should not be included in “Realized gains (losses) on available-for-sale debt securities”
(Schedule RI, item 6.b), but should be reported in Schedule RI-A, item 10, "Other comprehensive
income." These fair value changes should be accumulated in the "Net unrealized holding gains
(losses) on available-for-sale securities” component of "Accumulated other comprehensive income" in
Schedule RC, item 26.b. However, if a decline in fair value of a foreign-currency-denominated
available-for-sale debt security is judged to be other than temporary, the cost basis of the individual
security shall be written down to fair value as a new cost basis and the amount of the write-down shall
be included in earnings (Schedule RI, item 6.b).
See the Glossary entry for "derivative contracts" for information on the accounting and reporting for
foreign currency derivatives.
Accounting for foreign currency translation (applicable only to banks with foreign offices) --The Reports
of Condition and Income must be reported in U.S. dollars. Balances of foreign subsidiaries or
branches of the reporting bank denominated in a functional currency other than U.S. dollars shall be
converted to U.S. dollar equivalents and consolidated into the reporting bank's Reports of Condition
and Income. The translation adjustments for each reporting period, determined utilizing the current
rate method, should be reported in Schedule RI-A, item 10, "Other comprehensive income." Amounts
accumulated in the "Cumulative foreign currency translation adjustments" component of "Accumulated
other comprehensive income" in Schedule RC, item 26.b, will not be included in the bank's results of
operations until such time as the foreign office is disposed of, when they will be used as an element to
determine the gain or loss on disposition.
For further guidance, refer to ASC Topic 830, Foreign Currency Matters (formerly FASB Statement
No. 52, "Foreign Currency Translation").

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Foreign Debt Exchange Transactions: Foreign debt exchange transactions generally fall into three
categories: (1) loan swaps, (2) debt/equity swaps, and (3) debt-for-development swaps. These
transactions are to be reported in the Reports of Condition and Income in accordance with generally
accepted accounting principles as summarized below. The accounting pronouncements mentioned
below should be consulted for more detailed reporting guidance in these areas.
Generally accepted accounting principles require that these transactions be reported at their fair value.
There is a significant amount of precedent in the accounting for exchange transactions to consider both
the fair value of the consideration given up as well as the fair value of the assets received in arriving at
the most informed valuation, especially if the value of the consideration given up is not readily
determinable or may not be a good indicator of the value received. It is the responsibility of
management to make the valuation considering all of the circumstances. Such valuations are subject
to examiner review.
Among the factors to consider in determining fair values for foreign debt exchange transactions are:
(1) Similar transactions for cash;
(2) Estimated cash flows from the debt or equity instruments or other assets received;
(3) Market values, if any, of similar instruments; and
(4) Currency restrictions, if any, affecting payments on or sales of the debt or equity instruments, local
currency, or other assets received, including where appropriate those affecting the repatriation of
capital.
Losses arise from swap transactions when the fair value determined for the transaction is less than the
recorded investment in the sovereign debt and other consideration paid, if any. Such losses should
generally be charged to the allowance for loan and lease losses (or allocated transfer risk reserve, if
appropriate) and must include any discounts from official exchange rates that are imposed by
sovereign obligors as transaction fees. All other fees and transaction costs involved in such
transactions must be charged to expense as incurred.
Loss recoveries or even gains might be indicated in a swap transaction as a result of the valuation
process. However, due to the subjective nature of the valuation process, such loss recoveries or gains
ordinarily should not be recorded until the debt or equity instruments, local currency, or other assets
received in the exchange transaction are realized in unrestricted cash or cash equivalents.
Loan swaps – Foreign loan swaps, or debt/debt swaps, involve the exchange of one foreign loan for
another. This type of transaction represents an exchange of monetary assets that must be reported at
current fair value. Normally, when monetary assets are exchanged, with or without additional cash
payments, and the parties have no remaining obligations to each other, the earnings process is
complete.
Debt/equity swaps – The reporting treatment for this type of transaction is presented in ASC
Subtopic 942-310, Financial Services-Depository and Lending – Receivables (formerly AICPA Practice
Bulletin No. 4, "Accounting for Foreign Debt/Equity Swaps").
A foreign debt/equity swap represents an exchange of monetary for nonmonetary assets that must
be measured at fair value. This type of swap is typically accomplished when holders of U.S.
dollar-denominated sovereign debt agree to convert that debt into approved local equity investments.
The holders are generally credited with local currency at the official exchange rate. A discount from the
official exchange rate is often imposed as a transaction fee. The local currency is generally not

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Foreign Debt Exchange Transactions (cont.):
available to the holders for any purposes other than approved equity investments. Restrictions may be
placed on dividends on the equity investments and capital usually cannot be repatriated for several
years.
In arriving at the fair value of the transaction, both the secondary market price of the debt given up and
the fair value of the equity investment or assets received should be considered.
Debt-for-development swaps – In this type of exchange, sovereign debt held by a bank is generally
purchased by a nonprofit organization or contributed to the nonprofit the nonprofit organization. When
the sovereign debt is purchased by or donated to a nonprofit organization, the organization may enter
into an agreement with the debtor country to cancel the debt in return for the country's commitment to
provide local currency or other assets for use in connection with specific projects or programs in that
country. Alternatively, a bank may exchange the sovereign debt with the country and receive local
currency. In this alternative, the local currency will be donated or sold to the nonprofit organization for
use in connection with specific projects or programs in that country.
These transactions, including amounts charged to expense as donations, must be reported at their fair
values in accordance with generally accepted accounting principles applicable to foreign debt
exchange transactions. This includes appropriate consideration of the market value of the instruments
involved in the transaction and the fair value of any assets received, taking into account any restrictions
that would limit the use of the assets. In debt-for-development swaps where a bank receives local
currency in exchange for the sovereign loan it held and the local currency has no restrictions on its use
and is freely convertible, it is generally appropriate for fair value to be determined by valuing the local
currency received at its fair market exchange value.
Foreign Governments and Official Institutions: Foreign governments and official institutions are
central, state, provincial, and local governments in foreign countries and their ministries, departments,
and agencies. These include treasuries, ministries of finance, central banks, development banks,
exchange control offices, stabilization funds, diplomatic establishments, fiscal agents, and nationalized
banks and other banking institutions that are owned by central governments and that have as an
important part of their function activities similar to those of a treasury, central bank, exchange control
office, or stabilization fund. For purposes of these reports, other government-owned enterprises are
not included.
Also included as foreign official institutions are international, regional, and treaty organizations, such
as the International Monetary Fund, the International Bank for Reconstruction and Development
(World Bank), the Bank for International Settlements, the Inter-American Development Bank, and the
United Nations.
Foreign Office: For purposes of these reports, a foreign office of the reporting bank is a branch or
consolidated subsidiary located in a foreign country; an Edge or Agreement subsidiary, including both
its U.S. and its foreign offices; or an IBF. In addition, if the reporting bank is chartered and
headquartered in the 50 states of the United States and the District of Columbia, a branch or
consolidated subsidiary located in Puerto Rico or a U.S. territory or possession is a foreign office.
Branches on U.S. military facilities wherever located are treated as domestic offices, not foreign offices.
Forward Contracts: See "derivative contracts."
Functional Currency: See "foreign currency transactions and translation."
Futures Contracts: See "derivative contracts."

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Goodwill: According to ASC Topic 805, Business Combinations (formerly FASB Statement No. 141
(revised 2007), “Business Combinations”), goodwill is an asset representing the future economic
benefits arising from other assets acquired in a business combination that are not individually identified
and separately recognized. See "acquisition method" in the Glossary entry for "business
combinations" for guidance on the recognition and initial measurement of goodwill acquired in a
business combination.
Subsequent Measurement of Goodwill – Goodwill should not be amortized, but must be tested for
impairment at the reporting unit level at least annually, as described below. Any impairment losses
recognized on goodwill during the year-to-date reporting period should be reported in Schedule RI,
item 7.c.(1), “Goodwill impairment losses,” except those impairment losses associated with
discontinued operations, which should be reported on a net-of-tax basis in Schedule RI, item 11,
"Extraordinary items and other adjustments, net of income taxes." Goodwill, net of any impairment
losses, should be reported on the balance sheet in Schedule RC, item 10.a.
Goodwill Impairment Testing – ASC Subtopic 350-20, Intangibles-Goodwill and Other – Goodwill
(formerly FASB Statement No. 142, “Goodwill and Other Intangible Assets”) provides guidance for
testing and reporting goodwill impairment losses, a summary of which follows. Impairment is the
condition that exists when the carrying amount of goodwill exceeds its implied fair value. Because the
fair value of goodwill can be measured only as a residual and cannot be measured directly, ASC
Subtopic 350-20 includes a methodology for estimating the implied fair value of goodwill for impairment
measurement purposes.
Whether or not the reporting institution is a subsidiary of a holding company or other company, the
institution’s goodwill must be tested for impairment using the institution’s reporting units. Goodwill
should be assigned to reporting units in accordance with ASC Subtopic 350-20. The institution itself
may be a reporting unit.
Goodwill of a reporting unit must be tested for impairment annually and between annual tests if an
event occurs or circumstances change that would more likely than not reduce the fair value of a
reporting unit below its carrying amount. Examples of such events or circumstances include a
significant adverse change in the business climate, unanticipated competition, a loss of key personnel,
and a more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit
will be sold or otherwise disposed of. In addition, goodwill must be tested for impairment after a portion
of goodwill has been allocated to a business to be disposed of.
When testing the goodwill of a reporting unit for impairment, an institution has the option of first
assessing qualitative factors to determine whether it is necessary to perform the two-step quantitative
goodwill impairment test described in ASC Subtopic 350-20. If determined to be necessary, the twostep impairment test shall be used to identify potential goodwill impairment and measure the amount of
a goodwill impairment loss to be recognized (if any). However, an institution may choose to bypass the
qualitative assessment option for any reporting unit in any period and proceed directly to performing
the two-step quantitative goodwill impairment test described below.
Qualitative Assessment – If an institution performs a qualitative assessment and, after considering all
relevant events and circumstances, determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount (including goodwill), then the institution does not need to
perform the two-step quantitative goodwill impairment test. In other words, if it is more likely than not
that the fair value of a reporting unit is greater than its carrying amount; an institution would not have to
quantitatively test the unit’s goodwill for impairment.
However, if the institution instead concludes that the opposite is true (that is, it is more likely than not
that the fair value of a reporting unit is less than its carrying amount), then it is required to perform the
two-step quantitative goodwill impairment test described below.

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Goodwill (cont.):
ASC Subtopic 350-20 includes examples of events and circumstances that an institution should
consider in evaluating whether it is more likely than not that the fair value of a reporting unit is less than
its carrying amount. Because the examples are not all-inclusive, other relevant events and
circumstances also must be considered.
Quantitative Impairment Test –
•

Step 1: The first step of the goodwill impairment test compares the fair value of a reporting unit
with its carrying amount, including goodwill. If the carrying amount of a reporting unit is greater
2
than zero and its fair value exceeds its carrying amount, the reporting unit’s goodwill is
considered not impaired and the second step of the impairment test is unnecessary. However, if
the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill
impairment test must be performed to measure the amount of impairment loss, if any.

•

Step 2: The second step of the goodwill impairment test compares the implied fair value of the
3
reporting unit’s goodwill with the carrying amount of that goodwill. If the implied fair value of the
reporting unit’s goodwill exceeds the carrying amount of that goodwill, the goodwill is considered
not impaired. In contrast, if the carrying amount of the reporting unit’s goodwill exceeds the
implied fair value of that goodwill, an impairment loss must be recognized in earnings in an
amount equal to that excess. The loss recognized cannot exceed the carrying amount of the
reporting unit’s goodwill.

1

After an impairment loss is recognized on a reporting unit’s goodwill, the adjusted carrying amount of
that goodwill (i.e., the carrying amount of the goodwill before recognizing the impairment loss less the
amount of the impairment loss) shall be its new accounting basis. Subsequent reversal of a previously
recognized goodwill impairment loss is prohibited once the measurement of that loss is completed.
Disposal of a Reporting Unit – When a reporting unit is to be disposed of in its entirety, goodwill of that
reporting unit must be included in the carrying amount of the reporting unit when determining the gain
or loss on disposal. When a portion of a reporting unit that constitutes a business is to be disposed of,
goodwill associated with that business must be included in the carrying amount of the business in
determining the gain or loss on disposal. Otherwise, an institution may not remove goodwill from its
balance sheet, for example, by "selling" or "dividending" this asset to its parent holding company or
another affiliate.

1

The fair value of a reporting unit is the price that would be received to sell the unit as a whole in an orderly
transaction between market participants at the measurement date.
2
An institution should refer ASC Subtopic 350-20 for guidance on applying the quantitative impairment test if the
carrying amount of a reporting unit is zero or negative.
3
The implied fair value of goodwill should be determined in the same manner as the amount of goodwill recognized
in a business combination is determined. That is, an institution must assign the fair value of a reporting unit to all of
the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been
acquired in a business combination.

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Hypothecated Deposit: A hypothecated deposit is the aggregation of periodic payments on an
installment contract received by a reporting institution in a state in which, under law, such payments
are not immediately used to reduce the unpaid balance of the installment note, but are accumulated
until the sum of the payments equals the entire amount of principal and interest on the contract, at
which time the loan is considered paid in full. For purposes of these reports, hypothecated deposits
are to be netted against the related loans.
Deposits that simply serve as collateral for loans are not considered hypothecated deposits for
purposes of these reports.
See also "deposits."
IBF: See "International Banking Facility (IBF)."
Income Taxes: All banks, regardless of size, are required to report income taxes (federal, state and
local, and foreign) in the Reports of Condition and Income on an accrual basis. Note that, in almost all
cases, applicable income taxes as reported on the Report of Income will differ from amounts reported
to taxing authorities. The applicable income tax expense or benefit that is reflected in the Report of
Income should include both taxes currently paid or payable (or receivable) and deferred income taxes.
The following discussion of income taxes is based on ASC Topic 740, Income Taxes (formerly FASB
Statement No. 109, "Accounting for Income Taxes," and FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes”).
Applicable income taxes in the year-end Report of Income shall be the sum of the following:
(1) Taxes currently paid or payable (or receivable) for the year determined from the bank's federal,
state, and local income tax returns for that year. Since the bank's tax returns will not normally be
prepared until after the year-end Reports of Condition and Income have been completed, the bank
must estimate the amount of the current income tax liability (or receivable) that will ultimately be
reported on its tax returns. Estimation of this liability (or receivable) may involve consultation with
the bank's tax advisers, a review of the previous year's tax returns, the identification of significant
expected differences between items of income and expense reflected on the Report of Income and
on the tax returns, and the identification of expected tax credits.)
and
(2) Deferred income tax expense or benefit measured as the change in the net deferred tax assets or
liabilities for the period reported. Deferred tax liabilities and assets represent the amount by which
taxes payable (or receivable) are expected to increase or decrease in the future as a result of
"temporary differences" and net operating loss or tax credit carryforwards that exist at the reporting
date.
The actual tax liability (or receivable) calculated on the bank's tax returns may differ from the estimate
reported as currently payable or receivable on the year-end Report of Income. An amendment to the
bank's year-end and subsequent Reports of Condition and Income may be appropriate if the difference
is significant. Minor differences should be handled as accrual adjustments to applicable income taxes
in Reports of Income during the year the differences are detected. The reporting of applicable income
taxes in the Report of Income for report dates other than year-end is discussed below under "interim
period applicable income taxes."
When determining the current and deferred income tax assets and liabilities to be reported in any
period, a bank’s income tax calculation contains an inherent degree of uncertainty surrounding the
realizability of the tax positions included in the calculation. The term “tax position” refers to a position
in a previously filed tax return or a position expected to be taken in a future tax return that is reflected

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Income Taxes (cont.):
in measuring current or deferred income tax assets and liabilities. A tax position can result in a
permanent reduction of income taxes payable, a deferral of income taxes otherwise currently payable
to future years, or a change in the expected realizability of deferred tax assets. For each tax position
taken or expected to be taken in a tax return, a bank must evaluate whether the tax position is more
likely than not, i.e., more than a 50 percent probability, to be sustained upon examination by the
appropriate taxing authority, including resolution of any related appeals or litigation processes, based
on the technical merits of the position. In evaluating whether a tax position has met the more-likelythan-not recognition threshold, a bank should presume that the taxing authority examining the position
will have full knowledge of all relevant information. A bank’s assessment of the technical merits of a
tax position should reflect consideration of all relevant authoritative sources, e.g., tax legislation and
statutes, legislative intent, regulations, rulings, and case law, and reflect the bank’s determination of
the applicability of these sources to the facts and circumstances of the tax position. A bank must
evaluate each tax position without consideration of the possibility of an offset or aggregation with other
positions. No tax benefit can be recorded for a tax position that fails to meet the more-likely-than-not
recognition threshold.
Each tax position that meets the more-likely-than-not recognition threshold should be measured to
determine the amount of benefit to recognize in the Reports of Condition and Income. The tax position
is measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized
upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.
When measuring the tax benefit, a bank must consider the amounts and probabilities of the outcomes
that could be realized upon ultimate settlement using the facts, circumstances, and information
available at the reporting date. A bank may not use the valuation allowance associated with any
deferred tax asset as a substitute for measuring this tax benefit or as an offset to this amount.
If a bank’s assessment of the merits of a tax position subsequently changes, the bank should adjust
the amount of tax benefit it has recognized and accrue interest and penalties for any underpayment of
taxes in accordance with the tax laws of each applicable jurisdiction. In this regard, a tax position that
previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first
subsequent quarterly reporting period in which the threshold is met. A previously recognized tax
position that no longer meets the more-likely-than-not recognition threshold should be derecognized in
the first subsequent quarterly reporting period in which the threshold is no longer met.
Temporary differences result when events are recognized in one period on the bank's books but are
recognized in another period on the bank's tax return. These differences result in amounts of income
or expense being reported in the Report of Income in one period but in another period in the tax
returns. There are two types of temporary differences. Deductible temporary differences reduce
taxable income in future periods. Taxable temporary differences result in additional taxable income in
future periods.
For example, a bank's provision for loan and lease losses is expensed for financial reporting purposes
in one period. However, for some banks, this amount may not be deducted for tax purposes until the
loans are actually charged off in a subsequent period. This deductible temporary difference
"originates" when the provision for loan and lease losses is recorded in the financial statements and
"turns around" or "reverses" when the loans are subsequently charged off, creating tax deductions.
Other deductible temporary differences include writedowns of other real estate owned, the recognition
of loan origination fees, and other postemployment benefits expense.
Depreciation can result in a taxable temporary difference if a bank uses the straight-line method to
determine the amount of depreciation expense to be reported in the Report of Income but uses an
accelerated method for tax purposes. In the early years, tax depreciation under the accelerated
method will typically be larger than book depreciation under the straight-line method. During this

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period, a taxable temporary difference originates. Tax depreciation will be less than book depreciation
in the later years when the temporary difference reverses. Therefore, in any given year, the
depreciation reported in the Report of Income will differ from that reported in the bank's tax returns.
However, total depreciation taken over the useful life of the asset will be the same under either
method. Other taxable temporary differences include the undistributed earnings of unconsolidated
subsidiaries and associated companies and amounts funded to pension plans that exceed the
recorded expense.
Some events do not have tax consequences and therefore do not give rise to temporary differences.
Certain revenues are exempt from taxation and certain expenses are not deductible. These events
were previously known as "permanent differences." Examples of such events (for federal income tax
purposes) are interest received on certain obligations of states and political subdivisions in the U.S.,
premiums paid on officers' life insurance policies where the bank is the beneficiary, and 70 percent of
cash dividends received on the corporate stock of domestic U.S. corporations owned less than
20 percent.
Deferred tax assets shall be calculated at the report date by applying the "applicable tax rate" (defined
below) to the bank's total deductible temporary differences and operating loss carryforwards. A
deferred tax asset shall also be recorded for the amount of tax credit carryforwards available to the
bank. Based on the estimated realizability of the deferred tax asset, a valuation allowance should be
established to reduce the recorded deferred tax asset to the amount that is considered "more likely
than not" (i.e., greater than 50 percent chance) to be realized.
Deferred tax liabilities should be calculated by applying the "applicable tax rate" to total taxable
temporary differences at the report date.
Operating loss carrybacks and carryforwards and tax credit carryforwards -- When a bank's deductions
exceed its income for federal income tax purposes, it has sustained an operating loss. An operating
loss that occurs in a year following periods when the bank had taxable income may be carried back to
recover income taxes previously paid. The tax effects of any loss carrybacks that are realizable
through a refund of taxes previously paid is recognized in the year the loss occurs. In this situation, the
applicable income taxes on the Report of Income will reflect a credit rather than an expense. Banks
may carry back operating losses for two years.

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Income Taxes (cont.):
Generally, an operating loss that occurs when loss carrybacks are not available (e.g., occurs in a year
following periods of losses) becomes an operating loss carryforward. Banks may carry operating
losses forward 20 years.
Tax credit carryforwards are tax credits which cannot be used for tax purposes in the current year, but
which can be carried forward to reduce taxes payable in a future period.
Deferred tax assets are recognized for operating loss and tax credit carryforwards just as they are for
deductible temporary differences. As a result, a bank can recognize the benefit of a net operating loss
for tax purposes or a tax credit carryforward to the extent the bank determines that a valuation
allowance is not considered necessary (i.e., if the realization of the benefit is more likely than not).
Applicable tax rate -- The income tax rate to be used in determining deferred tax assets and liabilities is
the rate under current tax law that is expected to apply to taxable income in the periods in which the
deferred tax assets or liabilities are expected to be realized or paid. If the bank's income level is such
that graduated tax rates are a significant factor, then the bank shall use the average graduated tax rate
applicable to the amount of estimated taxable income in the period in which the deferred tax asset or
liability is expected to be realized or settled. When the tax law changes, banks shall determine the
effect of the change, adjust the deferred tax asset or liability and include the effect of the change in
Schedule RI, item 9, "Applicable income taxes (on item 8)."
Valuation allowance – A valuation allowance must be recorded, if needed, to reduce the amount of
deferred tax assets to an amount that is more likely than not to be realized. Changes in the valuation
allowance generally shall be reported in Schedule RI, item 9, "Applicable income taxes (on item 8)."
The following discussion of the valuation allowance relates to the allowance, if any, included in the
amount of net deferred tax assets or liabilities to be reported on the balance sheet (Schedule RC) and
in Schedule RC-F, item 2, or Schedule RC-G, item 2. This discussion does not address the
determination of the amount of deferred tax assets, if any, that is disallowed for regulatory capital
purposes and reported in Schedule RC-R, item 9.b.
Banks must consider all available evidence, both positive and negative, in assessing the need for a
valuation allowance. The future realization of deferred tax assets ultimately depends on the existence
of sufficient taxable income of the appropriate character in either the carryback or carryforward period.
Four sources of taxable income may be available to realize the deferred tax assets:
(1) Taxable income in carryback years (which can be offset to recover taxes previously paid),
(2) Reversing taxable temporary differences,
(3) Future taxable income (exclusive of reversing temporary differences and carryforwards.
(4) Tax-planning strategies.
In general, positive evidence refers to the existence of one or more of the four sources of taxable
income. To the extent evidence about one or more sources of income is sufficient to support a
conclusion that a valuation allowance is not necessary (i.e., the bank can conclude that the deferred
tax asset is more likely than not to be realized), other sources need not be considered. However, if a
valuation allowance is needed, each source of income must be evaluated to determine the appropriate
amount of the allowance needed.
Evidence used in determining the valuation allowance should be subject to objective verification. The
weight given to evidence when both positive and negative evidence exist should be consistent with the
extent to which it can be verified. Sources (1) and (2) listed above are more susceptible to objective
verification and, therefore, may provide sufficient evidence regardless of future events.

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Income Taxes (cont.):
The consideration of future taxable income (exclusive of reversing temporary differences and
carryforwards) as a source for the realization of deferred tax assets will require subjective estimates
and judgments about future events which may be less objectively verifiable.
Examples of negative evidence include:
•
•
•
•
•

Cumulative losses in recent years.
A history of operating loss or tax credit carryforwards expiring unused.
Losses expected in early future years by a presently profitable bank.
Unsettled circumstances that, if unfavorably resolved, would adversely affect future profit levels.
A brief carryback or carryforward that would limit the ability to realize the deferred tax asset.

Examples of positive evidence include:
•
•
•

A strong earnings history exclusive of the loss that created the future deductible amount (tax loss
carryforward or deductible temporary difference) coupled with evidence indicating that the loss is
an aberration rather than a continuing condition.
Existing contracts that will generate significant income.
An excess of appreciated asset value over the tax basis of an entity's net assets in an amount
sufficient to realize the deferred tax asset.

When realization of a bank's deferred tax assets is dependent upon future taxable income, the
reliability of a bank's projections is very important. The bank's record in achieving projected results
under an actual operating plan will be a strong measure of this reliability. Other factors a bank should
consider in evaluating evidence about its future profitability include but are not limited to current and
expected economic conditions, concentrations of credit risk within specific industries and geographical
areas, historical levels and trends in past due and nonaccrual assets, historical levels and trends in
loan loss reserves, and the bank's interest rate sensitivity.
When strong negative evidence, such as the existence of cumulative losses, exists, it is extremely
difficult for a bank to determine that no valuation allowance is needed. Positive evidence of significant
quality and quantity would be required to counteract such negative evidence.
For purposes of determining the valuation allowance, a tax-planning strategy is a prudent and feasible
action that would result in realization of deferred tax assets and that management ordinarily might not
take, but would do so to prevent an operating loss or tax credit carryforward from expiring unused. For
example, a bank could accelerate taxable income to utilize carryforwards by selling or securitizing loan
portfolios, selling appreciated securities, or restructuring nonperforming assets. Actions that
management would take in the normal course of business are not considered tax-planning strategies.
Significant expenses to implement the tax-planning strategy and any significant losses that would result
from implementing the strategy shall be considered in determining any benefit to be realized from the
tax-planning strategy. Also, banks should consider all possible consequences of any tax-planning
strategies. For example, loans pledged as collateral would not be available for sale.
The determination of whether a valuation allowance is needed for deferred tax assets should be made
for total deferred tax assets, not for deferred tax assets net of deferred tax liabilities. In addition, the
evaluation should be made on a jurisdiction-by-jurisdiction basis. Separate analyses should be
performed for amounts related to each taxing authority (e.g., federal, state, and local).
Deferred tax assets (net of the valuation allowance) and deferred tax liabilities related to a particular
tax jurisdiction (e.g., federal, state, and local) may be offset against each other for reporting purposes.
A resulting debit balance shall be included in "Other assets" and reported in Schedule RC-F, item 2. A

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Income Taxes (cont.):
resulting credit balance shall be included in "Other liabilities" and reported in Schedule RC-G, item 2.
(A bank may report a net deferred tax debit, or asset, for one tax jurisdiction (e.g., federal taxes) and
also report a net deferred tax credit, or liability, for another tax jurisdiction (e.g., state taxes).
Interim period applicable income taxes – When preparing its year-to-date Report of Income as of the
end of March, June, and September ("interim periods"), a bank generally should determine its best
estimate of its effective annual tax rate for the full year, including both current and deferred portions
and considering all tax jurisdictions (e.g., federal, state and local). To arrive at its estimated effective
annual tax rate, a bank should divide its estimated total applicable income taxes (current and deferred)
for the year by its estimated pretax income for the year (excluding extraordinary items). This rate
would then be applied to the year-to-date pretax income to determine the year-to-date applicable
income taxes at the interim date.
Intraperiod allocation of income taxes – When the Report of Income for a period includes
"Extraordinary items and other adjustments" that are reportable in Schedule RI, item 11, the total
amount of the applicable income taxes for the year to date shall be allocated in Schedule RI between
item 9, "Applicable income taxes (on item 8)," and item 11, "Extraordinary items and other adjustments,
net of income taxes."
The applicable income taxes on operating income (item 9) shall be the amount that the total applicable
income taxes on pretax income, including both current and deferred taxes (calculated as described
above), would have been for the period had "Extraordinary items and other adjustments" been zero.
The difference between item 9, "Applicable income taxes (on item 8)," and the total amount of the
applicable taxes shall then be reflected in item 11 as applicable income taxes on extraordinary items
and other adjustments.
Tax calculations by tax jurisdiction – Separate calculations of income taxes, both current and deferred
amounts, are required for each tax jurisdiction. However, if the tax laws of the state and local
jurisdictions do not significantly differ from federal income tax laws, then the calculation of deferred
income tax expense can be made in the aggregate. The bank would calculate both current and
deferred tax expense considering the combination of federal, state and local income tax rates. The
rate used should consider whether amounts paid in one jurisdiction are deductible in another
jurisdiction. For example, since state and local taxes are deductible for federal purposes, the
aggregate combined rate would generally be (1) the federal tax rate plus (2) the state and local tax
rates minus (3) the federal tax effect of the deductibility of the state and local taxes at the federal tax
rate.
Income taxes of a bank subsidiary of a holding company – A bank should generally report income tax
amounts in its Reports of Condition and Income as if it were a separate entity. A bank's separate entity
taxes include taxes of subsidiaries of the bank that are included with the bank in a consolidated tax
return. In other words, when a bank has subsidiaries of its own, the bank and its consolidated
subsidiaries are treated as one separate taxpayer for purposes of computing the bank's applicable
income taxes. This treatment is also applied in determining net deferred tax asset limitations for
regulatory capital purposes.
During profitable periods, a bank subsidiary of a holding company that files a consolidated tax return
should record current tax expense for the amount that would be due on a separate entity basis.
Certain adjustments resulting from the consolidated status may, however, be made to the separate
entity calculation as long as these adjustments are made on a consistent and equitable basis. For
example, the consolidated group's single surtax exemption may be allocated among the holding

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Income Taxes (cont.):
company affiliates if such an allocation is equitable and applied consistently. Such allocations should
be reflected in the bank's applicable income taxes, rather than as "Other transactions with parent
holding company" in Schedule RI-A, Changes in Bank Equity Capital.
In addition, bank subsidiaries should first compute their taxes on a separate entity basis without
considering the alternative minimum tax (AMT). The AMT should be determined on a consolidated
basis, and if it exceeds the regular tax on a consolidated basis, the holding company should allocate
that excess to its affiliates on an equitable and consistent basis. The allocation method must be based
upon the portion of tax preferences, adjustments, and other items causing the AMT to be applicable at
the consolidated level that are generated by the parent holding company and each bank and nonbank
subsidiary. In no case should amounts be allocated to bank subsidiaries that have not generated any
tax preference or positive tax adjustment items. Furthermore, the AMT allocated to banks within the
consolidated group should not exceed the consolidated AMT in any year.
In future years when a consolidated AMT credit carryforward is utilized, the credit must be reallocated
to the subsidiary banks. The allocation should be done on an equitable and consistent basis based
upon the amount of AMT giving rise to the credit that had been previously allocated. In addition, the
amount of AMT credit reallocated to affiliates within the consolidated group should not exceed the
consolidated AMT credit in any year. All AMT allocations should be reflected in the bank's applicable
income taxes, rather than as "Other transactions with parent holding company" in Schedule RI-A,
Changes in Bank Equity Capital.
Similarly, bank subsidiaries incurring a loss should record an income tax benefit and receive an
equitable refund from their parent, if appropriate. The refund should be based on the amount they
would have received on a separate entity basis, adjusted for statutory tax considerations, and shall be
made on a timely basis.
An exception to this rule is made when the bank, on a separate entity basis, would not be entitled to a
current refund because it has exhausted benefits available through carryback on a separate entity
basis, yet the holding company can utilize the bank's tax loss to reduce the consolidated liability for the
current year. In this situation, realization of the tax benefit is assured. Accordingly, the bank may
recognize a current tax benefit in the year in which the operating loss occurs, provided the holding
company reimburses the bank on a timely basis for the amount of benefit recognized. Any such tax
benefits recognized in the loss year should be reflected in the bank's applicable income taxes and not
as an extraordinary item. If timely reimbursement is not made, the bank cannot recognize the tax
benefit in the current year. Rather, the tax loss becomes a net operating loss carryforward for the
bank.
A parent holding company shall not adopt an arbitrary tax allocation policy within its consolidated group
if it results in a significantly different amount of subsidiary bank applicable income taxes than would
have been provided on a separate entity basis. If a holding company forgives payment by the
subsidiary of all or a significant portion of the current portion of the applicable income taxes computed
in the manner discussed above, such forgiveness should be treated as a capital contribution and
reported in Schedule RI-A in "Other transactions with parent holding company" and in Schedule RI-E,
item 5.
Further, if the subsidiary bank pays an amount greater than its separate entity current tax liability
(calculated as previously discussed), the excess should be reported as a cash dividend to the holding
company in Schedule RI-A, item 9. Payment by the bank of its deferred tax liability, in addition to its
current tax liability, is considered an excessive payment of taxes. As a result, the deferred portion
should likewise be reported as a cash dividend. Failure to pay the subsidiary bank an equitable refund
attributable to the bank's net operating loss should also be considered a cash dividend paid by the
bank to the parent holding company.

