Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks

Federal Financial Institutions Examination Council

Instructions for Preparation of the

Report of Assets and Liabilities
of U.S. Branches and Agencies
of Foreign Banks
Reporting Form FFIEC 002
Effective March 2003

Instructions for Preparation of the
Report of Assets and Liabilities of U.S.
Branches and Agencies of Foreign Banks

General Instructions

the report electronically should contact the appropriate
district Federal Reserve Bank for instructions.

Who Must Report
Pursuant to the supervisory responsibilities assigned to
the Board of Governors of the Federal Reserve System,
the Office of the Comptroller of the Currency, and the
Federal Deposit Insurance Corporation by the International Banking Act (IBA) of 1978, every U.S. branch and
agency of a foreign bank as defined in the Act is required
to file each quarter the report entitled ‘‘Report of Assets
and Liabilities of U.S. Branches and Agencies of Foreign
Banks’’ (FFIEC 002), including its supporting schedules
(except for Schedule O, ‘‘Other Data for Deposit Insurance Assessments,’’ and Part II in Schedule C, ‘‘Loans
to Small Businesses and Small Farms,’’ which only
branches whose deposits are insured by the Federal
Deposit Insurance Corporation (FDIC) are required to
complete and submit as part of the FFIEC 002 report).
The ‘‘U.S. branches and agencies’’ required to report
under the Act are foreign banks’ branches and agencies
that are organized under the laws of the 50 states of the
United States and the District of Columbia, where ‘‘Foreign banks’’ are those companies organized under the
laws of a foreign country, Puerto Rico, or a U.S. territory
or possession that engage in the business of banking.
Each U.S. branch or agency, whether state-chartered or
federally-licensed, must submit the report for itself.

Where and When to Submit the Report
The Federal Reserve acts as the collecting and processing agent of this report for the federal supervisory
authorities. The original and two copies of the completed
report shall be submitted each quarter to the Federal
Reserve Bank in whose district the reporting branch or
agency is located. Reporting institutions are required to
submit the report quarterly as of the last calendar day
each quarter. Reporting institutions that wish to submit
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

Submission Date
The term ‘‘submission date’’ is defined as the date by
which a completed original report must be received by
the appropriate district Federal Reserve Bank. Reports
must be received no more than 30 days after the report
date (subject to the timely filing provisions set forth in
the following paragraph). For example, the December 31
report must be received by January 30. Earlier submission would aid the Federal Reserve in reviewing and
processing the reports and is encouraged. No extensions
of time for submitting reports are granted.
The filing of a branch or agency’s completed report will
be considered timely, regardless of when the reports are
received by the appropriate Federal Reserve Bank, if
these reports are mailed first class and postmarked no
later than the third calendar day preceding the submission deadline. In the absence of a postmark, a branch or
agency whose completed report is received late may be
called upon to provide proof of timely mailing. A ‘‘Certificate of Mailing’’ (U.S. Postal Service Form 3817) may
be used to provide such proof. If an overnight delivery
service is used, entry of the completed original report
into the delivery system on the day before the submission deadline will constitute timely submission. In addition, the hand delivery of the completed original report
on or before the submission deadline to the location to
which the report would otherwise be mailed is an acceptable alternative to mailing the report. Branches or agencies that are unable to obtain the required officer signature on their completed original report in sufficient time
to file these reports so that they are received by the
submission deadline should not delay filing the report in
order to obtain this signature, nor should another name
be used in place of the senior executive officer. However,
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FFIEC 002

a revised cover page with signature must be sent as soon
as possible.
If the submission deadline falls on a weekend or holiday,
the report must be received by 5:00 P.M. on the first
business day after the Saturday, Sunday, or holiday. Any
report received after 5:00 P.M. on the first business day
after the Saturday, Sunday, or holiday deadline will be
considered late unless it has been postmarked three calendar days prior to the original Saturday, Sunday, or
holiday submission deadline (original deadline), or the
institution has a record of sending the report by overnight service one day prior to the original deadline.

Scope of the Report
The report asks for data on the entire operation of the
branch or agency including its International Banking
Facility (‘‘IBF’’) if it has one, and also asks for separate
data on the IBF only.
In general, each U.S. branch or agency of a given foreign
bank is required to file a separate report. No consolidation of statements for multiple branches and agencies of
a given foreign bank is permitted, except that a foreign
bank may submit to the appropriate Federal Reserve
Bank a request to consolidate reports for two or more
offices, provided that (1) the offices are located in the
same city or metropolitan area and are in the same state
and Federal Reserve district, and (2) the consolidated
report does not combine agencies with branches or
insured branches with uninsured branches.
For purposes of this report, assets administered by the
reporting branch or agency’s trust department are not to
be consolidated into the reporting branch or agency’s
assets. However, information concerning the branch or
agency’s trust activities must be reported in Schedule T,
‘‘Fiduciary and Related Services,’’ beginning December 31, 2001. Assets held in or administered by the
branch or agency’s trust department are excluded from
all of the other schedules of this report except when trust
funds are deposited by the trust department of the reporting institution. When such trust funds are deposited
in the reporting institution, they are to be reported as
deposit liabilities in Schedule E in the deposit category
appropriate to the beneficiary. Interest paid on such
deposits are to be reported as part of the reporting
institution’s unremitted profits reported on Schedule M.
However, there are two exceptions: (1) uninvested trust
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funds (cash) held in the branch or agency’s trust department, which are not included in Schedule RAL, ‘‘Assets
and Liabilities,’’ of the reporting institution, must be
reported in Schedule O, ‘‘Other Data for Deposit Insurance Assessments;’’ and (2) the fees earned by the trust
department for its fiduciary activities and the operating
expenses of the trust department should be included
as part of the reporting institution’s unremitted profits
reported on Schedule M.
Custody Accounts: All custody and safekeeping activities (i.e., the holding of securities, jewelry, coin collections, and other valuables in custody or in safekeeping
for customers) are not to be reflected in Schedule RAL,
‘‘Assets and Liabilities,’’ unless cash funds held by the
branch or agency in safekeeping for customers are commingled with the general assets of the reporting institution. In such cases, the commingled funds would be
reported in Schedule E as deposit liabilities of the branch
or agency.
Similarly, securities held in custody or in safekeeping for
customers shall only be included in Schedule T of this
report. However, funds held by the reporting institution
in safekeeping for customers, except those held in the
reporting institution’s own trust department, are included
(and must be reported in Schedule E, Deposit Liabilities
and Credit Balances).

