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pdfFFIEC 041
Draft Instructions for Call Report Revisions
Proposed to Take Effect Beginning
with the June 30, 2024, Report Date
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The following draft instructions, which are subject to change,
present the pages from the FFIEC 031 and 041 Call Report
instructions as they are proposed to be revised, subject to final
approval by the Office of Management and Budget.
These proposed revisions are described in the federal banking
agencies’ initial Paperwork Reduction Act (PRA) Federal Register
notices published in the Federal Register on September 28, 2023
(see FIL-53-2023, dated October 2, 2023) and on December
27, 2023 (see FIL-68-2023, dated December 27, 2023). As
discussed in the agencies' final PRA Federal Register notice
published in the Federal Register on May 22, 2024, the
agencies are proceeding with the revisions to the FFIEC 041
Call Report, with certain modifications.
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The initial PRA Federal Register notices and the draft redlined
reporting form for these proposed revisions to the FFIEC 041 Call
Report, are available on the FFIEC webpage for the FFIEC 041
Call Report.
Draft as of May 22, 2024
1
Table of Contents
Impacted Items/ Instructions/ Entry
Pages
17
18-21
22-24
25
26-27
28-29
30
31-34
B. Depository Institution Trade Names and Deposit Accepting URLs
1. RC-M Memoranda, Items 8.a through 8.c
35-37
C. Electronic Signatures
1. Signatures
38-39
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Effective June 30, 2024:
A. ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326): Troubled Debt
Restructurings and Vintage Disclosures”
1. RC-C, Loans and Leases, Part I, General Instructions
2. RC-C, Loans and Leases, Part I, Memorandum Items 1.a through 1.g
3. RC-N – Past Due, Definitions
4. RC-N – Past Due, Memorandum Items 1.a through 1.g
5. RC-O – Other Data for Deposit Insurance Assessments, Memorandum
Item 16
6. Glossary, Allowance for Credit Losses
7. Glossary, Foreclosed Assets
8. Glossary, Loan Fees
9. Glossary, Loan Modifications to Borrowers Experiencing Financial Difficulty
10. Glossary, Nonaccrual Status
11. Glossary, Renegotiated Troubled Debt
12. Glossary, Troubled Debt Restructurings
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Effective December 31, 2024:
A.
Loans to Nondepository Financial Institutions
1. RC-C, Part I—Loans and Lease Financing Receivables, Item 2
2. RC-C, Part I—Loans and Lease Financing Receivables, Item 4
3. RC-C, Part I—Loans and Lease Financing Receivables, Item 6.d
4. RC-C, Part I—Loans and Lease Financing Receivables, Item 9
5. RC-C, Part I—Loans and Lease Financing Receivables, Memoranda, Item 3
6. RC-C, Part I—Loans and Lease Financing Receivables, Memoranda, Item 10
7. RC-L, Items 1.e.(2) through 1.e.(4)
8. RC-L, Items 1.e.(3)(a) through 1.e.(3)(e)
9. RC-N, Memorandum Item 9
B.
Guaranteed Structured Products
1. Schedule RC-B, Item 4.c.(a)(1)
2. Schedule RC-B, Item 5.b
3. Schedule RC-B, Memoranda, Item 7
3
4-9
10-12
13-16
40
41
42
43-49
50
51-52
53-54
53-54
55
56
57-58
59
2
FFIEC 031 and 041
RC-C - LOANS AND LEASES
General Instructions for Part I (cont.)
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.
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All loans should be categorized in Schedule RC-C, part I, according to security, borrower, or purpose. All
loans satisfying the criteria in the Glossary entry for “Loan secured by real estate” (except those to states
and political subdivisions in the U.S.) should be categorized as “Loans secured by real estate” in
Schedule RC-C, part I. Loans secured by other collateral, such as securities, inventory, or automobiles,
would require further examination of both purpose and borrower to properly categorize the loans in
Schedule RC-C, part I. For loan categories in Schedule RC-C, part I, that include certain loans to
individuals, the term “individual” may include a trust or other entity that acts on behalf of (or in place of) an
individual or a group of individuals for purposes of obtaining the loan. 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 Loan Modifications to Borrowers Experiencing Financial Difficulty" and "fForeclosed
Aassets" for further discussion of these topics.
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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 held for
investment.” 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:
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(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.a, "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").
FFIEC 031 and 041
RC-C-2a
(3-196-24)
RC-C - LOANS AND LEASES
3
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 modifications to borrowers
experiencing financial difficulty that are in compliance with their modified terms.
Report in the appropriate subitem loans that have been restructured in troubled debt
restructuringsmodified to borrowers experiencing financial difficulty and are in compliance
with their modified terms.
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Institutions are required for financial reporting purposes to disclose modifications to
borrowers experiencing financial difficulty if such modifications include principal forgiveness,
an interest rate reduction, an other-than-insignificant payment delay, or a term extension (or a
combination thereof). For purposes of this Memorandum item, report loan modifications to
borrowers experiencing financial difficulty that are performing in accordance with their
modified terms, unless the loan meets the conditions that would require it to be reported in
Schedule RC-N, Memorandum item 1.
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.
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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, aA 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 restructuringloan modification to a borrower experiencing financial difficulty.
For further information, see the Glossary entry for "troubled debt restructuringsLoan
Modifications to Borrowers Experiencing Financial Difficulty."
Include in the appropriate subitem all loans restructured in troubled debt restructuringsloan
modifications to borrowers experiencing financial difficulty as defined above that are in
compliance with their modified terms, that is, modified 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.
FFIEC 031 and 041
RC-C-21
(3-176-24)
RC-C - LOANS AND LEASES
4
FFIEC 031 and 041
RC-C - LOANS AND LEASES
Exclude from this item (1) those loan modifications to borrowers experiencing financial
difficultys 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 loan modifications to borrowers experiencing financial difficulty s restructured in
troubled debt restructurings that are in nonaccrual status under their modified repayment
terms. Report such loans restructured in troubled debt restructurings modifications 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, Memorandum items 1.a through 1.f, column A, B, or C.
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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 Part I.
FFIEC 031 and 041
RC-C-22
(3-176-24)
RC-C - LOANS AND LEASES
5
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):
1-4 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 modified to borrowers experiencing financial difficulty
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 modified to borrowers experiencing financial difficulty
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)).
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 modified to borrowers
experiencing financial difficulty 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 e
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1.b
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1.a.(1)
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Exclude from this item all 1-4 family construction loans that have been modified to borrowers
experiencing financial difficulty 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 modified to
borrowers experiencing financial difficultyrestructured 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 modified to borrowers experiencing financial
difficulty restructured in troubled debt restructurings and are in compliance with their modified
terms. Exclude from this item loans secured by owner-occupied nonfarm nonresidential
FFIEC 031 and 041
RC-C-23
(3-176-24)
RC-C - LOANS AND LEASES
6
FFIEC 031 and 041
RC-C - LOANS AND LEASES
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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-24
(3-176-24)
RC-C - LOANS AND LEASES
7
FFIEC 031 and 041
RC-C - LOANS AND LEASES
Part I. (cont.)
Memoranda
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 modified to borrowers experiencing financial difficulty 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 modified to borrowers experiencing
financial difficulty restructured in troubled debt restructurings and are in compliance with their
modified terms.
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Item No.
On the FFIEC 041, all banks should report the total of these restructured modified 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 modifiedrestructured 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 modified 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).
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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.
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 modified to
borrowers experiencing financial difficultyrestructured 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)).
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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 modified to
borrowers experiencing financial difficultyrestructured 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 Schedule RC-C,
part I, Memorandum items 1.a through 1.e, above that have been modified to borrowers
experiencing financial difficulty 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
(6-186-24)
RC-C - LOANS AND LEASES
8
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 modified to borrowers experiencing financial difficulty and are in
compliance with their modified terms:
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(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) On the FFIEC 031, 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).
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For loans in the following loan categories within “All other loans” that have been modified to
borrowers experiencing financial difficulty restructured in troubled debt restructurings and are
in compliance with their modified terms, report the amount of such restructured modified
loans in the appropriate subitem of Schedule RC-C, part I, Memorandum item 1.f, if the dollar
amount of such restructuredmodified loans in that loan category exceeds 10 percent of total
loans modified to borrowers experiencing financial difficultyrestructured 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):
• Memorandum item 1.f.(1), “Loans secured by farmland (in domestic offices)”;
• Memorandum item 1.f.(3) on the FFIEC 031, “Loans to finance agricultural production
and other loans to farmers”;
• Memorandum item 1.f.(4)(a), Consumer “Credit cards”;
• Memorandum item 1.f.(4)(b), Consumer “Automobile loans”;
• Memorandum item 1.f.(4)(c), “Other” consumer loans; and
• Memorandum item 1.f.(5) on the FFIEC 041, “Loans to finance agricultural production
and other loans to farmers,” 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 and leases held for investment and held for sale (Schedule RC-C,
part I, item 12).
1.g
Total loan modifications to borrowers experiencing financial difficultys restructured in
troubled debt restructurings that are in compliance with their modified terms. On the
FFIEC 031, report the sum of Memorandum items 1.a.(1) through 1.f. On the FFIEC 041,
report the sum of Memorandum items 1.a.(1) through 1.e plus 1.f.
FFIEC 031 and 041
RC-C-22b
(6-186-24)
RC-C - LOANS AND LEASES
9
FFIEC 031 and 041
RC-N - PAST DUE
Definitions (cont.)
For a PCD loan, debt security, or other financial asset within the scope of ASC Topic 326 that is not
reported in nonaccrual status, the delinquency status of the PCD asset should be determined in
accordance with its contractual repayment terms for purposes of reporting the amortized cost basis of the
asset (fair value for a PCD available-for-sale debt security) as past due in Schedule RC-N, column A or B,
as appropriate. If the PCD asset that is not reported in nonaccrual status consists of a pool of loans that
was previously PCI, but is being maintained as a unit of account after the adoption of ASC Topic 326,
delinquency status should be determined individually for each loan in the pool in accordance with the
individual loan’s contractual repayment terms. For further information, see the Glossary entry for
“purchased credit-deteriorated assets.”
Nonaccrual – For purposes of this schedule, an asset is to be reported as being in nonaccrual status if:
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(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.
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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:
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(1) 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.
(2) The following criteria are met for a PCD asset, including a PCD asset that was previously a PCI
asset or part of a pool of PCI assets, that would otherwise be required to be placed in nonaccrual
status (see the Glossary entry for “nonaccrual status”):
(a) The institution reasonably estimates the timing and amounts of cash flows expected to be
collected, and
(b) The institution did not acquire the asset primarily for the rewards of ownership of the underlying
collateral, such as use of collateral in operations of the institution or improving the collateral for
resale.