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Income Taxes (cont.):
Purchase business combinations -- In purchase business combinations (as described in the Glossary
entry for "business combinations"), banks shall recognize as a temporary difference the difference
between the tax basis of acquired assets or liabilities and the amount of the purchase price allocated to
the acquired assets and liabilities (with certain exceptions specified in ASC Topic 740). As a result, the
acquired asset or liability shall be recorded gross and a deferred tax asset or liability shall be recorded
for any resulting temporary difference.
In a purchase business combination, a deferred tax asset shall generally be recognized at the date of
acquisition for deductible temporary differences and net operating loss and tax credit carryforwards of
either company in the transaction, net of an appropriate valuation allowance. The determination of the
valuation allowance should consider any provisions in the tax law that may restrict the use of an
acquired company's carryforwards.
Subsequent recognition (i.e., by elimination of the valuation allowance) of the benefit of deductible
temporary differences and net operating loss or tax credit carryforwards not recognized at the
acquisition date will depend on the source of the benefit. If the valuation allowance relates to
deductible temporary differences and carryforwards of the acquiring company established before the
acquisition, then subsequent recognition is reported as a reduction of income tax expense. If the
benefit is related to the acquired company's deductible temporary differences and carryforwards, then
the benefit is subsequently recognized by first reducing any goodwill related to the acquisition, then by
reducing all other noncurrent intangible assets related to the acquisition, and finally, by reducing
income tax expense.
Alternative Minimum Tax – Any taxes a bank must pay in accordance with the alternative minimum tax
(AMT) shall be included in the bank's current tax expense. Amounts of AMT paid can be carried
forward in certain instances to reduce the bank's regular tax liability in future years. The bank may
record a deferred tax asset for the amount of the AMT credit carryforward, which shall then be
evaluated in the same manner as other deferred tax assets to determine whether a valuation allowance
is needed.
Other tax effects – A bank may have transactions or items that are reportable in Schedule RI-A of the
Report of Income such as "Restatements due to corrections of material accounting errors and changes
in accounting principles," and, on the FFIEC 031 only, "Foreign currency translation adjustments" that
are included in “Other comprehensive income.” These transactions or other items will enter into the
determination of taxable income in some year (not necessarily the current year), but are not included in
the pretax income reflected in Schedule RI of the Report of Income. They shall be reported in
Schedule RI-A net of related income tax effects. These effects may increase or decrease the bank's
total tax liability calculated on its tax returns for the current year or may be deferred to one or more
future periods.
For further information, see ASC Topic 740.

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Income Taxes (cont.):
The following table has been included to aid banks in calculating their "applicable income taxes" for
purposes of the Reports of Condition and Income. The table includes the tax rates in effect for the
years presented.

FEDERAL INCOME TAX RATES APPLICABLE TO BANKS

Year
1993-2013

First
$25,000
15%

Second
$25,000
15%

Third
$25,000
25%

Fourth
$25,000
34%

Over
$100,000
1

Capital Alternative
Gains Minimum Tax
Regular
tax rates

20%

Intangible Assets: See "business combinations" and the instruction to Report of Condition
Schedule RC-M, item 2.
Interest-Bearing Account: See "deposits."
Interest Capitalization: See "capitalization of interest costs."
Interest Rate Swaps: See "derivative contracts."
Internal-Use Computer Software: Guidance on the accounting and reporting for the costs of
internal-use computer software is set forth in ASC Subtopic 350-40, Intangibles-Goodwill and Other –
Internal-Use Software (formerly AICPA Statement of Position 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use"). A summary of this accounting guidance
follows. For further information, see ASC Subtopic 350-40.
Internal-use computer software is software that meets both of the following characteristics:
(1) The software is acquired, internally developed, or modified solely to meet the bank's internal
needs; and
(2) During the software's development or modification, no substantive plan exists or is being
developed to market the software externally.
ASC Subtopic 350-40 identifies three stages of development for internal-use software: the preliminary
project stage, the application development stage, and the post-implementation/operation stage. The
processes that occur during the preliminary project stage of software development are the conceptual
formulation of alternatives, the evaluation of alternatives, the determination of the existence of needed
technology, and the final selection of alternatives. The application development stage involves the
design of the chosen path (including software configuration and software interfaces), coding,
installation of software to hardware, and testing (including the parallel processing phase). Generally,
training and application maintenance occur during the post-implementation/operation stage. Upgrades
of and enhancements to existing internal-use software, i.e., modifications to software that result in
additional functionality, also go through the three aforementioned stages of development.
1

A 39% tax rate applies to taxable income from $100,001 to $335,000; a 34% tax rate applies to taxable income
from $335,001 to $10,000,000; a tax rate of 35% applies to taxable income from $10,000,001 to $15,000,000; a tax
rate of 38% applies to taxable income from $15,000,001 to $18,333,333; and a 35% tax rate applies to taxable
income over $18,333,333.

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Internal-Use Computer Software (cont.):
Computer software costs that are incurred in the preliminary project stage should be expensed as
incurred.
Internal and external costs incurred to develop internal-use software during the application
development stage should be capitalized. Capitalization of these costs should begin once
(a) the preliminary project stage is completed and (b) management, with the relevant authority,
implicitly or explicitly authorizes and commits to funding a computer software project and it is probable
that the project will be completed and the software will be used to perform the function intended.
Capitalization should cease no later than when a computer software project is substantially complete
and ready for its intended use, i.e., after all substantial testing is completed. Capitalized internal-use
software costs generally should be amortized on a straight-line basis over the estimated useful life of
the software.
Only the following application development stage costs should be capitalized:
(1) External direct costs of materials and services consumed in developing or obtaining internal-use
software;
(2) Payroll and payroll-related costs for employees who are directly associated with and who devote
time to the internal-use computer software project (to the extent of the time spent directly on the
project); and
(3) Interest costs incurred when developing internal-use software.
Costs to develop or obtain software that allows for access or conversion of old data by new systems
also should be capitalized. Otherwise, data conversion costs should be expensed as incurred.
General and administrative costs and overhead costs should not be capitalized as internal-use
software costs.
During the post-implementation/operation stage, internal and external training costs and maintenance
costs should be expensed as incurred.
Impairment of capitalized internal-use computer software costs should be recognized and measured in
accordance with ASC Topic 360, Property, Plant, and Equipment (formerly FASB Statement No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets").
The costs of internally developed computer software to be sold, leased, or otherwise marketed as a
separate product or process should be reported in accordance with ASC Subtopic 985-20, Software –
Costs of Software to Be Sold, Leased or Marketed (formerly FASB Statement No. 86, "Accounting for
the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed"). If, after the
development of internal-use software is completed, a bank decides to market the software, proceeds
received from the license of the software, net of direct incremental marketing costs, should be applied
against the carrying amount of the software.
International Banking Facility (IBF): General definition – An International Banking Facility (IBF) is a set of
asset and liability accounts, segregated on the books and records of the establishing entity, which reflect
international transactions. An IBF is established in accordance with the terms of Federal
Reserve Regulation D and after appropriate notification to the Federal Reserve. The establishing entity
may be a U.S. depository institution, a U.S. office of an Edge or Agreement corporation, or a U.S.
branch or agency of a foreign bank pursuant to Federal Reserve Regulations D and Q. An IBF is
permitted to hold only certain assets and liabilities. In general, IBF accounts are limited, as specified in
the paragraphs below, to non-U.S. residents of foreign countries, residents of Puerto Rico and U.S.
territories and possessions, other IBFs, and U.S. and non-U.S. offices of the establishing entity.

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International Banking Facility (IBF) (cont.):
Permissible IBF assets include extensions of credit to the following:
(1) non-U.S. residents (including foreign branches of other U.S. banks);
(2) other IBFs; and
(3) U.S. and non-U.S. offices of the establishing entity.
Credit may be extended to non-U.S. nonbank residents only if the funds are used in their operations
outside the United States. IBFs may extend credit in the form of a loan, deposit, placement, advance,
security, or other similar asset.
Permissible IBF liabilities include (as specified in Federal Reserve Regulations D and Q) liabilities to
non-U.S. nonbank residents only if such liabilities have a minimum maturity or notice period of at least
two business days. IBF liabilities also may include overnight liabilities to:
(1)
(2)
(3)
(4)
(5)

non-U.S. offices of other depository institutions and of Edge or Agreement corporations;
non-U.S. offices of foreign banks;
foreign governments and official institutions;
other IBFs; and
the establishing entity.

IBF liabilities may be issued in the form of deposits, borrowings, placements, and other similar
instruments. However, IBFs are prohibited from issuing negotiable certificates of deposit, bankers
acceptances, or other negotiable or bearer instruments.
Treatment of the reporting bank's IBFs in the Reports of Condition and Income – IBFs established by
the reporting bank (i.e., by the bank or by its Edge or Agreement subsidiaries) are to be consolidated in
the Reports of Condition and Income. In the consolidated balance sheet (Schedule RC) and income
statement (Schedule RI), transactions between the IBFs of the reporting bank and between these IBFs
and other offices of the bank are to be eliminated. (See the discussion of consolidation in the General
Instructions section of this book.)
For purposes of these reports, the reporting bank's IBFs are to be treated as foreign offices of the
bank. Thus, a bank with an IBF, even if it has no other foreign offices, must submit the Reports
of Condition and Income applicable to banks with foreign offices (FFIEC 031). Similarly, the reporting
bank's IBFs are to be treated as foreign offices where, in the supporting schedules, a distinction is
made between foreign and domestic offices of the reporting bank.
Assets of the reporting bank's IBFs should be reported in the asset categories of the report by type of
instrument and customer, as appropriate. For example, IBFs are to report their holdings of securities in
Schedule RC, item 2, and in the appropriate items of Schedule RC-B; their holdings of loans that the
IBF has the intent and ability to hold for the foreseeable future or until maturity or payoff (including
loans of immediately available funds that have an original maturity of one business day or roll over
under a continuing contract that are not securities resale agreements) in Schedule RC, item 4.b, and in
the appropriate items of Schedule RC-C, part I; and securities purchased under agreements to resell in
Schedule RC, item 3.b.
For purposes of these reports, all liabilities of the reporting bank's IBFs to outside parties are classified
under four headings:
(1) Securities sold under agreements to repurchase, which are to be reported in Schedule RC,
item 14.b;

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International Banking Facility (IBF) (cont.):
(2) Borrowings of immediately available funds that have an original maturity of one business day or roll
over under a continuing contract that are not securities repurchase agreements, which are to be
reported in Schedule RC-M, item 5.b;
(3) Accrued liabilities, which are to be reported in Schedule RC, item 20; and
(4) All other liabilities, including deposits, placements, and borrowings, which are to be treated as
deposit liabilities in foreign offices and reported in Schedule RC, item 13.b, and by customer detail
in Schedule RC-E, part II.
In addition to being included in the appropriate items of the balance sheet, the total assets and total
liabilities of the reporting bank's IBFs are to be reported separately in Schedule RC-I, Assets and
Liabilities of IBFs, by banks with IBFs and other "foreign" offices. For a bank whose only foreign offices
are IBFs, the total assets and liabilities of the reporting bank's IBFs are not reported separately in
Schedule RC-I, but are derived from Schedule RC-H, Selected Balance Sheet Items for Domestic
Offices.
Treatment of transactions with IBFs of other depository institutions – Transactions between the
reporting bank and IBFs outside the scope of the reporting bank's consolidated Reports of
Condition and Income are to be reported as transactions with depository institutions in the U.S., as
appropriate. (Note, however, that only foreign offices of the reporting bank and the reporting bank's
IBFs are permitted to have transactions with other IBFs.)
Interoffice Accounts: See "suspense accounts."
Investments in Common Stock of Unconsolidated Subsidiaries: See “equity method of accounting”
and “subsidiaries.”
Joint Venture: See "subsidiaries."
Lease Accounting: A lease is an agreement that transfers the right to use land, buildings, or equipment
for a specified period of time. This financing device is essentially an extension of credit evidenced by
an obligation between a lessee and a lessor.
Standards for lease accounting are set forth in ASC Topic 840, Leases (formerly FASB Statement
No. 13, "Accounting for Leases," as amended and interpreted).
Accounting with bank as lessee – Any lease entered into by a lessee bank that meets certain criteria
(defined in the following paragraph) shall be accounted for as a property acquisition financed with a
debt obligation. The property shall be amortized according to the bank's normal depreciation policy
(except, if appropriate, the amortization period shall be the lease term) unless the lease involves land
only. The interest expense portion of each lease payment shall be calculated to result in a constant
rate of interest on the balance of the debt obligation. In the Report of Condition, the property "asset" is
to be reported in Schedule RC, item 6, and the liability for capitalized leases in Schedule RC-M,
item 5.b, "Other borrowings." In the Report of Income, the interest expense portion of the capital lease
payments is to be reported in Schedule RI, item 2.c, "Interest on trading liabilities and other borrowed
money," and the amortization expense on the asset is to be reported in Schedule RI, item 7.b,
"Expenses of premises and fixed assets."
If any one of the following criteria is met, a lease must be accounted for as a capital lease:
(1) ownership of the property is transferred to the lessee at the end of the lease term, or
(2) the lease contains a bargain purchase option, or

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Lease Accounting (cont.):
(3) the lease term represents at least 75 percent of the estimated economic life of the leased property,
or
(4) the present value of the minimum lease payments at the beginning of the lease term is 90 percent
or more of the fair value of the leased property to the lessor at the inception of the lease less any
related investment tax credit retained by and expected to be realized by the lessor.
If none of the above criteria is met, the lease should be accounted for as an operating lease. Normally,
rental payments should be charged to expense over the term of the operating lease as they become
payable.
NOTE: If a lease involves land only, the lease must be capitalized if either of the first two criteria
above is met. Where a lease that involves land and building meets either of these two criteria, the land
and building must be separately capitalized by the lessee. The accounting for a lease involving land
and building that meets neither of the first two criteria should conform to the standards prescribed by
ASC Topic 840.
Accounting for sales with leasebacks – Sale-leaseback transactions involve the sale of property by the
owner and a lease of the property back to the seller. If a bank sells premises or fixed assets and
leases back the property, the lease shall be treated as a capital lease if it meets any one of the four
criteria above for capitalization. Otherwise, the lease shall be accounted for as an operating lease.
As a general rule, the bank shall defer any gain resulting from the sale. For capital leases, this
deferred gain is amortized in proportion to the depreciation taken on the leased asset. For operating
leases, the deferred gain is amortized in proportion to the rental payments the bank will make over the
lease term. The unamortized deferred gain is to be reported in Schedule RC-G, item 4, "Other"
liabilities. (Exceptions to the general rule on deferral that permit full or partial recognition of a gain at
the time of the sale may occur if the leaseback covers less than substantially all of the property that
was sold or if the total gain exceeds the minimum lease payments.)
If the fair value of the property at the time of the sale is less than the book value of the property, the
difference between these two amounts shall be recognized as a loss immediately. In this case, if the
sales price is less than the fair value of the property, the additional loss shall be deferred since it is in
substance a prepayment of rent. Similarly, if the fair value of the property sold is greater than its book
value, any loss on the sale shall also be deferred. Deferred losses shall be amortized in the same
manner as deferred gains as described above.
For further information, see ASC Subtopic 840-40, Leases – Sale-Leaseback Transactions (formerly
FASB Statement No. 28, "Accounting for Sales with Leasebacks").
Accounting with bank as lessor – Unless a long-term creditor is also involved in the transaction, a
lease entered into by a lessor bank that meets one of the four criteria above for a capital lease plus two
additional criteria (as defined below) shall be treated as a direct financing lease. The unearned income
(minimum lease payments plus estimated residual value plus initial direct costs less the cost of the
leased property) shall be amortized to income over the lease term in a manner which produces a
constant rate of return on the net investment (minimum lease payments plus estimated residual value
plus initial direct costs less unearned income). Other methods of income recognition may be used if
the results are not materially different.
The following two additional criteria must be met for a lease to be classified as a direct financing lease:
(1) Collectability of the minimum lease payments is reasonably predictable.
(2) No important uncertainties surround the amount of unreimbursable costs yet to be incurred by the
lessor under the lease.

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Lease Accounting (cont.):
When a lessor bank enters into a lease that has all the characteristics of a direct financing lease but
where a long-term creditor provides nonrecourse financing to the lessor, the transaction shall be
accounted for as a leveraged lease. The lessor's net investment in a leveraged lease shall be
recorded in a manner similar to that for a direct financing lease but net of the principal and interest on
the nonrecourse debt. Based on a projected cash flow analysis for the lease term, unearned and
deferred income shall be amortized to income at a constant rate only in those years of the lease term in
which the net investment is positive. In the years in which the net investment is not positive, no income
is to be recognized on the leveraged lease.
If a lease is neither a direct financing lease nor a leveraged lease, the lessor bank shall account for it
as an operating lease. The leased property shall be reported as "Other assets" and depreciated in
accordance with the bank's normal policy. Rental payments are generally credited to income over the
term of an operating lease as they become receivable.
Letter of Credit: A letter of credit is a document issued by a bank on behalf of its customer (the account
party) authorizing a third party (the beneficiary), or in special cases the account party, to draw drafts on
the bank up to a stipulated amount and with specified terms and conditions. The letter of credit is a
conditional commitment (except when prepaid by the account party) on the part of the bank to provide
payment on drafts drawn in accordance with the terms of the document.
As a matter of sound practice, letters of credit should:
(1) be conspicuously labeled as a letter of credit;
(2) contain a specified expiration date or be for a definite term;
(3) be limited in amount;
(4) call upon the issuing bank to pay only upon the presentation of a draft or other documents as
specified in the letter of credit and not require the issuing bank to make determinations of fact or
law at issue between the account party and the beneficiary; and
(5) be issued only subject to an agreement between the account party and the issuing bank that
establishes the unqualified obligation of the account party to reimburse the issuing bank for all
payments made under the letter of credit.
There are four basic types of letters of credit:
(1)
(2)
(3)
(4)

commercial letters of credit,
letters of credit sold for cash,
travelers' letters of credit, and
standby letters of credit,

each of which is discussed separately on the following page.
A commercial letter of credit is issued specifically to facilitate trade or commerce. Under the terms of a
commercial letter of credit, as a general rule, drafts will be drawn when the underlying transaction is
consummated as intended.
A letter of credit sold for cash is a letter of credit for which the bank has received funds from the
account party at the time of issuance. This type of letter of credit is not to be reported as an
outstanding letter of credit but as a demand deposit. These letters are considered to have been sold
for cash even though the bank may have advanced funds to the account party for the purchase of such
letters of credit on a secured or unsecured basis.

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Letter of Credit (cont.):
A travelers' letter of credit is issued to facilitate travel. This letter of credit is addressed by the bank to
its correspondents authorizing the correspondents to honor drafts drawn by the person named in the
letter of credit in accordance with specified terms. These letters are generally sold for cash.
A standby letter of credit is a letter of credit or similar arrangement that:
(1) represents an obligation on the part of the issuing bank to a designated third party (the
beneficiary) contingent upon the failure of the issuing bank's customer (the account party) to
perform under the terms of the underlying contract with the beneficiary, or
(2) obligates the bank to guarantee or stand as surety for the benefit of a third party to the extent
permitted by law or regulation.
The underlying contract may entail either financial or nonfinancial undertakings of the account party
with the beneficiary. The underlying contract may involve such things as the customer's payment of
commercial paper, delivery of merchandise, completion of a construction contract, release of maritime
liens, or repayment of the account party's obligations to the beneficiary. Under the terms of a standby
letter, as a general rule, drafts will be drawn only when the underlying event fails to occur as intended.
Limited-Life Preferred Stock: See "preferred stock."
Loan: For purposes of these reports, a loan is generally an extension of credit resulting from direct
negotiations between a lender and a borrower. The reporting bank may originate a loan by directly
negotiating with a borrower or it may purchase a loan or a portion of a loan originated by another
lender that directly negotiated with a borrower. The reporting bank may also sell a loan or a portion of
a loan, regardless of the method by which it acquired the loan.
Loans may take the form of promissory notes, acknowledgments of advance, due bills, invoices,
overdrafts, acceptances, and similar written or oral obligations.
Among the extensions of credit reportable as loans in Schedule RC-C, which covers both loans held for
sale and loans that the reporting bank has the intent and ability to hold for the foreseeable future or
until maturity or payoff, are:
(1) acceptances of other banks purchased in the open market, not held for trading;
(2) acceptances executed by or for the account of the reporting bank and subsequently acquired by it
through purchase or discount;
(3) customers' liability to the reporting bank on drafts paid under letters of credit for which the bank
has not been reimbursed;
(4) "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;
(5) paper pledged by the bank whether for collateral to secure bills payable (e.g., margin collateral to
secure bills rediscounted) or for any other purpose;
(6) sales of so-called "term federal funds" (i.e., sales of immediately available funds with a maturity of
more than one business day), other than those involving security resale agreements;
(7) factored accounts receivable;

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Loan (cont.):
(8) loans arising out of the purchase of assets (other than securities) under resale agreements with a
maturity of more than one business day if the agreement requires the bank to resell the identical
asset purchased; and
(9) participations (acquired or held) in a single loan or in a pool of loans or receivables (see the
discussion of loan participations in the Glossary entry for "transfers of financial assets").
Loan assets held for trading are to be reported in Schedule RC, item 5, "Trading assets."
See also "loan secured by real estate," "overdraft," and "transfers of financial assets."
Loan Fees: The accounting standards for nonrefundable fees and costs associated with lending,
committing to lend, and purchasing a loan or group of loans are set forth in ASC Subtopic 310-20,
Receivables – Nonrefundable Fees and Other Costs (formerly FASB Statement No. 91, "Accounting
for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct
Costs of Leases"), a summary of which follows. The statement applies to all types of loans as well as
to debt securities (but not to loans or debt securities carried at fair value if the changes in fair value are
included in earnings) and to all types of lenders. For further information, see ASC Subtopic 310-20.
A bank may acquire a loan by originating the loan (lending) or by acquiring a loan from a party other
than the borrower (purchasing). Lending, committing to lend, refinancing or restructuring loans,
arranging standby letters of credit, syndicating loans, and leasing activities are all considered "lending
activities." Nonrefundable loan fees paid by the borrower to the lender may have many different
names, such as origination fees, points, placement fees, commitment fees, application fees,
management fees, restructuring fees, and syndication fees, but in this Glossary entry, they are referred
to as loan origination fees, commitment fees, or syndication fees.
ASC Subtopic 310-20 applies to both a lender and a purchaser, and should be applied to individual
loan contracts. Aggregation of similar loans for purposes of recognizing net fees or costs and
purchase premiums or discounts is permitted under certain circumstances specified in ASC
Subtopic 310-20 or if the result does not differ materially from the amount that would have been
recognized on an individual loan-by-loan basis. In general, the statement specifies that:
(1) Loan origination fees should be deferred and recognized over the life of the related loan as an
adjustment of yield (interest income). Once a bank adopts ASC Subtopic 310-20, recognizing a
portion of loan fees as revenue to offset all or part of origination costs in the reporting period in
which a loan is originated is no longer acceptable.
(2) Certain direct loan origination costs specified in the Statement should be deferred and recognized
over the life of the related loan as a reduction of the loan's yield. Loan origination fees and related
direct loan origination costs for a given loan should be offset and only the net amount deferred
and amortized.
(3) Direct loan origination costs should be offset against related commitment fees and the net
amounts deferred except for: (a) commitment fees (net of costs) where the likelihood of exercise
of the commitment is remote, which generally should be recognized as service fee income on a
straight line basis over the loan commitment period, and (b) retrospectively determined fees,
which are recognized as service fee income on the date as of which the amount of the fee is
determined. All other commitment fees (net of costs) shall be deferred over the entire
commitment period and recognized as an adjustment of yield over the related loan's life or, if the
commitment expires unexercised, recognized in income upon expiration of the commitment.

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Loan Fees (cont.):
(4) Loan syndication fees should be recognized by the bank managing a loan syndication (the
syndicator) when the syndication is complete unless a portion of the syndication loan is retained.
If the yield on the portion of the loan retained by the syndicator is less than the average yield to
the other syndication participants after considering the fees passed through by the syndicator, the
syndicator should defer a portion of the syndication fee to produce a yield on the portion of the
loan retained that is not less than the average yield on the loans held by the other syndication
participants.
(5) Loan fees, certain direct loan origination costs, and purchase premiums and discounts on loans
shall be recognized as an adjustment of yield generally by the interest method based on the
contractual term of the loan. However, if the bank holds a large number of similar loans for which
prepayments are probable and the timing and amount of prepayments can be reasonably
estimated, the bank may consider estimates of future principal prepayments in the calculation of
the constant effective yield necessary to apply the interest method. Once a bank adopts ASC
Subtopic 310-20, the practice of recognizing fees over the estimated average life of a group of
loans is no longer acceptable.
(6) A refinanced or restructured loan, other than a troubled debt restructuring, should be accounted
for as a new loan if the terms of the new loan are at least as favorable to the lender as the terms
for comparable loans to other customers with similar collection risks who are not refinancing or
restructuring a loan. Any unamortized net fees or costs and any prepayment penalties from the
original loan should be recognized in interest income when the new loan is granted. If the
refinancing or restructuring does not meet these conditions or if only minor modifications are made
to the original loan contract, the unamortized net fees or costs from the original loan and any
prepayment penalties should be carried forward as a part of the net investment in the new loan.
The investment in the new loan should consist of the remaining net investment in the original loan,
any additional amounts loaned, any fees received, and direct loan origination costs associated
with the transaction. In a troubled debt restructuring involving a modification of terms, fees
received should be applied as a reduction of the recorded investment in the loan, and all related
costs, including direct loan origination costs, should be charged to expense as incurred. (See the
Glossary entry for "troubled debt restructurings" for further guidance.)
(7) Deferred net fees or costs shall not be amortized during periods in which interest income on a
loan is not being recognized because of concerns about realization of loan principal or interest.
Direct loan origination costs of a completed loan are defined to include only (a) incremental direct costs
of loan origination incurred in transactions with independent third parties for that particular loan and
1
(b) certain costs directly related to specified activities performed by the lender for that particular loan.
Incremental direct costs are costs to originate a loan that (a) result directly from and are essential to the
lending transaction and (b) would not have been incurred by the lender had that lending transaction not
occurred. The specified activities performed by the lender are evaluating the prospective borrower's
financial condition; evaluating and recording guarantees, collateral, and other security arrangements;
negotiating loan terms; preparing and processing loan documents; and closing the transaction. The
costs directly related to those activities include only that portion of the employees' total compensation
and payroll-related fringe benefits directly related to time spent performing those activities for that
particular loan and other costs related to those activities that would not have been incurred but for that
particular loan.

1

For purposes of these reports, a bank which deems its costs for these lending activities not to be material and
which need not maintain records on a loan-by-loan basis for other purposes may expense such costs as incurred.