Signatures and Attestation
The original of the report shall be manually signed on the
cover sheet of the submitted report, in the manner indicated on the cover sheet, by a duly authorized officer of
the reporting institution. The title of the signing officer
shall also be shown. The correctness of the submitted
report shall be attested by the signature of the senior
executive official of the reporting institution, who may or
may not be the same officer who signed the report.
Signatures need not be notarized. All copies shall bear
the same signatures as on the original, but these signatures may be facsimiles or photocopies.

Release of Individual Branch and Agency
Reports
This report and all its schedules submitted by each
reporting branch or agency will be made available to the
public upon request, except for Schedule M, ‘‘Due from/
Due to Related Institutions in the U.S. and in Foreign
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

FFIEC 002

Countries,’’ which is considered to be confidential by the
federal supervisory authorities. The reports are made
available in their entirety to the relevant state supervisory
authorities.
Data reported in Schedule N, ‘‘Past Due, Nonaccrual,
and Restructured Loans,’’ will not be publicly disclosed
on an individual branch or agency basis for periods prior
to June 30, 2001.

Amended Reports
The primary federal supervisory authority of a branch or
agency may require the filing of amended reports if
reports as previously submitted contain significant errors
in how the reporting branch or agency classified or
categorized items in the reports, i.e., on what line of the
report an item has been reported.
When dealing with the recognition and measurement of
events and transactions in the Report of Assets and
Liabilities of U.S. Branches and Agencies of Foreign
Banks, amended reports may be required if a branch’s or
agency’s primary federal supervisory authority or the
Federal Reserve Bank to which the branch or agency
submits its reports determines that the reports as previously submitted contain errors that are material for the
reporting branch or agency.

Organization of Instruction Book

Glossary (all of which are extensively cross-referenced)
must be used jointly.

Preparation of Information to be Reported
U.S. branches and agencies of foreign banks are required
to prepare and file the report in accordance with these
instructions. Questions on, and requests for interpretations of, matters appearing in any part of these instructions should be addressed to the Federal Reserve Bank to
which the reports are submitted.
The financial records of the reporting branch or agency
shall be maintained in such a manner and scope as to
ensure that this report can be prepared and filed in
accordance with these instructions and reflects a fair
presentation of the financial condition and results of
operations. Branches and agencies should retain work
papers and other records used in the preparation of
the report until the next examination by their federal
regulator.
Transactions with related depository institutions are
treated differently in this report from transactions with
nonrelated institutions. For descriptions of what constitutes, for purposes of this report, a related institution and
of the different reporting treatments required for transactions with related and nonrelated institutions, see the
Glossary entries, ‘‘related institutions’’ and ‘‘transactions
with related institutions.’’

This instruction book is organized into three sections:
(1) The General Instructions, which describe the overall
reporting requirements.
(2) The line item instructions for each schedule.
(3) The Glossary, which presents—in alphabetical
order—definitions and discussions of accounting
issues and of other topics that require more extensive
treatment than is practical to include in the line item
instructions or that are relevant to several line items
or to the overall preparation of the report. The Glossary is not, and is not intended to be, a comprehensive discussion of the principles of bank accounting.
No one of these sections of the Instruction Book gives
the complete instructions for completing all the items on
the report. Thus, in determining the required treatment of
particular transactions or portfolio items, or in determining the definitions and scope of the various items, the
General Instructions, the line item instructions, and the
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

Accounting Basis
Applicability of Generally Accepted Accounting Principles to Regulatory Reporting Requirements: For recognition and measurement purposes, the regulatory
reporting requirements applicable to the Report of Assets
and Liabilities of U.S. Branches and Agencies of Foreign
Banks shall conform to generally accepted accounting
principles (GAAP). When reporting events and transactions not covered in principle by the instructions for
the Report of Assets and Liabilities of U.S. Branches and
Agencies of Foreign Banks or authoritative GAAP standards, branches and agencies are encouraged to discuss
the event or transaction with their primary federal supervisory authority or with the Federal Reserve Bank to
which their reports are submitted.
Regardless of whether a branch or agency discusses a
reporting issue with its supervisory authority or the
appropriate Federal Reserve Bank, when the supervisory
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FFIEC 002

authority’s or the Federal Reserve Bank’s interpretation
of how GAAP should be applied to a specified event or
transaction (or series of related events or transactions)
differs from the branch’s or agency’s interpretation, the
supervisory authority or Federal Reserve Bank may
require the branch or agency to reflect the event(s) or
transaction(s) in its Report of Assets and Liabilities
of U.S. Branches and Agencies of Foreign Banks in
accordance with the supervisory authority’s or Federal
Reserve Bank’s interpretation and to amend previously
submitted reports.
The instructions for the Report of Assets and Liabilities
of U.S. branches and agencies of foreign banks contain
certain specific reporting guidance that falls within the
range of acceptable practice under GAAP. These instructions have been adopted to achieve safety and soundness
and other public policy objectives and to ensure comparability. Should the need arise in the future, other specific
reporting guidance that falls within the range of GAAP
may be issued. For example, the Glossary entry for
‘‘Nonaccrual Status’’ includes specific reporting guidance that is within the range of GAAP.
There may be areas in which a branch or agency wishes
more technical detail on the application of accounting
standards and procedures to the requirements of these
instructions. Such information may often be found in
the appropriate entries in the Glossary section of these
instructions or, in more detail, in the GAAP standards.
Selected sections of the GAAP standards are referenced
in the instructions where appropriate. The accounting
entries in the Glossary are intended to serve as an aid in
specific reporting situations rather than as a comprehensive statement on branch and agency accounting.