When a PCD asset that meets the criteria above is not placed in nonaccrual status, the asset should
be subject to other alternative methods of evaluation to ensure that the institution’s net income is not
materially overstated. Further, regardless of whether a PCD asset is in nonaccrual or accrual status,
FFIEC 031 and 041
RC-N-3
(3-246-24)
RC-N - PAST DUE
10
FFIEC 031 and 041
RC-N - PAST DUE
an institution is not permitted to accrete the credit-related discount embedded in the purchase price of
such an asset that is attributable to the acquirer’s assessment of expected credit losses as of the date
of acquisition (i.e., the contractual cash flows the acquirer did not expect to collect at acquisition).
Interest income should no longer be recognized on a PCD asset to the extent that the net investment
in the asset would increase to an amount greater than the payoff amount. If an institution is required
or has elected to carry a PCD asset in nonaccrual status, the asset must be reported as a nonaccrual
asset at its amortized cost basis (fair value for a PCD available-for-sale debt security) in Schedule
RC-N, column C. (For PCD assets for which the institution has made a policy election to maintain
previously existing pools of PCI loans upon adoption of ASC Topic 326, the determination of
nonaccrual or accrual status should be made at the pool level, not the individual asset level.) For
further information, see the Glossary entry for “Purchased Credit-Deteriorated Assets.”
As a general rule, a nonaccrual asset may be restored to accrual status when:
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(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 modified to a borrower experiencing financial difficulty restructured in a troubled
debt restructuring 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; or
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(3) 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."
D
Loan Modifications to Borrowers Experiencing Financial Difficulty – Institutions are required for financial
reporting purposes to disclose modifications to borrowers experiencing financial difficulty if such
modifications include principal forgiveness, an interest rate reduction, an other-than-insignificant payment
delay, or a term extension (or a combination thereof).
The amounts reported should include modifications that were accounted for as new loans in addition to
modifications that were accounted for as a continuation of existing loans. Include only loans modified after
the beginning of the fiscal year in which ASU No. 2022-02, “Financial Instruments–Credit Losses (Topic
326): Troubled Debt Restructurings and Vintage Disclosures,” was adopted.
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.
FFIEC 031 and 041
RC-N-4
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Definitions (cont.)
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 (or meets the
conditions discussed under “Accounting for a Subsequent Restructuring of a Troubled Debt
Restructuring” in the Glossary entry for “troubled debt restructurings). 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.
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For further information, see the Glossary entry for "Loan Modifications to Borrowers Experiencing
Financial Difficultytroubled 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.
Institutions should report asset amounts in columns A, B, and C without any deduction for applicable
allowances for credit losses.
Report in columns A and B of Schedule RC-N (except for Memorandum item 6) the balance sheet
amounts of (not just the delinquent payments on) loans, leases, debt securities, and other assets that are
past due and upon which the bank continues to accrue interest, as follows:
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(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.
(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 on the FFIEC 031), all loans,
leases, debt securities, and other assets which, subsequent to their restructuring by means of a
modification of terms,
FFIEC 031 and 041
RC-N-4a
(3-246-24)
RC-N - PAST DUE
12
FFIEC 031 and 041
RC-N - PAST DUE
Memoranda
Item No.
1
Caption and Instructions
Loans restructured in troubled debt restructurings modifications to borrowers
experiencing financial difficulty included in Schedule RC-N, items 1 through 7, above.
Report in the appropriate subitem and column loans that have been modified to borrowers
experiencing financial difficultyrestructured in troubled debt restructurings (as described in
“Definitions” above) and, under their modified repayment terms, 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
modified to borrowers experiencing financial difficultyrestructured in troubled debt
restructurings that are in compliance with their modified terms (report in Schedule RC-C,
Ppart I, Memorandum item 1),
1.a
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For further information, see the Glossary entry for "troubled debt restructuringsLoan
Modifications to Borrowers Experiencing Financial Difficulty."
Construction, land development, and other land loans (in domestic offices):
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 modified to borrowers experiencing financial
difficultyrestructured 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 modified to borrowers experiencing financial
difficulty.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 modified to borrowers experiencing
financial difficulty.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.
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1.a.(1)
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 modified
to borrowers experiencing financial difficulty.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 modified to borrowers experiencing
financial difficulty.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
FFIEC 031 and 041
RC-N-11
(9-236-24)
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13
FFIEC 031 and 041
RC-N - PAST DUE
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nonresidential properties included in item 1.e.(2) of this schedule that have been modified to
borrowers experiencing financial difficulty.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-12
(9-236-24)
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14
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 modified to borrowers experiencing financial difficulty.
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 modifiedrestructured 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 restructuredmodified loans
between those loans to U.S. and non-U.S. addressees. On the FFIEC 031, all banks should
report a breakdown of these modifiedrestructured loans between those to U.S. and non-U.S.
addressees for the fully consolidated bank in Memorandum items 1.e.(1) and (2).
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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.
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 modified to borrowers experiencing financial difficulty.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 modified to borrowers experiencing financial
difficulty.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 been modified to borrowers experiencing financial
difficulty.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 modified to borrowers
experiencing financial difficulty.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.
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1.e.(1)
All other loans. Report in the appropriate column all other loans that cannot properly be
reported in Schedule RC-N, Memorandum items 1.a through 1.e, above that have been been
modified to borrowers experiencing financial difficulty.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 modified to borrowers experiencing
financial difficulty.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:
D
1.f
(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) On the FFIEC 031, loans to foreign governments and official institutions included in
Schedule RC-N, item 6;
FFIEC 031 and 041
RC-N-13
(9-236-24)
RC-N - PAST DUE
15
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 RCN, item 7; and
(10) On the FFIEC 031, loans secured by real estate in foreign offices included in
Schedule RC-N, item 1.f.
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For loans in the following loan categories within “All other loans” that have been been
modified to borrowers experiencing financial difficultyrestructured 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, report the amount of such restructured
modified loans in the appropriate subitem of Schedule RC-N, Memorandum item 1.f, if the
dollar amount of such restructured modified loans in that loan category exceeds 10 percent of
total loans restructured in troubled debt restructuringsmodified to borrowers experiencing
financial difficulty that are not in compliance with their modified terms (i.e., 10 percent of the
sum of Schedule RC-N, Memorandum items 1.a through 1.f, on the FFIEC 031; 10 percent of
the sum of Schedule RC-N, Memorandum items 1.a through 1.e plus Memorandum item 1.f,
on the FFIEC 041):
• Memorandum item 1.f.(1), “Loans secured by farmland (in domestic offices)”;
• Memorandum item 1.f.(3) on the FFIEC 031, “Loans to finance agricultural production
and other loans to farmers”;
• Memorandum item 1.f.(4)(a), Consumer “Credit cards”;
• Memorandum item 1.f.(4)(b), Consumer “Automobile loans”;
• Memorandum item 1.f.(4)(c), “Other” consumer loans; and
• Memorandum item 1.f.(5) on the FFIEC 041, “Loans to finance agricultural production
and other loans to farmers,” 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 and leases held for investment and held for sale (Schedule RC-C,
part I, item 12).
Total loan modifications to borrowers experiencing financial difficulyt s restructured in
troubled debt restructurings included in Schedule RC-N, items 1 through 7, above. On
the FFIEC 031, for columns A through C, report the sum of Memorandum items 1.a.(1)
through 1.f. Exclude amounts reported in Memorandum items 1.f.(1) through 1.f.(5) when
calculating the total in this Memorandum item 1.g.
D
1.g
On the FFIEC 041, for columns A through C, report the sum of Memorandum items 1.a.(1)
through 1.e plus 1.f. Exclude amounts reported in Memorandum items 1.e.(1), 1.e.(2), and
1.f.(1) through 1.f.(5) when calculating the total in this Memorandum item 1.g.
2
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
FFIEC 031 and 041
RC-N-13
(9-236-24)
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16
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.”
Portion of loans restructured in troubled debt restructurings modifications to
borrowers experiencing financial difficulty 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 loan modifications to borrowers
experiencing financial difficulty s 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 governmentsponsored agencies, including restructured loans guaranteed under FDIC loss-sharing
agreements.
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16
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
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.
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17.a
Selected fully consolidated data for deposit insurance assessment purposes:
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.
D
17.b
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.
FFIEC 031 and 041
RC-O-31
(9-13)
RC-O - ASSESSMENTS
17
FFIEC 031 and 041
GLOSSARY
Acquisition, Development, or Construction (ADC) Arrangements (cont.):
consideration for purposes of determining whether a credit facility is an HVCRE exposure for regulatory
capital purposes. Thus, a loan can be treated as an HVCRE exposure for regulatory capital purposes
even though it does not provide for the institution to participate in the property’s expected residual
profit.
Agreement Corporation: See "Edge and Agreement Corporation."
Allowances for Credit Losses: For more information on the allowances for credit losses (ACL),
institutions should also refer to the Interagency Policy Statement on Allowances for Credit Losses
(Revised April 2023).
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Standards for accounting for an ACL for financial assets measured at amortized cost and net
investments in leases (hereafter referred to collectively as financial assets measured at amortized
cost), as well as certain off-balance sheet credit exposures, are set forth in ASC Subtopic 326-20,
Financial Instruments–Credit Losses–Measured at Amortized Cost. For financial assets measured at
amortized cost, the ACL is a valuation account that is deducted from, or added to, the amortized cost
basis of financial assets to present the net amount expected to be collected over the contractual term
of the financial assets.
Standards for measuring credit losses on available-for-sale (AFS) debt securities are set forth in ASC
Subtopic 326-30, Financial Instruments—Credit Losses—Available-for-Sale Debt Securities. See the
Glossary entry for “Securities Activities” for guidance on allowances for credit losses on AFS debt
securities.
The following sections of this Glossary entry apply to financial assets measured at amortized cost and
also to off-balance sheet credit exposures within the scope of ASC Subtopic 326-20.
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Measurement – An ACL shall be established upon the origination or acquisition of a financial asset(s)
measured at amortized cost. A separate ACL shall be reported for each type of financial asset
measured at amortized cost (e.g., loans and leases held for investment, held-to-maturity (HTM) debt
securities, and receivables that relate to repurchase agreements and securities lending agreements) as
of the end of each reporting period.