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Loan Fees (cont.):
All other lending-related costs, whether or not incremental, should be charged to expense as incurred,
including costs related to activities performed by the lender for advertising, identifying potential
borrowers, soliciting potential borrowers, servicing existing loans, and other ancillary activities related
to establishing and monitoring credit policies, supervision, and administration. Employees'
compensation and fringe benefits related to these activities, unsuccessful loan origination efforts, and
idle time should be charged to expense as incurred. Administrative costs, rent, depreciation, and all
other occupancy and equipment costs are considered indirect costs and should be charged to expense
as incurred.
Net unamortized loan fees represent an adjustment of the loan yield, and shall be reported in the same
manner as unearned income on loans, i.e., deducted from the related loan balances (to the extent
possible) or deducted from total loans in "Any unearned income on loans reflected in items 1-9 above"
in Schedule RC-C, part I. Net unamortized direct loan origination costs shall be added to the related
loan balances in Schedule RC-C, part I. Amounts of loan origination, commitment, and other fees and
costs recognized as an adjustment of yield should be reported under the appropriate subitem of item 1,
"Interest income," in Schedule RI. Other fees, such as (a) commitment fees that are recognized during
the commitment period or included in income when the commitment expires (i.e., fees retrospectively
determined and fees for commitments where exercise is remote) and (b) syndication fees that are not
deferred, should be reported as "Other noninterest income" on Schedule RI.
Loan Impairment: The accounting standard for impaired loans is ASC Topic 310, Receivables (formerly
FASB Statement No. 114, "Accounting by Creditors for Impairment of a Loan," as amended). For
further information, refer to ASC Topic 310.
Each institution is responsible for maintaining an allowance for loan and lease losses (allowance) at a
level that is appropriate to cover estimated credit losses in its entire portfolio of loans and leases held
for investment, i.e., loans and leases that the bank has the intent and ability to hold for the foreseeable
future or until maturity or payoff. ASC Topic 310 sets forth measurement methods for estimating the
portion of the overall allowance for loan and lease losses attributable to individually impaired loans.
For the remainder of the portfolio, an appropriate allowance must be maintained in accordance with
ASC Subtopic 450-20, Contingencies – Loss Contingencies (formerly FASB Statement No. 5,
“Accounting for Contingencies”). For comprehensive guidance on the maintenance of an appropriate
allowance, banks should refer to the Interagency Policy Statement on the Allowance for Loan and
Lease Losses dated December 13, 2006, and the Glossary entry for “allowance for loan and lease
losses." National banks should also refer to the Office of the Comptroller of the Currency's Handbook
for National Bank Examiners discussing the allowance for loan and lease losses.
In general, loans are impaired under ASC Topic 310 when, based on current information and events, it
is probable that an institution will be unable to collect all amounts due (i.e., both principal and interest)
according to the contractual terms of the original loan agreement. An institution should apply its normal
loan review procedures when identifying loans to be individually evaluated for impairment under
ASC Topic 310. When an individually evaluated loan is deemed impaired under ASC Topic 310, an
institution should choose to measure impairment using (1) the present value of expected future cash
flows discounted at the loan’s effective interest rate (i.e., the contractual interest rate adjusted for any
net deferred loan fees or costs, premium, or discount existing at the origination or acquisition of the
loan), (2) the loan’s observable market price, or (3) the fair value of the collateral. An institution may
choose the appropriate ASC Topic 310 measurement method on a loan-by-loan basis for an
individually impaired loan, except for an impaired collateral dependent loan. As discussed in the
following paragraph, the agencies require impairment of a collateral dependent loan to be measured
using the fair value of collateral method. A loan is collateral dependent if repayment of the loan is
expected to be provided solely by the underlying collateral and there are no other available and reliable
sources of repayment. A creditor should consider estimated costs to sell, on a discounted basis, in the
measurement of impairment if those costs are expected to reduce the cash flows available to repay

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Loan Impairment (cont.):
or otherwise satisfy the loan. If the measure of an impaired loan is less than the recorded investment
in the loan, an impairment should be recognized by creating an allowance for estimated credit losses
for the impaired loan or by adjusting an existing allowance with a corresponding charge or credit to
"Provision for loan and lease losses."
For purposes of the Reports of Condition and Income, impairment of a collateral dependent loan must
be measured using the fair value of the collateral. In general, any portion of the recorded investment in
an impaired collateral dependent loan (including recorded accrued interest, net deferred loan fees or
costs, and unamortized premium or discount) in excess of the fair value of the collateral that can be
identified as uncollectible should be promptly charged off against the allowance for loan and lease
losses.
An institution should not provide an additional allowance for estimated credit losses on an individually
impaired loan over and above what is specified by ASC Topic 310. The allowance established under
ASC Topic 310 should take into consideration all available information existing as of the Call Report
date that indicates that it is probable that a loan has been impaired. All available information would
include existing environmental factors such as industry, geographical, economic, and political factors
that affect collectibility.
ASC Topic 310 also addresses the accounting by creditors for all loans that are restructured in troubled
debt restructurings involving a modification of terms, except loans that are measured at fair value or the
lower of cost or fair value. According to ASC Topic 310, all loans restructured in troubled debt
restructurings are impaired loans. For guidance on troubled debt restructurings, see the Glossary entry
for "troubled debt restructurings."
As with all other loans, all impaired loans should be reported as past due or nonaccrual loans in
Schedule RC-N in accordance with the schedule's instructions. A loan identified as impaired is one for
which it is probable that the institution will be unable to collect all principal and interest amounts due
according to the contractual terms of the original loan agreement. Therefore, a loan that is not already
in nonaccrual status when it is first identified as impaired will normally meet the criteria for placement in
nonaccrual status at that time. Exceptions may arise when a loan not previously in nonaccrual status
is identified as impaired because its terms have been modified in a troubled debt restructuring, but the
borrower’s sustained historical repayment performance for a reasonable time prior to the restructuring
is consistent with the modified terms of the loan and the loan is reasonably assured of repayment (of
principal and interest) and of performance in accordance with its modified terms. This determination
must be supported by a current, well documented credit evaluation of the borrower's financial condition
and prospects for repayment under the revised terms. Exceptions may also arise for those purchased
credit-impaired loans for which the criteria for accrual of income under the interest method are met as
specified in ASC Subtopic 310-30, Receivables – Loans and Debt Securities Acquired with
Deteriorated Credit Quality (formerly AICPA Statement of Position 03-3, “Accounting for Certain Loans
or Debt Securities Acquired in a Transfer”). Any cash payments received on impaired loans in
nonaccrual status should be reported in accordance with the criteria for the cash basis recognition of
income in the Glossary entry for "nonaccrual status." For further guidance, see the Glossary entries for
“nonaccrual status” and “purchased credit-impaired loans and debt securities.”
Loan Secured by Real Estate: For purposes of these reports, a loan secured by real estate is a loan
that, at origination, is secured wholly or substantially by a lien or liens on real property for which the lien
or liens are central to the extension of the credit – that is, the borrower would not have been extended
credit in the same amount or on terms as favorable without the lien or liens on real property. To be
considered wholly or substantially secured by a lien or liens on real property, the estimated value of the
real estate collateral at origination (after deducting any more senior liens held by others) must be
1
greater than 50 percent of the principal amount of the loan at origination.
1

Banks should apply this revised definition of “loan secured by real estate” prospectively beginning April 1, 2009.
Loans reported on or before March 31, 2009, as loans secured by real estate need not be reevaluated and, if
appropriate, recategorized into other loan categories on Schedule RC-C, part I, Loans and Leases.

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Loan Secured by Real Estate (cont.):
A loan satisfying the criteria above, except a loan to a state or political subdivision in the U.S., is to be
reported as a loan secured by real estate in Schedule RC-C, part I, item 1, and related items in the
Reports of Condition and Income, (1) regardless of whether the loan is secured by a first or a junior
lien; (2) regardless of whether the loan was originated by the reporting bank or purchased from others
and, if originated by the reporting bank, regardless of the department within the bank or bank
subsidiary that made the loan; (3) regardless of how the loan is categorized in the bank’s records;
(4) and regardless of the purpose of the financing. Only in a transaction where a lien or liens on real
property (with an estimated collateral value greater than 50 percent of the loan’s principal amount at
origination) have been taken as collateral solely through an abundance of caution and where the loan
terms as a consequence have not been made more favorable than they would have been in the
absence of the lien or liens, would the loan not be considered a loan secured by real estate for
purposes of the Reports of Condition and Income. In addition, when a loan is partially secured by a
lien or liens on real property, but the estimated value of the real estate collateral at origination (after
deducting any more senior liens held by others) is 50 percent or less of the principal amount of the loan
at origination, the loan should not be categorized as a loan secured by real estate. Instead, the loan
should be reported in one of the other loan categories used in these reports based on the purpose of
the loan.
The following are examples of the application of the preceding guidance:
(1) A bank loans $700,000 to a dental group to construct and equip a building that will be used as its
dental office. The loan will be secured by both the real estate and the dental equipment. At
origination, the estimated values of the building, upon completion, and the equipment are $400,000
and $350,000, respectively. The loan should be reported as a loan secured by real estate in
Schedule RC-C, part I, item 1.a.(2), “Other construction loans and all land development and other
land loans.” In contrast, if the estimated values of the building and equipment at origination were
$340,000 and $410,000, respectively, the loan should not be reported as a loan secured by real
estate. Instead, the loan should be reported in Schedule RC-C, part I, item 4, “Commercial and
industrial loans.”
(2) A bank grants a $25,000 line of credit and a $125,000 term loan to a commercial borrower for
working capital purposes on the same date. The loans will be cross-collateralized by equipment
with an estimated value of $40,000 and a third lien on the borrower’s residence, which has an
estimated value of $140,000 and first and second liens with unpaid balances payable to other
lenders totaling $126,000. The two loans should be considered together to determine whether
they are secured by real estate. Because the estimated equity in the real estate collateral
available to the bank is $14,000, the two cross-collateralized loans for $150,000 should not be
reported as loans secured by real estate. Instead, the loans should be reported in Schedule RC-C,
part I, item 4, “Commercial and industrial loans.”
(3) A bank grants a $50,000 working capital loan and takes a first lien on a vacant commercial building
lot as collateral. The estimated value of the lot is $30,000. The loan should be reported as a loan
secured by real estate in Schedule RC-C, part I, item 1.a.(2), “Other construction loans and all land
development and other land loans,” unless the lien has been taken as collateral solely through an
abundance of caution and where the loan terms as a consequence have not been made more
favorable than they would have been in the absence of the lien.
(4) A bank grants a $10,000 home equity line of credit secured by a junior lien on a 1-4 family
residential property. The bank also has a loan to the same borrower that is secured by a first lien
on the same 1-4 family residential property and has an unpaid principal balance of $71,000. There
are no intervening liens and the line of credit will be used for household, family, and other personal
expenditures. The estimated value of the residential property at the origination of the home equity
line of credit is $75,000. Consistent with the risk-based capital treatment of these loans, the two
loans should be considered together to determine whether the home equity line of credit should be

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Loan Secured by Real Estate (cont.):
reported as a loan secured by real estate. Because the value of the collateral is greater than
50 percent of the first lien balance plus the amount of the home equity line of credit, loans
extended under the line of credit should be reported as loans secured by real estate in
Schedule RC-C, part I, item 1.c.(1), “Revolving, open-end loans secured by 1-4 family residential
properties and extended under lines of credit.” In contrast, if a creditor other than the bank holds
the first lien on the borrower’s property, the estimated value of the collateral to the bank for the
home equity line of credit would have been $4,000 ($75,000 less the $71,000 first lien held by the
other creditor), which is 50 percent or less of the amount of the line of credit at origination. In this
case, the bank should not report loans extended under the line of credit as loans secured by real
estate in Schedule RC-C, part I, item 1. Rather, the loans should be reported as “Loans to
individuals for household, family, and other personal expenditures” in Schedule RC-C, part I,
item 6.b, “Other revolving credit plans.”

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Loss Contingencies: A loss contingency is an existing condition, situation, or set of circumstances that
involves uncertainty as to possible loss that will be resolved when one or more future events occur or
fail to occur. An estimated loss (or expense) from a loss contingency (for example, pending or
threatened litigation) must be accrued by a charge to income if it is probable that an asset has been
impaired or a liability incurred as of the report date and the amount of the loss can be reasonably
estimated.
A contingency that might result in a gain, for example, the filing of an insurance claim, shall not be
recognized as income prior to realization.
For further information, see ASC Subtopic 450-20, Contingencies – Loss Contingencies (formerly
FASB Statement No. 5, "Accounting for Contingencies").
Majority-Owned Subsidiary: See "subsidiaries."
Mandatory Convertible Debt: Mandatory convertible debt is a subordinated note or debenture with a
maturity of 12 years or less that obligates the holder to take the common or perpetual preferred stock
of the issuer in lieu of cash for repayment of principal by a date at or before the maturity date of the
debt instrument (so-called "equity contract notes").
Mergers: See "business combinations."
Money Market Deposit Account (MMDA): See "deposits."
Nonaccrual Status: This entry covers, for purposes of these reports, the criteria for placing assets in
nonaccrual status (presented in the general rule below) and related exceptions, the reversal of
previously accrued but uncollected interest, the treatment of cash payments received on nonaccrual
assets and the criteria for cash basis income recognition, the restoration of a nonaccrual asset to
accrual status, and the treatment of multiple extensions of credit to one borrower.
General rule – Banks shall not accrue interest, amortize deferred net loan fees or costs, or accrete
discount on any asset (1) which is maintained on a cash basis because of deterioration in the financial
condition of the borrower, (2) for which payment in full of principal or interest is not expected, or (3)
upon which principal or interest has been in default for a period of 90 days or more unless the asset is
both well secured and in the process of collection.
An asset is "well secured" if it is secured (1) by collateral in the form of liens on or pledges of real or
personal property, including securities, that have a realizable value sufficient to discharge the debt
(including accrued interest) in full, or (2) by the guarantee of a financially responsible party. An asset is
"in the process of collection" if collection of the asset is proceeding in due course either (1) through
legal action, including judgment enforcement procedures, or, (2) in appropriate circumstances, through
collection efforts not involving legal action which are reasonably expected to result in repayment of the
debt or in its restoration to a current status in the near future.
For purposes of applying the third test for nonaccrual status listed above, the date on which an asset
reaches nonaccrual status is determined by its contractual terms. If the principal or interest on an
asset becomes due and unpaid for 90 days or more on a date that falls between report dates, the asset
should be placed in nonaccrual status as of the date it becomes 90 days past due and it should remain
in nonaccrual status until it meets the criteria for restoration to accrual status described below.
Any state statute, regulation, or rule that imposes more stringent standards for nonaccrual of interest
takes precedence over this instruction.

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Nonaccrual Status (cont.):
Exceptions to the general rule – In the following situations, an asset need not be placed in nonaccrual
status:
(1) The criteria for accrual of income under the interest method specified in ASC Subtopic 310-30,
Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality (formerly
AICPA Statement of Position 03-3, “Accounting for Certain Loans or Debt Securities Acquired in a
Transfer”), are met for a purchased credit-impaired loan, pool of loans, or debt security accounted
for in accordance with that Subtopic, regardless of whether the loan, the loans in the pool, or debt
security had been maintained in nonaccrual status by its seller. (For purchased credit-impaired
loans with common risk characteristics that are aggregated and accounted for as a pool, the
determination of nonaccrual or accrual status should be made at the pool level, not at the individual
loan level.) For further information, see the Glossary entry for "purchased credit-impaired loans
and debt securities."
(2) The criteria for amortization (i.e., accretion of discount) specified in former AICPA Practice Bulletin
No. 6, “Amortization of Discounts on Certain Acquired Loans,” are met with respect to a loan or
other debt instrument accounted for in accordance with that Practice Bulletin that was acquired at a
discount (because there is uncertainty as to the amounts or timing of future cash flows) from an
unaffiliated third party (such as another institution or the receiver of a failed institution), including
those that the seller had maintained in nonaccrual status.
(3) The asset upon which principal or interest is due and unpaid for 90 days or more is a consumer
loan (as defined for Schedule RC-C, part I, item 6, "Loans to individuals for household, family, and
other personal expenditures") or a loan secured by a 1-to-4 family residential property (as defined
for Schedule RC-C, part I, item 1.c, Loans "Secured by 1-4 family residential properties").
Nevertheless, such loans should be subject to other alternative methods of evaluation to assure
that the bank's net income is not materially overstated. However, to the extent that the bank has
elected to carry such a loan in nonaccrual status on its books, the loan must be reported as
nonaccrual in Schedule RC-N.
Treatment of previously accrued interest – The reversal of previously accrued but uncollected interest
applicable to any asset placed in nonaccrual status should be handled in accordance with generally
accepted accounting principles. Acceptable accounting treatment includes a reversal of all previously
accrued but uncollected interest applicable to assets placed in a nonaccrual status against appropriate
income and balance sheet accounts.
For example, one acceptable method of accounting for such uncollected interest on a loan placed in
nonaccrual status is (1) to reverse all of the unpaid interest by crediting the "accrued interest receivable"
account on the balance sheet, (2) to reverse the uncollected interest that has been accrued during the
calendar year-to-date by debiting the appropriate "interest and fee income on loans" account on the
income statement, and (3) to reverse any uncollected interest that had been accrued during previous
calendar years by debiting the "allowance for loan and lease losses" account on the balance sheet.
The use of this method presumes that bank management's additions to the allowance through charges
to the "provision for loan and lease losses" on the income statement have been based on an evaluation
of the collectability of the loan and lease portfolios and the "accrued interest receivable" account.
Treatment of cash payments and criteria for the cash basis recognition of income – When doubt exists
as to the collectability of the remaining recorded investment in an asset in nonaccrual status, any
payments received must be applied to reduce the recorded investment in the asset to the extent
necessary to eliminate such doubt. Placing an asset in nonaccrual status does not, in and of itself,
require a charge-off, in whole or in part, of the asset's recorded investment. However, any identified
losses must be charged off.

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Nonaccrual Status (cont.):
While an asset is in nonaccrual status, some or all of the cash interest payments received may be
treated as interest income on a cash basis as long as the remaining recorded investment in the asset
3
(i.e., after charge-off of identified losses, if any) is deemed to be fully collectible. A bank's
determination as to the ultimate collectability of the asset's remaining recorded investment must be
supported by a current, well documented credit evaluation of the borrower's financial condition and
prospects for repayment, including consideration of the borrower's historical repayment performance
and other relevant factors.
When recognition of interest income on a cash basis is appropriate, it should be handled in accordance
with generally accepted accounting principles. One acceptable accounting practice involves allocating
contractual interest payments among interest income, reduction of the recorded investment in the
asset, and recovery of prior charge-offs. If this method is used, the amount of income that is
recognized would be equal to that which would have been accrued on the asset's remaining recorded
investment at the contractual rate. A bank may also choose to account for the contractual interest in its
entirety either as income, reduction of the recorded investment in the asset, or recovery of prior
charge-offs, depending on the condition of the asset, consistent with its accounting policies for other
financial reporting purposes.
Restoration to accrual status – As a general rule, a nonaccrual asset may be restored to accrual status
when (1) none of its principal and interest is due and unpaid, and the bank expects repayment of the
remaining contractual principal and interest, or (2) when it otherwise becomes well secured and in the
process of collection. If any interest payments received while the asset was in nonaccrual status were
applied to reduce the recorded investment in the asset, as discussed in the preceding section of this
entry, the application of these payments to the asset's recorded investment should not be reversed
(and interest income should not be credited) when the asset is returned to accrual status.
For purposes of meeting the first test, the bank must have received repayment of the past due principal
and interest unless, as discussed below, (1) the asset has been formally restructured and qualifies for
accrual status, (2) the asset is a purchased credit-impaired loan, pool of loans, or debt security
accounted for in accordance with ASC Subtopic 310-30 and it meets the criteria for accrual of income
under the interest method specified therein, (3) the asset has been acquired at a discount (because
there is uncertainty as to the amounts or timing of future cash flows) from an unaffiliated third party, is
accounted for in accordance with former AICPA Practice Bulletin No. 6, and meets the criteria for
amortization (i.e., accretion of discount) specified therein, or (4) the borrower has resumed paying the
full amount of the scheduled contractual interest and principal payments on a loan that is past due and
in nonaccrual status, even though the loan has not been brought fully current, and the following two
criteria are met. These criteria are, first, that all principal and interest amounts contractually due
(including arrearages) are reasonably assured of repayment within a reasonable period and, second,
that there is a sustained period of repayment performance (generally a minimum of six months) by the
borrower in accordance with the contractual terms involving payments of cash or cash equivalents. A
loan that meets these two criteria may be restored to accrual status but must continue to be disclosed
as past due in Schedule RC-N until it has been brought fully current or until it later must be placed in
nonaccrual status.

3

An asset in nonaccrual status that is subject to the cost recovery method required by former AICPA Practice
Bulletin No. 6 or ASC Subtopic 325-40, Investments-Other – Beneficial Interests in Securitized Financial Assets
(formerly Emerging Issues Task Force Issue No. 99-20, "Recognition of Interest Income and Impairment on
Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized
Financial Assets"), should follow that method for reporting purposes. In addition, when a purchased credit-impaired
loan, pool of loans, or debt security that is accounted for in accordance with ASC Subtopic 310-30 has been placed
on nonaccrual status, the cost recovery method should be used, when appropriate.

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Nonaccrual Status (cont.):
A loan or other debt instrument that has been formally restructured so as to be reasonably assured of
repayment (of principal and interest) and of performance according to its modified terms need not be
maintained in nonaccrual status, provided the restructuring and any charge-off taken on the asset are
supported by a current, well documented credit evaluation of the borrower's financial condition and
prospects for repayment under the revised terms. Otherwise, the restructured asset must remain in
nonaccrual status. The evaluation must include consideration of the borrower's sustained historical
repayment performance for a reasonable period prior to the date on which the loan or other debt
instrument is returned to accrual status. A sustained period of repayment performance generally would
be a minimum of six months and would involve payments of cash or cash equivalents. (In returning the
asset to accrual status, sustained historical repayment performance for a reasonable time prior to the
restructuring may be taken into account.) Such a restructuring must improve the collectability of the
loan or other debt instrument in accordance with a reasonable repayment schedule and does not
relieve the bank from the responsibility to promptly charge off all identified losses.
A formal restructuring may involve a multiple note structure in which, for example, a troubled loan is
restructured into two notes. The first or "A" note represents the portion of the original loan principal
amount that is expected to be fully collected along with contractual interest. The second or "B" note
represents the portion of the original loan that has been charged off and, because it is not reflected as
an asset and is unlikely to be collected, could be viewed as a contingent receivable. The "A" note may
be returned to accrual status provided the conditions in the preceding paragraph are met and: (1)
there is economic substance to the restructuring and it qualifies as a troubled debt restructuring under
generally accepted accounting principles, (2) the portion of the original loan represented by the "B"
note has been charged off before or at the time of the restructuring, and (3) the "A" note is reasonably
assured of repayment and of performance in accordance with the modified terms.
Until the restructured asset is restored to accrual status, if ever, cash payments received must be
treated in accordance with the criteria stated above in the preceding section of this entry. In addition,
after a formal restructuring, if a restructured asset that has been returned to accrual status later meets
the criteria for placement in nonaccrual status as a result of past due status based on its modified
terms or for any other reasons, the asset must be placed in nonaccrual status.
For further information on formally restructured assets, see the Glossary entry for "troubled debt
restructurings."
Treatment of multiple extensions of credit to one borrower – As a general principle, nonaccrual status
for an asset should be determined based on an assessment of the individual asset's collectability and
payment ability and performance. Thus, when one loan to a borrower is placed in nonaccrual status, a
bank does not automatically have to place all other extensions of credit to that borrower in nonaccrual
status. When a bank has multiple loans or other extensions of credit outstanding to a single borrower,
and one loan meets the criteria for nonaccrual status, the bank should evaluate its other extensions of
credit to that borrower to determine whether one or more of these other assets should also be placed in
nonaccrual status.
Noninterest-Bearing Account: See "deposits."
Nontransaction Account: See "deposits."
NOW Account: See "deposits."

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Offsetting: Offsetting is the reporting of assets and liabilities on a net basis in the balance sheet. Banks
are permitted to offset assets and liabilities recognized in the Report of Condition when a "right of
setoff" exists. Under ASC Subtopic 210-20, Balance Sheet – Offsetting (formerly FASB Interpretation
No. 39, "Offsetting of Amounts Related to Certain Contracts"), a right of setoff exists when all of the
following conditions are met:
(1) Each of two parties owes the other determinable amounts. Thus, only bilateral netting is permitted.
(2) The reporting party has the right to set off the amount owed with the amount owed by the other
party.
(3) The reporting party intends to set off. This condition does not have to be met for fair value
amounts recognized for conditional or exchange contracts that have been executed with the same
counterparty under a master netting arrangement.
(4) The right of setoff is enforceable at law. Legal constraints should be considered to determine
whether the right of setoff is enforceable. Accordingly, the right of setoff should be upheld in
bankruptcy (or receivership). Offsetting is appropriate only if the available evidence, both positive
and negative, indicates that there is reasonable assurance that the right of setoff would be upheld
in bankruptcy (or receivership).
According to ASC Subtopic 210-20, for forward, interest rate swap, currency swap, option, and other
conditional and exchange contracts, a master netting arrangement exists if the reporting bank has
multiple contracts, whether for the same type of conditional or exchange contract or for different types
of contracts, with a single counterparty that are subject to a contractual agreement that provides for the
net settlement of all contracts through a single payment in a single currency in the event of default or
termination of any one contract.
Offsetting the assets and liabilities recognized for conditional or exchange contracts outstanding with
a single counterparty results in the net position between the two counterparties being reported as an
asset or a liability in the Report of Condition. The reporting entity's choice to offset or not to offset
assets and liabilities recognized for conditional or exchange contracts must be applied consistently.
Offsetting of assets and liabilities is also permitted by other accounting pronouncements identified in
ASC Subtopic 210-20. These pronouncements apply to such items as leveraged leases, pension plan
and other postretirement benefit plan assets and liabilities, and deferred tax assets and liabilities.
In addition, ASC Subtopic 210-20, Balance Sheet – Offsetting (formerly FASB Interpretation No. 41,
"Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase Agreements"),
describes the circumstances in which amounts recognized as payables under repurchase agreements
may be offset against amounts recognized as receivables under reverse repurchase agreements and
reported as a net amount in the balance sheet. The reporting entity's choice to offset or not to offset
payables and receivables under ASC Subtopic 210-20 must be applied consistently.
According to the AICPA Audit and Accounting Guide for Depository and Lending Institutions,
ASC Subtopic 210-20 does not apply to securities borrowing or lending transactions. Therefore,
for purposes of the Report of Condition, banks should not offset securities borrowing and lending
transactions in the balance sheet unless all the conditions set forth in ASC Subtopic 210-20 are met.
See also "reciprocal balances."
One-Day Transaction: See "federal funds transactions."
Option: See "derivative contracts."
Organization Costs: See "start-up activities."

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Other Depository Institutions in the U.S.: See "depository institutions in the U.S."
Other Real Estate Owned: See "foreclosed assets" and the instruction to Schedule RC-M, item 3.
Overdraft: An overdraft can be either planned or unplanned. An unplanned overdraft occurs when a
depository institution honors a check or draft drawn against a deposit account when insufficient funds
are on deposit and there is no advance contractual agreement to honor the check or draft. When a
contractual agreement has been made in advance to allow such credit extensions, overdrafts are
referred to as planned or prearranged. Any overdraft, whether planned or unplanned, is an extension
of credit and is to be treated and reported as a "loan" rather than being treated as a negative deposit
balance.
Planned overdrafts in depositors' accounts are to be classified in Schedule RC-C, part I, by type of loan
according to the nature of the overdrawn depositor. For example, a planned overdraft by a commercial
customer is to be classified as a "commercial and industrial loan."
Unplanned overdrafts in depositors' accounts are to be classified in Schedule RC-C, part I, as "All other
loans," unless the depositor is a depository institution, a foreign government or foreign official
institution, or a state or political subdivision in the U.S. Such unplanned overdrafts would be reported
in Schedule RC-C, part I, item 2, "Loans to depository institutions and acceptances of other banks,"
item 7, "Loans to foreign governments and official institutions," and item 8, "Obligations (other than
securities and leases) of states and political subdivisions in the U.S.," respectively.
For purposes of treatment of overdrafts in depositors' accounts, a group of related transaction accounts
of a single type (i.e., demand deposit accounts or NOW accounts, but not a combination thereof)
maintained in the same right and capacity by a customer (a single legal entity) that is established under
a bona fide cash management arrangement by this customer function as, and are regarded as, one
account rather than as multiple separate accounts. In such a situation, overdrafts in one or more of the
transaction accounts within the group are not to be classified as loans unless there is a net overdraft
position in the group of related transaction accounts taken as a whole. (NOTE: Affiliates and
subsidiaries are considered separate legal entities.) For further information, see "cash management
arrangements."
The reporting bank's overdrafts on deposit accounts it holds with other banks (i.e., its "due from"
accounts) are to be reported as borrowings in Schedule RC, item 16, except overdrafts arising in
connection with checks or drafts drawn by the reporting bank and drawn on, or payable at or through,
another depository institution either on a zero-balance account or on an account that is not routinely
maintained with sufficient balances to cover checks or drafts drawn in the normal course of business
during the period until the amount of the checks or drafts is remitted to the other depository institution
(in which case, report the funds received or held in connection with such checks or drafts as deposits in
Schedule RC-E until the funds are remitted).
Participations: See "transfers of financial assets."
Participations in Acceptances: See "bankers acceptances."
Participations in Pools of Securities: See "repurchase/resale agreements."
Pass-through Reserve Balances: Under the Monetary Control Act of 1980, and as reflected in
Federal Reserve Regulation D, depository institutions that are members of the Federal Reserve
System must hold their balances maintained to satisfy reserve balance requirements (in excess of
vault cash) directly with a Federal Reserve Bank. However, nonmember depository institutions may
hold their balances maintained to satisfy reserve balance requirements (in excess of vault cash) in
one of two ways: either (1) directly with a Federal Reserve Bank or (2) indirectly in an account with
another institution (referred to here as a "correspondent"), which, in turn, is required to

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Pass-through Reserve Balances (cont.):
pass the reserves through to a Federal Reserve Bank. This second type of account is called a
"pass-through account," and a depository institution passing its reserves to the Federal Reserve
through a correspondent is referred to here as a "respondent." This pass-through reserve relationship
is legally and for supervisory purposes considered to constitute an asset/debt relationship between the
respondent and the correspondent, and an asset/debt relationship between the correspondent and the
Federal Reserve. The required reporting of the "pass-through reserve balances" reflects this structure
of asset/debt relationships.
In the balance sheet of the respondent bank, the pass-through reserve balances are to be treated as a
claim on the correspondent (not as a claim on the Federal Reserve) and, as such, are to be reflected in
the balance sheet of the Report of Condition, Schedule RC, item 1.a, "Noninterest-bearing balances
and currency and coin," or item 1.b, "Interest-bearing balances," as appropriate. For respondent banks
with foreign offices or with $300 million or more in total assets, the pass-through reserve balances
would also be reflected in Schedule RC-A, item 2, "Balances due from depository institutions in the
U.S."
In the balance sheet of the correspondent bank, the pass-through reserve balances are to be treated
as balances due to respondents and, to the extent that the balances have actually been passed
through to the Federal Reserve, as balances due from the Federal Reserve. The balances due to
respondents are to be reflected in the balance sheet of the Report of Condition, Schedule RC,
1
item 13.a, "Deposits in domestic offices," and on in Schedule RC-E, Deposit Liabilities, (part I), item 4.
The balances due from the Federal Reserve are to be reflected on the balance sheet in Schedule RC,
item 1.b, "Interest-bearing balances," and, for correspondent banks with foreign offices or with $300
million or more in total assets, in Schedule RC-A, item 4.
The reporting of pass-through reserve balances by correspondent and respondent banks differs from
the required reporting of excess balance accounts by participants and agents, which is described in the
Glossary entry for “excess balance accounts.”
Perpetual Preferred Stock: See "preferred stock."
Placements and Takings: Placements and takings are deposits between a foreign office of the
reporting bank and a foreign office of another bank and are to be treated as due from or due to
depository institutions. Such transactions are always to be reported gross and are not to be netted as
reciprocal balances.
Pooling of Interests: See "business combinations."
Preauthorized Transfer Account: See "deposits."
Preferred Stock: Preferred stock is a form of ownership interest in a bank or other company which
entitles its holders to some preference or priority over the owners of common stock, usually with
respect to dividends or asset distributions in a liquidation.
Limited-life preferred stock is preferred stock that has a stated maturity date or that can be redeemed
at the option of the holder. It excludes those issues of preferred stock that automatically convert into
perpetual preferred stock or common stock at a stated date.
Perpetual preferred stock is preferred stock that does not have a stated maturity date or that cannot be
redeemed at the option of the holder. It includes those issues of preferred stock that automatically
convert into common stock at a stated date.
1

When an Edge or Agreement Corporation acts as a correspondent, its balances due to respondents are to be
reflected on the FFIEC 031 report form in Schedule RC, item 13.b, "Deposits in foreign offices," and in
Schedule RC-E, part II, item 2.