Completion of the Report Form
The reports are to be submitted on the report forms
provided each quarter. Prior to or immediately following
the end of each quarter, each reporting institution will be
furnished with copies of the reporting form. Since, from
time to time, there may be minor changes in the report
form, forms from previous quarters should not be used.
Accounts and transactions shall be reported in the appropriate items on the reporting form as specified in the
instructions. No caption on the report form shall be
changed in any way.
No items are to be left blank. An entry must be made for
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each item, i.e., an amount, a zero, the word ‘‘none,’’ or
‘‘N/A.’’ The only exception to this rule applies to reporting institutions that do not have an IBF or are not insured
by the FDIC. If the reporting institution does not have an
IBF, then column B in Schedules RAL, A, C (Part I), and
P; column D in Schedule E; and Part II in Schedule M
are to be left blank. For those institutions that are not
insured by the FDIC, Schedule O and Part II in Schedule C are to be left blank.
Consolidation of Subsidiaries: To the extent required by
GAAP, a U.S. branch or agency should consolidate all
entities in which it maintains a controlling financial
ownership interest, e.g., a direct or indirect ownership
interest of more than 50 percent of an entity’s outstanding voting shares. Investments in unconsolidated subsidiaries should be reported in Schedule RAL, item 1(h),
‘‘Other assets,’’ using the equity method of accounting.
Negative Entries: Negative entries are not permitted for
any item in any schedule of the report except where
explicitly called for in Schedule M.
Foreign Currency Translation: The amounts entered in
the report shall be stated in U.S. dollars. Transactions or
balances denominated in currencies other than the U.S.
dollar shall be converted to U.S. dollar equivalents prior
to their incorporation in the report. Translation admustments should be included in Schedule M as part of
unremitted profits and losses.
Rounding: For purposes of this report, all figures are to
be rounded to the nearest thousand U.S. dollars. Rounding may result in details not adding to their stated totals.
The only permissible difference between totals and the
sums of their components are those attributable to the
mechanics of rounding. In Schedule RAL, Assets and
Liabilities, ‘‘Total assets,’’ item 3, and ‘‘Total liabilities,’’
item 6, which must be equal, must be derived from
unrounded numbers and then rounded in order to ensure
that these two items are equal as reported.
Verification: All addition and subtraction should be
double-checked before reports are submitted. Totals and
subtotals in supporting schedules should be crosschecked
to corresponding items elsewhere in the report. Before a
report is submitted, all amounts should be compared with
the corresponding amounts in the previous report. If
there are any unusual changes from the previous report, a
brief explanation of the changes should be attached to
the report.
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

FFIEC 002

All reports must be made out clearly and distinctly by
typewriter or in ink. Reports completed in pencil are not
acceptable. Computer printouts are acceptable provided
that they are identical in size, format, and detail, including all item and column captions, to the printed form

Instructions for Preparation of Reporting Form FFIEC 002
June 2001

distributed each quarter by the Federal Reserve and
provided that they meet the legibility and other specifications set by the Federal Reserve. Copies must be legible
and preferably should be photocopies.

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INSTRUCTIONS FOR THE PREPARATION OF THE

FFIEC 002
Schedule RAL—Assets and Liabilities

General Instructions

Items 1(b) and 1(c)

Detailed definitions of certain asset and liability items
will be found in the instructions pertaining to the schedules referred to under those items. Transactions with
related depository institutions (as defined in the General
Instructions) are to be reflected only in the items ‘‘Net
due from/net due to related depository institutions’’
(item 2 or 5) and are excluded from the other individual
items of this schedule.

Report in the appropriate subitem all U.S. Government
securities and other securities that are not held for trading. Held-to-maturity securities are to be reported at
amortized cost in items 1(b) and 1(c). (Amortized cost is
the purchase price of a debt security adjusted for amortization of premium or accretion of discount if the debt
security was purchased at other than par or face value.)
Available-for-sale debt securities are to be reported at
fair (market) value in items 1(b) and 1(c). Equity securities with readily determinable fair values are to be
reported at fair (market) value in item 1(c).

The amounts reported in column A are for the reporting
branch or agency including its own IBF, and those
reported in column B are for the reporting branch or
agency’s IBF only. The shading out of certain lines in
column B reflects the fact that IBFs are restricted in the
types of assets and liabilities they can carry. Unless
otherwise specified, the item instructions pertain to both
the reporting branch or agency, including its IBF, and the
IBF only. At times the instructions may discuss assets
that are permissible for the branch or agency but not for
the IBF. Report in the IBF column only those permissible
IBF assets. If the reporting branch or agency has no IBF,
no amounts are to be reported in column B.

Item Instructions
The line item instructions should be read in conjunction with the Glossary and other sections of these
instructions.

ASSETS
Item 1

Claims on nonrelated parties.

Item 1(a) Cash and balances due from depository
institutions.
Report the amount from Schedule A, item 6, ‘‘Total,’’ as
appropriate. For a discussion of interbank placements,
refer to the Glossary entry,‘‘placements.’’
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

Securities.