D
As of the end of each quarter, or more frequently if warranted, each institution must evaluate the
collectability of its financial assets measured at amortized cost, including, if applicable, any recorded
accrued interest receivable (i.e., not already reversed or charged off, as applicable), and make
adjusting entries to maintain the balance of each of the separate ACLs reported on the balance sheet
at an appropriate level.
An institution shall measure expected credit losses on a collective or pool basis when financial assets
share similar risk characteristics. If a financial asset does not share similar risk characteristics with
other assets, expected credit losses for that asset should be evaluated individually. Individually
evaluated assets should not be included in a collective assessment of expected credit losses. If a
financial asset ceases to share similar risk characteristics with other assets in its pool, it should be
moved to a different pool with assets sharing similar risk characteristics, if such a pool exists.
ASC Subtopic 326-20 generally does not require the use of a specific loss estimation method for
purposes of determining ACLs. Various methods may be used to estimate the expected collectibility of
financial assets measured at amortized cost, with those methods generally applied consistently over
time. The same loss estimation method does not need to be applied to all financial assets. An
institution is not precluded from selecting a different method when it determines the method will result
in a better estimate of ACLs.
FFIEC 031 and 041
A-6
(3-246-24)
GLOSSARY
18
FFIEC 031 and 041
GLOSSARY
Allowances for Credit Losses (cont.):
ASC Subtopic 326-20 requires an institution to measure estimated expected credit losses over the
contractual term of its financial assets, considering expected prepayments. Renewals, extensions, and
modifications are excluded from the contractual term of a financial asset for purposes of estimating the
ACL unless there is a reasonable expectation of executing a troubled debt restructuring or the renewal
and extension options are part of the original or modified contract and are not unconditionally
cancellable by the institution. If such renewal or extension options are present, an institution must
evaluate the likelihood of a borrower exercising those options when determining the contractual term.
In estimating the net amount expected to be collected on financial assets measured at amortized cost,
an institution should consider the effects of past events, current conditions, and reasonable and
supportable forecasts on the collectibility of the institution’s financial assets. Under ASC Subtopic
326-20, an institution is required to use relevant forward-looking information and expectations drawn
from reasonable and supportable forecasts when estimating expected credit losses.
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Expected recoveries, prior to collection, are a component of management’s estimate of the net amount
expected to be collected for a financial asset. Expected recoveries of amounts previously charged off
or expected to be charged off that are included in ACLs may not exceed the aggregate amounts
previously charged off or expected to be charged off. All assumptions related to expected recoveries
should be appropriately documented and supported. When estimating expected recoveries,
management may conclude that amounts previously charged off are not collectible.
Changes in the ACL – Additions to, or reductions of, the ACL to adjust its level to management’s
current estimate of expected credit losses are to be made through charges or credits to the "provisions
for credit losses on financial assets" in item 4 of Schedule RI, Income Statement, including changes to
adjust the level of the ACL for off-balance-sheet credit exposures. When available information
confirms that specific financial assets measured at amortized cost, or portions thereof, are
uncollectible, these amounts should be promptly charged off against the related ACL in the period in
which the financial assets are deemed uncollectible.
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Recoveries on financial assets measured at amortized cost represent collections on amounts that were
previously charged off against the related ACL. Recoveries shall be credited to the ACL, provided that
the total amount credited to the ACL as recoveries on a financial asset (which may include amounts
representing principal, interest, and fees) is limited to the amount previously charged off against the
ACL on that financial asset. Any amounts collected in excess of this limit should generally be
recognized as noninterest income upon collection.
FFIEC 031 and 041
A-7
(3-246-24)
GLOSSARY
19
FFIEC 031 and 041
GLOSSARY
Allowances for Credit Losses (cont.):
Financial Assets with Collateral Maintenance Agreements – Institutions may have financial assets that
are secured by collateral (such as debt securities) and are subject to collateral maintenance
agreements requiring the borrower to continuously replenish the amount of collateral securing the
asset. If the fair value of the collateral declines, the borrower is required to provide additional collateral
as specified by the agreement.
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ASC Topic 326 includes a practical expedient for financial assets with collateral maintenance
agreements where the borrower is required to provide collateral greater than or equal to the amortized
cost basis of the asset and is expected to continuously replenish the collateral. In those cases, the
institution may elect the collateral maintenance practical expedient and measure expected credit losses
for these qualifying assets based on the fair value of the collateral. If the fair value of the collateral is
greater than the amortized cost basis of the financial asset and the institution expects the borrower to
replenish collateral as needed, the institution may record an ACL of zero for the financial asset when
the collateral maintenance practical expedient is applied. Similarly, if the fair value of the collateral is
less than the amortized cost basis of the financial asset and the institution expects the borrower to
replenish collateral as needed, the ACL is limited to the difference between the fair value of the
collateral and the amortized cost basis of the asset as of the reporting date when applying the collateral
maintenance practical expedient.
Loan Modifications
An institution should measure any expected credit losses on loans whose terms have been modified in
accordance with ASC Topic 326. ASC Topic 326 allows an institution to use any appropriate loss
estimation method to estimate allowances for credit losses. However, there are circumstances when
specific measurement methods are required. For Call Report purposes, the ACL of a collateral
dependent loan must be estimated using the fair value of collateral, less cost to sell, as appropriate. An
institution measuring the allowance using the present value of expected future cash flow method (i.e.,
discounted cash flow method) should use the post-modification effective interest rate as the discount
rate.
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If an institution adopted ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326): Troubled
Debt Restructurings and Vintage Disclosures,” using the prospective method (versus the modified
retrospective method), loans previously identified as troubled debt restructurings should retain the
existing method for measurement purposes. As such, unless the loan is collateral-dependent, an
institution should continue to apply a discounted cash flow method, discounted at the loan’s original
effective interest rate, to estimate expected credit losses until the loan is subsequently modified or
settled.
FFIEC 031 and 041
A-9
(3-246-24)
GLOSSARY
20
FFIEC 031 and 041
GLOSSARY
Allowances for Credit Losses (cont.):
Off-Balance-Sheet Credit Exposures – Each institution should also estimate, as a separate liability
account, expected credit losses for off-balance-sheet credit exposures not accounted for as insurance,
over the contractual period during which the institution is exposed to credit risk. The estimate of
expected credit losses should take into consideration the likelihood that funding will occur as well as
the amount expected to be funded over the estimated remaining contractual term of the off-balancesheet credit exposures. Off-balance sheet credit exposures include loan commitments, financial
standby letters of credit, and financial guarantees not accounted for as insurance, and other similar
instruments except for those within the scope of ASC Topic 815 on derivatives and hedging. This
separate allowance should be reported in Schedule RC-G, item 3, "Allowance for credit losses on offbalance-sheet credit exposures," not as part of the "Allowance for credit losses on loans and leases" in
Schedule RC, item 4.c. Additions to, or reductions of, the allowance for credit losses on off-balance
sheet credit exposures to adjust the balance of the allowance to an appropriate level are reported in
net income.
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Institutions should not record an estimate of expected credit losses for off-balance-sheet credit
exposures that are unconditionally cancellable by the issuer. For example, for an institution that has
unfunded commitments (i.e., available credit) on credit cards, the institution should not record an
allowance for expected credit losses for unfunded commitments for which the institution has the ability
to unconditionally cancel the available line of credit. In contrast, home equity lines of credit may be
deemed unconditionally cancellable for regulatory capital purposes. However, unfunded commitments
under home equity lines of credit are not considered unconditionally cancellable by the issuer for
purposes of estimating expected credit losses under ASC Topic 326, because the lender may not
unilaterally refuse to extend credit under the commitment.
Recourse Liability Accounts – Recourse liability accounts that arise from recourse obligations for any
transfers of financial assets that are reported as sales should not be included in an ACL. These
accounts are considered separate and distinct from ACLs 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."
D
R
See also the Glossary entries for “Accrued Interest Receivable,” “Amortized Cost Basis,” “Business
Combinations,” “Foreclosed Assets,” “Loan,” “Loan Fees,” “Loan Modifications to Borrowers
Experiencing Financial Difficulty,” “Nonaccrual Status,” “Purchased Credit-Deteriorated Assets,”
“Securities Activities,” and “Transfers of Financial Assets.”
FFIEC 031 and 041
A-10
(3-246-24)
GLOSSARY
21
FFIEC 031 and 041
GLOSSARY
Federal Funds Transactions (cont.):
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):
AF
T
(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.
R
Fees, Loan: See "Loan Fees."
D
Foreclosed Assets: The accounting and reporting standards for the receipt and holding of foreclosed
assets are set forth in ASC Subtopic 310-20, Nonrefundable Fees and Other Costs, 40, Receivables –
Troubled Debt Restructurings by Creditors, and ASC Topic 360, Property, Plant, and Equipment.
Subsequent to the issuance of FASB Statement No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" (the predecessor of ASC Topic 360), 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 institutions must follow for purposes of preparing their
Consolidated Reports of Condition and Income.
An institution 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 an
institution 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 institution 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
the recorded investment in the loan or the amortized cost basis of the loan exceeds the fair value (less
FFIEC 031 and 041
A-54
(3-246-24)
GLOSSARY
22
FFIEC 031 and 041
GLOSSARY
Foreclosed Assets (cont.):
loan1 exceeds the fair value (less cost to sell, if applicable) of the asset is a loss which must be
charged to the allowance for credit losses on loans and leases 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 in accordance with applicable U.S. GAAP on
the income statement in a manner consistent with the balance sheet classification of the asset
satisfied.
AF
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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 investment in, or amortized cost basis of the loan, as applicable 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 an institution receives in full or partial satisfaction of a
loan, the institution 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.
D
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For purposes of these reports, foreclosed assets include loans (other than residential real estate
property collateralizing a consumer mortgage loan) where an institution, as creditor, has received
physical possession of a borrower's assets, regardless of whether formal foreclosure proceedings take
place. An institution, as creditor, is considered to have received physical possession (resulting from
an in-substance repossession or foreclosure) of residential real estate property collateralizing a
consumer mortgage loan only upon the occurrence of either of the following:
(1) The institution obtains legal title to the residential real estate property upon completion of a
foreclosure even if the borrower has redemption rights that provide the borrower with a legal right
for a period of time after a foreclosure to reclaim the real estate property by paying certain amounts
specified by law, or
(2) The borrower conveys all interest in the residential real estate property to the bank to satisfy the
loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The
deed in lieu of foreclosure or similar legal agreement is completed when agreed-upon terms and
conditions have been satisfied by both the borrower and the creditor.
In situations where physical possession is received, 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, except for foreclosures on
certain fully and partially government-guaranteed mortgage loans, which are to be reported in
Schedule RC-F, item 6, “All other assets,” as discussed below in this Glossary entry.