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Premiums and Discounts: A premium arises when a bank purchases a security, loan, or other asset at
a price in excess of its par or face value, typically because the current level of interest rates for such
assets is less than its contract or stated rate of interest. The difference between the purchase price
and par or face value represents the premium, which all banks are required to amortize.
A discount arises when a bank purchases a security, loan, or other asset at a price below its par or
face value, typically because the current level of interest rates for such assets is greater than its
contract or stated rate of interest. A discount is also present on instruments that do not have a stated
rate of interest such as U.S. Treasury bills and commercial paper. The difference between par or face
value and the purchase price represents the discount that all banks are required to accrete.
Premiums and discounts are accounted for as adjustments to the yield on an asset over the life of the
asset. A premium must be amortized and a discount must be accreted from date of purchase to
maturity, not to call or put date. The preferable method for amortizing premiums and accreting
discounts involves the use of the interest method for accruing income on the asset. The objective of
the interest method is to produce a constant yield or rate of return on the carrying value of the asset
(par or face value plus unamortized premium or less unaccreted discount) at the beginning of each
amortization period over the asset's remaining life. The difference between the periodic interest
income that is accrued on the asset and interest at the stated rate is the periodic amortization or
accretion. However, a straight-line method of amortization or accretion is acceptable if the results are
not materially different from the interest method.
A premium or discount may also arise when the reporting bank, acting either as a lender or a borrower,
is involved in an exchange of a note for assets other than cash and the interest rate is either below the
market rate or not stated, or the face amount of the note is materially different from the fair value of the
noncash assets exchanged. The noncash assets and the related note shall be recorded at either the
fair value of the noncash assets or the market value of the note, whichever is more clearly
determinable. The market value of the note would be its present value as determined by discounting
all future payments on the note using an appropriate interest rate, i.e., a rate comparable to that on
new loans of similar risk. The difference between the face amount and the recorded value of the note
is a premium or discount. This discount or premium shall be accounted for as an adjustment of the
interest income or expense over the life of the note using the interest method described above.
For further information, see ASC Subtopic 835-30, Interest – Imputation of Interest (formerly
APB Opinion No. 21, "Interest on Receivables and Payables").
Purchase Acquisition: See "business combinations."
Purchased Credit-Impaired Loans and Debt Securities: Purchased credit-impaired loans and debt
securities are loans and debt securities that an institution has purchased or otherwise acquired by
completion of a transfer, including those acquired in a purchase business combination, where there is
evidence of deterioration of credit quality since the origination of the loan or debt security and it is
probable, at the acquisition date, that the institution will be unable to collect all contractually required
payments receivable. Such loans and debt securities must be accounted for in accordance with ASC
Subtopic 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality
(formerly AICPA Statement of Position 03-3, "Accounting for Certain Loans or Debt Securities Acquired
in a Transfer"). ASC Subtopic 310-30 does not apply to loans that an institution has originated.
Under ASC Subtopic 310-30, a purchased credit-impaired loan or debt security is initially recorded at
its purchase price (in a purchase business combination, the present value of amounts to be received).
ASC Subtopic 310-30 limits the yield that may be accreted on the loan or debt security (the accretable
yield) to the excess of the institution's estimate of the undiscounted principal, interest, and other cash
flows expected at acquisition to be collected on the asset over the institution's initial investment in the
asset. The excess of the contractually required payments receivable on the loan or debt security over
the cash flows expected to be collected, which is referred to as the nonaccretable difference, must not
be recognized as an adjustment of yield, loss accrual, or valuation allowance. Neither the accretable

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Purchased Credit-Impaired Loans and Debt Securities (cont.):
yield nor the nonaccretable difference may be shown on the balance sheet (Schedule RC). After
acquisition, increases in the cash flows expected to be collected generally should be recognized
prospectively as an adjustment of the asset's yield over its remaining life. Decreases in cash flows
expected to be collected should be recognized as an impairment.
For purposes of applying the guidance in ASC Subtopic 310-30 to loans not accounted for as debt
securities, an institution may aggregate loans acquired in the same fiscal quarter that have common
risk characteristics and thereby use a composite interest rate and expectation of cash flows expected
to be collected for the pool. To be eligible for aggregation, each loan first should be determined
individually to meet the scope criteria in the first sentence of this Glossary entry. After determining that
certain acquired loans individually meet these scope criteria, the institution may evaluate whether such
loans have common risk characteristics, thus permitting the aggregation of such loans into one or more
pools. The aggregation must be based on common risk characteristics that include similar credit risk or
risk ratings, and one or more predominant risk characteristics, such as financial asset type, collateral
type, size, interest rate, date of origination, term, and geographic location. Upon establishment of a
pool of purchased credit-impaired loans, the pool becomes the unit of account.
Once a pool of purchased credit-impaired loans is assembled, the integrity of the pool must be
maintained. An institution should remove an individual loan from a pool of purchased credit-impaired
loans only if the institution sells, forecloses, or otherwise receives assets in satisfaction of the loan or if
the loan is written off. When an individual loan is removed from a pool of purchased credit-impaired
loans under these circumstances, the loan shall be removed at its carrying amount. Carrying amount
is defined as the loan’s current contractually required payments receivable less its remaining
nonaccretable difference and accretable yield, but excluding any post-acquisition loan loss allowance.
An institution that accounts for a pool of purchased credit-impaired loans with common risk
characteristics as one unit of account may or may not document and maintain data on the
nonaccretable difference and accretable yield on a loan-by-loan basis. Accordingly, for purposes of
determining the carrying amount of an individual loan in the pool, an institution may apply a systematic
and rational approach to allocating the nonaccretable difference and accretable yield for the pool to an
individual loan in the pool. One acceptable approach is a pro rata allocation of the pool’s total
remaining nonaccretable difference and accretable yield to an individual loan in proportion to the loan’s
current contractually required payments receivable compared to the pool’s total contractually required
payments receivable.
A refinancing or restructuring of a loan within a pool of purchased credit-impaired loans should not
result in the removal of the loan from the pool. In addition, a modification of the terms of a loan within a
pool of purchased credit-impaired loans is not considered a troubled debt restructuring under the scope
exceptions in ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors
(formerly FASB Statement No. 15, “Accounting by Debtors and Creditors for Troubled Debt
Restructurings,” as amended). However, a modification of the terms of a purchased credit-impaired
loan accounted for individually must be evaluated to determine whether the modification represents a
troubled debt restructuring that should be accounted for in accordance with ASC 310-40. For further
information, see the Glossary entry for “troubled debt restructurings.”
ASC Subtopic 310-30 does not prohibit an institution from placing a purchased credit-impaired loan
accounted for individually, a pool of purchased credit-impaired loans with common risk characteristics,
or a purchased credit-impaired debt security in nonaccrual status. Because a loan (including a loan
aggregated with other loans with common risk characteristics) or debt security accounted for in
accordance with ASC Subtopic 310-30 has evidence of deterioration of credit quality since origination,
an acquiring institution must determine upon acquisition whether it is appropriate to recognize the
accretable yield as income over the life of the loan, pool of loans, or debt security using the interest
method. In order to apply the interest method, the institution must have sufficient information to
reasonably estimate the amount and timing of the cash flows expected to be collected on the loan, loan
pool, or debt security. Thus, when the amount and timing of the cash flows cannot be reasonably
estimated at acquisition, the institution should place the purchased credit-impaired loan, pool, or debt

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Purchased Credit-Impaired Loans and Debt Securities (cont.):
security in nonaccrual status and then apply the cost recovery method or cash basis income
recognition to the asset. (For purchased credit-impaired loans with common risk characteristics that
are aggregated and accounted for as a pool, the determination of nonaccrual or accrual status should
be made at the pool level, not at the individual loan level.) In addition, if a purchased credit-impaired
loan or debt security is acquired primarily for the rewards of ownership of the underlying collateral,
accrual of income is inappropriate and the loan or debt security should be placed in nonaccrual status.
The carrying amount of a purchased credit-impaired loan, pool of loans, or debt security in nonaccrual
status should be reported in the appropriate items of Schedule RC-N, Past Due and Nonaccrual Loans,
Leases, and Other Assets, column C.
When accrual of income on a purchased credit-impaired loan accounted for individually or a purchased
credit-impaired debt security is appropriate (either at acquisition or at a later date when the amount and
timing of the cash flows can be reasonably estimated), the delinquency status of the individual asset
should be determined in accordance with its contractual repayment terms for purposes of reporting the
carrying amount of the loan or debt security as past due in the appropriate items of Schedule RC-N,
column A or B. When accrual of income on a pool of purchased credit-impaired loans with common
risk characteristics is appropriate, delinquency status should be determined individually for each loan in
the pool in accordance with the individual loan’s contractual repayment terms for purposes of reporting
the carrying amount (before any post-acquisition loan loss allowance) of individual loans within the pool
as past due in the appropriate items of Schedule RC-N, column A or B.
ASC Subtopic 310-30 prohibits an institution from "carrying over" or creating loan loss allowances in
the initial accounting for purchased credit-impaired loans. This prohibition applies to the purchase of
an individual impaired loan, a pool or group of impaired loans, and impaired loans acquired in a
business combination. However, for a purchased credit-impaired loan accounted for individually (and
not accounted for as a debt security), if upon subsequent evaluation it is probable based on current
information and events that an institution will be unable to collect all cash flows expected at acquisition
(plus additional cash flows expected to be collected arising from changes in estimate after acquisition),
the purchased credit-impaired loan should be considered impaired for purposes of establishing an
allowance pursuant to ASC Subtopic 450-20, Contingencies – Loss Contingencies (formerly FASB
Statement No. 5, “Accounting for Contingencies”) or ASC Subtopic 310-10, Receivables – Overall
(formerly FASB Statement No. 114, “Accounting by Creditors for Impairment of a Loan”), as
appropriate. For purchased credit-impaired loans with common risk characteristics that are aggregated
and accounted for as a pool, this impairment analysis should be performed subsequent to acquisition
at the pool level as a whole and not at the individual loan level. An institution should include
post-acquisition allowances on purchased credit-impaired loans and pools of purchased credit-impaired
loans in the overall allowance for loan and lease losses it reports in Schedule RC, item 4.c, and
Schedule RI-B, part II, item 7, and disclose the amount of these post-acquisition allowances in
Schedule RI-B, part II, Memorandum item 4.
In Schedule RC-C, part I, Loans and Leases, an institution should report the carrying amount (before
any post-acquisition loan loss allowance) of a purchased credit-impaired loan in the appropriate loan
category (items 1 through 9). Neither the accretable yield nor the nonaccretable difference associated
with a purchased credit-impaired loan should be reported as unearned income in Schedule RC-C,
part I, item 11. In addition, an institution should report in Schedule RC-C, part I, Memorandum
items 7.a and 7.b, the outstanding balance and carrying amount (before any post-acquisition loan loss
allowance), respectively, of all purchased credit-impaired loans reported as held for investment in
Schedule RC-C, part I. An institution also should report the outstanding balance and carrying amount
(before any post-acquisition loan loss allowance) of those held-for-investment purchased creditimpaired loans reported in Schedule RC-C, part I, Memorandum items 7.a and 7.b, that are past due
30 through 89 days and still accruing, past due 90 days or more and still accruing, or in nonaccrual
status as of the report date in Schedule RC-N, Memorandum items 9.a and 9.b, column A, B, or C,
respectively, in accordance with the past due and nonaccrual guidance provided above in this Glossary
entry.
For further information, refer to ASC Subtopic 310-30.

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Put Option: See "derivative contracts."
Real Estate ADC Arrangements: See "acquisition, development, or construction (ADC) arrangements."
Real Estate, Loan Secured By: See "loan secured by real estate."
Reciprocal Balances: Reciprocal balances arise when two depository institutions maintain deposit
accounts with each other; that is, when a reporting bank has both a due to and a due from balance with
another depository institution.
For purposes of the balance sheet of the Report of Condition, reciprocal balances between the
reporting bank and other depository institutions may be reported on a net basis when a right of setoff
exists. See the Glossary entry for "offsetting" for the conditions that must be met for a right of setoff to
exist.
Renegotiated Troubled Debt: See "troubled debt restructurings."
Reorganizations: See "business combinations."
Repurchase/Resale Agreements: A repurchase agreement is a transaction involving the "sale" of
financial assets by one party to another, subject to an agreement by the "seller" to repurchase the
assets at a specified date or in specified circumstances. A resale agreement (also known as a reverse
repurchase agreement) is a transaction involving the "purchase" of financial assets by one party from
another, subject to an agreement by the "purchaser" to resell the assets at a specified date or in
specified circumstances.
As stated in the AICPA's Audit and Accounting Guide for Banks and Savings Institutions, dollar
repurchase agreements (also called dollar rolls) are agreements to sell and repurchase similar but not
identical securities. The dollar roll market consists primarily of agreements that involve
mortgage-backed securities (MBS). Dollar rolls differ from regular repurchase agreements in that the
securities sold and repurchased, which are usually of the same issuer, are represented by different
certificates, are collateralized by different but similar mortgage pools (for example, single-family
residential mortgages), and generally have different principal amounts.
General rule – Consistent with ASC Topic 860, Transfers and Servicing (formerly FASB Statement
No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities," as amended), repurchase and resale agreements involving financial assets (e.g., securities
and loans), including dollar repurchase agreements, are either reported as (a) secured borrowings and
loans or (b) sales and forward repurchase commitments based on whether the transferring ("selling")
institution maintains control over the transferred assets. (See the Glossary entry for "transfers of
financial assets" for further discussion of control criteria.)

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Repurchase/Resale Agreements (cont.):
If a repurchase agreement both entitles and obligates the "selling" bank to repurchase or redeem the
transferred assets from the transferee ("purchaser"), the "selling" bank should report the transaction as
a secured borrowing if and only if the following conditions have been met:
(1) The assets to be repurchased or redeemed are the same or "substantially the same" as those
transferred, as defined by ASC Topic 860.
(2) The "selling" institution has the ability to repurchase or redeem the transferred assets on
substantially the agreed terms, even in the event of default by the transferee ("purchaser"). This
ability is presumed to exist if the "selling" bank has obtained cash or other collateral sufficient to
fund substantially all of the cost of purchasing replacement assets from others.
(3) The agreement is to repurchase or redeem the transferred assets before maturity, at a fixed or
determinable price.
(4) The agreement is entered into concurrently with the transfer.
Participations in pools of securities are to be reported in the same manner as security
repurchase/resale transactions.
Repurchase agreements reported as secured borrowings – If a repurchase agreement qualifies as a
secured borrowing, the "selling" institution should report the transaction as indicated below based on
whether the agreement involves a security or some other financial asset.
(1) Securities "sold" under agreements to repurchase are reported in Schedule RC, item 14.b,
"Securities sold under agreements to repurchase."
(2) Financial assets (other than securities) "sold" under agreements to repurchase are reported as
follows:
(a) If the repurchase agreement has an original maturity of one business day (or is under a
continuing contract) and is in immediately available funds, it should be reported in
Schedule RC, item 14.a, "Federal funds purchased (in domestic offices)," if it is in a domestic
office, and in Schedule RC-M, item 5.b, "Other borrowings," if it is in a foreign office.
(b) If the repurchase agreement has an original maturity of more than one business day or is not in
immediately available funds, it should be reported in Schedule RC-M, item 5.b.
In addition, the "selling" institution may need to record further entries depending on the terms of the
agreement. If the "purchaser" has the right to sell or repledge noncash assets, the "selling" institution
should recategorize the transferred financial assets as "assets receivable" and report them in
Schedule RC, item 11, "Other assets." Otherwise, the financial assets should continue to be reported
in the same asset category as before the transfer (e.g., securities should continue to be reported in
Schedule RC, item 2, "Securities," or item 5, "Trading assets," as appropriate).
Resale agreements reported as secured borrowings. Similarly, if a resale agreement qualifies as a
secured borrowing, the "purchasing" institution should report the transaction as indicated below based
on whether the agreement involves a security or some other financial asset.
(1) Securities "purchased" under agreements to resell are reported in Schedule RC, item 3.b,
"Securities purchased under agreements to resell."
(2) Financial assets (other than securities) "purchased" under agreements to resell are reported as
follows:

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Repurchase/Resale Agreements (cont.):
(a) If the resale agreement has an original maturity of one business day (or is under a continuing
contract) and is in immediately available funds, it should be reported in Schedule RC, item 3.a,
"Federal funds sold (in domestic offices)," if it is in a domestic office, and in Schedule RC,
item 4.b, "Loans and leases, net of unearned income," if it is in a foreign office.
(b) If the resale agreement has an original maturity of more than one business day or is not in
immediately available funds, it should be reported in Schedule RC, item 4.b.
In addition, the "purchasing" institution may need to record further entries depending on the terms of
the agreement. If the "purchasing" institution has the right to sell the noncash assets it has
"purchased" and sells these assets, it should recognize the proceeds from the sale and report its
obligation to return the assets in Schedule RC, item 20, "Other liabilities." If the "selling" institution
defaults under the terms of the repurchase agreement and is no longer entitled to redeem the noncash
assets, the "purchasing" bank should recognize these assets on its own balance sheet (e.g., securities
should be reported in Schedule RC, item 2, "Securities," or item 5, "Trading assets," as appropriate)
and initially measure them at fair value. However, if the "purchasing" bank has already sold the assets
it has "purchased," it should derecognize its obligation to return the assets. Otherwise, the
"purchasing" bank should not recognize the transferred financial assets (i.e., the financial assets
"purchased" under the resale agreement) on its balance sheet.
Repurchase/resale agreements reported as sales – If a repurchase agreement does not qualify as a
secured borrowing under ASC Topic 860, the selling bank should account for the transaction as a sale
of financial assets and a forward repurchase commitment. The selling bank should remove the
transferred assets from its balance sheet, record the proceeds from the sale of the transferred assets
(including the forward repurchase commitment), and record any gain or loss on the transaction.
Similarly, if a resale agreement does not qualify as a borrowing under ASC Topic 860, the purchasing
bank should account for the transaction as a purchase of financial assets and a forward resale
commitment. The purchasing bank should record the transferred assets on its balance sheet, initially
measure them at fair value, and record the payment for the purchased assets (including the forward
resale commitment).
Reserve Balances, Pass-through: See "pass-through reserve balances."
Retail Sweep Arrangements: See “deposits.”
Sales of Assets for Risk-Based Capital Purposes: This entry should be read in conjunction with the
banking agencies' final rule revising the regulatory capital treatment of recourse arrangements and
direct credit substitutes, including residual interests and credit-enhancing interest-only strips, which
was published on November 29, 2001. This entry provides guidance for determining whether sales of
loans, securities, receivables, and other assets are subject to the agencies' risk-based capital
standards and are reportable in Schedule RC-R, Regulatory Capital, and Schedule RC-S, Servicing,
Securitization, and Asset Sale Activities. For information on the reporting of transfers of financial
assets for purposes of the balance sheet, income statement, and related schedules, see the Glossary
entry for "transfers of financial assets."
For purposes of reporting in Schedules RC-R and RC-S, some transfers of assets that qualify as sales
under generally accepted accounting principles are subject to the agencies' risk-based capital
standards because they meet the following definition of "recourse" that is set forth in those standards.
Definition of "recourse" for risk-based capital purposes – As defined in the agencies' risk-based capital
standards, recourse means an arrangement in which a bank retains, in form or in substance, any credit
risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted
accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no
claim on an asset it has sold, then the retention of any credit risk is recourse.

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Sales of Assets for Risk-Based Capital Purposes (cont.):
A recourse obligation typically arises when an institution transfers assets on a sale and retains an
obligation to repurchase the assets or absorb losses due to a default of principal or interest or any
other deficiency in the performance of the underlying obligor or some other party. Recourse may also
exist implicitly where a bank provides credit enhancement beyond any contractual obligation to support
assets it has sold.
The following are examples of recourse arrangements:
(1) Credit-enhancing representations and warranties made on the transferred assets, i.e.,
representations and warranties that are made in connection with a transfer of assets (including
loan servicing assets) and that obligate a bank to protect investors from losses arising from credit
risk in the assets transferred or the loans serviced. Credit-enhancing representations and
warranties include promises to protect a party from losses resulting from the default or
nonperformance of another party or from an insufficiency in the value of collateral.
Credit-enhancing representations and warranties do not include:
(a) Early-default clauses and similar warranties that permit the return of, or premium refund
clauses covering, qualifying 1-4 family residential first mortgage loans, i.e., those that qualify
for a 50 percent risk weight for risk-based capital purposes, for a period of 120 days from the
date of transfer. These warranties may cover only those loans that were originated within 1
year of the date of transfer.
(b) Premium refund clauses covering assets guaranteed, in whole or in part, by the U.S.
Government, a U.S. Government agency, or a U.S. Government-sponsored agency, provided
the premium refund clauses are for a period not to exceed 120 days from the date of transfer.
(c) Warranties that permit the return of assets in instances of fraud, misrepresentation, or
incomplete documentation.
(2) Loan servicing assets retained pursuant to an agreement under which the bank does one or more
of the following:
(a) Is responsible for losses associated with the loans serviced.
(b) Is responsible for making mortgage servicer cash advances, i.e., funds that a residential
mortgage servicer advances to ensure an uninterrupted flow of payments or the timely
collection of residential mortgage loans, including disbursements made to cover foreclosure
costs or other expenses arising from a mortgage loan to facilitate its timely collection. A
mortgage servicer cash advance is not a recourse obligation if:
(i)

the mortgage servicer is entitled to full reimbursement or, for any one residential
mortgage loan, nonreimbursable advances are limited to an insignificant amount of the
outstanding principal on that loan, and

(ii)

the servicer's entitlement to reimbursement is not subordinated.

(c) Makes credit-enhancing representations and warranties on the serviced loans.
(3) Retained subordinated interests that absorb more than their pro rata share of losses from the
underlying assets.
(4) Assets sold under an agreement to repurchase, if the assets are not already included on the
balance sheet.

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Sales of Assets for Risk-Based Capital Purposes (cont.):
(5) Loan strips sold without contractual recourse where the maturity of the transferred portion of the
loan is shorter than the maturity of the commitment under which the loan is drawn.
(6) Credit derivative contracts under which the bank retains more than its pro rata share of credit risk
on transferred assets.
(7) Clean-up calls, except that calls that are exercisable at the option of the bank (as servicer or as an
affiliate of the servicer) only when the pool balance is 10 percent or less of the original pool
balance are not recourse.
In addition, all recourse arrangements in the form of on-balance sheet assets are "residual interests."
The agencies' risk-based capital standards define "residual interest" to mean any on-balance sheet
asset that represents an interest (including a beneficial interest) created by a transfer that qualifies as a
sale (in accordance with generally accepted accounting principles) of financial assets, whether through
a securitization or otherwise, and that exposes a bank to credit risk directly or indirectly associated with
the transferred asset that exceeds a pro rata share of the bank's claim on the asset, whether through
subordination provisions or other credit enhancement techniques. In general, residual interests include
credit-enhancing interest-only strips, spread accounts, cash collateral accounts, retained subordinated
interests, other forms of overcollateralization, accrued but uncollected interest on transferred assets
that (when collected) will be available to serve in a credit-enhancing capacity, and similar on-balance
sheet assets that function as a credit enhancement.
If an asset transfer that qualifies for sale treatment under generally accepted accounting principles
meets the preceding definition of "recourse," the transaction must be treated as an "asset sale with
recourse" for purposes of reporting risk-based capital information in Schedule RC-R. The transaction
must also be reported as an asset sale with recourse in Schedule RC-S, item 1 or item 11, as
appropriate, depending on whether the asset was securitized by the reporting bank.
Assets transferred in transactions that do not qualify as sales under generally accepted accounting
principles should continue to be reported as assets on the Call Report balance sheet and are subject to
the agencies' regulatory capital requirements.
Summary Description of the Risk-Based Capital Treatment of Recourse Arrangements -- Under the
agencies' capital standards, in general, a bank must hold risk-based capital against the entire
outstanding amount of the assets sold with recourse. However, some of the exceptions to this general
rule include the following:
(1) Under the low-level exposure provisions of the agencies’ capital standards, the risk-based capital
requirement for a recourse arrangement is limited to the maximum contractual loss exposure
when this amount is less than the amount of risk-based capital that would be required to be held
against the entire outstanding amount of the assets sold.
(2) For a residual interest or other recourse exposure in a securitization (other than a creditenhancing interest-only strip) that qualifies for the ratings-based approach, the required amount of
risk-based capital is determined based on the relative risk of loss of the residual interest or other
recourse exposure.
(3) For a residual interest that does not qualify for the ratings-based approach, including a
credit-enhancing interest-only strip that is not deducted from Tier 1 capital under the concentration
limit, the residual interest is subject to a dollar-for-dollar capital charge.
(4) Under Section 208 of the Riegle Community Development and Regulatory Improvement Act of
1994, risk-based capital must be held against the amount of recourse retained on small business
obligations transferred with recourse.

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Sales of Assets for Risk-Based Capital Purposes (cont.):
For further information on the reporting of recourse arrangements for risk-based capital calculation
purposes, refer to the instructions for Schedule RC-R, Regulatory Capital, including the sections of
instructions on "Risk-Weighted Assets" and "Balance Sheet Asset Categories" and the instructions for
the following Schedule RC-R items:
•
•
•

Item 49, "Retained recourse on small business obligations sold with recourse;"
Item 50, "Recourse and direct credit substitutes (other than financial standby letters of credit)
subject to the low level exposure rule and residual interests subject to a dollar-for-dollar capital
requirement;" and
Item 51, "All other financial assets sold with recourse."

Interpretations and illustrations of the definition of "recourse" for risk-based capital purposes:
(1) For any given asset transfer, the determination of whether credit risk is retained by the transferring
institution in excess of a pro rata share of its claim on the asset is to be based upon the substance
of the transfer agreement or other relevant documents or informal commitments and
understandings, or subsequent actions of the parties to the transactions, not upon the form or
particular terminology used. The presence of a bona fide "sale with recourse" provision would
establish the transaction as an asset sale with recourse for purposes of risk-based capital and
Schedules RC-R and RC-S. However, the absence of a recourse provision, the absence of the
term "recourse," even the presence of a statement to the effect that there is no recourse or, in the
case of a participation, the use of the terms "pass-through" or "pure pass-through" will not by
themselves establish a transaction as a sale that is not subject to risk-based capital. If other
conditions and provisions of the transfer are such as to leave the transferor with credit risk as
described in the definition of recourse, the transfer is an asset sale with recourse for purposes of
risk-based capital and Schedules RC-R and RC-S.
(2) If assets are sold subject to specific contractual terms that limit the seller's recourse liability to a
percentage of the amount of assets sold or to a specific dollar amount and this percentage or
amount exceeds a pro rata share of the seller's claim on the assets, the transaction represents an
asset sale with recourse for risk-based capital purposes. For example, if assets are sold subject
to a ten percent recourse liability provision (i.e., the seller's credit risk is limited to ten percent of
the amount of assets sold) with no other retention of credit risk by the seller, the total outstanding
amount of the assets sold is subject to risk-based capital, not just ten percent of the assets sold,
unless the low level exposure rule (discussed in the instructions to Schedule RC-R, item 50)
applies.

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Sales of Assets for Risk-Based Capital Purposes (cont.):
(3) Among the transfers where credit risk has been retained by the seller and that should be
considered by the seller as asset sales with recourse for purposes of risk-based capital and
Schedules RC-R and RC-S are arrangements such as the following (this list is illustrative of the
principles involved in the application of the definition of "recourse" and is not all-inclusive) –
(a) the sale of an asset with a realistic bona fide put option allowing the purchaser, at its option, to
return the asset to the seller;
(b) the sale of an asset guaranteed by a standby letter of credit issued by the seller;
(c) the sale of an asset guaranteed by a standby letter of credit issued by any other party in which
the credit risk on the asset sold, either directly or indirectly, rests with the seller;
(d) the sale of an asset guaranteed by an insurance contract in which the seller, either directly or
indirectly, indemnifies or otherwise protects the insurer in any manner against credit risk; and
(e) sales and securitizations of assets which use contractual cash flows (e.g., interest-only strips
receivable and so-called "spread accounts"), retained subordinated interests, or retained
securities (e.g., collateral invested amounts and cash collateral accounts) as credit
enhancements.
(4) The sale of a loan or other asset subject to an agreement under which the seller will pass through
to the purchaser a rate of interest that differs from the stated rate of interest on the transferred
asset would not, for this reason alone, require the transaction to be treated as an asset sale with
recourse for risk-based capital purposes provided (1) the seller's obligation to pass interest through
to the purchaser is contingent upon the continued interest payment performance of the underlying
obligor of the transferred asset (i.e., the seller has no obligation to pass interest through if the
obligor defaults in whole or in part on interest or principal) and (2) none of the other characteristics
of the sale or participation causes the transaction to meet the definition of "recourse."
(5) The definition of "recourse" applies to all transfers of assets, including sales of a single asset or of
a pool of assets and sales of participations in a single asset or in a pool of assets (whether of
similar or dissimilar instruments). In participations that qualify for sale treatment under generally
accepted accounting principles and are not "syndications" (as described in the Glossary item for
that term), the seller of the participations should handle the transfer of shares to participants in
accordance with the definition of "recourse", even though the assets being participated were
acquired or accumulated for the express purpose of issuing participations and even though the
participation was prearranged with the purchasers of the participations. However, the definition of
"recourse" does not apply to the initial operation and distribution of participations in the form of
syndications, since in a syndication there is no transfer of assets involved of the type to which this
definition is addressed. Any subsequent transfers of shares, or parts of shares, in a syndicated
loan would be subject to the "recourse" definition.
(6) The definition of "recourse" (and these interpretations and illustrations) is also applicable to asset
transfers that are made to special or limited purpose entities that are not technically affiliated with
the seller. Regardless of the legal structure of the transaction, if credit risk is retained by the seller,
either contractually or otherwise, either directly or indirectly, the seller should treat the transaction
as an asset sale with recourse for purposes of risk-based capital and Schedules RC-R and RC-S
even if the sale to the special purpose entity is stated as being without recourse.
Savings Deposits: See "deposits."