Exclude from items 1(b) and 1(c) securities held in
trading accounts (report such securities in Schedule RAL, item 1(f)) and equity securities that do not have
readily determinable fair values (report such securities at
historical cost in item 1(h), ‘‘Other assets including other
claims on nonrelated parties’’).
The preferred method for reporting security holdings is
on the basis of trade date accounting. However, if the
reported amounts under settlement date accounting
would not be materially different from those under trade
date accounting, settlement date accounting is acceptable. Whichever method is selected should be used consistently, unless the branch or agency has selected settlement date accounting and subsequently decides to change
to the preferred trade date accounting method. For a
discussion of this topic, refer to the Glossary entry,
‘‘trade date and settlement date accounting.’’
For purposes of this report, the following events and
transactions involving securities should be reported in
the manner indicated below:
A. Purchases of securities under agreements to resell
and sales of securities under agreements to repurchase: These transactions are not to be treated as
purchases or sales of securities but as lending or
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FFIEC 002

borrowing (i.e., financing) transactions collateralized
by these securities if the agreements meet the criteria
for a borrowing set forth in FASB Statement No. 140,
‘‘Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.’’ Purchases of securities under agreements to resell that
meet the criteria for a borrowing are to be reported in
Asset item 1(d). Sales of securities under agreements
to repurchase that meet the criteria for a borrowing
are to be reported in Liability item 4(b). For further
information, see the Glossary entries for ‘‘transfers of
financial assets’’ and ‘‘repurchase/resale agreements.’’
B. Pooled securities in which the reporting institution
purchases or sells participations: Similarly, these
transactions are not to be treated as purchases or sales
of the securities in the pool but as lending or borrowing (i.e., financing) transactions collateralized by the
pooled securities if the participation agreements meet
the criteria for a borrowing set forth in FASB Statement No. 140. The proceeds of the sale of participations that meet the criteria for a borrowing are to be
reported as securities sold under agreements to repurchase in Liability item 4(b). Reporting institutions
that buy participations in pooled securities that meet
the criteria for a borrowing are to report the participations as securities purchased under agreements to
resell in Asset item 1(d).
C. Pledged securities: Pledged securities that have not
been transferred to the secured party should continue
to be included in the pledging institution’s holdings
of securities that are reported in Asset items 1(b) or
1(c), as appropriate. If the reporting institution has
transferred pledged securities to the secured party,
the reporting institution should account for the
pledged securities in accordance with FASB Statement No. 140.
D. Securities borrowed and lent: Securities borrowed
and lent shall be reported as an asset of either the
borrowing or lending institution in accordance with
FASB Statement No. 140. For further information, see the Glossary entries for ‘‘transfers of financial assets’’ and ‘‘securities borrowing/lending
transactions.’’
E. Short sales of securities: These sales are not to be
netted against securities held. Rather, the reporting
branch or agency’s liability to others to deliver securities sold short (other than the liability represented by
SCHEDULE RAL-2

due bills) is to be reported in Liability item 4(e),
‘‘Trading liabilities.’’ The rights to receive payment
from such a sale of securities shall be reported in
Asset item 1(h), ‘‘Other assets (including other claims
on nonrelated parties).’’ For institutions that issue due
bills representing obligations to deliver securities,
such due bills are to be reported as borrowings in
Liability item 4(c), ‘‘Other borrowed money,’’ and in
Schedule P, as appropriate.
F. Futures, forward, and option contracts: such open
contracts to buy or sell securities in the future are to
be reported as derivatives in Schedule L, item 9 or
Schedule M, Part V, item 9.
Item 1(b)(1)

U.S. Treasury securities.

Report the appropriate value of all U.S. Treasury securities not held for trading. Include all bills, certificates of
indebtedness, notes, and bonds, including those issued
under the Separate Trading of Registered Interest and
Principal of Securities (STRIPS) program and those that
are ‘‘inflation-indexed.’’
Exclude all obligations of U.S. Government agencies and
corporations. Also exclude detached Treasury security
coupons and ex-coupon Treasury securities held as the
result of either their purchase or the branch or agency’s
stripping of such securities and Treasury receipts such as
CATS, TIGRs, COUGARs, LIONs, and ETRs (report in
item 1(c)(4), ‘‘All other’’ securities).
Item 1(b)(2)

U.S. Government agency obligations.

Report the appropriate value of all U.S. Government
agency obligations (excluding mortgage-backed securities) not held in trading accounts.
For purposes of this item, a U.S. government agency is
defined as an instrumentality of the U.S. government
whose debt obligations are fully and explicitly guaranteed as to the timely payment of principal and interest by
the full faith and credit of the U.S. government.
Include, among others, debt securities (but not mortgagebacked securities) of the following U.S. government
agencies:
(1) Export–Import Bank (Ex-Im Bank)
(2) Federal Housing Administration (FHA)
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(3) Government National Mortgage Association
(GNMA or Ginnie Mae)
(4) Maritime Administration
(5) Small Business Administration (SBA)
Include such obligations as:
(1) Small Business Administration (SBA) ‘‘Guaranteed
Loan Pool Certificates,’’ which represent an undivided interest in a pool of SBA-guaranteed portion
of loans for which the SBA has further guaranteed
the timely payment of scheduled principal and interest payments.
(2) Participation certificates issued by the Export–Import
Bank and the General Services Administration.
For purposes of this item government sponsored agencies are defined as agencies originally established or
chartered by the U.S. government to serve public purposes specified by the U.S. Congress but whose debt
obligations are not explicitly guaranteed by the full faith
and credit of the U.S. government.
Include, among others, debt securities (but not mortgagebacked securities) of the following governmentsponsored agencies:

(1) Loans to the Export–Import Bank and to federallysponsored lending agencies (report in Schedule C,
item 8, ‘‘All other loans’’). Refer to the Glossary
entry for ‘‘federally-sponsored lending agency’’ for
the definition of this term.
(2) All holdings of U.S. government-issued or
-guaranteed mortgage pass-through securities (report
in item 1(c)(2), ‘‘Mortgage-backed securities,’’
below).
(3) Collateralized mortgage obligations (CMOs), real
estate mortgage investments conduits (REMICs),
CMO and REMIC residuals, and stripped mortgagebacked securities (such as interest-only strips (IOs),
principal-only strips (POs) and similar instruments)
issued by U.S. government agencies and corporations (report in item 1(c)(2), ‘‘Mortgage-backed
securities,’’ below).
(4) Participants in pools of Federal Housing Administration (FHA) Title I loans, which generally consist
of junior lien home improvement loans (report in
Schedule C, item 1, ‘‘Loans secured by real estate’’).
Item 1(c) Other bonds, notes, debentures, and
corporate stock (including state and local
securities):

(1) Federal Agricultural Mortgage Corporation
(Farmer Mac)

Item 1(c)(1) Securities of foreign governments and
official institutions.