1
The recorded investment in 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.
For institutions that have adopted ASC Topic 326, the term “amortized cost basis” is used in place of “recorded
investment.” See the Glossary entry for “Amortized Cost Basis.”
FFIEC 031 and 041
A-55
(3-246-24)
GLOSSARY
23
FFIEC 031 and 041
GLOSSARY
Foreclosed Assets (cont.):
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 institution
receives physical possession) 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.
AF
T
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 allowance for credit losses on loans
and leases. 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.”
Reporting Certain Government-Guaranteed Mortgage Loans upon Foreclosure – ASC Subtopic 310-40
20 clarifies the conditions under which a creditor must derecognize a government-guaranteed
mortgage loan and recognize a separate “other receivable” upon foreclosure (that is, when a creditor
receives physical possession of real estate property collateralizing a mortgage loan). When these
conditions are met, other real estate owned should not be recognized by an institution.
An institution should derecognize a mortgage loan and record a separate other receivable upon
foreclosure of the real estate collateral if all of the following conditions are met:
The loan has a government guarantee that is not separable from the loan before foreclosure.
At the time of foreclosure, the institution has the intent to convey the property to the guarantor
and make a claim on the guarantee and it has the ability to recover under that claim.
At the time of foreclosure, any amount of the claim that is determined on the basis of the fair
value of the real estate is fixed (that is, the real estate property has been appraised for purposes
of the claim and thus the institution is not exposed to changes in the fair value of the property).
R
•
•
•
D
This guidance is applicable to fully and partially government-guaranteed mortgage loans provided the
three conditions identified above have been met. In such situations, upon foreclosure, the separate
other receivable should be measured based on the amount of the loan balance (principal and interest)
expected to be recovered from the guarantor. This other receivable should be reported in
Schedule RC-F, item 6, “All other assets.” Any interest income earned on the other receivable should
be reported in Schedule RI, item 1.g, “Other interest income.”
FFIEC 031 and 041
A-56
(3-246-24)
GLOSSARY
24
FFIEC 031 and 041
GLOSSARY
Loan Fees (cont.):
(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.
AF
T
(6) A refinanced or restructured loan, other than a troubled debt restructuringincluding loan
modifications to borrowers experiencing financial difficulty, should be accounted for as a new loan
if the following exist: 1) 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 and 2) the change in cash flows is more than minor. 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 or amortized cost basis of the new refinanced or
restructured loan. See also the Glossary entry for “Loan Modifications to Borrowers Experiencing
Financial Difficulty.”
The net investment in, or the amortized cost basis of, the new loan, as applicable, should
include 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, or the amortized cost basis of, the loan, as applicable; 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 discussion.)
(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.
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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
(b) certain costs directly related to specified activities performed by the lender for that particular loan.1
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.
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
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.
FFIEC 031 and 041
A-89
(3-246-24)
GLOSSARY
25
FFIEC 031 and 041
GLOSSARY
Loan Fees (cont.):
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.
AF
T
Loan Modifications to Borrowers Experiencing Financial Difficulty: The accounting standards for
loan modifications to borrowers experiencing financial difficulty are set forth in ASC Topic 326,
Financial Instruments – Credit Losses and ASC Topic 310, Receivables. ASC Subtopic 310-10
requires modifications of receivables to borrowers experiencing financial difficulty where the
modification results in the form of principal forgiveness, an interest rate reduction, an other-thaninsignificant payment delay, or a term extension (or a combination thereof) to be disclosed for financial
reporting purposes. These disclosures only include loan modifications to borrowers experiencing
financial difficulty, regardless of whether the modifications result in new loans or the continuation of
existing loans. Loan modifications to borrowers who are not experiencing financial difficulty or do not
meet the definition above would not be disclosed.
For Call Report purposes, loans modified to borrowers experiencing financial difficulty must be included
in the amounts reported in the appropriate loan category in Schedule RC-C, Part I, Loans and Leases,
items 1 through 9. Additionally, if the loan is in compliance with its modified terms, these modifications
are reported in the appropriate loan category in Schedule RC-C, Part I, Memorandum item 1. For loans
that are not in compliance with their modified terms, the loans must be included in the amounts
reported in the appropriate loan category in Schedule RC-N, items 1 through 7, and reported in
Schedule RC-N, Memorandum item 1.
R
See the Glossary entry for “Nonaccrual Status” for a discussion of the conditions under which a loan on
nonaccrual that has undergone a modification to a borrower experiencing financial difficulty (including
those that involve a multiple note structure) may be returned to accrual status.
Other Considerations - A modification of a loan in which an institution receives physical possession of
the borrower's assets, whether in full or partial satisfaction of the debt, should be accounted for in
accordance with ASC Subtopic 310-20. 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."
D
In addition, if a modification of a loan includes both a modification of terms and the acceptance of
property in partial satisfaction of the loan, the accounting for such a modification is a two-step process.
First, the amortized cost basis of the loan is reduced by the fair value (less cost to sell, if appropriate)
of the property received, and second, the institution is expected to measure any expected credit losses
on the remaining amortized cost basis of the modified loan in accordance with ASC Subtopic 326-20,
Financial Instruments – Credit Losses – Measured at Amortized Cost, and record any related
allowance. If the modification of terms meets the definition of a loan modification to a borrower
experiencing financial difficulty, then include the loan in the amounts reported on Schedule RC-C, Part
I, or Schedule RC-N, as appropriate.
A modification may also involve the substitution or addition of a new debtor for the original borrower.
The treatment of these situations depends upon their substance. Modifications 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. Modifications 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
FFIEC 031 and 041
A-91
(3-246-24)
GLOSSARY
26
FFIEC 031 and 041
GLOSSARY
should be recorded at its fair value. If the modification of terms meets the definition of a loan
modification to a borrower experiencing financial difficulty, then include the loan in the amounts
reported on Schedule RC-C, Part I, or Schedule RC-N, as appropriate.
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
greater than 50 percent of the principal amount of the loan at origination.
AF
T
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
Consolidated 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 Consolidated 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:
D
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(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.
FFIEC 031 and 041
A-92
(3-246-24)
GLOSSARY
27
FFIEC 031 and 041
GLOSSARY
Nonaccrual Status (cont.):
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, or the
amortized cost basis of, the asset, as applicable, 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, or the amortized cost basis of, the asset, as applicable, or recovery of prior charge-offs, depending
on the condition of the asset, consistent with its accounting policies for other financial reporting
purposes.
AF
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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, or the amortized cost basis of, the asset, as applicable,
as discussed in the preceding section of this entry, the application of these payments to the asset's
recorded investment or amortized cost basis, as applicable, 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:
R
(1) The asset has been formally restructured and qualifies for accrual status as discussed below;
(2) The asset is a PCD asset and it meets the two criteria specified in the second exception to the
general rule discussed above; or
(3) 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.
D
A loan or other debt instrument that has been formally restructured in a troubled debt restructuring 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.
FFIEC 031 and 041
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(3-246-24)
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28
FFIEC 031 and 041
GLOSSARY
AF
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Nonaccrual Status (cont.):
A modification of a loan to a borrower experiencing financial difficulty troubled debt 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. For a troubled debt restructuringmodification of
a collateral-dependent loan involving a multiple note structure, the amount of the “A” note should be
determined using the fair value of the collateral. 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. In conjunction with the reporting requirements on
Schedule RC-C, Part I, and Schedule RC-N for loan modifications to borrowers experiencing financial
difficulty, the institution should consider both the “A” and “B” notes in its analysis of whether the
modification results in principal forgiveness, an interest rate reduction, or a deferral of payment(s).
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
RestructuringsLoan Modifications to Borrowers Experiencing Financial Difficulty."
R
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."
D
NOW Account: See "Deposits."
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 Consolidated Report of Condition when a
"right of setoff" exists. Under ASC Subtopic 210-20, Balance Sheet – Offsetting, 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.
FFIEC 031 and 041
A-98
(3-246-24)
GLOSSARY
29
FFIEC 031 and 041
GLOSSARY
Purchased Credit-Deteriorated Assets (cont.):
ACL and the related deferred tax asset because the provisions are expensed for financial reporting
purposes. These increases in the ACL typically are not deducted in the same period for income tax
purposes. Tax deductions for credit losses typically occur in the period when financial assets are
actually charged off. However, an addition to the ACL as of the acquisition date of a PCD asset
(i.e., the “gross–up”) does not create such a deductible temporary difference or a deferred tax asset.
An institution’s deferred tax assets should be calculated at the report date by applying the "applicable
tax rate" based on the institution’s total deductible temporary differences. See the Glossary entry for
"Income Taxes" for information on how to determine the tax effect of such a temporary difference and
the need for any deferred tax asset valuation allowance.
See also the Glossary entries for “Allowances for Credit Losses” and “Nonaccrual Status.”
Put Option: See "Derivative Contracts."
AF
T
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 Consolidated Report of Condition, reciprocal balances
between the reporting bank and other depository institutions may be reported on a net basis in
accordance with generally accepted accounting principles.
Renegotiated Troubled Debt: See "Troubled Debt Restructurings."
D
R
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.
FFIEC 031 and 041
A-105
(3-246-24)
GLOSSARY
30
FFIEC 031 and 041
GLOSSARY
Treasury Stock (cont.):
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.
Troubled Debt Restructurings: The accounting standards for troubled debt restructurings are set forth
in ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors, and, for institutions
that have adopted ASC Topic 326, Financial Instruments–Credit Losses, in ASC Topic 326.
Institutions should refer to the Glossary entries for “Allowance for Loan and Lease Losses” and
“Allowance for Credit Losses,” as applicable, when considering measurement of the allowance for loan
losses or allowance for credit losses (allowance, when used interchangeably) for TDRs.
AF
T
A troubled debt restructuring (TDR) is a restructuring in which an institution, 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 institution 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 TDR. Modifications of loans should be evaluated to determine if a TDR exists in
totality. In some instances a borrower may have been able to add additional collateral or a guarantor
to a loan which fully compensates for a concession made by the institution.
See the Glossary entry for “Nonaccrual Status” for a discussion of the conditions under which a
nonaccrual asset which has undergone a TDR (including those that involve a multiple note structure)
may be returned to accrual status.
R
A TDR in which an institution receives physical possession of the borrower's assets 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."