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Securities Activities: Institutions should categorize their investments in debt securities and certain
equity securities (i.e., those equity securities with readily determinable fair values) as trading, availablefor-sale, or held-to-maturity consistent with ASC Topic 320, Investments-Debt and Equity Securities
(formerly FASB Statement No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," as amended). Management should periodically reassess its security categorization
decisions to ensure that they remain appropriate.
Securities that are intended to be held principally for the purpose of selling them in the near term
should be classified as trading assets. Trading activity includes active and frequent buying and selling
of securities for the purpose of generating profits on short-term fluctuations in price. Securities held for
trading purposes must be reported at fair value, with unrealized gains and losses recognized in current
earnings and regulatory capital. Institutions may also elect to report securities within the scope of
ASC Topic 320 at fair value in accordance with ASC Subtopic 825-10, Financial Instruments – Overall
(formerly FASB Statement No. 159, “The Fair Value Option for Financial Assets and Financial
Liabilities”). Securities for which the fair value option is elected should be classified as trading assets
with unrealized gains and losses recognized in current earnings and regulatory capital. In general, the
fair value option may be elected for an individual security only when it is first recognized and the
election is irrevocable.
Held-to-maturity securities are debt securities that an institution has the positive intent and ability to
hold to maturity. Held-to-maturity securities are generally reported at amortized cost. Securities not
categorized as trading or held-to-maturity must be reported as available-for-sale. An institution must
report its available-for-sale securities at fair value on the balance sheet, but unrealized gains and
losses are excluded from earnings and reported in a separate component of equity capital (i.e., in
Schedule RC, item 26.b, “Accumulated other comprehensive income”).
When the fair value of a security is less than its (amortized) cost basis, the security is impaired and the
impairment is either temporary or other than temporary. Under ASC Topic 320, institutions must
determine whether an impairment of an individual available-for-sale or held-to-maturity security is other
than temporary. To make this determination, institutions should apply applicable accounting guidance
including, but not limited to, ASC Topic 320, ASC Subtopic 325-40, Investments-Other – Beneficial
Interests in Securitized Financial Assets (formerly EITF Issue No. 99-20, “Recognition of Interest
Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial
Assets,” as amended), and SEC Staff Accounting Bulletin No. 59, Other Than Temporary Impairment
of Certain Investments in Equity Securities (Topic 5.M. in the Codification of Staff Accounting Bulletins).
Under ASC Topic 320, if an institution intends to sell a debt security or it is more likely than not that it
will be required to sell the debt security before recovery of its amortized cost basis, an other-thantemporary impairment has occurred and the entire difference between the security’s amortized cost
basis and its fair value at the balance sheet date must be recognized in earnings. In these cases, the
fair value of the debt security would become its new amortized cost basis.
In addition, under ASC Topic 320, if the present value of cash flows expected to be collected on a debt
security is less than its amortized cost basis, a credit loss exists. In this situation, if an institution does
not intend to sell the security and it is not more likely than not that the institution will be required to sell
the debt security before recovery of its amortized cost basis less any current-period credit loss, an
other-than-temporary impairment has occurred. The amount of the total other-than-temporary
impairment related to the credit loss must be recognized in earnings, but the amount of the total
impairment related to other factors must be recognized in other comprehensive income, net of
applicable taxes.
Other-than-temporary impairment losses on held-to-maturity and available-for-sale debt securities that
must be recognized in earnings should be included in Schedule RI, items 6.a and 6.b, respectively.
Other-than-temporary impairment losses that are to be recognized in other comprehensive income, net

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Securities Activities (cont.):
of applicable taxes, should be reported in item 10 of Schedule RI-A, Changes in Bank Equity Capital,
and included on the balance sheet in Schedule RC, item 26.b, “Accumulated other comprehensive
income.” Information about other-than-temporary impairment losses on held-to-maturity and availablefor-sale debt securities that occur during the current calendar year-to-date reporting period should be
reported in Schedule RI, Memorandum items 14.a through 14.c. For a held-to-maturity debt security
on which the institution has recognized an other-than-temporary impairment loss related to factors
other than credit loss in other comprehensive income, the institution should report the carrying value of
the debt security in Schedule RC, item 2.a, and in column A of Schedule RC-B, Securities. Under ASC
Topic 320, this carrying value should be the fair value of the held-to-maturity debt security as of the
date of the most recently recognized other-than-temporary impairment loss adjusted for subsequent
accretion of the impairment loss related to factors other than credit loss.
The proper categorization of securities is important to ensure that trading gains and losses are
promptly recognized in earnings and regulatory capital. This will not occur when securities intended to
be held for trading purposes are categorized as held-to-maturity or available-for-sale. The following
practices are considered trading activities:
(1) Gains Trading – Gains trading is characterized by the purchase of a security and the subsequent
sale of the same security at a profit after a short holding period, while securities acquired for this
purpose that cannot be sold at a profit are typically retained in the available-for-sale or held-tomaturity portfolio. Gains trading may be intended to defer recognition of losses, as unrealized
losses on available-for-sale and held-to-maturity debt securities do not directly affect regulatory
capital and generally are not reported in income until the security is sold.
(2) When-Issued Securities Trading – When-issued securities trading is the buying and selling of
securities in the period between the announcement of an offering and the issuance and payment
date of the securities. A purchase of a "when-issued" security acquires the risks and rewards of
owning a security and may sell the when-issued security at a profit before having to take delivery
and pay for it. Because such transactions are intended to generate profits from short-term price
movements, they should be categorized as trading.
(3) Pair-offs – Pair-offs are security purchase transactions that are closed-out or sold at, or prior to,
settlement date. In a pair-off, an institution commits to purchase a security. Then, prior to the
predetermined settlement date, the institution will pair-off the purchase with a sale of the same
security. Pair-offs are settled net when one party to the transaction remits the difference between
the purchase and the sale price to the counterparty. Pair-offs may also involve the same sequence
of events using swaps, options on swaps, forward commitments, options on forward commitments,
or other off-balance sheet derivative contracts.
(4) Extended Settlements – In the U.S., regular-way settlement for federal government and federal
agency securities (except mortgage-backed securities and derivative contracts) is one business
day after the trade date. Regular-way settlement for corporate and municipal securities is three
business days after the trade date. For mortgage-backed securities, it can be up to 60 days or
more after the trade date. The use of extended settlements may be offered by securities dealers
in order to facilitate speculation on the part of the purchaser, often in connection with pair-off
transactions. Securities acquired through the use of a settlement period in excess of the regularway settlement periods in order to facilitate speculation should be reported as trading assets.
(5) Repositioning Repurchase Agreements – A repositioning repurchase agreement is a funding
technique offered by a dealer in an attempt to enable an institution to avoid recognition of a loss.
Specifically, an institution that enters into a "when-issued" trade or a "pair-off" (which may include
an extended settlement) that cannot be closed out at a profit on the payment or settlement date will
be provided dealer financing in an effort to fund its speculative position until the security can be
sold at a gain. The institution purchasing the security typically pays the dealer a small margin that

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Securities Activities (cont.):
approximates the actual loss in the security. The dealer then agrees to fund the purchase of the
security, typically buying it back from the purchaser under a resale agreement. Any securities
acquired through a dealer financing technique such as a repositioning repurchase agreement that
is used to fund the speculative purchase of securities should be reported as trading assets.
(6) Short Sales – A short sale is the sale of a security that is not owned. The purpose of a short sale
generally is to speculate on a fall in the price of the security. (For further information, see the
Glossary entry for "short position.")
One other practice, referred to as "adjusted trading," is not acceptable under any circumstances. Adjusted
trading involves the sale of a security to a broker or dealer at a price above the prevailing market value
and the contemporaneous purchase and booking of a different security, frequently a lower-rated or lower
quality issue or one with a longer maturity, at a price above its market value. Thus, the dealer is
reimbursed for losses on the purchase from the institution and ensured a profit. Such transactions
inappropriately defer the recognition of losses on the security sold and establish an excessive cost basis
for the newly acquired security. Consequently, such transactions are prohibited and may be in violation of
18 U.S.C. Sections 1001–False Statements or Entries and 1005–False Entries.
See also "trading account."
Securities Borrowing/Lending Transactions: Securities borrowing/lending transactions are typically
initiated by broker-dealers and other financial institutions that need specific securities to cover a short
sale or a customer's failure to deliver securities sold. A transferee ("borrower") of securities generally
is required to provide "collateral" to the transferor ("lender") of securities, commonly cash but
sometimes other securities or standby letters of credit, with a value slightly higher than that of the
securities "borrowed."
Most securities borrowing/lending transactions do not qualify as sales under ASC Topic 860, Transfers
and Servicing (formerly FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities,” as amended), because the agreement entitles and obligates
the securities lender to repurchase or redeem the transferred assets before their maturity. (See the
Glossary entry for "transfers of financial assets" for further discussion of sale criteria.) When such
transactions do not qualify as sales, securities lenders and borrowers should account for the
transactions as secured borrowings in which cash (or securities that the holder is permitted by contract
or custom to sell or repledge) received as "collateral" by the securities lender is considered the amount
borrowed and the securities "loaned" are considered pledged as collateral against the amount
borrowed. The "loaned" securities should continue to be reported on the securities lender's balance
sheet as available-for-sale securities, held-to-maturity securities, or trading assets, as appropriate.
"Loaned" securities that are reported as available-for-sale or held-to-maturity securities in
Schedule RC-B, Securities, should also be reported as "Pledged securities" in Memorandum item 1 of
that schedule. Similarly, “loaned” securities that are reported as trading assets in Schedule RC-D,
Trading Assets and Liabilities, should be reported as “Pledged securities” in Memorandum item 4.a of
that schedule.
If the securities borrowing/lending transaction meets the criteria for a sale under ASC Topic 860, the
lender of the securities should remove the securities from its balance sheet, record the proceeds from
the sale of the securities (including the forward repurchase commitment), and recognize any gain or
loss on the transaction. The borrower of the securities should record the securities on its balance
sheet at fair value and record the payment for the purchased assets (including the forward resale
commitment).
Securities, Participations in Pools of: See "repurchase/resale agreements."

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Servicing Assets and Liabilities: The accounting and reporting standards for servicing assets and
liabilities are set forth in ASC Subtopic 860-50, Transfers and Servicing – Servicing Assets and
Liabilities (formerly FASB Statement No. 140, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities," as amended by FASB Statement No. 156, “Accounting for
Servicing of Financial Assets,” and FASB Statement No. 166, “Accounting for Transfers of Financial
Assets”), and ASC Topic 948, Financial Services-Mortgage Banking (formerly FASB Statement No. 65,
"Accounting for Certain Mortgage Banking Activities," as amended by Statement No. 140). A summary
of the relevant sections of these accounting standards follows. For further information, see
ASC Subtopic 860-50, ASC Topic 948, and the Glossary entry for "transfers of financial assets."
Servicing of mortgage loans, credit card receivables, or other financial assets includes, but is not
limited to, collecting principal, interest, and escrow payments from borrowers; paying taxes and
insurance from escrowed funds; monitoring delinquencies; executing foreclosure if necessary;
temporarily investing funds pending distribution; remitting fees to guarantors, trustees, and others
providing services; and accounting for and remitting principal and interest payments to the holders of
beneficial interests in the financial assets. Servicers typically receive certain benefits from the
servicing contract and incur the costs of servicing the assets.
Servicing is inherent in all financial assets; it becomes a distinct asset or liability for accounting
purposes only in certain circumstances as discussed below. Servicing assets result from contracts to
service financial assets under which the benefits of servicing (estimated future revenues from
contractually specified servicing fees, late charges, and other ancillary sources) are expected to more
than adequately compensate the servicer for performing the servicing. Servicing liabilities result from
contracts to service financial assets under which the benefits of servicing are not expected to
adequately compensate the servicer for performing the servicing. Contractually specified servicing
fees are all amounts that, per contract, are due to the servicer in exchange for servicing the financial
asset and would no longer be received by a servicer if the beneficial owners of the serviced assets or
their trustees or agents were to exercise their actual or potential authority under the contract to shift the
servicing to another servicer. Adequate compensation is the amount of benefits of servicing that would
fairly compensate a substitute servicer should one be required including the profit that would be
demanded by a substitute servicer in the marketplace.
A bank must recognize and initially measure at fair value a servicing asset or a servicing liability each
time it undertakes an obligation to service a financial asset by entering into a servicing contract in
either of the following situations:
(1) The bank’s transfer of an entire financial asset, a group of entire financial assets, or a participating
interest in an entire financial asset that meets the requirements for sale accounting; or
(2) An acquisition or assumption of a servicing obligation that does not relate to financial assets of the
bank or its consolidated affiliates included in the Reports of Condition and Income being presented.
If a bank sells a participating interest in an entire financial asset, it only recognizes a servicing asset or
servicing liability related to the participating interest sold.
A bank that transfers its financial assets to an unconsolidated entity in a transfer that qualifies as a sale
in which the bank obtains the resulting securities and classifies them as debt securities held-to-maturity
in accordance with ASC Topic 320, Investments–Debt and Equity Securities (formerly FASB Statement
No. 115, “Accounting for Certain Investments in Debt and Equity Securities”), may either separately
recognize its servicing assets or servicing liabilities or report those servicing assets or servicing
liabilities together with the assets being serviced.

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Servicing Assets and Liabilities (cont.):
A bank should account for its servicing contract that qualifies for separate recognition as a servicing
asset or servicing liability initially measured at fair value regardless of whether explicit consideration
was exchanged. A bank that transfers or securitizes financial assets in a transaction that does not
meet the requirements for sale accounting under ASC Topic 860 and is accounted for as a secured
borrowing with the underlying assets remaining on the bank’s balance sheet must not recognize a
servicing asset or a servicing liability.
After initially measuring a servicing asset or servicing liability at fair value, a bank should subsequently
measure each class of servicing assets and servicing liabilities using either the amortization method or
the fair value measurement method. The election of the subsequent measurement method should be
made separately for each class of servicing assets and servicing liabilities. A bank must apply the
same subsequent measurement method to each servicing asset and servicing liability in a class. Each
bank should identify its classes of servicing assets and servicing liabilities based on (a) the availability
of market inputs used in determining the fair value of servicing assets and servicing liabilities, (b) the
bank’s method for managing the risks of its servicing assets or servicing liabilities, or (c) both. Different
elections can be made for different classes of servicing. For a class of servicing assets and servicing
liabilities that is subsequently measured using the amortization method, a bank may change the
subsequent measurement method for that class of servicing by making an irrevocable decision to elect
the fair value measurement method for that class at the beginning of any fiscal year. Once a bank
elects the fair value measurement method for a class of servicing, that election must not be reversed.
Under the amortization method, all servicing assets or servicing liabilities in the class should be
amortized in proportion to, and over the period of, estimated net servicing income for assets (servicing
revenues in excess of servicing costs) or net servicing loss for liabilities (servicing costs in excess of
servicing revenues). The servicing assets or servicing liabilities should be assessed for impairment or
increased obligation based on fair value at each quarter-end report date. The servicing assets within a
class should be stratified into groups based on one or more of the predominant risk characteristics of
the underlying financial assets. If the carrying amount of a stratum of servicing assets exceeds its fair
value, the bank should separately recognize impairment for that stratum by reducing the carrying
amount to fair value through a valuation allowance for that stratum. The valuation allowance should be
adjusted to reflect changes in the measurement of impairment subsequent to the initial measurement
of impairment. For the servicing liabilities within a class, if subsequent events have increased the fair
value of the liability above the carrying amount of the servicing liabilities, the bank should recognize the
increased obligation as a loss in current earnings.
Under the fair value measurement method, all servicing assets or servicing liabilities in a class should
be measured at fair value at each quarter-end report date. Changes in the fair value of these servicing
assets and servicing liabilities should be reported in earnings in the period in which the changes occur.

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Servicing Assets and Liabilities (cont.):
For purposes of these reports, servicing assets resulting from contracts to service loans secured by
real estate (as defined for Schedule RC-C, part I, item 1, in the Glossary entry for "Loans secured by
real estate") should be reported in Schedule RC-M, item 2.a, "Mortgage servicing assets." Servicing
assets resulting from contracts to service all other financial assets should be reported in
Schedule RC-M, item 2.b, "Purchased credit card relationships and nonmortgage servicing assets."
When reporting the carrying amount of mortgage servicing assets in Schedule RC-M, item 2.a, and
nonmortgage servicing assets in Schedule RC-M, item 2.b, banks should include all classes of
servicing accounted for under the amortization method as well as all classes of servicing accounted for
under the fair value measurement method. The fair value of all recognized mortgage servicing assets
should be reported in Schedule RC-M, item 2.a.(1), regardless of the subsequent measurement
method applied to these assets. The servicing asset carrying amounts reported in Schedule RC-M,
items 2.a and 2.b, even if these amounts include fair values, should be used when determining the
lesser of 90 percent of the fair value of these assets and 100 percent of their carrying amount for
regulatory capital calculation purposes in Schedule RC-R. Changes in the fair value of any class of
servicing assets and servicing liabilities accounted for under the fair value measurement method
should be included in earnings in Schedule RI, item 5.f, “Net servicing fees.” In addition, certain
information about assets serviced by the reporting bank should be reported in Schedule RC-S,
Servicing, Securitization, and Asset Sale Activities.
Settlement Date Accounting: See "trade date and settlement date accounting."
Shell Branches: Shell branches are limited service branches that do not conduct transactions with
residents, other than with other shell branches, in the country in which they are located. Transactions
at shell branches are usually initiated and effected by their head office or by other related branches
outside the country in which the shell branches are located, with records and supporting documents
maintained at the initiating offices. Examples of such locations are the Bahamas and the Cayman
Islands.
Short Position: When a bank sells an asset that it does not own, it has established a short position. If
on the report date a bank is in a short position, it shall report its liability to purchase the asset in
Schedule RC, item 15, "Trading liabilities." In this situation, the right to receive payment shall be
reported in Schedule RC-F, item 6, "All other assets.” Short positions shall be reported gross. Short
trading positions shall be revalued consistent with the method used by the reporting bank for the
valuation of its trading assets.
Significant Subsidiary: See "subsidiaries."
Standby Letter of Credit: See "letter of credit."
Start-Up Activities: Guidance on the accounting and reporting for the costs of start-up activities,
including organization costs, is set forth in ASC Subtopic 720-15, Other Expenses – Start-Up Costs
(formerly AICPA Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities"). A
summary of this accounting guidance follows. For further information, see ASC Subtopic 720-15.
Start-up activities are defined broadly as those one-time activities related to opening a new facility,
introducing a new product or service, conducting business in a new territory, conducting business with
a new class of customer, or commencing some new operation. Start-up activities include activities
related to organizing a new entity, such as a new bank, the costs of which are commonly referred to as
1
organization costs.

1

Organization costs for a bank are the direct costs incurred to incorporate and charter the bank. Such costs include,
but are not limited to, professional (e.g., legal, accounting, and consulting) fees and printing costs directly related to
the chartering or incorporation process, filing fees paid to chartering authorities, and the cost of economic impact
studies.

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Start-Up Activities (cont.):
Costs of start-up activities, including organization costs, should be expensed as incurred. Costs of
acquiring or constructing premises and fixed assets and getting them ready for their intended use are
not start-up costs, but the costs of using such assets that are allocated to start-up activities
(e.g., depreciation of computers) are considered start-up costs.
For a new bank, pre-opening expenses such as salaries and employee benefits, rent, depreciation,
supplies, directors' fees, training, travel, postage, and telephone are considered start-up costs.
Pre-opening income earned and expenses incurred from the bank's inception until the date the bank
commences operations should be reported in the Report of Income using one of the two following
methods, consistent with the manner in which the bank reports pre-opening income and expenses for
other financial reporting purposes:
(1) Pre-opening income and expenses for the entire period from the bank's inception until the date the
bank commences operations should be reported in the appropriate items of Schedule RI, Income
Statement, each quarter during the calendar year in which operations commence; or
(2) Pre-opening income and expenses for the period from the bank's inception until the beginning of
the calendar year in which the bank commences operations should be included, along with the
bank's opening (original) equity capital, in Schedule RI-A, item 5, "Sale, conversion, acquisition, or
retirement of capital stock, net." The net amount of these pre-opening income and expenses
should be identified and described in Schedule RI-E, item 7. Pre-opening income earned and
expenses incurred during the calendar year in which the bank commences operations should be
reported in the appropriate items of Schedule RI, Income Statement, each quarter during the
calendar year in which operations commence.
The organization costs of forming a holding company and the costs of other holding company start-up
activities are sometimes paid by the bank that will be owned by the holding company. Because these
are the holding company’s costs, whether or not the holding company formation is successful, they
should not be reported as expenses of the bank. Accordingly, any unreimbursed costs paid by the
bank on behalf of the holding company should be reported as a cash dividend to the holding company
in Schedule RI-A, item 9. In addition, if a new bank and holding company are being formed at the
same time, the costs of the bank’s start-up activities, including its organization costs, should be
reported as start-up costs for the bank. If the holding company pays these costs for the bank but is not
reimbursed by the bank, the bank should treat the holding company’s forgiveness of payment as a
capital contribution, which should be reported in Schedule RI-A, item 11, “Other transactions with
parent holding company,” and in Schedule RI-E, item 5.
STRIPS: See "coupon stripping, Treasury receipts, and STRIPS."
Subordinated Notes and Debentures: A subordinated note or debenture is a form of debt issued by a
bank or a consolidated subsidiary. When issued by a bank, a subordinated note or debenture is not
insured by a federal agency, is subordinated to the claims of depositors, and has an original weighted
average maturity of five years or more. Such debt shall be issued by a bank with the approval of, or
under the rules and regulations of, the appropriate federal bank supervisory agency and is to be
reported in Schedule RC, item 19, "Subordinated notes and debentures."
When issued by a subsidiary, a note or debenture may or may not be explicitly subordinated to the
deposits of the parent bank and is to be reported in Schedule RC, item 16, "Other borrowed money," or
item 19, "Subordinated notes and debentures," as appropriate.
Those subordinated notes and debentures that are to be reported in Schedule RC, item 19, include
mandatory convertible debt.

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Subsidiaries: The treatment of subsidiaries in the Reports of Condition and Income depends upon the
degree of ownership held by the reporting bank.
A majority-owned subsidiary of the reporting bank is a subsidiary in which the parent bank directly or
indirectly owns more than 50 percent of the outstanding voting stock.
A significant subsidiary of the reporting bank is a majority-owned subsidiary that meets any one or
more of the following tests:
(1) The bank's direct and indirect investment in and advances to the subsidiary equals five percent or
more of the total equity capital of the parent bank.
NOTE: For the purposes of this test, the amount of direct and indirect investments and advances
is either (a) the amount carried on the books of the parent bank or (b) the parent's proportionate
share in the total equity capital of the subsidiary, whichever is greater.
(2) The parent bank's proportional share (based on equity ownership) of the subsidiary's gross
operating income or revenue amounts to five percent or more of the gross operating income or
revenue of the consolidated parent bank.
(3) The subsidiary's income or loss before income taxes amounts to five percent or more of the parent
bank's income or loss before income taxes.
(4) The subsidiary is, in turn, the parent of one or more subsidiaries which, when consolidated with the
subsidiary, constitute a significant subsidiary as defined in one or more of the above tests.
An associated company is a corporation in which the bank, directly or indirectly, owns 20 to 50 percent
of the outstanding voting stock and over which the bank exercises significant influence. This 20 to 50
percent ownership is presumed to carry "significant" influence unless the bank can demonstrate the
contrary to the satisfaction of the appropriate federal supervisory authority.
A corporate joint venture is a corporation owned and operated by a group of banks or other businesses
("joint venturers"), no one of which has a majority interest, as a separate and specific business or
project for the mutual benefit of the joint venturers. Each joint venturer may participate, directly or
indirectly, in the management of the joint venture. An entity that is a majority-owned subsidiary of one
of the joint venturers is not a corporate joint venture.
The equity ownership in majority-owned subsidiaries that are not consolidated on the Reports of
Condition and Income (in accordance with the guidance in the General Instructions on the Scope of the
"Consolidated Bank" Required to be Reported in the Submitted Reports) and in associated companies
is accounted for using the equity method of accounting and is reported in Schedule RC, item 8,
"Investments in unconsolidated subsidiaries and associated companies," or item 9, “Direct and indirect
investments in real estate ventures,” as appropriate.
Ownership in a corporate joint venture is to be treated in the same manner as an associated company
(defined above) only to the extent that the equity share represents significant influence over
management. Otherwise, equity holdings in a joint venture are treated as holdings of corporate stock
and income is recognized only when distributed in the form of dividends.
See also “equity method of accounting.”

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Suspense Accounts: Suspense accounts are temporary holding accounts in which items are carried
until they can be identified and their disposition to the proper account can be made. Such accounts
may also be known as interoffice or clearing accounts. The balances of suspense accounts as of the
report date should not automatically be reported as "Other assets" or "Other liabilities." Rather, the
items included in these accounts should be reviewed and material amounts should be reported in the
appropriate accounts of the Reports of Condition and Income.
Syndications: A syndication is a participation, usually involving shares in a single loan, in which several
participants agree to enter into an extension of credit under a bona fide binding agreement that
provides that, regardless of any event, each participant shall fund and be at risk only up to a specified
percentage of the total extension of credit or up to a specified dollar amount. In a syndication, the
participants agree to the terms of the participation prior to the execution of the final agreement and the
contract is executed by the obligor and by all the participants, although there is usually a lead institution
organizing or managing the credit. Large commercial and industrial loans, large loans to finance
companies, and large foreign loans may be handled through such syndicated participations.
Each participant in the syndicate, including the lead bank, records its own share of the participated loan
and the total amount of the loan is not entered on the books of one bank to be shared through transfers
of loans. Thus, the initial operation and distribution of this type of participation does not require a
determination as to whether a transfer that should be accounted for as a sale has occurred. However,
any subsequent transfers of shares, or parts of shares, in the syndicated loan would be subject to the
provisions of ASC Topic 860, Transfers and Servicing (formerly FASB Statement No. 140, “Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” as amended),
governing whether these transfers should be accounted for as a sale or a secured borrowing. (See the
Glossary entry for "transfers of financial assets.")
Telephone Transfer Account: See "deposits."
Term Federal Funds: See "federal funds transactions."
Time Deposits: See "deposits."
Trade Date and Settlement Date Accounting: For purposes of the Reports of Condition and Income,
the preferred method for reporting transactions in held-to-maturity securities, available-for-sale
securities, and trading assets (including money market instruments) other than derivative contracts
(see the Glossary entry for "derivative contracts") is on the basis of trade date accounting. However,
if the reported amounts under settlement date accounting would not be materially different from those
under trade date accounting, settlement date accounting is acceptable. Whichever method a bank
elects should be used consistently, unless the bank has elected settlement date accounting and
subsequently decides to change to the preferred trade date method.
Under trade date accounting, assets purchased shall be recorded in the appropriate asset category on
the trade date and the bank's obligation to pay for those assets shall be reported in Schedule RC-G,
item 4, "All other liabilities." Conversely, when an asset is sold, it shall be removed on the trade date
from the asset category in which it was recorded, and the proceeds receivable resulting from the sale
shall be reported in Schedule RC-F, item 6, "All other assets." Any gain or loss resulting from such
transaction shall also be recognized on the trade date. On the settlement date, disbursement of the
payment or receipt of the proceeds will eliminate the respective "All other liabilities" or "All other assets"
entry resulting from the initial recording of the transaction.
Under settlement date accounting, assets purchased are not recorded until settlement date. On the
trade date, no entries are made. Upon receipt of the assets on the settlement date, the asset is
reported in the proper asset category and payment is disbursed. The selling bank, on the trade date,
would make no entries. On settlement date, the selling bank would reduce the appropriate asset
category and reflect the receipt of the payment. Any gain or loss resulting from such transaction would
be recognized on the settlement date.

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Trading Account: Trading activities typically include (a) regularly underwriting or dealing in securities;
interest rate, foreign exchange rate, commodity, equity, and credit derivative contracts; other financial
instruments; and other assets for resale, (b) acquiring or taking positions in such items principally for
the purpose of selling in the near term or otherwise with the intent to resell in order to profit from shortterm price movements, and (c) acquiring or taking positions in such items as an accommodation to
customers or for other trading purposes.
Pursuant to ASC Subtopic 825-10, Financial Instruments – Overall (formerly FASB Statement No. 159,
“The Fair Value Option for Financial Assets and Financial Liabilities”), all securities within the scope of
ASC Topic 320, Investments-Debt and Equity Securities (formerly FASB Statement No. 115,
“Accounting for Certain Investments in Debt and Equity Securities”), that a bank has elected to report at
fair value under a fair value option with changes in fair value reported in current earnings should be
classified as trading securities. In addition, for purposes of these reports, banks may classify assets
(other than securities within the scope of ASC Topic 320 for which a fair value option is elected) and
liabilities as trading if the bank applies fair value accounting, with changes in fair value reported in
current earnings, and manages these assets and liabilities as trading positions, subject to the controls
and applicable regulatory guidance related to trading activities. For example, a bank would generally
not classify a loan to which it has applied the fair value option as a trading asset unless the bank holds
the loan, which it manages as a trading position, for one of the following purposes: (1) for market
making activities, including such activities as accumulating loans for sale or securitization; (2) to benefit
from actual or expected price movements; or (3) to lock in arbitrage profits.
All trading assets should be segregated from a bank's other assets and reported in Schedule RC,
item 5, "Trading assets." In addition, banks that reported average trading assets (Schedule RC-K,
item 7) of $2 million or more in any of the four preceding calendar quarters should detail the types of
assets and liabilities in the trading account in Schedule RC-D, Trading Assets and Liabilities, and the
levels within the fair value measurement hierarchy in which the trading assets and liabilities fall in

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Trading Account (cont.):
Schedule RC-Q, Assets and Liabilities Measured at Fair Value on a Recurring Basis. A bank's failure
to establish a separate account for assets that are used for trading purposes does not prevent such
assets from being designated as trading for purposes of these reports. For further information, see
ASC Topic 320.
All trading account assets should be reported at their fair value with unrealized gains and losses
recognized in current income. When a security or other asset is acquired, a bank should determine
whether it intends to hold the asset for trading or for investment (e.g., for securities, available-for-sale
or held-to-maturity). A bank should not record a newly acquired asset in a suspense account and later
determine whether it was acquired for trading or investment purposes. Regardless of how a bank
categorizes a newly acquired asset, management should document its decision.
All trading liabilities should be segregated from other transactions and reported in Schedule RC,
item 15, "Trading liabilities." The trading liability account includes the fair value of derivative contracts
held for trading that are in loss positions and short positions arising from sales of securities and other
assets that the bank does not own. (See the Glossary entry for "short position.") Trading account
liabilities should be reported at fair value with unrealized gains and losses recognized in current income
in a manner similar to trading account assets.
Given the nature of the trading account, transfers into or from the trading category should be rare.
Transfers between a trading account and any other account of the bank must be recorded at fair value
at the time of the transfer. For a security transferred from the trading category, the unrealized holding
gain or loss at the date of the transfer will already have been recognized in earnings and should not be
reversed. For a security transferred into the trading category, the unrealized holding gain or loss at the
date of the transfer should be recognized in earnings.
Transaction Account: See "deposits."
Transfers of Financial Assets: The accounting and reporting standards for transfers of financial assets
are set forth in ASC Topic 860, Transfers and Servicing (formerly FASB Statement No. 140, “Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” as amended by FASB
Statement No. 156, “Accounting for Servicing of Financial Assets,” FASB Statement No. 166, “Accounting
for Transfers of Financial Assets,” and certain other standards). Banks must follow ASC Topic 860 for
purposes of these reports. ASC Topic 860 limits the circumstances in which a financial asset, or a
portion of a financial asset, should be derecognized when the transferor has not transferred the entire
original financial asset or when the transferor has continuing involvement with the transferred financial
asset. ASC Topic 860 also defines a “participating interest” (which is discussed more fully below) and
establishes the accounting and reporting standards for loan participations, syndications, and other
transfers of portions of financial assets. A summary of these accounting and reporting standards follows.
For further information, see ASC Topic 860.
A financial asset is cash, evidence of an ownership interest in another entity, or a contract that conveys
to the bank a contractual right either to receive cash or another financial instrument from another entity
or to exchange other financial instruments on potentially favorable terms with another entity. Most of the
assets on a bank's balance sheet are financial assets, including balances due from depository
institutions, securities, federal funds sold, securities purchased under agreements to resell, loans and
1
lease financing receivables, and interest-only strips receivable. However, servicing assets are not

1

ASC Topic 860 defines an interest-only strip receivable as the contractual right to receive some or all of the interest
due on a bond, mortgage loan, collateralized mortgage obligation, or other interest-bearing financial asset.

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Transfers of Financial Assets (cont.):
financial assets. Financial assets also include financial futures contracts, forward contracts, interest
rate swaps, interest rate caps, interest rate floors, and certain option contracts.
A transferor is an entity that transfers a financial asset, an interest in a financial asset, or a group of
financial assets that it controls to another entity. A transferee is an entity that receives a financial
asset, an interest in a financial asset, or a group of financial assets from a transferor.
In determining whether a bank has surrendered control over transferred financial assets, the bank must
first consider whether the entity to which the financial assets were transferred would be required to be
consolidated by the bank. If it is determined that consolidation would be required by the bank, then the
transferred financial assets would not be treated as having been sold in the bank’s Reports of
1
Condition and Income even if all of the other provisions listed below are met.
Determining Whether a Transfer Should be Accounted for as a Sale or a Secured Borrowing – A
transfer of an entire financial asset, a group of entire financial assets, or a participating interest in an
entire financial asset in which the transferor surrenders control over those financial assets shall be
accounted for as a sale if and only if all of the following conditions are met:
(1) The transferred financial assets have been isolated from the transferor, i.e., put presumptively
beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership.
Transferred financial assets are isolated in bankruptcy or other receivership only if the transferred
financial assets would be beyond the reach of the powers of a bankruptcy trustee or other receiver
for the transferor or any of its consolidated affiliates included in the financial statements being
presented. For multiple step transfers, an entity that is designed to make remote the possibility
that it would enter bankruptcy or other receivership (bankruptcy-remote entity) is not considered a
consolidated affiliate for purposes of performing the isolation analysis. Notwithstanding the
isolation analysis, each entity involved in the transfer is subject to the applicable guidance on
whether it must be consolidated.
(2) Each transferee (or, if the transferee is an entity whose sole purpose is to engage in securitization
or asset-backed financing activities and that entity is constrained from pledging or exchanging the
assets it receives, each third-party holder of its beneficial interest) has the right to pledge or
exchange the assets (or beneficial interests) it received, and no condition both constrains the
transferee (or third-party holder of its beneficial interests) from taking advantage of its right to
pledge or exchange and provides more than a trivial benefit to the transferor.
(3) The transferor, its consolidated affiliates included in the financial statements being presented, or its
agents do not maintain effective control over the transferred financial assets or third-party
beneficial interests related to those transferred assets. Examples of a transferor’s effective control
over the transferred financial assets include, but are not limited to (a) an agreement that both
entitles and obligates the transferor to repurchase or redeem the transferred financial assets
before their maturity, (b) an agreement that provides the transferor with both the unilateral ability to
cause the holder to return specific financial assets and a more-than-trivial benefit attributable to
that ability, other than through a cleanup call, or (c) an agreement that permits the transferee to
require the transferor to repurchase the transferred financial assets at a price that is so favorable to
the transferee that it is probable that the transferee will require the transferor to repurchase them.