(2) Federal Farm Credit Banks

Report the appropriate value of all securities of foreign
governments and official institutions not held for trading,
including securities of international agencies such as the
International Bank for Reconstruction and Development
(World Bank), Inter-American Development Bank, and
Asian Development Bank. For further information, refer
to the Glossary entry for ‘‘foreign governments and
official instructions.’’

(3) Federal Home Loan Banks (FHLBs)
(4) Federal Home Loan Mortgage Corporation
(FHLMC or Freddie Mac)
(5) Federal Land Banks (FLBs)
(6) Federal National Mortgage Association (FNMA or
Fannie Mae)
(7) Financing Corporation (FICO)
(8) Resolution Funding Corporation (REFCORP)
(9) Student Loan Marketing Association (SLMA or
Sallie Mae)
(10) Tennessee Valley Authority (TVA)
(11) U.S. Postal Service
Exclude from U.S. government agency obligations:
Instructions for Preparation of Reporting Form FFIEC 002
March 2003

Item 1(c)(2)

Mortgage-backed securities.

Mortgage-backed securities include mortgage passthrough securities, 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).
In general, a mortgage pass-through security represents
an undivided interest in a pool that provides the holder
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with a pro rata share of all principal and interest payments on the residential mortgages in the pool, and
includes certificates of participation in pools of residential mortgages.
Include certificates of participation in pools of residential
mortgages even though the reporting institution was the
original holder of the mortgages underlying the pool and
holds the instruments covering that pool, as may be the
case with GNMA certificates issued by the reporting
institution and swaps with FNMA and FHLMC. Also
include U.S. Government-issued participation certificates
(PCs) that represent a pro rata share of all principal and
interest payments on a pool of resecuritized participation
certificates that, in turn, are backed by residential mortgages, e.g., FHLMC Giant PCs.
Exclude from mortgage-backed securities:
(1) Securities backed by loans extended under home
equity lines, i.e., revolving open-end lines of credit
secured by 1–4 family residential properties (report
as asset-backed securities backed by ‘‘Home equity
lines’’ in Schedule RAL, item 1(c)(3).
(2) Bonds issued by the Federal National Mortgage
Association (FNMA) and the Federal Home Loan
Mortgage Corporation (FHLMC) that are collateralized by mortgages, i.e., mortgage-backed bonds,
(report in Schedule RAL, item 1(b)(2), ‘‘U.S. Government agency and corporation obligations,’’ and
mortgage-backed bonds issued by non-U.S. Government issuers (report in Schedule RAL, item 1(c)(4),
‘‘All other,’’ below).
(3) Participation certificates issued by the Export–Import
Bank and the General Services Administration
(report in Schedule RAL, item 1(b)(2)).
(4) Participation certificates issued by a Federal Intermediate Credit Bank (report in Schedule RAL,
item 1(h), ‘‘Other assets (including other claims on
unrelated parties)’’).
Item 1(c)(2)a. Mortgage-backed securities: Issued
or guaranteed by U.S. Goverment agencies
Report the appropriate value of all mortage-backed 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
REMICs issued by the U.S. Department of Veterans
SCHEDULE RAL-4

Affairs (VA).
Item 1(c)(2)b.

Mortgage-backed securities: Other.

Report the apropriate value of all mortgage-backed securities issued by non-U.S.-government issuers (e.g., other
depository institutions, insurance companies, and state
and local housing authorities in the U.S.).
Item 1(c)(3)

Other asset-backed securities.

Report the appropriate value of all asset-backed securities (other than mortgatge-backed securities), including
asset-backed commercial paper, not held for trading.
Include asset-backed securities collateralized by credit
card receivables (i.e., extensions of credit to individuals
for household, family, and other personal expenditures
arising from credit cards), home equity lines of credit
(i.e., revolving, open-end lines of credit secured by 1-to-4
family residential properties), automobile loans (i.e.,
loans to individuals for the purpose of purchasing private
passenger vehicles, including minivans, vans, sportutility vehicles, pickup trucks, and similar light trucks
for personal use), other consumer loans (i.e., loans to
individuals for household, family, and other personal
expenditures), commercial and industrial loans (i.e.,
loans for commercial and industrial purposes to sole
proprietorships, partnerships, corporations, and other
business enterprises, whether secured (other than by real
estate) or unsecured, single-payment or installment), and
all other asset-backed securities collateralized by nonmortgage loans.
Item 1(c)(4)

All other.