D
A TDR 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: (i) the recorded amount
(or amortized cost basis if the institution has adopted ASC Topic 326) of the loan is reduced by the fair
value (less cost to sell, if appropriate) of the property received, and (ii) the institution should measure
any impairment (or expected credit losses if the institution has adopted ASC Topic 326) on the
remaining recorded balance, or amortized cost basis, as applicable, of the restructured loan in
accordance with ASC Topic 310 (or ASC Subtopic 326-20 if the institution has adopted ASC
Topic 326) and record any related allowance.
A TDR 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.
FFIEC 031 and 041
A-127
(9-206-24)
GLOSSARY
31
FFIEC 031 and 041
GLOSSARY
Troubled Debt Restructurings (cont.):
A credit analysis should be performed for a TDR in conjunction with its restructuring to determine its
collectibility and estimated allowance. When available information confirms that a specific TDR, or a
portion thereof, is uncollectible, the uncollectible amount should be charged off against the allowance
at the time of the restructuring. As is the case for all loans, the credit quality of restructured loans
should be regularly reviewed. The institution should periodically evaluate the collectibility of the TDR
so as to determine whether any additional amounts should be charged to the allowance, or, if the
restructuring involved a financial asset other than a loan, to another appropriate account.
Once an obligation has been restructured in a TDR, it continues to be considered a TDR until paid in
full or otherwise settled, sold, or charged off (or meets the conditions discussed below under
“Accounting for a Subsequent Restructuring of a Troubled Debt Restructuring”). The loan must be
reported in the appropriate loan category in Schedule RC-C, Part I, items 1 through 9, and in the
appropriate loan category in:
Schedule RC-C, Part I, Memorandum item 1, if it is in compliance with its modified terms, or
Schedule RC-N, items 1 through 7, and Memorandum item 1, if it is not in compliance with its
modified terms.
AF
T
•
•
However, for a loan that is a TDR for which the concession did not include a reduction of principal, if
the restructuring agreement specifies a contractual interest rate that is a market interest rate at the time
of the restructuring and the loan is in compliance with its modified terms, the loan need not continue to
be reported as a TDR in Schedule RC-C, Part I, Memorandum item 1, in calendar years after the year
in which the restructuring took place. A market interest rate is a contractual interest rate that at the
time of the restructuring is greater than or equal to the rate that the institution was willing to accept for a
new loan with comparable risk. To be considered in compliance with its modified terms, a loan that is a
TDR must be in accrual status and must be current or less than 30 days past due on its contractual
principal and interest payments under the modified repayment terms.
D
R
Accounting for a Subsequent Restructuring of a TDR – When a loan has previously been modified in a
TDR, the lending institution and the borrower may subsequently enter into another restructuring
agreement. The facts and circumstances of each subsequent restructuring of a TDR loan should be
carefully evaluated to determine the appropriate reporting by the institution under U.S. GAAP. Under
certain circumstances it may be acceptable not to report a subsequently restructured loan as a TDR.
The banking agencies will not object to an institution no longer reporting such a loan as a TDR if at the
time of the subsequent restructuring the borrower is not experiencing financial difficulties and, under
the terms of the subsequent restructuring agreement, no concession has been granted by the
institution to the borrower. To meet these conditions for removing the TDR designation, the
subsequent restructuring agreement must specify market terms, including a contractual interest rate
not less than a market interest rate for new debt with similar credit risk characteristics and other terms
no less favorable to the institution than those it would offer for such new debt. When determining
whether the borrower is experiencing financial difficulties, the institution's assessment of the borrower's
financial condition and prospects for repayment after the restructuring should be supported by a
current, well-documented credit evaluation performed at the time of the restructuring. When assessing
whether a concession has been granted by the institution, the agencies consider any principal
forgiveness on a cumulative basis to be a continuing concession. Accordingly, a TDR loan with any
principal forgiveness would retain the TDR designation after subsequent restructurings.
If at the time of the subsequent restructuring the institution appropriately demonstrates that a loan
meets the conditions discussed above, the loan need no longer be disclosed as a TDR in the
Call Report.
The recorded investment or amortized cost basis, as applicable, should not change at the time of the
subsequent restructuring (unless cash is advanced or received). When there have been charge-offs
prior to the subsequent restructuring, consistent with Call Report instructions, any expected recoveries
FFIEC 031 and 041
A-128
(9-206-24)
GLOSSARY
32
FFIEC 031 and 041
GLOSSARY
Troubled Debt Restructurings (cont.):
of amounts previously charged off are not added to the recorded investment in, or the amortized cost
basis of, the TDR, as applicable. For institutions that have not adopted ASC Topic 326, no recoveries
should be recognized until collections on amounts previously charged off have been received. For
institutions that have adopted ASC Topic 326, expected recoveries of amounts previously charged off
should be considered as part of the allowance estimate but are not included in the amortized cost basis
of the TDR. Similarly, if interest payments were applied to the recorded investment in, or amortized
cost basis of, the TDR, as applicable, prior to the subsequent restructuring, the application of these
payments to the recorded investment or amortized cost basis, as applicable, should not be reversed
nor reported as interest income at the time of the subsequent restructuring.
If the TDR designation is removed from a loan that meets the conditions discussed above and the loan
is later modified in a TDR, the loan should be reported as a TDR.
AF
T
Measurement of Impairment on a TDR when ASC Topic 326 Has Not Been Adopted – This section of
this Glossary entry applies to institutions that have not adopted ASC Topic 326. Institutions that have
adopted ASC Topic 326 should refer to the “Measurement of Expected Credit Losses on a TDR when
ASC Topic 326 Has Been Adopted” section below.
All loans whose terms have been modified in a TDR, including both commercial and retail loans, are
impaired loans. Therefore, an institution should measure any impairment on the restructured loan in
accordance with ASC Topic 310, Receivables, and should refer to the Glossary entry for "Loan
Impairment."
R
An institution measuring the allowance on a TDR that is not collateral dependent using the present
value of expected future cash flows method (i.e., discounted cash flow method) should discount the
cash flows using the effective interest rate of the original or modified loan prior to the restructuring
that resulted in the TDR classification. 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 an institution to aggregate impaired loans that have risk characteristics in
common with other impaired loans, such as modified residential mortgage loans that represent TDRs,
and use historical statistics along with a composite effective interest rate as a means of measuring the
impairment of these loans.
D
For a subsequently restructured TDR, if at the time of the subsequent restructuring the institution
appropriately determines that the loan no longer meets the conditions discussed above, the impairment
on the loan need no longer be measured as a TDR (i.e., as an impaired loan) in accordance with
ASC Topic 310 and the Glossary entry for “Loan Impairment.” Accordingly, going forward, the loan’s
allowance should be measured under ASC Subtopic 450-20, Contingencies – Loss Contingencies.
For a subsequently restructured TDR on which there was principal forgiveness and therefore does not
meet the conditions discussed above, the impairment on the TDR should continue to be measured as a
TDR (i.e., as an impaired loan) in accordance with ASC Topic 310.
Measurement of Expected Credit Losses on a TDR when ASC Topic 326 Has Been Adopted – This
section of this Glossary entry applies to institutions that have adopted ASC Topic 326. Institutions that
have not adopted ASC Topic 326 should continue to refer to the “Measurement of Impairment on a
TDR when ASC Topic 326 Has Not Been Adopted” section above.
An institution should measure any expected credit losses on loans whose terms have been modified in
a TDR in accordance with ASC Topic 326 as set forth in the Glossary entry for "Allowance for Credit
Losses." ASC Topic 326 allows an institution to use any appropriate loss estimation method to
estimate ACLs for TDRs. However, there are circumstances when specific measurement methods are
required. For purposes of the Consolidated Reports of Condition and Income, if a TDR, or a loan for
which a TDR is reasonably expected, is collateral-dependent, the ACL must be estimated using the fair
value of collateral.
FFIEC 031 and 041
A-129
(9-206-24)
GLOSSARY
33
FFIEC 031 and 041
GLOSSARY
Troubled Debt Restructurings (cont.):
An institution measuring the allowance on a TDR, or a pool of TDRs with shared risk characteristics,
using the present value of expected future cash flow method (i.e., discounted cash flow method) should
discount the cash flows using the effective interest rate of the original or modified loan prior to the
restructuring that resulted in the TDR classification. 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.
When there is a reasonable expectation of executing a TDR or if a TDR has been executed, the
expected effect of the modification (e.g., a term extension or an interest rate concession) is included in
the estimate of the allowance.
AF
T
If the TDR designation is removed from a loan balance when it is appropriate for the loan to no longer
be reported as a TDR, given the change in the loan’s risk characteristics, the institution should
determine whether the loan should be included in a pool of loans with similar risk characteristics for
allowance measurement purposes or evaluated for expected credit losses on an individual basis.
See also the Glossary entries for “Allowance for Credit Losses” or “Allowance for Loan and Lease
Losses,” as applicable, “Amortized Cost Basis,” and “Foreclosed Assets.”
R
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.
D
Trust preferred securities meet the definition of a security in ASC Topic 320, Investments–Debt
Securities, and in ASC Topic 321, Investments–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 securities under ASC Topic 321 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, “Structured financial
products,” and, for banks with $10 billion or more in total assets, 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.
FFIEC 031 and 041
A-130
(9-206-24)
GLOSSARY
34
FFIEC 031 and 041
Item No.
8
RC-M - MEMORANDA
Caption and Instructions
Internet website addresses and physical office trade names. Because the Uniform
Resource Locators (URLs) of Internet websites and the physical office trade names reported
in items 8.a, 8.b, and 8.c are publicly available, each institution should ensure that it
accurately reports its URLs and physical office trade names, if any. This information will
assist the FDIC in responding to public inquiries as to whether a particular Internet website or
institution operating under a trade name that accepts or solicits deposits from the public is in
fact operated by an FDIC-insured depository institution. URLs of Internet websites and
physical office trade names should not exceed 75 characters in length.
Examples of URLs are www.bank.com, www.isp.com/bank/, and bank.isp.com. When
entering the URL of an Internet website in items 8.a and 8.b, the URL should not be prefaced
with http:// because this is already included on the form. Do not provide e-mail addresses in
the spaces for URLs of Internet websites.
Uniform Resource Locator (URL) of the reporting institution’s primary Internet website
(home page), if any. The URL of an institution’s primary Internet website is the URL of the
public-facing website that the institution’s customers or potential customers enter into Internet
browser software in order to find the first page of the institution’s principal website.
AF
T
8.a
If the reporting institution has a primary Internet website or home page, report in this item the
URL of this website or home page (e.g., www.examplebank.com). If the reporting institution
does not have its own website or home page, but information on or functions of the institution
can be accessed through the URL of an affiliate’s website, the URL of that affiliate’s primary
website should be reported in this item.