1

The requirements in ASC Subtopic 810-10, Consolidation – Overall (formerly FASB Interpretation No. 46 (revised
December 2003), “Consolidation of Variable Interest Entities,” as amended by FASB Statement No. 167,
“Amendments to FASB Interpretation No. 46(R)”), should be applied to determine when a variable interest entity
should be consolidated. For further information, refer to the Glossary entry for “variable interest entity.”

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Transfers of Financial Assets (cont.):
If a transfer of an entire financial asset, a group of entire financial assets, or a participating interest in
an entire financial asset does not meet the conditions for sale treatment, or if a transfer of a portion of
an entire financial interest does not meet the definition of a participating interest (discussed below), the
transferor and the transferee shall account for the transfer as a secured borrowing with pledge of
collateral. The transferor shall continue to report the transferred financial assets in its financial
statements with no change in their measurement (i.e., the original basis of accounting for the
transferred financial assets is retained).
Accounting for a Transfer of an Entire Financial Asset or a Group of Entire Financial Assets That
1
Qualifies as a Sale – Upon the completion of a transfer of an entire financial asset or a group of entire
financial assets that satisfies all three of the conditions to be accounted for as a sale, the transferee(s)
(i.e., purchaser(s)) must recognize all assets obtained and any liabilities incurred and initially measure
them at fair value. The transferor (seller) should:
(1) Derecognize or remove the transferred financial assets from the balance sheet.
(2) Recognize and initially measure at fair value servicing assets, servicing liabilities, and any other
assets obtained (including a transferor’s beneficial interest in the transferred financial assets) and
liabilities incurred in the sale.
(3) Recognize in earnings any gain or loss on the sale.
If, as a result of a change in circumstances, a bank transferor regains control of a transferred financial
asset after a transfer that was previously accounted for as a sale because one or more of the
conditions for sale accounting in ASC Topic 860 are no longer met or a transferred portion of an entire
financial asset no longer meets the definition of a participating interest, such a change generally
should be accounted for in the same manner as a purchase of the transferred financial asset from the
former transferee (purchaser) in exchange for a liability assumed. The transferor should recognize
(rebook) the financial asset on its balance sheet together with a liability to the former transferee,
measuring the asset and liability at fair value on the date of the change in circumstances. If the
rebooked financial asset is a loan, it must be reported as a loan in Schedule RC-C, part I, either as a
loan held for sale or a loan held for investment, based on facts and circumstances, in accordance with
generally accepted accounting principles. The liability to the former transferee should be reported as a
secured borrowing in Schedule RC-M, item 5.b, “Other borrowings.” This accounting and reporting
treatment applies, for example, to U.S. Government-guaranteed or -insured residential mortgage loans
backing Government National Mortgage Association (GNMA) mortgage-backed securities that a bank
services after it has securitized the loans in a transfer accounted for as a sale. If and when individual
loans later meet delinquency criteria specified by GNMA, they are eligible for repurchase (buy-back)
and the bank is deemed to have regained effective control over these loans. The delinquent loans
must be brought back onto the bank's books and recorded as loans, regardless of whether the bank
intends to exercise the buy-back option.
Banks should refer to ASC Topic 860 for implementation guidance for accounting for transfers of
certain lease receivables, securities lending transactions, repurchase agreements including "dollar
rolls," "wash sales," loan syndications, loan participations (discussed below), risk participations in
bankers acceptances, factoring arrangements, and transfers of receivables with recourse. However,
this accounting standard does not provide guidance on the accounting for most assets and liabilities
recorded on the balance sheet following a transfer accounted for as a sale. As a result, after their
initial measurement or carrying amount allocation, these assets and liabilities should be accounted for
in accordance with the existing generally accepted accounting principles applicable to them.

1

The guidance in this section of this Glossary entry does not apply to a transfer of a participating interest in an entire
financial asset that qualifies as a sale. The accounting for such a transfer is discussed in a separate section later in
this Glossary entry.

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Transfers of Financial Assets (cont.):
Participating Interests – Before considering whether the conditions to be accounted for as a sale have
been met (as discussed above), the transfer of a portion of an entire financial asset must first meet the
definition of a participating interest. If the transferred portion of the entire financial asset is a qualifying
participating interest (as defined below), then it should be determined whether the transfer of the
participating interest meets the sales conditions discussed above.
A participating interest in an entire financial asset, as defined by ASC Topic 860, has all of the following
characteristics:
(1) From the date of the transfer, it must represent a proportionate (pro rata) ownership interest in an
entire financial asset;
(2) From the date of the transfer, all cash flows received from the entire financial asset, except any
cash flows allocated as compensation for servicing or other services performed (which must not be
subordinated and must not significantly exceed an amount that would fairly compensate a
substitute service provider should one be required), must be divided proportionately among the
participating interest holders in an amount equal to their share of ownership;
(3) The rights of each participating interest holder (including the lead lender) must have the same
priority, no interest is subordinated to another interest, and no participating interest holder has
recourse to the lead lender or another participating interest holder other than standard
representations and warranties and ongoing contractual servicing and administration obligations;
and
(4) No party has the right to pledge or exchange the entire financial asset unless all participating
interest holders agree to do so.
Thus, under ASC Topic 860, so-called “last-in, first-out” (LIFO) participations in which all principal cash
flows collected on the loan are paid first to the party acquiring the participation do not meet
the definition of a participating interest. Similarly, so-called “first-in, first-out” (FIFO) participations in
which all principal cash flows collected on the loan are paid first to the lead lender do not meet the
definition of a participating interest. As a result, neither LIFO nor FIFO participations transferred on
or after the beginning of an institution’s first annual reporting period that begins after November 15, 2009
(i.e., January 1, 2010, for a bank with a calendar year fiscal year) will qualify for sale accounting and
instead must be reported as secured borrowings.
The participating interest definition also applies to transfers of government-guaranteed portions of
loans, such as those guaranteed by the Small Business Administration (SBA). In this regard, for a
transfer of the guaranteed portion of an SBA loan at a premium that settled before February 15, 2011,
the "seller" was obligated by the SBA to refund the premium to the “purchaser” if the loan was repaid
within 90 days of the transfer. This premium refund obligation was a form of recourse, which meant
that the transferred guaranteed portion of the loan did not meet the definition of a "participating
interest" for the 90-day period that the premium refund obligation existed. As a result, the transfer was
required to be accounted for as a secured borrowing during this period. After the 90-day period,
assuming the transferred guaranteed portion and the retained unguaranteed portion of the SBA loan
then met the definition of a "participating interest," the transfer of the guaranteed portion could be
accounted for as a sale if all of the conditions for sale accounting were met. In contrast, for transfers of
guaranteed portions of SBA loans at a premium that settled on or after February 15, 2011, the SBA has
eliminated the premium refund requirement. With the elimination of the premium refund obligation from
such transfers, the transferred guaranteed portion and the retained unguaranteed portion of the SBA
loan should normally meet the definition of a “participating interest” on the transfer date. Assuming the
definition of “participating interest” is met and all of the conditions for sale accounting are met, the
transfer of the guaranteed portion of an SBA loan at a premium on or after February 15, 2011, would
qualify as a sale on the transfer date. The conditions for sale accounting are described above under
“Determining Whether a Transfer Should be Accounted for as a Sale or a Secured Borrowing” in this
Glossary entry.
On the other hand, if the guaranteed portion of the SBA loan is transferred at par in a so-called “par
sale” in which the “seller” agrees to pass interest through to the “purchaser” at less than the contractual

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Transfers of Financial Assets (cont.):
interest rate and the spread between the contractual rate and the pass-through interest rate
significantly exceeds an amount that would fairly compensate a substitute servicer, the excess spread
is viewed as an interest-only strip. The existence of this interest-only strip results in a disproportionate
sharing of the cash flows on the entire SBA loan, which means that the transferred guaranteed portion
and the retained unguaranteed portion of the SBA loan do not meet the definition of a "participating
interest," which precludes sale accounting. Instead, the transfer of the guaranteed portion must be
accounted for as a secured borrowing.
Accounting for a Transfer of a Participating Interest That Qualifies as a Sale – Upon the completion of
a transfer of a participating interest that satisfies all three of the conditions to be accounted for as a
sale, the participating institution(s) (the transferee(s)) shall recognize the participating interest(s)
obtained, other assets obtained, and any liabilities incurred and initially measure them at fair value.
The originating lender (the transferor) must:
(1) Allocate the previous carrying amount of the entire financial asset between the participating
interest(s) sold and the participating interest that it continues to hold based on their relative fair
values at the date of the transfer.
(2) Derecognize the participating interest(s) sold.
(3) Recognize and initially measure at fair value servicing assets, servicing liabilities, and any other
assets obtained and liabilities incurred in the sale.
(4) Recognize in earnings any gain or loss on the sale.
(5) Report any participating interest(s) that continue to be held by the originating lender as the
difference between the previous carrying amount of the entire financial asset and the amount
derecognized.
Additional Considerations Pertaining to Participating Interests – When evaluating whether the transfer
of a participating interest in an entire financial asset satisfies the conditions for sale accounting under
ASC Topic 860, an originating lender's right of first refusal on a bona fide offer to the participating
institution from a third party, a requirement for a participating institution to obtain the originating
lender's permission to sell or pledge the participating interest that shall not be unreasonably withheld,
or a prohibition on the participating institution's sale of the participating interest to the originating
lender's competitor (if other potential willing buyers exist) is a limitation on the participating institution's
rights, but is presumed not to constrain a participant from exercising its right to pledge or exchange the
participating interest. However, if the participation agreement constrains the participating institution
from pledging or exchanging its participating interest, the originating lender presumptively receives
more than a trivial benefit, has not relinquished control over the participating interest, and should
account for the transfer of the participating interest as a secured borrowing.
A loan participation agreement may give the originating lender the contractual right to repurchase a
participating interest at any time. In this situation, the right to repurchase is effectively a call option on
a specific participating interest, i.e., a participating interest that is not readily obtainable in the
marketplace. Regardless of whether this option is freestanding or attached, it either constrains the
participating institution from pledging or exchanging its participating interest or results in the originating
lender maintaining effective control over the participating interest. As a consequence, the contractual
right to repurchase precludes sale accounting and the transfer of the participating interest should be
accounted for as a secured borrowing, not as a sale.
In addition, under a loan participation agreement, the originating lender may give the participating
institution the right to resell the participating interest, but reserves the right to call the participating

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Transfers of Financial Assets (cont.):
interest at any time from whoever holds it and can enforce that right by discontinuing the flow of
interest to the holder of the participating interest at the call date. In this situation, the originating lender
has maintained effective control over the participating interest and the transfer of the participating
interest should be accounted for as a secured borrowing, not as a sale.
If an originating FDIC-insured lender has transferred a loan participation to a participating institution
with recourse prior to January 1, 2002, the existence of the recourse obligation in and of itself does not
preclude sale accounting for the transfer. If a loan participation transferred with recourse prior to
January 1, 2002, meets the three conditions then in effect for the transferor to have surrendered control
over the transferred assets, the transfer should be accounted for as a sale for financial reporting
purposes. However, a loan participation sold with recourse is subject to the banking agencies’ riskbased capital requirements as discussed in the Glossary entry for “sales of assets for risk-based
capital purposes” and in the instructions for Schedule RC-R, Regulatory Capital.
If an originating FDIC-insured lender transfers a loan participation with recourse after December 31,
2001, the participation generally will not be considered isolated from the transferor, i.e., the originating
lender, in the event of an FDIC receivership. Section 360.6 of the FDIC's regulations limits the FDIC's
ability to reclaim loan participations transferred "without recourse," as defined in the regulations, but
does not limit the FDIC's ability to reclaim loan participations transferred with recourse. Under
Section 360.6, a participation that is subject to an agreement that requires the originating lender to
repurchase the participation or to otherwise compensate the participating institution due to a default on
the underlying loan is considered a participation "with recourse." As a result, a loan participation
transferred "with recourse" after December 31, 2001, generally should be accounted for as a secured
borrowing and not as a sale for financial reporting purposes. This means that the originating lender
should not remove the participation from its loan assets on the balance sheet, but should report the
secured borrowing in Schedule RC-M, item 5.b, “Other borrowings.”
Reporting Transfers of Loan Participations That Do Not Qualify for Sale Accounting – If a transfer of a
portion of an entire financial asset does not meet the definition of a participating interest, or if a transfer
of a participating interest does not meet all of the conditions for sale accounting, the transfer must be
reported as a secured borrowing with pledge of collateral. In these situations, because the transferred
loan participation does not qualify for sale accounting, the originating lender must continue to report the
transferred participation (as well as the retained portion of the loan) as a loan on the Report of
Condition balance sheet (Schedule RC), normally in item 4.b, “Loans and leases, net of unearned
income,” and in the appropriate loan category in Schedule RC-C, part I, Loans and Leases. The
originating lender should report the transferred loan participation as a secured borrowing on the Call
Report balance sheet in Schedule RC, item 16, “Other borrowed money,” and in the appropriate
subitem or subitems in Schedule RC-M, item 5.b, “Other borrowings;” in Schedule RC-M, item 10.b,
“Amount of ‘Other borrowings’ that are secured;” and in Schedule RC-C, part I, Memorandum item 14,
“Pledged loans and leases.” As a consequence, the transferred loan participation should be included
in the originating lender’s loans and leases for purposes of determining the appropriate level for the
lender’s allowance for loan and lease losses.
A bank that acquires a nonqualifying loan participation (or a qualifying participating interest in a transfer
that does not does not meet all of the conditions for sale accounting) should normally report the loan
participation or participating interest in item 4.b, “Loans and leases, net of unearned income,” on the
Report of Condition balance sheet (Schedule RC) and in the loan category appropriate to the
underlying loan, e.g., as a “commercial and industrial loan” in item 4 or as a “loan secured by real
estate” in item 1, in Schedule RC-C, part I, Loans and Leases. Furthermore, for risk-based capital
purposes, the acquiring bank should assign the loan participation or participating interest to the riskweight category appropriate to the underlying borrower or, if relevant, the guarantor or the nature of the
collateral.

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Transfers of Financial Assets (cont.):
Financial Assets Subject to Prepayment – Financial assets such as interest-only strips receivable,
other beneficial interests, loans, debt securities, and other receivables, but excluding financial
instruments that must be accounted for as derivatives, that can contractually be prepaid or otherwise
settled in such a way that the holder of the financial asset would not recover substantially all of its
recorded investment do not qualify to be accounted for at amortized cost. After their initial recording on
the balance sheet, financial assets of this type must be subsequently measured at fair value like
available-for-sale securities or trading securities.
Traveler's Letter of Credit: See "letter of credit."
Treasury Receipts: See "coupon stripping, Treasury receipts, and STRIPS."
Treasury Stock: Treasury stock is stock that the bank has issued and subsequently acquired, but that
has not been retired or resold. As a general rule, treasury stock, whether carried at cost or at
par value, is a deduction from a bank's total equity capital. For purposes of the Reports of Condition
and Income, the carrying value of treasury stock should be reported (as a negative number) in
Schedule RC, item 26.c, "Other equity capital components."
"Gains" and "losses" on the sale, retirement, or other disposal of treasury stock are not to be reported
in Schedule RI, Income Statement, but should be reflected in Schedule RI-A, item 6, "Treasury stock
transactions, net." Such gains and losses, as well as the excess of the cost over the par value of
treasury stock carried at par, are generally to be treated as adjustments to Schedule RC, item 25,
"Surplus."
For further information, see ASC Subtopic 505-30, Equity – Treasury Stock (formerly Accounting
Research Bulletin No. 43, Chapter 1, Section B, as amended by APB Opinion No. 6, “Status of
Accounting Research Bulletins”).
Troubled Debt Restructurings: The accounting standards for troubled debt restructurings are set forth
in ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors (formerly FASB
Statement No. 15, "Accounting by Debtors and Creditors for Troubled Debt Restructurings," as
amended by FASB Statement No. 114, "Accounting by Creditors for Impairment of a Loan"). A
summary of these accounting standards follows. For further information, see ASC Subtopic 310-40.
A troubled debt restructuring is a restructuring in which a bank, for economic or legal reasons related to
a borrower's financial difficulties, grants a concession to the borrower that it would not otherwise
consider. The restructuring of a loan or other debt instrument (hereafter referred to collectively as a
"loan") may include, but is not necessarily limited to: (1) the transfer from the borrower to the bank of
real estate, receivables from third parties, other assets, or an equity interest in the borrower in full or
partial satisfaction of the loan (see the Glossary entry for "foreclosed assets" for further information),
(2) a modification of the loan terms, such as a reduction of the stated interest rate, principal, or accrued
interest or an extension of the maturity date at a stated interest rate lower than the current market rate
for new debt with similar risk, or (3) a combination of the above. A loan extended or renewed at a
stated interest rate equal to the current interest rate for new debt with similar risk is not to be reported
as a restructured troubled loan.
The recorded amount of a loan is the loan balance adjusted for any unamortized premium or discount
and unamortized loan fees or costs, less any amount previously charged off, plus recorded accrued
interest.
All loans whose terms have been modified in a troubled debt restructuring, including both commercial
and retail loans, must be evaluated for impairment under ASC Topic 310, Receivables (formerly FASB
Statement No. 114, "Accounting by Creditors for Impairment of a Loan," as amended). Accordingly, a
bank should measure any loss on the restructuring in accordance with the guidance concerning
impaired loans set forth in the Glossary entry for "loan impairment." Under ASC Topic 310, when

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Troubled Debt Restructurings (cont.):
measuring impairment on a restructured troubled loan using the present value of expected future cash
flows method, the cash flows should be discounted at the effective interest rate of the original loan, i.e.,
before the restructuring. For a residential mortgage loan with a “teaser” or starter rate that is less than
the loan’s fully indexed rate, the starter rate is not the original effective interest rate. ASC Topic 310
also permits a bank to aggregate impaired loans that have risk characteristics in common with other
impaired loans, such as modified residential mortgage loans that represent troubled debt
restructurings, and use historical statistics along with a composite effective interest rate as a means of
measuring the impairment of these loans.
See the Glossary entry for "nonaccrual status" for a discussion of the conditions under which a
nonaccrual asset which has undergone a troubled debt restructuring (including those that involve a
multiple note structure) may be returned to accrual status.
A troubled debt restructuring in which a bank receives physical possession of the borrower's assets,
regardless of whether formal foreclosure or repossession proceedings take place, should be accounted
for in accordance with ASC Subtopic 310-40. Thus, in such situations, the loan should be treated as if
assets have been received in satisfaction of the loan and reported as described in the Glossary entry
for "foreclosed assets."
Despite the granting of some type of concession by a bank to a borrower, a troubled debt restructuring
may still result in the recorded amount of the loan bearing a market yield, i.e., an effective interest rate
that at the time of the restructuring is greater than or equal to the rate that the bank is willing to accept
for a new extension of credit with comparable risk. This may arise as a result of reductions in the
recorded amount of the loan prior to the restructuring (e.g., by charge-offs). All loans that have
undergone troubled debt restructurings and that are in compliance with their modified terms must be
reported as restructured loans in Schedule RC-C, part I, Memorandum item 1. However, a
restructured loan that is in compliance with its modified terms and yields a market rate need not
continue to be reported as a troubled debt restructuring in this memorandum item in calendar years
after the year in which the restructuring took place.
A restructuring may include both a modification of terms and the acceptance of property in partial
satisfaction of the loan. The accounting for such a restructuring is a two step process. First, the
recorded amount of the loan is reduced by the fair value less cost to sell of the property received.
Second, the institution should measure any impairment on the remaining recorded balance of the
restructured loan in accordance with the guidance concerning impaired loans set forth in ASC
Topic 310.
A restructuring may involve the substitution or addition of a new debtor for the original borrower. The
treatment of these situations depends upon their substance. Restructurings in which the substitute or
additional debtor controls, is controlled by, or is under common control with the original borrower, or
performs the custodial function of collecting certain of the original borrower's funds, should be
accounted for as modifications of terms. Restructurings in which the substitute or additional debtor
does not have a control or custodial relationship with the original borrower should be accounted for as
a receipt of a "new" loan in full or partial satisfaction of the original borrower's loan. The "new" loan
should be recorded at its fair value.
A credit analysis should be performed for a restructured loan in conjunction with its restructuring to
determine its collectibility and estimated credit loss. When available information confirms that a
specific restructured loan, or a portion thereof, is uncollectible, the uncollectible amount should be
charged off against the allowance for loan and lease losses at the time of the restructuring. As is the
case for all loans, the credit quality of restructured loans should be regularly reviewed. The bank
should periodically evaluate the collectibility of the restructured loan so as to determine whether any
additional amounts should be charged to the allowance for loan and lease losses or, if the restructuring
involved an asset other than a loan, to another appropriate account.

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GLOSSARY

Trust Preferred Securities: As bank investments, trust preferred securities are hybrid instruments
possessing characteristics typically associated with debt obligations. Although each issue of these
securities may involve minor differences in terms, under the basic structure of trust preferred securities a
corporate issuer, such as a bank holding company, first organizes a business trust or other special
purpose entity. This trust issues two classes of securities: common securities, all of which are
purchased and held by the corporate issuer, and trust preferred securities, which are sold to investors.
The business trust’s only assets are deeply subordinated debentures of the corporate issuer, which the
trust purchases with the proceeds from the sale of its common and preferred securities. The corporate
issuer makes periodic interest payments on the subordinated debentures to the business trust, which
uses these payments to pay periodic dividends on the trust preferred securities to the investors. The
subordinated debentures have a stated maturity and may also be redeemed under other circumstances.
Most trust preferred securities are subject to mandatory redemption upon the repayment of the
debentures.
Trust preferred securities meet the definition of a security in ASC Topic 320, Investments-Debt and
Equity Securities (formerly FASB Statement No. 115, "Accounting for Certain Investments in Debt and
Equity Securities"). Because of the mandatory redemption provision in the typical trust preferred
security, investments in trust preferred securities would normally be considered debt securities for
financial accounting purposes. Accordingly, regardless of the authority under which a bank is
permitted to invest in trust preferred securities, banks should report these investments as debt
securities for purposes of these reports (unless, based on the specific facts and circumstances of a
particular issue of trust preferred securities, the securities would be considered equity rather than debt
securities under ASC Topic 320). If not held for trading purposes, an investment in trust preferred
securities issued by a single U.S. business trust should be reported in Schedule RC-B, item 6.a, “Other
domestic debt securities.” If not held for trading purposes, an investment in a structured financial
product, such as a collateralized debt obligation, for which the underlying collateral is a pool of trust
preferred securities issued by U.S. business trusts should be reported in Schedule RC-B, item 5.b.(1),
“Cash instruments,” and in the appropriate subitem of Schedule RC-B, Memorandum item 6,
“Structured financial products by underlying collateral or reference assets.”
U.S. Banks: See "banks, U.S. and foreign."
U.S. Territories and Possessions: United States territories and possessions include American Samoa,
Guam, the Northern Mariana Islands, and the U.S. Virgin Islands.
Valuation Allowance: In general, a valuation allowance is an account established against a specific
asset category or to recognize a specific liability, with the intent of absorbing some element of
estimated loss. Such allowances are created by charges to expense in the Report of Income and
those established against asset accounts are netted from the accounts to which they relate for
presentation in the Report of Condition. Provisions establishing or augmenting such allowances are to
be reported as "Other noninterest expense" except for the provision for loan and lease losses which is
reported in a separate, specifically designated income statement item on Schedule RI.
Variable Interest Entity: A variable interest entity (VIE), as described in ASC Subtopic 810-10,
Consolidation – Overall (formerly FASB Interpretation No.46 (revised December 2003), “Consolidation
of Variable Interest Entities,” as amended by FASB Statement No. 167, "Amendments to FASB
Interpretation No. 46(R)”), is an entity in which equity investors do not have sufficient equity at risk for
that entity to finance its activities without additional subordinated financial support or, as a group, the
holders of the equity investment at risk lack one or more of the following three characteristics: (a) the
power, through voting rights or similar rights, to direct the activities of an entity that most significantly
impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the
entity, or (c) the right to receive the expected residual returns of the entity.

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Variable Interest Entity (cont.):
Variable interests in a VIE are contractual, ownership, or other pecuniary interests in an entity that
change with changes in the fair value of the entity’s net assets exclusive of variable interests. For
example, equity ownership in a VIE would be a variable interest as long as the equity ownership is
considered to be at risk of loss.
ASC Subtopic 810-10 provides guidance for determining when a bank or other company must
consolidate certain special purposes entities, such as VIEs. Under ASC Subtopic 810-10, a bank must
perform a qualitative assessment to determine whether it has a controlling financial interest in a VIE. This
must include an assessment of the characteristics of the bank’s variable interest or interests and other
involvements (including involvement of related parties and de facto agents), if any, in the VIE, as well as
the involvement of other variable interest holders. The assessment must also consider the entity’s
purpose and design, including the risks that the entity was designed to create and pass through to its
variable interest holders. In making this assessment, only substantive terms, transactions, and
arrangements, whether contractual or noncontractual, are to be considered. Any term, transaction, or
arrangement that does not have a substantive effect on an entity’s status as a VIE, the bank’s power
over a VIE, or the bank’s obligation to absorb losses or its right to receive benefits of the VIE are to be
disregarded when applying the provisions of ASC Subtopic 810-10.
If a bank has a controlling financial interest in a VIE, it is deemed to be the primary beneficiary of the VIE
and, therefore, must consolidate the VIE. An entity is deemed to have a controlling financial interest in a
VIE if it has both of the following characteristics:
•
•

The power to direct the activities of a variable interest entity that most significantly impact the
entity’s economic performance.
The obligation to absorb losses of the entity that could potentially be significant to the variable
interest entity or the right to receive benefits from the entity that could potentially be significant to
the variable interest entity.

If a bank holds a variable interest in a VIE, it must reassess each reporting period to determine whether
it is the primary beneficiary. Based on a bank’s reassessment it may be required to consolidate or
deconsolidate the VIE if a change in the bank’s status as the primary beneficiary has occurred.
ASC Subtopic 810-10 provides guidance on the initial measurement of a VIE that the primary
beneficiary must consolidate. For example, if the primary beneficiary and the VIE are not under
common control, the initial consolidation of a VIE that is a business is a business combination and
must be accounted for in accordance with ASC Topic 805, Business Combinations (formerly FASB
Statement No. 141 (revised 2007), "Business Combinations"). If a bank is required to deconsolidate a
VIE, it must follow the guidance for deconsolidating subsidiaries in ASC Subtopic 810-10 (formerly
FASB Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements”).
When a bank is required to consolidate a VIE because it is the primary beneficiary, the standard
principles of consolidation apply after initial measurement (see “Rules of Consolidation” in the General
Instructions). The assets and liabilities of consolidated VIEs should be reported on the Report of
Condition balance sheet (Schedule RC) in the balance sheet category appropriate to the asset or
liability. An institution that consolidates one or more VIEs must complete Schedule RC-V, Variable
Interest Entities, to report, by balance sheet category, (a) the assets of consolidated VIEs that can be
used only to settle obligations of the consolidated VIEs and (b) the liabilities of consolidated VIEs for
which creditors do not have recourse to the general credit of the reporting institution. Such an
institution also must report in Schedule RC-V the total amount of assets and the total amount of
liabilities of its consolidated VIEs that do not meet these criteria.

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When-Issued Securities Transactions: Transactions involving securities described as "when-issued" or
"when-as-and-if-issued" are, by their nature, conditional, i.e., their completion is contingent upon the
issuance of the securities. The accounting for contracts for the purchase or sale of when-issued
securities or other securities that do not yet exist is addressed in ASC Topic 815, Derivatives and
Hedging (formerly FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended by FASB Statement No. 149). Such contracts are excluded from the
requirements of ASC Topic 815 as a regular-way security trade only if:
(1) There is no other way to purchase or sell that security;
(2) Delivery of that security and settlement will occur within the shortest period possible for that type of
security; and
(3) It is probable at inception and throughout the term of the individual contract that the contract will
not settle net and will result in physical delivery of a security when it is issued.
A contract for the purchase or sale of when-issued securities may qualify for the regular-way security
trade exclusion even though the contract permits net settlement or a market mechanism to facilitate net
settlement of the contract exists (as described in ASC Topic 815). A bank should document the basis
for concluding that it is probable that the contract will not settle net and will result in physical delivery.
If a when-issued securities contract does not meet the three criteria above, it should be accounted for
as a derivative at fair value on the balance sheet (Schedule RC) and reported as a forward contract in
Schedule RC-L, item 12.b. Such contracts should be reported on a gross basis on the balance sheet
unless the criteria for netting in ASC Subtopic 210-20, Balance Sheet – Offsetting (formerly FASB
Interpretation No. 39, “Offsetting of Amounts Related to Certain Contracts”), are met. (See the
Glossary entry for "offsetting" for further information.)
If a when-issued securities contract qualifies for the regular-way security trade exclusion, it is not
accounted for as a derivative. If the bank accounts for these contracts on a trade-date basis, it should
recognize the acquisition or disposition of the when-issued securities on its balance sheet
(Schedule RC) at the inception of the contract. If the bank accounts for these contracts on a
settlement-date basis, contracts for the purchase of when-issued securities should be reported as
"Other off-balance sheet liabilities" in Schedule RC-L, item 9, and contracts for the sale of when-issued
securities should be reported as "Other off-balance sheet assets" in Schedule RC-L, item 10, subject to
the existing reporting thresholds for these two items.
Trading in when-issued securities normally begins when the U.S. Treasury or some other issuer of
securities announces a forthcoming issue. (In some cases, trading may begin in anticipation of such
an announcement and should also be reported as described herein.) Since the exact price and terms
of the security are unknown before the auction date, trading prior to that date is on a "yield" basis. On
the auction date the exact terms and price of the security become known and when-issued trading
continues until settlement date, when the securities are delivered and the issuer is paid. If physical
delivery is taken on settlement date and settlement date accounting is used, the securities purchased
by the bank shall be reported on the balance sheet as held-to-maturity securities in Schedule RC,
item 2.a, available-for-sale securities in Schedule RC, item 2.b, or trading assets in Schedule RC,
item 5, as appropriate.