Report the appropriate value of all bonds, notes, debentures, commercial paper, and equity securities with
readily determinable fair values not held for trading that
cannot properly be reported in items 1(b) and 1(c)(1)
through 1(c)(3) above, including:
(1) securities issued by states and political subdivisions
in the U.S. (including industrial development bonds
that the branch or agency reports as securities for
other financial reporting purposes, as described more
fully in Schedule C, part I, item 8),
(2) obligations of business corporations,
(3) detached U.S. Government security coupons and
ex-coupon U.S. Government securities held as a
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FFIEC 002

result of either their purchase or the branch or agency’s stripping of such securities and Treasury
receipts such as CATS, TIGRs, COUGARs, LIONs,
and ETRs,
(4) corporate stock with readily determinable fair values,
(5) common stock of the Federal National Mortgage
Association and the Federal Home Loan Mortgage
Corporation and preferred stock and unrestricted voting common stock of the Student Loan Marketing
Association, and
(6) equipment trust certificates.
The fair value of an equity security is readily determinable if sales or bid-and-asked quotations are currently
available on a securities exchange registered with the
Securities and Exchange Commission (SEC) or in the
over-the-counter market, provided that those prices or
quotations for the over-the-counter market are publicly
reported by the National Association of Securities Dealers Automated Quotations systems or by the National
Quotation Bureau. The fair value of an equity security
traded only on a foreign market is readily determinable if
that foreign market is of a breadth and scope comparable
to one of the U.S. markets referred to above.
Exclude from this item:
(1) Holdings of bankers acceptances and certificates of
deposit, which are not classified as securities for
purposes of this report. When held for trading
purposes, such assets are to be reported in RAL
item 1(f). Holdings of bankers acceptances not held
for trading purposes are to be reported as loans in
RAL item 1(e) and in Schedule C, item 11. Holdings
of certificates of deposit not held for trading purposes are to be reported as balances due from depository institutions in RAL item 1(a) and in Schedule A,
item 6.
(2) All loans (including overdrafts) and lease financing
receivables of states and political subdivisions in the
U.S. (report in RAL item 1(e) and in Schedule C,
item 11.
NOTE: For the IBF column (column B), report only the
dollar amount of the IBF’s holdings of notes, bonds,
debentures, and equity securities with readily determinable fair values issued by non-U.S. addressees, other than
related depository institutions. This amount is also
included in the amount reported in column A. Include
Instructions for Preparation of Reporting Form FFIEC 002
March 2004

obligations that are purchased directly from the issuers of
the equity or debt securities—that is, from foreign governments and official institutions and from private nonU.S. addressees. In addition, any securities reported in
column A that were acquired by the IBF as the result of
defaulted loans should be included in this item.
Item 1(d)(1)

Federal funds sold

Federal funds sold are immediately available funds lent
under agreements or contracts that mature in one business day or roll over under a continuing contract, excluding such funds lent in the form of securities purchased
under agreements to resell (which should be reported in
Schedule RAL, item 1(d)(2)) and overnight lending for
commercial and industrial purposes (which generally
should be reported in Schedule RAL, item 1(e). Transactions that are to be reported as federal funds sold may be
secured or unsecured or may involve an agreement to
resell loans or other instruments that are not securities.
Immediately available funds are funds that the purchasing institution can either use or dispose of on the same
business day that the transaction giving rise to the receipt
or disposal of the funds is executed. A continuing contract, regardless of the terminology used, is an agreement
that remains in effect for more than one business day, but
has no specified maturity and does not require advance
notice of the lender or the borrower to terminate.
Report federal funds sold on a gross basis; i.e., do not net
them against federal funds purchased, except to the
extent permitted under FASB Interpretation No. 39.
Also exclude from fed funds sold:
(1) Sales of so-called ‘‘term federal funds’’ (as defined
in the Glossary entry for ‘‘federal funds transactions’’) (report in Schedule RAL item 1.e.).
(2) Security resale agreements that have an original maturity of one business day or roll over under a
continuing contract, if the agreement requires the
bank to resell the identical security purchased or a
security that meets the definition of substantially the
same in the case of a dollar roll (report in Schedule
RAL, item 1(d)(2), ‘‘Securities purchased under
agreements to resell’’).
(3) Deposit balances from a Federal Home Loan Bank
(report as balances due from depository institutions
in RAL, item 1(a).
(4) Lending transactions in foreign offices involving
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immediately available funds with an original maturity of one business day or under a continuing contract that are not security resale agreements (report in
RAL, item 1.e).
For further information, see the Glossary entry for ‘‘federal funds transactions.’’
Item 1(d)(1)a.
U.S.

With depository institutions in the

In column A report federal funds sold (as defined above)
to all non-related depository institutions in the U.S.,
including nonrelated U.S. branches and agencies of foreign banks (including their IBFs) which are doing business in any one of the 50 states of the U.S., the District of
Columbia, Puerto Rico, or the U.S. territories and possessions. For purposes of this schedule, the term ‘‘U.S.
branches and agencies of foreign banks’’ covers:
(1) the U.S. branches and agencies of other foreign
banks;
(2) the U.S. branches and agencies of foreign official
banking institutions, including central banks, nationalized banks, and other banking institutions owned
by foreign governments; and
(3) investment companies that are chartered under
Article XII of the New York State banking law and
that are majority-owned by one or more nonrelated
foreign banks.
Also report all federal funds sold (as defined above) to
the following U.S. offices ofbanking institutions domiciled in any state of the United States, the District of
Columbia, Puerto Rico, and U.S. territories and possessions:

(1) IBFs of all nonrelated depository institutions in the
U.S., including IBFs of U.S. branches and agencies
of foreign banks; and
(2) nonrelated U.S. and foreign depository institutionss
domiciled in Puerto Rico and in the U.S. territories
and possessions, including branches and agencies of
other foreign banks located in Puerto Rico and the
U.S. territories and possessions.
Item 1(d)(1)b.

With others.