An institution that maintains more than one website that prominently displays the institution’s
legal title should report the URL of the institution’s primary Internet website in this item and
determine whether it should report the URLs of these other websites in Schedule RC-M,
operated by the FDIC-insured depository
item 8.b, below.
institution
R
If an institution has no website or home page of its own and the institution cannot be
accessed through the URL of an affiliate’s website, this item should be left blank. Do not
enter such phrases as "Not applicable," "N/A," "None," and "Null."
8.b
URLs of all other public-facing Internet websites that the reporting institution uses to
accept or solicit deposits from the public, if any. If the reporting institution:
D
(1) Uses one or more trade names (other than its legal title) to accept or solicit deposits
from the public, and directly or indirectly operates one or more public-facing Internet
websites – other than its primary Internet website (home page) reported in
Schedule RC-M, item 8.a, above – to present such trade names to the public, or
operated by the FDIC-insured depository institution which
(2) Uses any other public-facing Internet websites prominently displaying the institution’s
legal title – other than its primary Internet website (home page) – to accept or solicit
deposits from the public,
the institution should report the URLs of each of its other public-facing websites that it uses to
accept or solicit deposits from the public1 in the text fields for items 8.b.(1) through 8.b.(10)
and, if necessary, in Schedule RI-E, item 7, “Other explanations.” If an institution has no
additional public-facing Internet websites to report, the text fields for these items should be
left blank. Do not enter such phrases as "Not applicable," "N/A," "None," and "Null."
Excluding deposits that would be carried on the books and records of an office of the institution located outside the
United States, Puerto Rico, and U.S. territories and possessions.
1
FFIEC 031 and 041
RC-M-14
(06-24)
(12-19)
RC-M - MEMORANDA
35
FFIEC 031 and 041
RC-M - MEMORANDA
Item No.
Caption and Instructions
8.b
(cont.)
When reporting the URLs for public-facing websites used to accept or solicit deposits, report
only the highest level URLs. For example, an institution with a legal title of XYZ Bank reports
in item 8.a that the URL of its primary Internet website is www.xyzbank.com. The institution
also solicits deposits using the website address www.safeandsoundbank.com and provides
more specific deposit information at “www.safeandsoundbank.com/checking” and
“www.safeandsoundbank.com/CDs.” Only the first of these three URLs
(i.e., “www.safeandsoundbank.com”) should be reported in this item.
bank operated websites using
When an institution uses multiple top level domains (e.g., .com, .net, and .biz), it should
separately report the URLs that are otherwise the same except for the top level domain
name. For example, if XYZ Bank also uses the website address “www.xyzbank.biz” in the
solicitation of deposits, it should report this URL in this item.
For example,
AF
T
However, if an institution uses one or more URLs that automatically redirect the public to the
institution’s primary website or to another website used to accept or solicit deposits that is
being reported in this item, the institution should not report these additional URLs. For
example, if XYZ Bank uses the URLs “www.xyzbank.net” and “www.safeandsoundbank.net”
to automatically redirect the public to “www.xyzbank.com” (reported in item 8.a as its primary
website) and “www.safeandsoundbank.com” (reported in this item as the URL of another
website the institution uses), respectively, it should not report the two redirecting URLs in this
item.
Ddo not report the URLs of:
R
(1) Public-facing Internet websites operated by the reporting institution that do not accept or
solicit deposits from the public. For example, if XYZ Bank uses the website address
“www.xyzautoloans.com” but does not accept or solicit deposits through this site, its URL
should not be reported in this item;
(2) Internet websites of any non-bank affiliates or subsidiaries that do not accept or solicit
deposits from the public on behalf of the institution;
(3) Affiliated, separately chartered insured depository institutions;
(4) Foreign affiliates; and
(5) Third-party deposit listing services and deposit brokers.;
(6) Internet websites of any non-bank entity, including any third parties that accepts or solicits deposits from the public
on behalf of the FDIC-insured depository institution; and
(7) Any person or entity other than the institution that is acting as fiduciary in the placement of deposit funds into an
FDIC-insured depository institution as described under 12 C.F.R. §330.5 and 12 C.F.R. §330.7. The FDIC commonly
refers to this process as “pass-through deposit insurance coverage.”
Trade names other than the reporting institution’s legal title used to identify one or
more of the institution’s physical offices at which deposits are accepted or solicited
from the public, if any. An institution may use a trade name other than its legal title as
reflected in its charter to identify certain of its physical offices, for example, due to a merger
and an interest in maintaining the presence of the acquired institution’s well recognized name
in the community or communities it served.
D
8.c
If the reporting institution operates one or more physical offices to conduct banking activities
and uses one or more trade names other than its legal title to identify these physical offices
(for example, via signage displayed on the facilities), the institution should report each trade
name used by one or more of its physical offices at which it accepts or solicits deposits
from the public1 in the text fields for items 8.c.(1) through 8.c.(6) and, if necessary, in
Excluding deposits that would be carried on the books and records of an office of the institution located outside the
United States, Puerto Rico, and U.S. territories and possessions.
1
FFIEC 031 and 041
RC-M-14a
(12-19)
(06-24)
RC-M - MEMORANDA
36
FFIEC 031 and 041
RC-M - MEMORANDA
Item No.
Caption and Instructions
8.c
(cont.)
Schedule RI-E, item 7, “Other explanations.” Do not report the trade names used by any
physical offices of the reporting institution at which the institution does not accept or solicit
deposits from the public. In addition, do not report the physical office trade names of any
non-bank affiliates or subsidiaries that do not accept or solicit deposits from the public on
behalf of the institution. Do not report the physical office trade names of affiliated, separately
chartered insured depository institutions. If an institution does not use any trade names other
than its legal title, the text fields for items 8.c.(1) through 8.c.(6) should be left blank. Do not
enter such phrases as "Not applicable," "N/A," "None," and "Null."
AF
T
For example, an institution with a legal title of XYZ Bank operates one or more branch offices
under the trade name of “Community Bank of ABC” (as identified by the signage displayed on
each facility) where it accepts and solicits deposits from the public. XYZ Bank should report
this trade name (and any other trade names it uses at other physical office locations where it
accepts or solicits deposits) in this item 8.c. XYZ Bank also has a loan production office that
operates under the trade name of “XYZ Consumer Loans” and a mortgage lending subsidiary
that operates physical offices using the trade name of “XYZ Mortgage Company”; deposits
are not accepted nor solicited on behalf of XYZ Bank at these physical offices. Thus, neither
of these two trade names should be reported in this item 8.c.
NOTE: Schedule RC-M, item 9, is to be completed annually in the December report only.
9
10
Do any of the bank’s Internet websites have transactional capability, i.e., allow the
bank’s customers to execute transactions on their accounts through the website?
Indicate whether any of the reporting bank’s Internet websites have transactional capability.
Place an “X” in the box marked “Yes” if the bank or a bank affiliate has any Internet websites
that allow the bank’s customers to execute transactions on their accounts through the website.
Otherwise, place an “X” in the box marked “No.”
The Internet web address of the website (or sites) with transactional capability does not have
to be the address of the bank’s primary Internet website that is reported in Schedule RC-M,
item 8, above.
R
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.
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.
D
10.a
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-14b
(12-19)
(06-24)
RC-M - MEMORANDA
37
GENERAL INSTRUCTIONS
FFIEC 031 and 041
SIGNATURES
Insert C
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.
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 Consolidated Reports of
Condition and Income that the bank has filed with the appropriate supervisory agency.
Director Attestation
AF
T
National banks, state member banks, and savings associations – The correctness of the Consolidated
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 Consolidated 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 data in one of the following two ways:
A bank may use computer software to prepare and edit its report data and then electronically submit
the data 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 report in paper form and arrange with a software vendor or another
party to convert its paper report into the electronic format that can be processed by the CDR. The
software vendor or other party then must electronically submit the institution’s Call Report data file to
the CDR.
R
•
D
The filing of a Call Report in paper form directly with the FDIC (for national banks, FDIC-supervised
banks, and savings associations) 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 website (http://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
website.) 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.
FFIEC 031 and 041
9
(6-24)
GENERAL INSTRUCTIONS
38
INSERT C
Electronic Signatures
D
R
AF
T
Electronic signatures may be used instead of physical (ink) signatures, provided the
institution’s electronic signature process satisfies the following principles:
• Form of signature: May be an image of the signer’s physical signature or application of
an electronic signature. The electronic signature can be applied through various means,
including clicking a box or entering a Personal Identification Number (PIN).
• Intent to sign: The institution’s appropriate officer or director must intend to sign the
Call Report as the attestation that it is prepared in accordance with the instructions and
is true and correct, as stated on the signature page of the Call Report. This intent and
capacity must be included as part of the electronic signature process by using an
electronic version of the relevant attestation text on the Call Report signature page.
• Association of signature: The electronic signature process must associate the signature
with a full version of the bank’s Call Report. This association can be made by using a
process that appends the signature data to the record signed, or which establishes a
database-type link between the signature data and the record signed. The bank must
include the date of signing as part of the signature process to validate that the electronic
signature occurred prior to Call Report submission.
• Identification and authentication of signer: The bank must use a reliable information
technology system identification and authentication method or process that associates
access to and execution of the electronic signature transaction with the identity of the
signer, such as requiring the institution’s officer or director to log into the institution’s
systems to verify identity.
• Integrity of the signed record: An institution must have sufficient data security and data
integrity practices to ensure that the Call Report with electronic signature is safely
stored, readily retrievable, and cannot be lost or altered. The Call Report with electronic
signature must be retained for the same timeframe as if it were a paper Call Report.
(6-24)
39
FFIEC 031 and 041
RC-C - LOANS AND LEASES
Part I. (cont.)
Caption and Instructions
2
(cont.)
(6)
Loans to brokers and dealers in securities, investment companies, and mutual funds
(report as loans for purchasing or carrying securities “Loans to nondepository financial
institutions” in Schedule RC-C, pPart I, item 9.ab).
(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, including margin
loans (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.
AF
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Item No.
(10) Dollar exchange acceptances created by foreign governments and official institutions
(report in Schedule RC-C, part I, item 7, on the FFIEC 031; Schedule RC-C, part I,
item 9.b, on the FFIEC 041).
(11) Loans to foreign governments and official institutions, including foreign central banks
(report in Schedule RC-C, part I, item 7, on the FFIEC 031; Schedule RC-C, part I,
item 9.b, on the FFIEC 041). See the Glossary entry for "foreign governments and
official institutions" for the definition of this term.