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FFIEC 031 and 041

INDEX

INDEX
Acceptances

Bank's Acceptance
Liability
Customers' Acceptance
Liability

RI-4, RI-13, RI-B-2,
RI-B-4, RC-C-5, RC-C-15,
RC-L-5, RC-N-6, RC-N-9,
RC-R-21, RC-R-22,
RC-T-8, A-4, A-54

Statement of Position
No. 92-3

A-35

Statement of Position
No. 93-6

RC-15, RC-M-9

RC-10b, RC-H-1, A-5

A-48

RC-8, RC-H-1, A-5

Statement of Position
No. 98-1
Statement of Position
No. 98-5

A-75

Participations in

RC-L-5, RC-R-1, RC-R-2,
RC-R-24, A-6

Accounting Changes

A-1

Accounting Errors
Accounting Research Bulletin
No. 43
Accounts Payable
Accrual Basis Reporting

Allocated Transfer Risk
Reserve

RI-A-1, RI-E-2, A-2
Provision for
Allocated Transfer
Risk

A-83

Accrued Interest on Securities
Purchased

RC-F-3

All Other Assets

RC-F-3

All Other Liabilities

RC-G-2

Allowance for Credit Losses
on Off-Balance Sheet
Credit Exposures
Provision

RC-F-1, A-60

Related to Credit Card
Securitizations

RC-F-3, A-2a

Accumulated Net Gains
(Losses) on Cash Flow
Hedges

13, RI-A-4, RC-14, RC-R-3

Allowance for Loan and
Lease Losses

Changes in

Acquisition, Development, or
Construction (ADC)
Arrangements
Acquisition Fees Paid to
Insurance Carriers
Adjusted Trading
Advertising Expense
Advisory Fees
Agreement Corporation

RI-22
11, 12, RI-9, RI-B-1,
RI-B-6, RI-B-7, RI-B-8,
RI-E-2, RC-6, RC-R-10,
RC-R-15, RC-R-22, A-3,
A-57
RI-B-6
RC-R-29

13, RC-13, A-31, A-38
Interagency Policy
Statement (1993)
RC-14, RC-M-4, RC-M-7,
A-3

Policy Statement on
Methodologies and
Documentation
(2001)

RC-F-3

RI-20a, RI-E-1

11, A-4, A-57
A-4

Provision

RI-9, RI-B-7, RI-D-1, A-3,
A-57

Amended Reports

7, RI-A-1, RI-B-6

A-73

RI-11

Annuities

RC-M-11, RC-T-8

8, A-8, A-16, A-33, A-40

Sales

RI-9, RI-11, RI-12, RI-26,
RC-M-10

AICPA
Audit and Accounting
Guide for Banks and
Savings Institutions

A-66

Practice Bulletin No. 4

A-39

Practice Bulletin No. 6

RC-N-2, A-60, A-61

FFIEC 031 and 041

RI-B-6, RC-G-1, RC-R-10,
A-3

RI-A-4
Excess

Accumulated Other
Comprehensive Income

RI-9

12
RC-G-1

Change in

RI-B-1, RI-B-6, RI-B-8,
RC-6, RC-C-1, RC-R-10,
RC-R-15, RC-R-19,
RC-R-29

RC-G-2

Accrued Expenses

Accrued Interest Receivable

AICPA (cont.)

APB

IN-1
(6-03)

Opinion No. 6

A-83

Opinion No. 16

A-11

Opinion No. 17

RI-20, RC-9

Opinion No. 20

A-2

INDEX

FFIEC 031 and 041

INDEX

APB (cont.)

Banks (cont.)

Opinion No. 21

A-66

Opinion No. 30

RI-24, A-34

Applicability of Generally
Accepted Accounting
Principles
Asset-Backed Securities
Commercial Paper
Conduits
Asset Sale Activities
Assets and Liabilities of IBFs
Assets Netted Against
Deposit Liabilities

in Foreign Countries

RC-A-5, RC-C-8, RC-E-9,
A-9

U.S. Banks

RI-B-2, RC-E-18, RC-N-6,
RC-O-6, RC-O-7, A-8

U.S. Branches and
Agencies of Foreign
Banks

RC-A-4, RC-C-8, RC-E-8,
RC-E-18, A-9, A-16

11

RI-6, RC-B-7, RC-K-2,
RC-R-16, RC-S-1
RC-S-8

Benefit-Responsive
Depository Institution
Investment Contracts

RC-S-1

Bilateral Netting Agreements

RC-I-1
RC-O-7

Bill-of-Lading Draft
Borrowings in Foreign Offices
Branch Acquisition

Assets Under Management

12, RI-11, RI-12, RI-15,
RC-8, RC-M-7, RC-R-22a,
A-33, A-77

Brokerage Fees
Broker's Security Draft

ATS Account
Audit Fees
Auditing Work Performed

RC-E-4, RC-K-3, RI-7,
A-20

Business Combinations

RI-21, RC-T-7

RI-10, RI-13, RI-E-1, A-18,
A-21, A-22

Automobile Loans

RC-B-8, RC-C-14, RC-S-1

Bank Investment Contracts
Bank Premises
Bankers Acceptances

Banks

RC-K-3, RC-R-11,
RC-R-14

RI-5, RC-1, RC-A-4,
RC-K-1, RC-R-19, A-64
RC-O-6, RC-T-8
12, RI-12a, RI-18, RC-7,
RC-R-22a
RI-4, RI-13, RC-C-5,
RC-C-15, RC-H-1, RC-L-5,
RC-R-21, RC-R-22,
RC-T-8, A-4
A-7
RC-A-4, RC-C-8, RC-E-8,
A-8

Foreign Banks

RI-B-2, RC-E-18, RC-N-6,
RC-O-7, A-7

RI-11
A-11
4, RI-1, RI-A-3, RI-B-6,
RI-B-7, RC-K-1, A-11,
A-47

Capital Reserves

RC-12

Capital Stock Transactions

RI-A-2

RC-A-5

Carrybacks and
Carryforwards
Cash and Balances Due From
Depository Institutions
Cash Collateral Accounts
Cash Flow Hedges
Accumulated Net Gains
(Losses) on

A-14
RC-L-15, RC-L-16, A-27
RI-23, A-44
RC-1, RC-A-1, RC-R-19
RC-R-24a, RC-S-2, A-70,
A-71
A-29, A-30
13, RI-A-4, RC-14, RC-R-3

Cash Items
in Process of Collection
Not in Process of
Collection
Cash Management
Arrangements
Cash Surrender Value of Life
Insurance

FFIEC 031 and 041

RI-14, RI-20a

RC-1

Commercial Banks in the
U.S.

Foreign Central Banks

4

RI-D-2

Caps
Balances Due From
Depository Institutions

A-9

Capital Allocation Adjustment

Capitalization of Interest
Costs
Balance Sheet

A-15

RC-16

Automated Teller Machines

Average Total Assets

RC-R-28, RC-R-30

RC-M-11
Branch Sales

Associated Company

RC-O-6

IN-2
(6-03)

RC-1, RC-2, RC-A-2
RC-F-3
A-14
RI-14, RC-F-3

INDEX

FFIEC 031 and 041

Cashiers' Checks
Ceding Fees
Certificates of Deposit

Certified Checks

INDEX

RI-13, RC-E-6a, A-18
RC-F-3
RC-4, RC-7, RC-A-4,
RC-E-12, RC-E-13,
RC-E-15, RC-R-22,
RC-T-8, A-23
RI-10, RC-E-5, RC-E-6a,
RC-E-18

Changes in Accounting
Estimates

A-1

Changes in Accounting
Principles

RI-24, RI-A-1, RI-E-2, A-1

Charge-offs and Recoveries
Claim Reserves
Clean-up Calls
Close of Business

Contractholder Funds
Convertible Debt
Core Deposit Intangibles
Corporate Joint Venture
Corporate Trust and Agency
Accounts
Corrections of Accounting
Errors
Cost Recovery Method
Coupon Stripping

RI-B-1, RC-S-4, RC-S-5,
RC-S-6
RC-G-2

Covered Positions
Credit Cards

A-70

Collateral Invested Amounts
Collateralized Mortgage
Obligations (CMOs)
Collective Investment Funds
Commercial Paper
Commercial Paper Conduits
Commission Income
Commitments

Fees
Commodity Contracts

Commodity Draft

Common Trust Funds
Computer Software
Conduit Structures

RC-B-6, RC-B-16,
RC-H-3, RC-T-8

RC-T-4, RC-T-6, RC-T-9,
RC-T-11
RI-A-1, RI-E-2, A-2
A-37, A-60
A-15
RC-R-17, RC-R-28
RI-4, RI-B-3, RC-B-7,
RC-C-12, RC-C-31,
RC-K-2, RC-N-7,
RC-R-26b, RC-S-1
RI-14

Credit Balances on

RC-E-3

Credit Card Lines

RC-L-2

Fees and Finance Charges

RC-T-3, RC-T-7, RC-T-10
RC-7, RC-B-8, RC-B-9,
RC-T-8, A-15

Interchange Fees

RC-S-8

Merchant Credit Card Sales
Volume

RI-4, RI-B-5, RI-B-8,
RC-C-29, RC-S-3,
RC-S-5, RC-S-6, RC-S-10,
A-2a
RI-14
RC-L-9

RI-11, RI-12, RI-13, RI-26
RC-L-1, RC-L-15, RC-R-2,
RC-R-26b, RC-S-4,
RC-S-6, RC-S-9, A-26
RI-2, RI-14, RC-E-3, A-55
RI-10, RI-30, RC-7,
RC-D-2, RC-D-3, RC-L-11,
RC-N-10, RC-R-28,
RC-R-30, RC-R-32, A-27,
A-78

Merchant Income and
Expense
Credit Conversion Factor
Credit Enhancements
Credit-Enhancing Interest-Only
Strip

RI-14, RI-22
RC-R-1, RC-R-2
RC-S-2, RC-S-3, RC-S-4,
RC-S-6, RC-S-7, RC-S-9
RC-R-6, RC-R-11,
RC-R-16, RC-R-17,
RC-R-18, RC-R-22a,
RC-R-24b, RC-S-2,
RC-S-4

A-15
RI-A-1, RI-A-2, RI-A-3,
RC-12, RC-B-9, RC-T-9,
A-11, A-12

RC-R-7, RC-R-11,
RC-R-15,

Cumulative Effect of Changes
in Accounting Principles

RI-24, RI-A-1, RI-E-2

Cumulative Foreign Currency
Translation Adjustments

RC-14, RI-A-4

RC-T-10
RI-21, RI-22, RC-F-4, A-48
RC-S-8
8, 9, 10, RC-O-11

Contingencies

RC-12, RC-L-1, A-58

FFIEC 031 and 041

RI-11, RI-12, RI-15,
RC-M-7, A-33, A-77

RC-S-2, A-71

Consolidation

Continuing Contract

RC-M-3

RC-L-15, RC-L-16, A-27

Disallowed
Common Stock

RI-A-2

1
Annual Fees

Collars

RC-G-2

RC-5, RC-10, RC-M-9,
A-34

Currency and Coin

RC-1, RC-3, RC-A-3,
RC-R-19

Custodial Services

RC-T-1

Custodial Trust
Custody Account

IN-3
(6-03)

RC-B-11
9, RC-T-5, RC-T-6,
RC-T-11, A-16
INDEX

FFIEC 031 and 041

INDEX

Certified Checks

Data Processing Services

Demand Deposits

RI-14, RI-20, RI-E-1

RI-10, RC-E-5, RC-E-6,
RC-E-18
RC-E-4, RC-E-5, A-19
RI-7, RI-15, A-23

Dealer Reserve Account

A-16

Early Withdrawal
Penalties

Debt/Equity Swaps

A-39

Employee Benefit Plan

RC-O-10

Debt-for-Development Swaps

A-40

Fiduciary

RC-O-10

Deferred Compensation
Liabilities
Deferred Tax Assets
Disallowed
Net Deferred Tax Assets
Deferred Tax Liabilities
Net Deferred Tax
Liabilities
Demand Notes Issued to the
U.S. Treasury
Deposit Broker
Deposit Insurance Expense
Deposit Listing Service
Deposit Method
Depository Institution
Investment Contracts
Depository Institutions in the
U.S.
Deposits

RC-G-2

RC-R-5, RC-R-11,
RC-R-15, RC-R-22a

RC-G-1

Interest on

RI-20a, RI-E-1

Interest-Bearing

A-11

Maturity and Repricing
Data for Time Deposits

RC-M-4, RC-M-5, A-37
RC-O-6, RC-O-10

Money Market Deposit
Accounts (MMDAs)

RC-A-4, A-16

Money Orders

RI-7, RI-9, RC-10, RC-E-1,
A-17

RC-O-6

Assets Netted Against
Deposits

RC-O-7

FFIEC 031 and 041

Interest Accrued and
Unpaid on

RI-7, RI-21, A-10

Adjustments to Demand
Deposits for Reciprocal
Balances

Deposits (cont.)

Individuals, Partnerships,
and Corporations,
Deposits of

RC-M-9

RC-O-9

Certificates of Deposit

in Foreign Offices

A-42, A-63

Accounts of $100,000 or
Less

Cashiers' Checks

in Domestic Offices

RC-F-1

RC-O-9

Brokered Deposits

in Insured Branches in
Puerto Rico and U.S.
Territories and
Possessions

A-42, A-63

Accounts of More Than
$100,000

ATS Account

Hypothecated

Noninterest-Bearing
Nontransaction Accounts
NOW Accounts

RI-7, RC-E-4, RC-K-3,
A-20

RI-8, RI-14, RC-10,
RC-E-17, RC-K-4, A-9
RC-E-5, RC-E-18

RC-G-1, RC-O-3
RI-7
RC-10, RC-T-8, A-24
RC-E-13, RC-E-18
RC-E-4, RC-E-5, RC-E-12,
RC-T-8, A-23, A-25
RI-13, RC-E-3, RC-E-6,
A-18
RC-10, RC-T-8, A-25
RI-8, RC-E-5, RC-E-11,
RC-K-4, A-21
RI-7, RC-E-4, RC-K-3,
RC-T-8, A-19

Oakar Deposits

RC-O-5

of Consolidated
Subsidiaries

RC-O-2

Other Savings Deposits
Overdraft

RC-4, RC-A-4, RC-E-12,
RC-E-13, RC-E-15,
RC-R-22, RC-T-8, A-23

RI-7, RI-9, RC-10, RC-E-1

RC-O-9

Open-Account Time
Deposits

RI-13, RC-E-6a, A-18

RC-O-3

Number of Deposit
Accounts

Official Checks

RI-7, RI-21, RC-E-5,
RC-E-10, RC-O-10, A-10

RC-C-1, RC-E-2, A-41

Preauthorized Transfer
Accounts

RC-E-5, RC-E-6, RC-E-18
RC-E-12, RC-E-13,
RC-E-15, A-23
RC-E-12, A-23, A-25
RC-C-18, RC-E-2, A-63
RI-7, RC-K-3, A-20

Deposits (cont.)

IN-4
(6-03)

INDEX

FFIEC 031 and 041

INDEX

Preferred Deposits

RC-E-11

Retail Sweep
Arrangements

A-24

Savings Deposits
Service Charges
States and Political
Subdivisions in the
U.S., Deposits of
Telephone Transfer
Accounts
Time Deposits

Derivatives Implementation
Group
Embedded

RI-8, RC-E-4, RC-E-5,
RC-E-12, A-21

Fair Value Hedges

RI-9, RI-14

Fair Values

RC-E-8, RC-E-18,
RC-O-11

Foreign Currency Hedges
Held for Purposes Other
Than Trading

RI-7, RC-E-5, RC-K-3,
A-20

Held for Trading

RC-E-5, A-23

Time Deposits of Less
Than $100,000

RI-8, RC-E-12, RC-E-13,
RC-K-4

Time Deposits of
$100,000 or More

RI-8, RC-E-13, RC-E-15,
RC-K-4

Transaction Accounts

RI-7, RC-E-4, RC-E-5,
RC-K-3, A-18

Revaluation Gains
(Losses)
Impact on Income of
Past Due
Remaining Maturity of

Travelers' Checks
U.S. Government
Deposits
Unamortized Premiums
and Discounts
Uninsured
Depreciation
Derivative Contracts

Cash Flow Hedges
Accumulated Net Gains
(Losses) on
Benchmark Interest Rate
Credit Derivatives

Credit Losses
Current Credit Exposure
Across
Definition

RI-13, RC-E-3, RC-E-6,
RC-E-7
RC-E-7, RC-E-18,
RC-O-11

Differences in Detail of
Reports
Direct Credit Substitutes

A-25
RC-L-9, RC-R-18, A-27,
A-31
A-29, A-30
RC-L-6, RC-L-18, A-29
A-30
RI-15, RI-21, RI-31,
RC-L-17, RC-L-18, A-31
RI-10, RI-29, RC-D-1,
RC-L-17, RC-L-18,
RC-R-17, RC-R-22, A-31,
A-78, A-79
RC-7, RC-10b, RC-D-2,
RC-D-3
RI-31
3, RC-N-10
RC-R-31
2
RC-R-2, RC-R-24a,
RC-R-26a

RC-O-4
Director Attestation
RC-O-10
12, RI-18, RC-7, RC-T-6,
A-76
RI-10, RI-15, RI-21, RI-29,
RI-31, RC-14, RC-D-1,
RC-F-3, RC-G-2, RC-L-5,
RC-L-9, RC-L-17,
RC-L-18, RC-N-10,
RC-O-5, RC-R-1,
RC-R-15, RC-R-17,
RC-R-18, RC-R-22a,
RC-R-27, RC-R-30,
RC-R-31, RC-T-2, A-25,
A-62, A-78, A-79, A-81

Directors, Extensions of
Credit to
Directors' Fees
Discontinued Operations
Discounts
Dividend Income on
Securities
Dividends
Cash Dividends
Declared But Not Yet
Payable

A-29, A-30
13, RI-A-4, RC-14, RC-R-3

Property Dividends
Stock Dividends

A-30

6
RC-M-1
RI-20, RI-E-1, A-76
RI-24
RC-B-1, RC-O-4, A-65
RI-6, RI-7
RC-E-6, A-32
RI-A-4, RC-12, RC-G-2,
A-32
RC-G-2
11, RI-A-5, A-32
RI-A-3, RC-12, A-32

Dollar Repurchase
Agreements

A-66

Domestic Office

A-32

RI-31

Domicile

A-32

RC-R-30

Due Bills

A-33, A-54

RI-10, RC-7, RC-D-1,
RC-L-5, RC-R-23,
RC-R-26a, A-70

A-26

Derivative Contracts (cont.)
Early Default Clauses
FFIEC 031 and 041

IN-5
(6-03)

A-68
INDEX

FFIEC 031 and 041

Edge Corporation
EITF Issue No. 90-5
Electronic Filing
Employee Benefits

INDEX

8, A-8, A-16, A-33, A-40

Interpretation No. 14

A-81

A-14

Interpretation No. 39

RC-5, RC-10a, RC-D-2,
RC-D-3, A-31, A-62

Interpretation No. 41

RI-6, RI-8, RC-6, RC-10a,
A-63

6
RI-16, RC-T-6, A-76

Employee Benefit Trust and
Agency Accounts

RC-T-3, RC-T-4, RC-T-6

Employee Stock Ownership
Plan (ESOP)

RI-16, RI-A-2, RC-15,
RC-C-17, RC-M-9

Equity Capital
Changes in
Equity Contract Notes
Equity Derivative
Contracts

Statement No. 5

RI-A-1, RI-A-5, RC-15,
RC-R-2

A-2a, A-57, A-58, A-81

Statement No. 13

A-51

Statement No. 15

RI-24, A-35, A-83

Statement No. 28

A-52

Statement No. 34

A-14

Statement No. 52

RC-14, A-29, A-38

Statement No. 65

RC-C-1, A-74

Statement No. 66

RC-M-4, RC-M-5, A-36

Statement No. 72

RI-19, RI-20, RC-M-3,
A-12

RI-A-1
RC-R-10, A-59
RI-10, RI-30, RC-7,
RC-D-2, RC-D-3, RC-L-11,
RC-N-10, RC-R-28,
RC-R-30, RC-R-32, A-27,
A-78

Equity Method of Accounting

RC-M-7, A-33

Statement No. 86

RI-22, RC-F-4, A-49

Escrow Funds

RC-E-3, A-17

Statement No. 91

A-55, A-65

RI-20a, RC-T-7

Statement No. 94

9

Examination Fees
Executive Officers, Extensions
of Credit to
Explanations
Extended Settlements

RC-M-1
RI-E-1

RC-M-1

Extinguishments of Liabilities

A-33

A-54

Fails

A-34

Fair Value Hedges

Statement No. 114

A-57, A-83

Statement No. 115

RC-13, RC-B-1, RC-F-2,
RC-R-5, A-2a, A-72, A-79,
A-84

Statement No. 125

A-79

Statement No. 133

RC-14, RC-L-9, RC-L-15,
RC-L-18, RC-R-18,
RC-T-2, A-25

Statement No. 140

RC-F-1, RC-M-9, RC-T-2,
A-2a, A-28, A-33, A-66,
A-73, A-74, A-78, A-79,
A-81

Statement No. 141

RC-M-2, A-11, A-12

Statement No. 142

RI-19, RI-20, RC-M-2,
A-12

Statement No. 144

RI-20, RI-24, A-35, A-49

RI-24, RI-D-1, RI-E-1,
A-34

Factored Accounts Receivable

Fair Value

A-12, A-42

A-73

Extensions of Credit to
Executive Officers,
Directors, Principal
Shareholders, and Their
Related Interests

Extraordinary Items

Statement No. 109

RC-7, RC-B-1, RC-D-1,
RC-F-1, RC-L-6, RC-L-18,
RC-M-2, A-12, A-13, A-29,
A-39, A-79, A-80, A-81

Technical Bulletin
No. 85-4
Federal Funds Purchased

RC-T-9
Federal Home Loan Bank

FASB
Derivatives Implementation
Group

RI-8, RC-10, RC-H-1,
RC-K-4, A-34

A-29, A-30
Federal Funds Sold

Farm Management Accounts

RC-F-3

Advances

A-25

Balances Due From

RI-6, RC-5, RC-H-1,
RC-K-2, A-34
A-35
RC-M-8
RC-3, RC-4, RC-A-4

FASB (cont.)

FFIEC 031 and 041

IN-6
(6-03)

INDEX

FFIEC 031 and 041

INDEX

Federal Home Loan Bank
(cont.)
Federal Home Loan Bank
Stock
Standby Letters of Credit

RC-F-2, RC-R-22b
RC-L-8

Federal Reserve
Balances Due From
Federal Reserve Banks
Borrowings from Federal
Reserve Banks
Federal Reserve Bank
Stock

RC-3, RC-A-6, RC-R-19,
A-64
RC-M-9

Regulation H

RC-M-4, RC-M-8, A-3

Regulation K

RC-R-8, A-33

Regulation O

RC-M-1

Regulation Q

A-49

Regulation U

RC-C-17, RC-C-18

Deposit Accounts

RC-C-19, A-35
RI-2, RI-9, RI-11, RI-12,
RI-13, RI-14, RI-26, RI-28,
A-55
RI-9, RI-14

Insurance Activities

RI-12

Investment Banking,
Advisory, Brokerage,
and Underwriting

RI-11

Net Servicing Fees

RI-11

Fiduciary and Related Services
Fiduciary Settlements,
Surcharges, and Other
Losses
Financial Assets
Sold With Recourse

Financial Guarantee
Insurance
Financial Subsidiaries

Foreign Currency Hedges

A-30

Foreign Currency
Transactions
Foreign Currency Translation
Adjustments
Foreign Debt Exchange
Transactions

RC-F-2, RC-R-22b
RC-E-3, A-17, A-49

Fee Income

14

Foreign Exchange Contracts

Regulation D

Federally-Sponsored Lending
Agency

Foreign Branch Report of
Condition

11, RI-9, RC-T-1

Spot Contracts
Foreign Governments and
Official Institutions
Foreign Office

Floors
Food Stamps
Foreclosed Assets
FFIEC 031 and 041

RI-A-4, RI-B-7, RC-14,
A-38, A-47
A-39
RI-10, RI-30, RC-7,
RC-D-2, RC-D-3, RC-L-10,
RC-N-10, RC-R-28,
RC-R-30, RC-R-31, A-26,
A-78
RC-L-6
RC-C-15, RC-E-9,
RC-E-18, A-40
4, A-40

Foreign Office Guarantees

RC-L-3, RC-L-4

Foreign Official Institutions

A-40

Forward Agreement
Forward Contracts
Forward Rate Agreement
Frequency of Reporting

RC-R-2
RC-B-2, RC-L-12,
RC-R-31, A-26, A-62
A-27
2

Full Accrual Method

RC-M-4, RC-M-5, A-36

Full-Time Equivalent
Employees

RI-28

Functional Currency

A-38

Futures Contracts

RC-B-2, RC-L-11,
RC-R-30, A-26, A-30

11, RC-T-7, RC-T-11

A-79, A-80
RC-R-1, RC-R-2,
RC-R-18, RC-R-24a,
RC-R-26, RC-S-2,
RC-S-3, RC-S-7, A-68,
A-82

Gain Contingencies

A-58

Gains Trading

A-72

General Instructions

1

General Obligations

RC-B-4, RC-R-20,
RC-R-20a, RC-R-22

RC-L-8
Generally Accepted
Accounting Principles

11

RC-R-12
Gold Contracts

Fixed Assets

RI-14, RI-21, A-38

12, RI-12a, RI-18, RC-7,
RC-R-22a

Goodwill

RC-L-15, RC-L-16, A-27
RI-13, RC-2, RC-A-2
Impairment Losses

RI-12a, RC-M-5, A-35
IN-7
(6-03)

RC-R-28, RC-R-31
RI-19, RI-20, RC-9,
RC-R-3, RC-R-11,
RC-R-12, RC-R-15,
RC-R-22a, A-12, A-13
RI-19

INDEX

FFIEC 031 and 041

Ground Rents
Guaranteed Investment
Contracts

INDEX

RI-15, RC-F-4, RC-T-9

Income Taxes (cont.)

RC-T-8

Hedge Accounting

A-30

Home Equity Lines

RC-B-7, RC-L-1,
RC-R-26b, RC-S-1

Host Contract

A-27

Hybrid Instrument

A-28

Applicable Tax Rate
Carrybacks and
Carryforwards

RI-23, A-42

Current

RI-23, A-41

Deferred Income Taxes

RI-23, A-41

Deferred Tax Assets

RC-F-1, A-42, A-63

Disallowed

RC-R-5, RC-R-11,
RC-R-14, RC-R-15,
RC-R-22a

Deferred Tax Liabilities

Immediately Available Funds

RC-5, RC-10, RC-M-9,
A-34

Impairment

11, RI-16, RI-19, RI-20,
A-57, A-72, A-75

Fee Income

from Fiduciary Activities
from Lease Financing
Receivables
from International
Operations
from Other Insurance
Activities
from the Sale and
Servicing of Mutual
Funds and Annuities

RI-2, RI-9, RI-11, RI-12,
RI-13, RI-14, RI-26, RI-28,
A-55
9, 11, RI-9, RC-T-1,
RC-T-5

A-45

Intraperiod Allocation

A-45

A-44

Tax Rates

A-48

Indirect Expenses
Individual Retirement
Accounts (IRAs)
Individuals, Partnerships, and
Corporations, Deposits of
Industrial Development
Obligations
Installment Method

RI-12
RI-11, RI-26

Insurance Commissions and
Fees
Insurance Expense

Intangible Assets

RI-11

Trust Income
Income Statement
Income Taxes

Amortization of

RI-14, RI-15, RI-18, A-53

RC-B-1, RC-B-4, RC-C-16
RC-M-4, RC-M-5, A-37
RI-12
RI-17, RI-18, RI-20a,
RC-T-6
RI-12

RI-27, RI-28
RI-9, RC-T-1, RC-T-5
RI-1
11, 12, A-41
A-46, A-47

Applicable Income Taxes

RI-23, RI-24, RI-D-2,
RI-E-1, A-45

RI-20, A-12
RC-R-3, RC-R-4,
RC-R-11, RC-R-15,
RC-R-20, RC-R-22a

Identifiable

RC-M-3, A-11

Impairment Losses
Interchange Fees
Interest Accrued and Unpaid
on Deposits
Interest-Bearing Due From
Balances

IN-8
(6-03)

RI-19, RI-20, RC-9,
RC-L-8, RC-M-2, RC-R-3,
RC-R-11, RC-R-15,
RC-R-22a, A-11

Disallowed

RI-11, A-75

Alternative Minimum Tax

FFIEC 031 and 041

RC-E-5, RC-E-18

RC-F-1

Net Securitization Income

Tax-Exempt Income

RI-10, RC-E-10, RC-T-2,
RC-T-4

RI-D-1

RI-12

Servicing Income

RC-T-7

RI-5

Insurance and Reinsurance
Underwriting Income

Rental Income

11, A-45

Tax-Planning Strategy

Insurance Underwriting Income
Income Earned, Not
Collected

RC-G-1, RC-R-3, A-42,
A-63

Interim Period

Separate Entity Method

Income

A-43

RI-19, RI-20
RI-14
RC-G-1, RC-O-3
RI-5, RC-4, RC-K-2

INDEX

FFIEC 031 and 041

Interest Capitalization
Interest Expense
Incurred to Carry
Tax-Exempt Assets
on Trading Liabilities and
Other Borrowed Money

INDEX

A-14
RI-7, RI-D-1
RI-26
RI-8, A-51

Intracompany Income Credits
Investment Banking, Advisory,
Brokerage, and
Underwriting Fees
Investment Management
Agency Accounts

RC-T-7
RI-11

RC-T-4, RC-T-6, RC-T-11

Investments in
on Deposits

RI-7

on Federal Funds
Purchased and
Securities Sold Under
Agreements to
Repurchase

RI-8

on Subordinated Notes
and Debentures

RI-8

Mutual Funds

RC-B-9, RC-H-3,
RC-R-20b

Real Estate Ventures

RC-M-4, RC-M-7

Unconsolidated
Subsidiaries and
Associated Companies
Issue Costs

Interest Income

RI-6

on Balances Due From
Depository Institutions

RI-5

on Federal Funds Sold
and Securities
Purchased Under
Agreements to Resell

RI-6

on Loans

RI-2

on Securities

RI-5

Other

RI-7
RI-7, RC-F-1, RC-R-20,
RC-R-20b, RC-R-22a,
A-28, A-71, A-82

Joint Venture

Keogh Plan Accounts

Leasehold Improvements

Capital Lease

Caps

RC-L-15, RC-L-16, A-27

Collars

RC-L-15, RC-L-16, A-27

RI-11, RI-12, RI-15,
RC-M-7, A-33, A-77

RI-10, RC-E-10, RC-T-2,
RC-T-4

RI-18, RC-7

Leases

Interest Rate

Contracts

RI-8, RC-F-4

RI-2, RI-D-1

from Trading Assets

Interest-Only Strips
Receivable

8, 12, RI-11, RI-12, RI-15,
RC-8, RC-M-7, RC-R-22a,
A-33, A-76

RI-10, RI-30, RC-7,
RC-D-2, RC-D-3, RC-L-10,
RC-N-10, RC-R-28,
RC-R-30, RC-R-31, A-27,
A-78

A-51

Charge-Offs and
Recoveries

RI-B-3, RI-B-4

Direct Financing Lease

RC-C-20, A-52

Favorable Leasehold
Rights

RC-M-3, A-12

Held for Sale

RI-12, RC-6, RC-C-1

Floors

RC-L-15, RC-L-16, A-27

Income from

RI-5, RI-15, RI-27

Swaps

RC-L-16, RC-L-17, A-27,
A-62

Lease Accounting

Internal-Use Computer
Software
International Banking Facility
(IBF)
International Operations
Internet Web Site
Interoffice Accounts
Intrabank Transactions

FFIEC 031 and 041

Lease Financing
Receivables

A-48

Leveraged Lease

8, RC-I-1, A-8, A-16, A-18,
A-40, A-49
RI-D-1
RC-M-11
A-77

IN-9
(6-03)

RI-7, RI-12, RI-27, RC-6,
RC-C-1, RC-C-20, RC-K-3
RC-C-20, A-52, A-63

Maturity and Repricing
Data

RC-C-22

Net Gains (Losses) on
Sales of

RI-12

Obligations Under
Capitalized Leases

10

A-51

RC-M-9

INDEX

FFIEC 031 and 041

INDEX

Leases (cont.)
Operating Lease
Past Due and Nonaccrual
Restructured
Sale-Leaseback
Transactions
Legal Fees

Loans (cont.)
RI-15, RI-18, RC-F-4,
A-52, A-53

RC-C-21, RC-N-3, RC-N-9

RI-13, RC-L-5, RC-R-2,
RC-R-24, A-53

Deferred Payment

RI-13, RC-F-4, RC-G-2

RI-13, RC-L-3, RC-S-4,
RC-S-6, RC-S-9, A-53,
A-70
RC-L-4, RC-R-2, RC-R-23

Performance Standby

RC-L-4, RC-R-2, RC-R-24

Leverage Capital Ratio
Life Insurance
Liquidity Facility
Loans

1-4 Family Residential
Real Estate Loans
Adjustable Rate
Closed-End First
Lien Loans
Serviced for Others
Agricultural