R
(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 in
other items of Schedule RC-C, part I, according to the account party.
NOTE: Items 2.a is not applicable to banks filing the FFIEC 041 report forms that have less than
$300 million in total assets.
To commercial banks in the U.S. On the FFIEC 041, report all loans to and acceptances of
other commercial banks in the U.S. On the FFIEC 031, report the total amount of all loans to
and acceptances of other commercial banks in the U.S. held 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.
D
2.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, item 2.a, 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).
FFIEC 031 and 041
RC-C-8a
(6-1912-24)
RC-C - LOANS AND LEASES
40
FFIEC 031 and 041
RC-C - LOANS AND LEASES
Part I. (cont.)
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.
AF
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Item No.
(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.
R
(13) Overnight lending for commercial and industrial purposes.
Exclude from commercial and industrial loans:
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).
D
(1)
(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, including margin loans
(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
(6-1812-24)
RC-C - LOANS AND LEASES
41
FFIEC 031 and 041
RC-C - LOANS AND LEASES
Part I. (cont.)
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.
AF
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Item No.
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:
R
(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).
D
(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, including margin
loans (report in Schedule RC-C, part I, item 9.b or 9.b.(1), as appropriate).
(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 or 9.b.(1), as appropriate).
(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).
FFIEC 031 and 041
RC-C-14a
(3-1712-24)
RC-C - LOANS AND LEASES
42
FFIEC 031 and 041
RC-C - LOANS AND LEASES
Part I. (cont.)
Item No.
9
Caption and Instructions
and
Loans to nondepository financial institutions and other loans. Report loans to
nondepository financial institutions, loans for purchasing or carrying securities, including
margin loans, as described below. Also, include in this item and all other loans that cannot
properly be reported in one of the preceding items in this schedule.
On the FFIEC 041, all banks institutions should report in the appropriate subitem of column B
loans to nondepository financial institutions (item 9.a) and other loans (item 9.b);
institutionsbanks with $300 million or more in total assets should also report in the
appropriate subitem of column A loans for purchasing or carrying securities, including margin
loans (item 9.b.(1)) and all other loans (item 9.b.(2)).
9.a
Loans to nondepository financial institutions. Report loans to nondepository financial
institutions on the FFIEC 031 (columns A and B) and FFIEC 041 (column B), as defined
below. For institutions with $10 billion or more in total assets, the amounts reported in this
item must equal Schedule RC-C, Part I, sum of Memorandum items 10.a through 10.e,
columns A and B, respectively.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.)
R
INSERT D
AF
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On the FFIEC 031, all banksinstitutions 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, including margin
loans (item 9.b.(1)), and all other loans (item 9.b.(2)) for the fully consolidated bank and for
domestic offices in columns A and B, respectively.
(2) Loans to holding companies of other depository institutions.
(3) Loans to insurance companies.
D
(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
(3-1912-24)
RC-C - LOANS AND LEASES
43
Insert D
Nondepository financial institutions (NDFIs) encompass a wide range of financial entities that provide
services similar to those of traditional banks but do not accept deposits from the general public and are
not regulated by the Federal banking agencies. NDFIs include, but are not limited to, mortgage
companies, insurance companies, investment funds (such as mutual funds, money market funds, hedge
funds, and private capital funds), pension funds, broker-dealers, securitization vehicles, and other
financial entities engaged in credit intermediation, asset management, market-making, and other
financial services activities.
Include the following loans in this item:
AF
T
(1) Loans to mortgage credit intermediaries. Include loans to mortgage companies that
specialize in residential or commercial mortgage loan origination or servicing activities (other
than those that meet the definition of a “loan secured by real estate”). Include loans to special
purpose entities designed to facilitate residential or commercial mortgage-related
securitizations activities, such as mortgage warehousing facilities, including loans to direct
lenders, real estate investment trusts (REITs), collateralized debt obligations (CDOs),
collateralized loan obligations (CLOs), private debt funds, asset-backed commercial paper
(ABCP) conduits, or other financial intermediaries in which the underlying assets are
predominately (greater than 50% of assets or lending activities) comprised of residential or
commercial mortgages. Include CLO tranche holdings that are reported as “loans” in
accordance with GAAP. Exclude outright purchases of mortgages or other loans that meet the
definition of "loans secured by real estate," which - unless held for trading - are to be reported
in item 1 above. Report in RC-C, Memorandum item 10.a, if applicable.
R
(2) Loans to business credit intermediaries. Include loans to special purpose entities, finance
companies, direct lenders, CDOs, CLOs, private debt funds, leasing companies, ABCP
conduits, Business Development Companies (BDCs), Small Business Investment Companies
(SBICs), or other financial intermediaries in which the underlying assets are predominately
(greater than 50% of assets or lending activities) comprised of loans to businesses. Include
CLO tranche holdings that are reported as “loans” in accordance with GAAP. Include loans to
other non-bank business lenders, including internet-based lending platforms and other
marketplace lenders. Report in RC-C, Memorandum item 10.b, if applicable.
D
(3) Loans to private equity funds. Include all loans to private equity funds. Include capital call
commitment and other subscription-based facilities to private equity and venture capital funds,
or any other general partnership funds that raise capital through limited partnership
arrangements in which the underlying investment assets are predominately (greater than 50%
of assets) comprised of equity investments in private, non-listed assets or companies. Report
in RC-C, Memorandum item 10.c, if applicable.
(4) Loans to consumer credit intermediaries. Include loans to special purposes entities,
finance companies, direct lenders, private debt funds, leasing companies, ABCP conduits, or
other financial intermediaries in which the underlying assets are predominately (greater than
50% of assets or lending activities) comprised of loans to consumers. Include loans designed
to facilitate asset-backed securitization (ABS) activities for consumer credit products, such as
auto ABS, credit card ABS, student loan ABS, etc. Include loans to other non-bank consumer
lenders, including internet-based lending platforms and other marketplace lenders. Report in
RC-C, Memorandum item 10.d, if applicable.
(5) Other loans to nondepository financial institutions. Other NDFI loans include, but are not
limited to, the following (report in RC-C, Memorandum item 10.e, if applicable):
(12-24)
44
Loans to holding companies of other depository institutions.
•
Loans to insurance companies.
•
Loans to federally-sponsored lending agencies (see the Glossary entry for
"Federally-Sponsored Lending Agency" for the definition of this term).
•
Loans to investment banks and brokers-dealers. Exclude loans that meet the definition of a
"loan secured by real estate" (Report in Schedule RC-C, Part I, item 1) and loans that meet
the definition of “loans for purchasing or carrying securities, including margin loans" (Report
in Schedule RC-C, Part I, item 9.b.1).
•
Loans and advances made to the bank's own trust department.
•
Loans to publicly-listed investment funds, such as money market funds, mutual funds (both
open and closed-end), index funds, and exchange-traded funds.
•
Loans to private capital funds, including private equity and private debt funds.
•
Loans to hedge funds.
•
Loans to pension funds, endowments, family offices and sovereign wealth funds.
•
Loans to securitization vehicles.
•
Loans to other investment firms and financial vehicles.
D
R
AF
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•
(12-24)
45
FFIEC 031 and 041
RC-C - LOANS AND LEASES
(9) Loans to Small Business Investment Companies.
Note: Item 9.b is not applicable to institutions filing the FFIEC 031 report form.
9.b
Other loans. On the FFIEC 041, column B, report all other loans that cannot properly be
reported in one of the preceding items in this schedule. iInclude (1) loans for purchasing or
carrying securities, including margin loans, and (2) all other loans, as described below.
NOTE: Items 9.b.(1) and 9.b.(2) are not applicable to institutions filing the FFIEC 041 report
form that have less than $300 million in total assets.
AF
T
9.b.(1) Loans for purchasing or carrying securities, including margin loans. Report (on the
FFIEC 041, in column A; on the FFIEC 031, for the fully consolidated bank in column A and
for domestic offices in column B, as appropriate) all loans for purchasing or carrying
securities, including margin loans, as described below.
iInclude:
D
R
(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).
FFIEC 031 and 041
RC-C-18
(3-1912-24)
RC-C - LOANS AND LEASES
46
FFIEC 031 and 041
RC-C - LOANS AND LEASES
Part I. (cont.)
Caption and Instructions
(21)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) Loans made to provide funds to pay for the purchase of securities at settlement date;
(b) Loans made to provide funds to repay indebtedness incurred in purchasing
securities;
(c) Loans that represent the renewal of loans to purchase or carry securities;
(d) Loans to investment companies and mutual funds, but excluding loans to Small
Business Investment Companies;
(ed)Loans to "plan lenders" as defined in Section 221.4(a) of Federal Reserve
Regulation U; and
(ef) Loans to Employee Stock Ownership Plans (ESOPs);
9.b.(1)
(cont.)
AF
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Item No.
but excluding loans to finance an acquirer’s purchase of the stock of another entity in a
merger or acquisition that meets the definition of a business combination under U.S.
generally accepted accounting principles (and which may include funds to cover
acquisition-related costs incurred to effect the business combination).
For purposes of the Consolidated Report of Condition, the purpose of a loan collateralized by
"stock" is determined as follows:
•
•
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.
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.
D
R
(2) All purpose and non-purpose securities-based margin loans, regardless of borrower
type, that are predominately secured (greater than 50% of underlying collateral) by
securities with readily determinable fair values. A securities-based margin loan is a loan
provided to an investor that is secured by the borrower’s investment portfolio, which
generally consists of equity and debt securities with readily determinable fair values.
Securities-based margin loans are further distinguished by routine monitoring and
margining practices, which generally involves ongoing assessment and adjustment of the
loan’s credit availability. Margining is a risk management practice where the lender
routinely reviews the value of the underlying securities collateral to ensure it remains
sufficient to secure the loan based on agreed upon terms. If the market value of the
underlying securities falls below a certain threshold, the lender may initiate a “margin
call”.
Exclude from loans for purchasing or carrying securities, including margin loans:
(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 RCC, part I, item 1).
FFIEC 031 and 041
RC-C-19
(3-1912-24)
RC-C - LOANS AND LEASES
47
FFIEC 031 and 041
9.b.2
RC-C - LOANS AND LEASES
All other loans. Report (on the FFIEC 041, in column A; on the FFIEC 031, for
the fully consolidated bank in column A and for domestic offices in column B, as
approporiate), all other loans as described below.
iInclude 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:
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 states and
political subdivisions in the U.S., which are to be reported in Schedule RC-C, part I,
item 8; and, on the FFIEC 031 only, overdrafts of foreign governments and official
institutions, which are to be reported in Schedule RC-C, part I, item 7).
(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.”
(4)
On the FFIEC 041, 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”.
(5)
On the FFIEC 041, 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 (except acceptances
held for trading, which are to be reported in Schedule RC, item 5).
R
AF
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(1)
D
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.
FFIEC 031 and 041
RC-C-20
(3-1912-24)
RC-C - LOANS AND LEASES
48
FFIEC 031 and 041
RC-C - LOANS AND LEASES
Part I. (cont.)
Item No.
9.a
Caption and Instructions
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.
AF
T
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.
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.
D
R
9.b.(1)
FFIEC 031 and 041
RC-C-21
(9-2012-24)
RC-C - LOANS AND LEASES
49
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.
3
AF
T
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.
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, pPart I, items 4, "Commercial and industrial loans," item 9.a, "Loans to
nondepository financial institutions," and item 9.b, "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.
R
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.
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.
D
4
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
(3-1712-24)
RC-C - LOANS AND LEASES
50
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 semiannually in the June and December
reports only 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
held for investment and held for sale in domestic offices (as reported in Schedule RC-C, part I, item 12,
column B) as of the previous December 31 report date.
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 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 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
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.
D
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8.b
10
Insert E
-11
Not applicable.
NOTE: Memorandum items 12.a through 12.d are to be completed semiannually in the June and
December reports only.
12
Loans (not considered purchased credit-deteriorated) 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, with an acquisition date in the
current calendar year.
FFIEC 031 and 041
RC-C-31
(3-2412-24)
RC-C - LOANS AND LEASES
51
Insert E
Part I. (cont.)
Memoranda
Item No.
Caption and Instructions
Note: Memorandum items 10.a through 10.e are to be completed by institutions with $10 billion or
more in total assets.
Loans to nondepository financial institutions. The sum of Memorandum items 10.a
through 10.e must equal the amounts reported on Schedule RC-C, Part I, item 9.a, column A
and column B, respectively.
10.a
Loans to mortgage credit intermediaries. Report all loans to mortgage credit
intermediaries (as defined for Schedule RC-C, Part I, item 9.a).
10.b
Loans to business credit intermediaries. Report all loans to business credit
intermediaries, as defined for Schedule RC-C, Part I, item 9.a).
10.c
Loans to private equity funds. Report all loans to private equity funds, as defined for
Schedule RC-C, Part I, item 9.a.
10.d
Loans to consumer credit intermediaries. Report all loans to consumer credit
intermediaries, as defined for Schedule RC-C, Part I, item 9.a.
10.e
Other loans to nondepository financial institutions. Report all other loans to
nondepository financial institutions, as defined for Schedule RC-C, Part I, item 9.a, that are
not included in Memorandum items 10.a through 10.d, above.
D
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AF
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10
(12-24)
52
FFIEC 031 and 041
RC-L – DERIVATIVES AND OFF-BALANCE SHEET
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 depository financial institutions. Report the unused portions of commitments to
extend credit to depository financial institutions, i.e., commitments that, when funded, would
be reportable either as loans to depository institutions in Schedule RC-C, pPart 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.”
Loans to nondepository financial institutions. Report the unused portions of
commitments to extend credit to nondepository financial institutions, i.e.,
commitments that, when funded, would be reportable as loans in Schedule RC-C,
Part I, item 9.a, “Loans to nondepository financial institutions.” For banks with $10
billion or more in total assets, this item must equal Schedule RC-L, sum of items
1.e.(3)(a) through 1.e.(3)(e), below.
R
1.e.(3)
AF
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Item No.
D
Note: Items 1.e.(3)(a) through 1.e.(3)(e) are to be completed by banks with $10 billion or more in total
assets.
1.e.(3)(a)
Loans to mortgage credit intermediaries. Report the unused portions of
commitments to extend credit to mortgage intermediaries, i.e., commitments that,
when funded, would be reportable as loans in Schedule RC-C, Part I, Memorandum
item 10.a, “Loans to mortgage credit intermediaries."
1.e.(3)(b)
Loans to business credit intermediaries. Report the unused portions of
commitments to extend credit to business credit intermediaries, i.e., commitments
that, when funded, would be reportable as loans in Schedule RC-C, Part I,
Memorandum item 10.b, “Loans to business credit intermediaries."
FFIEC 031 and 041
RC-L-2c
(3-1012-24)
RC-L – DERIVATIVES AND OFF-BALANCE SHEET
53
RC-L – DERIVATIVES AND OFF-BALANCE SHEET
FFIEC 031 and 041
Item No.
Caption and Instructions
Loans to private equity funds. Report the unused portions of commitments to extend
credit to private equity funds, i.e., commitments that, when funded, would be
reportable as loans in Schedule RC-C, Part I, Memorandum item 10.c, “Loans
to private equity funds."
1.e.(3)(d)
Loans to consumer credit intermediaries. Report the unused portions of
commitments to extend credit to consumer credit intermediaries, i.e.,
commitments that, when funded, would be reportable as loans in Schedule
RC-C, Part I, Memorandum item 10.d, “Loans to consumer credit
intermediaries."
1.e.(3)(e)
Other loans to nondepository financial institutions. Report the unused portions of
commitments to extend credit to other nondepository financial institutions, i.e.,
commitments that, when funded, would be reportable as loans in Schedule RC-C,
Part I, Memorandum item 10.e, “Other loans to nondepository financial institutions."
1.e.(43)
AF
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1.e.(3)(c)
All other unused commitments. Report the unused portions of commitments not reportable
in Schedule RC-L, items 1.a through 1.e.(23), 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.
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.
R
2 and 3
D
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
FFIEC 031 and 041
RC-L-3
(9-2012-24)
RC-L – DERIVATIVES AND OFF-BALANCE SHEET
54
FFIEC 031 and 041
RC-N - PAST DUE
Memoranda
Item No.
Caption and Instructions
NOTE: Memorandum item 6 is not applicable to banks filing the FFIEC 041 report form.
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.
NOTE: Memorandum items 7 and 8 are to be completed semiannually in the June and December reports
only.
Additions to nonaccrual assets during the previous six months. 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 six months ending on the semiannual
(i.e., June 30 or December 31) report date for this item. Include those assets placed in
nonaccrual status during this six month period that are included as of the current report date
in Schedule RC-N, column C, items 1 through 8 and 10. Also include those assets placed in
nonaccrual status during this six month period that, before the current semiannual report date
for this item, 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 semiannual report date 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 six month period ending on the
current semiannual report date, report the amount of the asset only once.
8
Nonaccrual assets sold during the previous six months. 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 8 and 10) that were sold
during the six months ending on the semiannual (i.e., June 30 or December 31) report date
for this item. 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.”
D
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7
9
Not applicable Loans to nondepository financial institutions included in
Schedule RC-N, item 7. Report in the appropriate column the amount of all loans
to nondepository financial institutions included in Schedule RC-C, Part I, item 9.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 7.
FFIEC 031 and 041
RC-N-15
(3-2412-24)
RC-N - PAST DUE
55
FFIEC 031 and 041
RC-B - SECURITIES
Caption and Instructions
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
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.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.
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.
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4.c.(1)
AF
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Item No.
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.
D
4.c.(1)(a)
Exclude from the amounts reported in this item the structured financial products that are
reported in item 5.b. For example, securitizations that involve more than one trust to
structure principal and interest cash flows to investors or that are collateralized by debt
instruments, such as FHLMC K-deals and Q-deals and similar securitizations, should
be reported in item 5.b.
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
FFIEC 031 and 041
RC-B-8
(6-1812-24)
RC-B - SECURITIES
56
FFIEC 031 and 041
RC-B - SECURITIES
Item No.
Caption and Instructions
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, or securities 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).
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.
AF
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4.c.(2)(b)
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. Include asset-backed securities issued
by non-U.S. issuers. For banks with $10 billion or more in total assets, this item must equal
Schedule RC-B, sum of Memorandum items 5.a through 5.f.
5.b
Structured financial products. Report in the appropriate columns the amortized cost and
fair value of all structured financial products not held for trading. Include cash, synthetic, and
hybrid instruments, including those issued by non-U.S. issuers. For banks with $10 billion or
more in total assets, this item must equal Schedule RC-B, sum of Memorandum items 6.a
through 6.g.
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5
D
Structured financial products generally convert a pool of assets (such as whole loans,
securitized assets, bonds, and similar instruments) 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.
(1) A cash instrument means that the instrument represents a claim against a reference pool
of assets.
(2) 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.
(3) A hybrid instrument means that the instrument is a mix of both cash and synthetic
instruments.
One of the more common cash instrument structured financial products is referred to as a
collateralized debt obligation (CDO). For example, include in this item investments in CDOs
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 from this item 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”).
FFIEC 031 and 041
RC-B-9
(9-2312-24)
RC-B - SECURITIES
57
FFIEC 031 and 041
RC-B - SECURITIES
Item No.
Caption and Instructions
5.b
(cont.)
Examples of other products to be reported in this item 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 loan
obligations (CLOs), 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. Also include in this item structured financial
products that are securitizations involving more than one trust to structure principal and
interest cash flows to investors or that are collateralized by debt instruments and are
guaranteed by U.S. government agencies such as FHLMC K-Deals and Q-Deals (report, if
applicable, in Schedule RC-B, Memorandum item 6.g, “Other collateral or reference assets,”
below).
AF
T
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).
R
(6) Pass-thru securities issued or guaranteed by FNMA, FHLMC, or GNMA (report in
Schedule RC-B, item 4.c.(1)(a), above)
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.
D
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 321,
Investments-Equity Securities, for example, common and perpetual preferred stock.
(See also the instructions to Schedule RC, item 2.c and Schedule RC-F, item 4.)
FFIEC 031 and 041
RC-B-10
(9-2312-24)
RC-B - SECURITIES
58
FFIEC 031 and 041
RC-B - SECURITIES
Memoranda
Item No.
6.c
Caption and Instructions
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).
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.
7.
Guaranteed by U.S. Government agencies or sponsored agencies included in
Schedule RC‐B, item 5.b. Report in the appropriate columns the amortized cost and fair
value of the maximum amount recoverable from the U.S. Government, including its agencies
and its government-sponsored agencies, under the guarantee applicable to the structured
securities included in Schedule RC-B, item 5.b.
D
R
AF
T
6.d
FFIEC 031 and 041
RC-B-24
(6-1812-24)
RC-B - SECURITIES
59
| File Type | application/pdf |
| File Title | 93RC-C |
| Author | FDIC |
| File Modified | 2024-05-21 |
| File Created | 2024-04-26 |