All Other

Automobile
Charge-Offs
Collateral Dependent

RI-3, RI-4, RI-B-3, RC-B-8,
RC-C-12, RC-C-14,
RC-K-2, RC-N-2, RC-N-7,
RC-S-1, A-60

Credit Cards

RI-4, RI-B-3, RI-B-5,
RI-B-8, RC-B-7, RC-C-12,
RC-C-29, RC-K-2, RC-L-2,
RC-N-7, RC-S-1

Farmland
Fees
for Purchasing or
Carrying Securities

RC-E-7, A-54

Government Guaranteed

RC-L-8

Held for Sale

RC-R-14
RI-12, RI-14, RI-17,
RI-E-1, RC-F-3, A-26

Interagency Guidance
on Certain Loans
Held for Sale

RC-S-2, RC-S-6, RC-S-9
RI-2, RI-12, RI-27, RI-28,
RI-B-1, RC-6, RC-C-1,
RC-K-2, RC-K-4, RC-N-1,
RC-R-21, A-54

Home Equity

RI-B-1, RC-C-4, RC-C-24,
RC-L-3, RC-N-2, RC-N-5,
RC-R-21, RC-S-1, A-60

in Foreign Offices

Impairment

Insider

RC-C-28

Interest and Fee Income
Land Loans

RC-S-8, RC-S-9

Loan Losses

RI-3, RI-4, RI-28, RI-B-2,
RI-B-5, RC-C-9, RC-C-35,
RC-K-2, RC-K-5, RC-N-6,
RC-N-10
RI-4, RI-B-3, RC-C-18,
RC-C-19, RC-N-7,
RC-S-1, A-63

RI-B-1, RI-B-7, RC-S-5,
RC-S-6

RI-2, RC-C-1, RC-G-2,
A-55
RC-C-17, RC-C-19
RC-N-8, RC-R-21
RI-12, RC-6, RC-C-1,
RC-N-10
RC-C-1

RI-B-1, RC-C-4, RC-L-1,
RC-N-5, RC-S-1
11, A-57
RI-4, RI-B-2, RC-K-3,
RC-N-6
RC-M-1
RI-2
RI-B-1, RC-C-3, RC-N-5
RI-B-1, RI-B-7
RC-C-22

Multifamily Real Estate

RI-B-2, RC-C-5, RC-L-2,
RC-N-5, RC-R-21

Net Gains (Losses) on
Sales

RI-12

Nonfarm Nonresidential
Real Estate

11, 12, RC-N-2, A-58,
A-59
RI-B-2, RC-C-5, RC-L-2,
RC-N-6

11, A-57, A-58
Origination Fees and
Costs

FFIEC 031 and 041

RI-B-1, RC-C-4, RC-N-5

Maturity and Repricing
Data

Nonaccrual

RC-B-8, RC-C-14, RC-S-1

RI-B-1, RC-C-3, RC-L-2,
RC-N-5

Consumer

RI-13, RC-E-7, A-53

Financial Standby

Letters of Indemnity

RI-B-4, RC-C-5, RC-C-28,
RC-L-2, RC-N-9

Construction, Land
Development, and
Other Land Loans

RI-20a, RI-E-1

Commercial

Traveler's

Commercial Real Estate

RC-G-2, A-52

RI-13, A-53

Standby

RI-3, RI-B-2, RI-B-4,
RC-B-8, RC-C-10,
RC-K-2, RC-N-6, RC-N-9,
RC-S-1, A-7

RC-N-7

Letters of Credit

Sold for Cash

Commercial and
Industrial

IN-10
(6-03)

RC-C-1, A-55

INDEX

FFIEC 031 and 041

INDEX

Loans (cont.)
Other
Overdraft

Overdraft Checking

Loans (cont.)
RI-4, RC-C-17

to Individuals for
Household, Family, and
Other Personal
Expenditures

RI-10, RC-C-5, RC-C-15,
RC-C-16, RC-C-18,
RC-E-2, RC-O-2, RC-T-2,
A-54, A-63

to Nonprofit
Organizations

RC-N-1, RC-S-4, RC-S-5,
A-58

Real Estate

RI-3, RI-B-1, RI-B-4,
RC-C-2, RC-C-29,
RC-K-2, RC-L-2, RC-N-5,
RC-N-9, RC-T-9, A-58

Recoveries

RI-B-1, RI-B-7, RC-S-5,
RC-S-6

Losses from Fiduciary and
Related Services

Managed Assets
Mandatory Convertible Debt

Residential Real Estate

RI-B-1, RC-C-4, RC-C-24,
RC-L-3, RC-N-2, RC-N-5,
RC-R-21, RC-S-1, A-60

Market Risk Equivalent Assets

Restructured

RC-C-21, RC-N-3,
RC-N-9, A-56, A-61, A-83

Marketing Expenses

Revolving Credit Plans
SBA Loans
Secured by Real Estate

Serviced for Others

RC-C-13
RC-C-9, RC-C-10,
RC-N-8, RC-R-21

RC-S-2, RC-S-8, RC-S-9
RC-C-30, RC-C-31

Small Farm

RC-C-30, RC-C-35

Student
Swaps
Tax-Exempt

RI-4, RI-27, RI-B-3,
RC-C-16, RC-N-7, A-63
RC-C-14, RC-R-21
A-39
RI-27

to Depository Institutions
and Acceptances
of Other Banks

RI-4, RI-B-2, RI-B-4,
RC-C-5, RC-N-6, RC-N-9,
RC-R-21, A-7, A-63

to Finance Commercial
Real Estate,
Construction, and Land
Development

RI-B-4, RC-C-28, RC-L-2,
RC-N-9

to Finance Agricultural
Production and Other
Loans to Farmers

RI-3, RI-4, RI-28, RI-B-2,
RI-B-5, RC-C-9, RC-C-37,
RC-K-2, RC-K-5, RC-N-6,
RC-N-10

to Foreign Governments
and Official Institutions

FFIEC 031 and 041

Master Netting Arrangement

Materiality

A-58
RC-T-7, RC-T-11

RC-T-3, RC-T-7
RC-10b, RC-R-10, A-59
RC-R-17, RC-R-28
A-62
RI-20a, RI-E-1, RC-T-7
7

Maturity and Repricing Data

RI-3, RI-B-1, RI-B-4,
RC-C-2, RC-C-29,
RC-K-2, RC-L-2, RC-N-5,
RC-N-9, RC-T-9, A-58

Small Business

States and Political
Subdivisions in the
U.S.

RC-C-1, RC-C-20

RC-C-6, A-55, A-81
Loss Contingencies

Past Due

RC-C-18

RC-C-13
Unearned Income on

Participations

RI-3, RI-4, RI-B-3,
RC-C-12, RC-K-2, RC-N-7

for Debt Securities

RC-B-11

for Loans and Leases

RC-C-22

for Time Deposits
Merchant Credit Card Sales
Volume
Mergers
Minority Interests in
Consolidated Subsidiaries
Money Market Deposit
Accounts (MMDAs)
Money Market Mutual Funds
Money Orders
Mortgage Indebtedness

RC-E-13, RC-E-15,
RC-E-18
RC-L-9
A-11
10, RC-11, RC-R-3
RC-E-4, RC-E-5, RC-E-12,
RC-T-8, A-23, A-25
RC-B-9, RC-T-8
RI-13, RC-E-3, RC-E-6,
A-18
RC-M-9

Mortgage Servicing Assets

RI-11, RC-M-2, RC-R-4,
RC-R-11, RC-R-15,
RC-R-22a, A-74

Mutual Funds

RC-B-9, RC-T-8, RC-T-9

Assets Under
Management
Sales

RC-M-11
RI-11, RI-26, RC-M-10

RI-4, RI-B-3, RC-C-15,
RC-N-7, A-7, A-63

IN-11
(6-03)

INDEX

FFIEC 031 and 041

Negative Entries

INDEX

12

Obligations Under Capitalized
Leases

RC-M-9

Net Due From (To) Own
Foreign Offices

RC-H-1

Net Gains (Losses) From
Sales of Assets

RI-12a

All Other Off-Balance
Sheet Assets

RC-L-8

RI-25, RI-A-2

All Other Off-Balance
Sheet Liabilities

RC-L-7, RC-R-26a

Net Income (Loss)
Net Income Attributable to
International Operations
Net Interest Income
Net Losses from Fiduciary and
Related Services

Off-Balance Sheet Items

RI-D-2
Office Supplies
RI-9, RI-D-1
RC-T-7, RC-T-11

Officer Declaration
Official Checks
Offsetting

Net Securitization Income

RI-11

Net Servicing Fees

RI-11
One-Day Transaction

Net Unrealized Gain on
Available-for-Sale Equity
Securities
Net Unrealized Holding Gains
(Losses) on Available-forSale Securities
Change in
Net Unrealized Loss on
Available-for-Sale Equity
Securities
Netting

Nonaccrual Status
Nonfinancial Equity Investments
Noninterest Expense
Other
Noninterest Income
Other
Noninterest-Bearing Due
From Balances
Non-Managed Assets

RC-R-10, RC-R-20a,
RC-R-20b

RI-6, RI-8, RC-5, RC-6,
RC-10a, RC-O-7,
RC-R-28, RC-R-30, A-62
11, 12, RC-N-2, A-59
RC-R-8, RC-R-11
RI-16, RI-23, RI-D-1

RI-13, RI-E-1
RC-1, RC-3
RC-T-3

RI-8, RC-E-5, RC-E-11,
RC-K-4, A-21

Number of Full-Time
Equivalent Employees

FFIEC 031 and 041

RC-L-1, RC-L-3, RC-R-2,
RC-R-26b
RI-7, RC-E-4, RC-K-3,
RC-T-8, A-19
RC-O-9

5
RC-E-5, RC-E-6, RC-E-18
RI-6, RI-8, RC-5, RC-6,
RC-10a, RC-O-7,
RC-R-28, RC-R-30, A-62
RC-5, RC-10, A-34
RC-B-2, RC-L-13,
RC-L-14, A-27, A-62
A-27
RC-L-13

Over-the-Counter Option

RC-L-14

Put Option
Written Option
Optional Narrative Statement
Organization Costs
Other Assets
Other Borrowed Money

RI-20, RI-E-1
RI-9, RI-15, RI-D-1

RI-20a, RI-E-1

Exchange-Traded Option

Purchased Option

RC-R-2, RC-R-20a,
RC-R-20b

Nontransaction Accounts

Number of Deposit Accounts

Call Option

RI-A-4

RI-11, RC-M-3, RC-R-4,
RC-R-11, RC-R-15,
RC-R-22a, A-74

NOW Accounts

Option Contracts

13, RC-13, RC-R-2

Nonmortgage Servicing
Assets

Note Issuance Facilities
(NIFs)

RC-L-1, RC-R-2, RC-R-23

Other Comprehensive Income
Other Data for Deposit
Insurance and FICO
Assessments
Other Depository Institutions
in the U.S.
Other Expenses Accrued and
Unpaid
Other Fiduciary Accounts
Other Liabilities
Other Real Estate Owned

Other U.S. Depository
Institutions

RC-L-14, RC-L-16, A-27
A-27, A-70
RC-L-13, RC-L-15,
RC-R-26a, A-27
RC-X-1
A-75
RC-9, RC-F-1
RI-8, RC-10b, RC-H-1,
RC-K-4, RC-M-8, A-33,
A-36, A-51, A-67, A-82
RI-A-4, A-29, A-38
RC-O-1

RC-C-8, RC-E-8, A-17
RC-G-1
RC-T-4, RC-T-6, RC-T-11
RC-11, RC-G-1
RI-12a, RI-14, RI-20a,
RC-8, RC-M-3, RC-M-5,
RC-R-22a, A-35
RI-B-2, RC-E-18, RC-N-6

RI-28

IN-12
(6-03)

INDEX

FFIEC 031 and 041

Overdraft

Pair-Offs
Partnerships
Pass-Through Reserve
Balances
Past Due and Nonaccrual
Loans, Leases, and Other
Assets
Payable Through Drafts
Paying Agent
Personal Trust and Agency
Accounts
Placements and Takings
Policyholder Benefits

INDEX

RI-10, RC-C-5, RC-C-15,
RC-C-16, RC-C-18,
RC-E-2, RC-O-2, RC-T-2,
A-54, A-63

A-72
RI-11, RI-12, RI-15,
RC-M-4, RC-M-7, A-33
RC-4, RC-A-4, RC-A-6,
RC-O-4, RC-R-19, A-64
RC-N-1

RC-E-3, RC-O-1
RC-T-10
RC-T-3, RC-T-5, RC-T-7,
RC-T-11
A-65
RC-G-2

Pooling of Interests

RI-1, RI-A-2, RI-B-6,
RC-K-1, A-11

Postage

RI-20a, RI-E-1, A-76

Pre-Opening Income and
Expenses

RI-1, RI-A-3, A-76

Precious Metals Contracts

RC-R-28, RC-R-32

Preferred Stock

Auction Rate
Intermediate-Term
Limited-Life
Long-Term
Perpetual

RI-A-1, RI-A-2, RC-B-9,
RC-R-3, RC-R-8b,
RC-R-9, RC-T-9, A-65
RC-R-9

RI-A-2, RI-A-4, RC-10b,
RC-12, RC-R-8b, A-65

RI-A-1, RI-A-2, RI-A-3,
RI-A-4, RC-12, A-65

Nonqualifying

RC-R-3

Expenses of
Premium Refund Clause
Premiums
Prepaid Expenses

FFIEC 031 and 041

Principal-Only Strips

Principal Shareholders,
Extensions of Credit to
Property Taxes
Proprietary Mutual Funds and
Annuities
Provision for Allocated
Transfer Risk
Provision for Credit Losses on
Off-Balance Sheet Credit
Exposures
Provision for Loan and Lease
Losses
Publication Requirements

RI-2
RC-B-6, RC-R-20,
RC-R-20b, RC-R-22a,
A-28
RC-M-1
RI-18, RC-T-6
RC-M-11
RI-9
RI-22

RI-9, RI-B-7, RI-D-1, A-3,
A-57
10

Purchase Acquisition

RI-1, RI-A-3, RI-B-6,
RC-K-1, A-11

Purchased Credit Card
Relationships

RC-M-3, RC-R-4,
RC-R-11, RC-R-22a

Push Down Accounting

11, RI-1, RI-29, RI-A-4,
RI-B-6, RI-B-7, RC-K-1,
A-12

Qualifying Subordinated Debt
and Redeemable Preferred
Stock
Quarterly Averages

Ratings-Based Approach

RC-R-8b, RC-R-9

RC-R-9

Premises and Fixed Assets

Prepayment Penalties

5

RC-R-8b

RC-K-1

RC-R-8b

Cumulative

Redeemable

Preparation of the Reports

Real Estate
Real Estate Mortgage
Investment Conduits
(REMICs)
Reciprocal Balances

RC-R-8b
12, RI-12a, RC-7,
RC-R-22a

Reciprocal Holdings of
Capital Instruments

RC-R-16, RC-R-22a,
RC-R-23, A-70
RC-M-4, RC-M-7, RC-T-9
RC-B-6, RC-B-7, RC-B-16,
RC-H-3
RC-A-1, RC-E-2, RC-O-6,
RC-O-7, A-66
RC-R-11, RC-R-15

RI-18, RC-T-6, A-51
A-69
12, RC-B-1, RC-O-4, A-65
RC-F-3

IN-13
(6-03)

INDEX

FFIEC 031 and 041

Recourse
Financial Assets
Transferred With
Recourse

Liability Account
Low Level Exposure
Small Business
Obligations Transferred
With Recourse

INDEX

RC-R-24a, RC-S-2, A-68,
A-69
RC-R-1, RC-R-2,
RC-R-18, RC-R-22a,
RC-R-24a, RC-R-26,
RC-S-2, RC-S-3, RC-S-7,
A-68
RC-G-2, A-4
RC-R-1, RC-R-23,
RC-R-24a, A-70, A-70a
RC-R-24a, RC-S-8

Retirement of Capital Stock

RI-A-2

Retirement Plan Contributions

RI-16

Retirement Related Trust and
Agency Accounts

RC-T-3, RC-T-4, RC-T-5,
RC-T-6, RC-T-11

Revenue Obligations
Revolving Underwriting
Facilities (RUFs)
Right of Setoff
Risk-Based Capital
20 Percent Risk Weight

RC-B-4, RC-R-20,
RC-R-20b
RC-L-1, RC-L-3, RC-R-2,
RC-R-26b
A-62
RC-R-1, A-68
RC-R-16

Recoveries on Loans and
Leases

RI-B-1, RI-B-7, RC-S-5,
RC-S-6

Covered Positions

RC-R-17, RC-R-28

Reduced-Profit Method

RC-M-4, RC-M-5, A-37

Credit Conversion
Factors

RC-R-1, RC-R-2

Registrar
Regular Way Securities Trades

RC-T-10

Regulatory Capital

RC-R-1

Reinsurance Recoverables

RC-F-4

Related Interests, Extensions of
Credit to

RC-M-1

Release of Reports
Remote Service Units
Renegotiated Troubled Debt

Credit Equivalent Amount

RC-R-1, RC-R-15,
RC-R-23, RC-R-24,
RC-R-24a, RC-R-25,
RC-R-26, RC-R-26a,
RC-R-26b, RC-R-27,
RC-R-28

Items Not Subject to RiskWeighting

13, RC-R-15

A-26, A-73

11

Market Risk Capital
Guidelines

RI-10, RI-13, RC-E-4,
RC-E-5, A-18, A-21

Market Risk Equivalent
Assets
Ratings-Based Approach

RI-14, RI-15, RI-18, RI-27

Reorganization

A-13

Reporting Unit
Repossessed Property
Repurchase/Resale
Agreements

RC-R-28

A-83

Rental Income

Reporting by Type of Office

RC-R-17, RC-R-22,
RC-R-28

Ratios

10

Risk-Weighted Assets

RI-19, Ri-20

Sales of Assets for
Risk-Based Capital
Purposes

RI-12a, RC-F-3, A-35
A-35, A-63, A-66, A-68,
A-73

RC-R-16, RC-R-22a,
RC-R-23, A-70
RC-R-14
RC-R-15, RC-R-29
A-68

Tier 1 Capital

13, RC-R-8b

Tier 2 Capital

RC-R-10

Tier 3 Capital

RC-R-10

Research and Development
Costs

RI-21

Reserve for Contingencies

RC-12

Total Risk-Based Capital

13, RC-R-11

RC-C-21, RC-N-3,
RC-N-9, A-56, A-61, A-83

200 Percent Risk Weight

RC-R-18

Zero Percent Risk
Weight

RC-R-15

Restructured Loans and
Leases
Residuals

Restatements
Retained Earnings
Retained Subordinated
Interests

FFIEC 031 and 041

RC-R-18, RC-R-22a,
RC-R-22b, RC-R-24a,
RC-S-4, A-68, A-70

Rounding

12

RI-A-1, RI-E-2, A-2
12, RI-A-1, RC-12, A-1,
A-2, A-12, A-13
RC-R-24b, A-69, A-70

Safe Deposit Boxes
Safekeeping Accounts

IN-14
(6-03)

RI-13, RI-E-1
RC-T-5, RC-T-6, RC-T-11

INDEX

FFIEC 031 and 041

Salaries and Employee
Benefits
Sale-Leaseback Transactions
Sales of Assets for Risk-Based
Capital Purposes
Sales of Capital Stock

INDEX

RI-16, RC-T-6, A-76
RC-G-2, A-52
A-68

Impairment of

RI-16, A-72

Interest and Dividend
Income on

RI-5, RI-28

Lent

RI-A-2
Market Value of

Sales Taxes
Savings Bonds
SEC Staff Accounting Bulletin
No. 92
Securities

Accrued Interest on
Securities Purchased

9

Mortgage-Backed
Securities

RI-5, RC-5, RC-B-1,
RC-H-2, RC-H-3, RC-K-1,
RC-K-2, RC-N-8, RC-R-5,
RC-R-20, RC-R-20a, A-72
Mutual Funds

RC-F-3

Borrowed

RC-B-2, RC-L-7, RC-T-2,
A-73

Equity Securities

Maturity and Repricing
Data for Debt
Securities

RI-13, RC-2, RC-A-2,
RC-E-7

13, RI-A-4, RC-5, RC-13,
RC-B-1, RC-B-17,
RC-H-2, RC-R-5,
RC-R-20a, A-72

Commercial Paper

Net Unrealized Holding
Gains (Losses) on
Available-for-Sale
Securities
Other Debt Securities

RI-6, RC-B-5, RC-B-6,
RC-B-13, RC-B-14,
RC-D-1, RC-H-2, RC-H-3,
RC-K-1, RC-R-16,
RC-R-20, RC-R-20a,
RC-R-20b, RC-R-22, A-66
RI-6, RC-B-9, RC-H-3,
RC-K-3
13, RI-A-4, RC-13, RC-R-2

RI-6, RC-B-8, RC-B-13,
RC-D-2, RC-H-3, RC-K-2,
RC-T-8

Participations in Pools of
Securities

RC-6, RC-10a, RC-B-1,
A-67

RC-7, RC-B-8, RC-B-9,
A-15

Pass-Through Securities

RC-B-6, RC-B-13,
RC-B-14, RC-D-1,
RC-H-2, RC-T-8

RC-R-2, RC-R-10
RI-7, RC-F-2, RC-H-4

With Readily
Determinable Fair
Values

RI-6, RC-B-9, RC-H-3,
RC-K-3, RC-R-20a,
RC-R-20b

Federal Home Loan
Mortgage Corporation
(FHLMC)

RC-B-3, RC-B-6, RC-B-7,
RC-B-9, RC-H-3,
RC-R-20, RC-R-20a,
RC-R-20b, RC-R-22,
RC-T-8

Past Due and Nonaccrual
Pledged
Purchased Under
Agreements to Resell

RC-B-3, RC-B-6, RC-B-7,
RC-B-9, RC-H-3,
RC-R-20, RC-R-20a,
RC-R-20b, RC-R-22,
RC-T-8

Foreign Debt Securities

RC-B-9, RC-H-3, RC-T-8

Government National
Mortgage Association
(GNMA)

RC-B-3, RC-B-6, RC-B-7,
RC-H-3, RC-R-20,
RC-R-20a, RC-R-20b,
RC-R-22, RC-T-8

IN-15
(6-03)

RC-B-1, RC-B-11
RI-6, RC-6, RC-B-1,
RC-H-1, RC-K-2,
RC-R-20b, RC-T-8, A-63,
A-66, A-68
RC-B-6, RC-B-16,
RC-H-3, RC-T-8

Realized Gains (Losses)

RI-16, RI-D-1

Sold Under Agreements
to Repurchase

RC-5, RC-B-1, RC-B-17,
RC-H-2, RC-R-20, A-72

RC-N-8

Real Estate Mortgage
Investment Conduits
(REMICs)

Securities Activities
Federal National
Mortgage Association
(FNMA)

FFIEC 031 and 041

RC-B-11

RC-B-6, RC-B-16,
RC-H-3, RC-T-8

That Do Not Have
Readily
Determinable Fair
Values

Held-to-Maturity

A-59

RI-21

Available-for-Sale

Collateralized Mortgage
Obligations (CMOs)

RC-B-2, RC-L-5, RC-R-2,
RC-R-24, RC-T-2, RC-T-7,
A-73

A-72
RI-8, RC-10a, RC-B-1,
RC-H-1, RC-K-4, A-63,
A-66, A-68

States and Political
Subdivisions in the
U.S.

RI-6, RC-7, RC-B-4,
RC-B-13, RC-D-1,
RC-H-2, RC-K-2,
RC-R-20, RC-R-20a,
RC-R-20b, RC-R-22,
RC-R-22a, RC-T-8

Stripped MortgageBacked Securities

RC-B-6, RC-B-16,
RC-H-3, RC-R-20,
RC-R-20b, RC-R-22

INDEX

FFIEC 031 and 041

INDEX

Securities (cont.)
STRIPS
Structured Notes
Subordinated
Tax-Exempt
Trading
Trust Preferred
U.S. Government Agency
Obligations

Servicing (cont.)
RC-B-2, A-16

RI-26, RI-28
RC-7, RC-B-17, RC-D-1,
A-72
RC-B-8, A-84
RI-6, RC-7, RC-B-3,
RC-B-13, RC-D-1,
RC-H-2, RC-K-1,
RC-R-15, RC-R-20,
RC-R-20a, RC-R-22,
RC-T-8

U.S. Treasury

RI-6, RC-7, RC-B-2,
RC-B-13, RC-D-1,
RC-H-2, RC-K-1,
RC-R-20, RC-R-20a,
RC-R-22, RC-T-8

Underwriting

RI-11, RC-L-3

When-Issued

RC-L-7, RC-L-8, RC-L-12,
A-72, A-84

Selected Balance Sheet Items
for Domestic Offices
Seller-Provided Credit
Enhancement
Seller's Interest

RC-S-1

11, A-45
RI-9, RI-14

RC-S-3, RC-S-8

RC-S-1

Short Position
Short-Term Obligations
Signatures

RC-B-1, A-78
A-75
3
RC-D-3, A-73, A-75
RC-T-8
5

Small Business Investment
Company

RC-R-8, RC-R-8a

Small Business Obligations

RC-R-24a, A-70

Social Security Taxes
Spread Accounts
Start-Up Activities

RC-E-7, RI-16
RC-R-24a, RC-S-2, A-71
A-75

States and Political
Subdivisions in the U.S.
Deposits of
General Obligation
Claims on
Obligations of
Securities Issued By

Stock Options
Strip Participation

Structured Notes
Subchapter S Election

RC-E-8, RC-E-18
RC-R-16
RI-4, RI-26, RI-27,
RC-C-16
RI-6, RI-26, RI-28, RC-7,
RC-B-4, RC-B-13,
RC-D-1, RC-H-2, RC-K-2,
RC-R-20, RC-R-20a,
RC-R-20b, RC-R-22,
RC-R-22a
RI-A-2
A-70
RC-B-2, A-16
RC-B-17
RI-32

A-74

Disallowed Servicing
Assets

RC-R-4, RC-R-11,
RC-R-15, RC-R-22a

Mortgage Servicing
Assets

RI-11, RC-M-2, A-74

Net Servicing Fees

RI-11

FFIEC 031 and 041

Shifts in Reporting Status

STRIPS

Servicing

Contractually Specified
Servicing Fees

Shell Branches

RC-S-2, RC-S-5

RC-G-2

A-74

A-62

Settlement Date Accounting

RC-S-2, RC-S-3, RC-S-7

Separate Account Liabilities

Assets Serviced for
Others

Setoff

RC-H-1

RC-F-4

Service Charges on Deposit
Accounts

Servicing, Securitization, and
Asset Sale Activities

RI-11

Separate Account Assets

Separate Entity Method

Servicing Assets and
Liabilities

RC-S-2, RC-S-4

RC-B-3, RC-R-20,
RC-R-20a, RC-R-22

Securitization Income

RI-11, RC-M-3, A-74

RC-B-17

U.S. GovernmentSponsored Agency
Obligations

Securitization Activities

Nonmortgage Servicing
Assets

Submission Date

7

Submission of Reports

6

Subordinated Notes and
Debentures

IN-16
(6-03)

RI-8, RC-10b, RC-12,
RC-R-8b, A-76

INDEX

FFIEC 031 and 041

Subsidiaries
Deposits of Consolidated
Subsidiaries
Financial

INDEX

8, 9, 10, A-76

Trading (cont.)

RC-O-2

Trading Assets

RC-R-12
Trading Derivatives

Investments in
Unconsolidated
Subsidiaries
Majority-Owned
Minority Interests in
Consolidated
Subsidiaries
Real Estate
Significant
Trust Company
Unconsolidated Banking
and Finance

8, 12, RI-11, RI-12, RI-15,
RC-8, RC-M-7, RC-R-22a,
A-33, A-77

Suspense Accounts
Swap Contracts

RI-8, RC-10b, RC-D-1,
RC-D-3, A-79

Trading Revenue

RI-10, RI-29, A-31

Transaction Accounts

RI-7, RC-E-4, RC-E-5,
RC-K-3, A-18

8, A-76
RC-11, RC-R-3

RC-R-8a

Transactions Near End of
Period

Syndications

13

8, A-76
RI-9, RC-T-1
RC-R-22a

Transactions with Parent
Holding Company
Transfer Agent

RI-A-5, RI-E-2
RC-T-10
A-79

RI-A-1, RC-12, A-11
Travelers' Checks

RI-13, RC-E-3, RC-E-6,
RC-E-7

Treasury Receipts

RC-B-9, A-15

A-77
RC-L-10, RC-L-16, A-27,
A-62

Treasury Stock
Sweep Arrangements, Retail

RC-D-2, RC-D-3, RC-L-17,
RC-L-18, A-31

Trading Liabilities

Transfers of Financial Assets
Surplus

3, RI-6, RC-7, RC-D-1,
RC-D-3, RC-K-3,
RC-R-22, A-79

RI-A-3, RC-15, A-83

A-24
A-56, A-78

Treasury Tax and Loan
Accounts
Troubled Debt Restructurings

RI-13, RC-E-7
RI-24, RC-C-21, RC-N-3,
RC-N-9, A-56, A-61, A-83
RC-T-9

Tax-Exempt Income

RI-27, RI-28

Trusteeships, Corporate and
Municipal

Telephone Expenses

RI-20a, A-76

Trust Funds

RC-E-2, RC-O-2, A-17

Tellers' Overages and
Shortages

RI-14, RI-21

Trust Income

RI-9, RC-T-5, RC-T-7

Temporary Differences
Term Federal Funds

A-4, A-12, A-42
A-35, A-54

Tier 1 Capital

13, RC-R-8b

Tier 2 Capital

RC-R-10

Tier 3 Capital

RC-R-10

Total Assets
Total Equity Capital
Total Liabilities

RC-9, RC-H-2, RC-I-1,
RC-K-3, RC-R-22b
13, RI-A-1, RI-A-5, RC-15,
RC-R-2

Trust Overdrafts
Trust Preferred Securities

Underlying

Underwriting Income, Insurance

RI-12

Undivided Profits

RC-12

Unearned ESOP Shares

RC-15

RC-11, RC-H-2, RC-I-1
RI-16

RC-B-1, A-78
Uniform Resource Locator
(URL)
A-72, A-78

Uninvested Trust Funds
Unit Investment Trusts

FFIEC 031 and 041

RC-G-2

13, RC-R-11

Trading
Trading Account

A-26
RI-11

Unemployment Taxes
Trade Date Accounting

RC-B-8, A-84

Underwriting Fees, Securities

Unearned Insurance Premiums
Total Risk-Based Capital

RC-O-2

IN-17
(6-03)

RC-M-11
9, RC-O-2
RC-T-9
INDEX

FFIEC 031 and 041

Unposted Credits
Unposted Debits
Unused Commitments
U.S. Branches and Agencies of
Foreign Banks
U.S. Territories and
Possessions
Utility Costs

Valuation Allowance

Venture Capital Revenue
Verification

Web Site
When-Issued Securities
Withheld Taxes

FFIEC 031 and 041

INDEX

RC-O-2
RC-3, RC-A-3, RC-O-1
RC-L-1, RC-R-2,
RC-R-26b, A-57
RC-A-4, RC-C-8, RC-E-8,
RC-E-18, A-9, A-16
A-85
RI-18, RC-T-6

RI-12a, RI-23, RI-B-8,
RC-6, RC-C-1, RC-M-2,
RC-M-5, A-43, A-75, A-85
RI-11
13

RC-M-11
RC-L-7, RC-L-8, RC-L-12,
A-72, A-85
RC-E-7, RC-E-8, A-17

IN-18
(6-03)

INDEX