In column A, report federal funds sold (as defined above)
to nonrelated institutions not covered in item 1(d)(1)a,
such as other financial institutions, state and local governments, agencies of the U.S. Government, banks in
foreign countries (including branches and subsidiaries of
U.S. banks), and any other nonrelated institution or organization located in the U.S. or abroad.
NOTE: In the IBF column, report federal funds sold to:
(1) persons or other nonbank entities domiciled in
Puerto Rico or in the U.S. territories and possessions;
(2) persons or entities, including banks, domiciled in
foreign countries; and
(3) IBFs of all nonrelated depository institutions other
than commercial banks.
Item 1(d)(2) Securities purchased under
agreements to resell.
Securities purchased under agreements to resell include:

(2) state-chartered commercial banks;

(1) Securities resale agreements, regardless of maturity,
if the agreement requires the bank to resell the
identical security purchased or a security that meets
the definition of substantially the same in the case of
a dollar roll.

(3) trust companies that perform a commercial banking
business;

(2) Purchases of participations in pools of securities,
regardless of maturity.

(4) industrial banks;

Report securities purchased under agreements to resell
on a gross basis, i.e., do not net them against securities
sold under agreements to repurchase, except to the extent
permitted under FASB Interpretation No. 41.

(1) national banks;

(5) private or unincorporated banks;
(6) International Banking Facilities (IBFs) of U.S. banking institutions; and
(7) Edge and Agreement corporations.
NOTE: IBFs are to report in column B federal funds sold
to:
SCHEDULE RAL-6

Exclude from items 1(d)(2)a and 1(d)(2)b the following:
(1) Resale agreements involving assets other than securities (report in Schedule RAL, item 1(d)(1), ‘‘Federal
funds sold,’’ or item 1(e), ‘‘Loans, net of unearned
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FFIEC 002

income’’ as appropriate, depending on the maturity
and office location of the transaction).

(4) industrial banks;
(5) private or unincorporated banks;

(2) Due bills representing purchases of securities or
other assets by the branch or agencies that have not
been delivered and similar instruments, whether collateralized or uncollateralized (report in Schedule
RAL, item 1(e)). See the Glossary entry for ‘‘due
bills.’’

(6) International Banking Facilities (IBFs) of U.S. banking institutions; and

(3) So-called yield maintenance dollar repurchase agreements (see the Glossary entry for ‘‘repurchase/resale
agreements’’).

(1) IBFs of all nonrelated depository institutions in the
U.S., including IBFs of U.S. branches and agencies
of foreign banks; and

For further information, see the Glossary entry for
repurchase/resale agreements.

(2) nonrelated U.S. and foreign depository institutionss
domiciled in Puerto Rico and in the U.S. territories
and possessions, including branches and agencies of
other foreign banks located in Puerto Rico and the
U.S. territories and possessions.

Item 1(d)(2)a. With depository institutions in the
U.S.
In column A report securities purchased under agreements to resell (as defined above) with all non-related
depository institutions in the U.S., including nonrelated
U.S. branches and agencies of foreign banks (including
their IBFs) which are doing business in any one of the
50 states of the U.S., the District of Columbia, Puerto
Rico, or the U.S. territories and possessions. For purposes of this schedule, the term ‘‘U.S. branches and
agencies of foreign banks’’ covers:
(1) the U.S. branches and agencies of other foreign
banks;

(7) Edge and Agreement corporations.
NOTE: IBFs are to report in column B securities purchased under agreements to resell with:

Item 1(d)(2)b.

With others.

In column A, report securities purchased under agreements to resell (as defined above) with nonrelated institutions not covered in item 1(d)(2)a, such as other financial
institutions, state and local governments, agencies of the
U.S. Government, banks in foreign countries (including
branches and subsidiaries of U.S. banks), and any other
nonrelated institution or organization located in the U.S.
or abroad.

(2) the U.S. branches and agencies of foreign official
banking institutions, including central banks, nationalized banks, and other banking institutions owned
by foreign governments; and

NOTE: In the IBF column, report securities purchased
under agreements to resell with:

(3) investment companies that are chartered under
Article XII of the New York State banking law and
that are majority-owned by one or more nonrelated
foreign banks.

(2) persons or entities, including banks, domiciled in
foreign countries; and

Also report all securities purchased under agreements to
resell (as defined above) with the following U.S. offices
ofbanking institutions domiciled in any state of the
United States, the District of Columbia, Puerto Rico, and
U.S. territories and possessions:
(1) national banks;

(1) persons or other nonbank entities domiciled in
Puerto Rico or in the U.S. territories and possessions;

(3) IBFs of all nonrelated depository institutions other
than commercial banks.
Item 1(e)

Loans, net of unearned income.

Report in the appropriate columns the amounts from
Schedule C, part I, item 11, columns A and B. For a
detailed description of loans, see the discussion in the
introduction to Schedule C.

(2) state-chartered commercial banks;
(3) trust companies that perform a commercial banking
business;
Instructions for Preparation of Reporting Form FFIEC 002
March 2004

Item 1(f)

Trading assets.

Branches and agencies that (a) regularly underwrite or
SCHEDULE RAL-7

FFIEC 002

deal in securities; interest rate, foreign exchange rate,
commodity, equity, and credit derivative contracts; other
financial instruments; and other assets for resale; (b)
acquire or take positions in such items principally for the
purpose of selling in the near term or otherwise with the
intent to resell in order to profit from short-term price
movements; or (c) acquire or take postitions in such
items as an accommodation to customers or for other
trading purposes shall report in items 1(f)(1) and 1(f)(2)
the value of such assets or positions on the report date.
Assets and other financial instruments held for trading
shall be consistently valued at fair value. See the Glossary entry for ‘‘trading account’’ for further information.
Trading assets also include the amount of revaluation
gains (i.e., assets) from the ‘‘marking to market’’ of
derivative contracts held for trading purposes. Revaluation gains and losses (i.e., assets and liabilities) from the
‘‘marking to market’’ of the reporting branch or agency’s
derivative contracts with the same counterparty that meet
the criteria for a valid right of setoff contained in FASB
Interpretation No. 39 (e.g., these contracts subject to a
qualifying master netting agreement) may be reported on
a net basis using this item and Schedule RAL, item 4(e),
‘‘Trading liabilities,’’ as appropriate. For further information, see the Glossary entry for ‘‘offsetting.’’
Do not include in this item the carrying value of any
securities that are available for sale or any loans or leases
that are held for sale. Available-for-sale securities should
be reported in Schedule RAL, item 1(b) or 1(c), and in
Schedule RAL, Memorandum items 3 and 4. Loans and
leases that are held for sale should be reported in Schedule RAL, item 1(e), and in Schedule C.
Item 1(f)(1) Trading assets: U.S. Treasury and
Agency securities
Report the fair value of all U.S. Treasury securities and
U.S. Government agency and corporation obligations
held for trading by the reporting branch or agency.
Item 1(f)(2) Trading assets: other trading assets
Report the fair value of all other assets held for trading
by the reporting branch or agency. Other trading assets
include but are not limited to:

(3) certificates of deposit;
(4) commercial paper;
(5) bankers acceptances; and
(6) loans
Item 1(g) Customers’ liability to this branch or
agency on acceptances outstanding.
Include the liability to the reporting institution of its
customers on drafts and bills of exchange that have been
accepted by the reporting institution, or its agents, and
that are outstanding (that is, not held by the reporting
branch or agency) on the date of the report. Amounts
reportable in Liability item 4(d), ‘‘Branch or agency
liability on acceptances executed and outstanding’’ cannot be netted against this item or vice versa. Similarly,
participations in acceptances—regardless of form or
terminology—cannot be netted from this item. For further information, see the Glossary entry for ‘‘bankers
acceptances.’’
Items 1(g)(1) and 1(g)(2) U.S. addressees
(domicile), and Non-U.S. addressees (domicile).
Report in the appropriate subitem the liability to this
branch or agency on acceptances outstanding of customers with U.S. addresses, i.e., domiciled in the United
States, and those of customers with non-U.S. addresses,
i.e., domiciled in foreign countries. For a definition
of U.S. domicile and foreign (non-U.S.) domicile, see
‘‘domicile’’ in the Glossary.
NOTE: The breakdown is by the domicile of the reporting institution’s customer liable for payment of the
underlying draft or bill of exchange and not by the
domicile of the holder of the acceptance.
Item 1(h) Other assets (including other claims on
nonrelated parties).
Report the total of all other claims on related nondepository and nonrelated parties, and other assets, which cannot properly be reported in Asset items 1(a) through 1(g)
of this schedule.
Include:

(1) securities issued by states and political subdivisions
in the U.S.

(1) Income earned or accrued but not collected on
loans, securities, and other interest-bearing assets.

(2) other bonds, notes, and debentures;

(2) Prepaid expenses (i.e., those applicable as a charge

SCHEDULE RAL-8

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against operations in future periods).
(3) Accrued interest on securities purchased.
(4) Cash items not conforming to the definition of
‘‘Cash items in process of collection’’ found in the
instructions to Schedule A, item 1.
(5) Credit or debit card sales slips in process of collection until the reporting branch or agency has been
notified that it has been given credit (thereafter
report in Schedule A, item 3 or 4, as appropriate).
(6) Derivative instruments with nonrelated parties that
have a positive fair value that are held for purposes
other than trading.
(7) Purchased computer software, net of accumulated
amortization, and unamortized costs of computer
software to be sold, leased, or otherwise marketed
capitalized in accordance with the provisions of
FASB Statement No. 86.

adjoining or not adjoining the reporting institution’s premises, that are owned by the reporting
institution and that are used by its customers or
employees.
(d) All furniture, fixtures and movable equipment.
(e) The amounts assigned to leases acquired in
purchase and assumption transactions.
(f) The amount of stocks and bonds that indirectly
represent premises, equipment, furniture or
fixtures.
(g) The amount of capital lease property (with the
reporting institution as lessee)—premises, furniture, fixtures, and equipment. See the discussion of ‘‘accounting with branch or agency as
lessee’’ contained in the ‘‘lease accounting’’
section of the Glossary.

(8) Bullion not held for trading (e.g., gold or silver).
(9) Original art objects, including paintings, antique
objects, and similar valuable decorative articles
(report at cost, unless there has been a decline in
value, judged to be other than temporary, in which
case the object should be written down to its fair
value).
(10) Cash surrender value of life insurance policies for
which the branch or agency is the beneficiary.
(11) The book value, less accumulated depreciation or
amortization, of all premises, equipment, furniture
and fixtures. Any method of depreciation conforming to acceptable accounting principles may be
used. Do not deduct mortgages or other liens on
such property (report in Liability item 4(f)).
Include:
(a) Premises that are actually owned by the reporting institution and that are entirely or partly
occupied (or are to be occupied, if under construction) by the reporting institution.
(b) Leasehold improvements, vaults, and fixed
machinery and equipment.
(c) Remodeling costs to existing premises, real
estate acquired and intended to be used for
future expansion, and parking lots, whether
Instructions for Preparation of Reporting Form FFIEC 002
February 2004

(12) Automobiles, boats, equipment, appliances, real
estate and similar property repossessed or otherwise acquired for debts previously contracted, even
if the branch or agency has not yet received title to
the property.
(13) All real estate owned other than premises and foreclosed real estate, net of accumulated depreciation
and other reserves and allowances, if any. Foreclosed real estate includes real estate acquired in
any manner for debts previously contracted and real
estate collateral underlying a loan when the branch
or agency has obtained physical possession of
the collateral, regardless of whether formal foreclosure proceedings have been instituted against the
borrower.
NOTE: Foreclosed real estate received in full or
partial satisfaction of a loan should be recorded at
the fair value less cost to sell of the property at the
time of foreclosure. This amount becomes the
‘‘cost’’ of the foreclosed real estate. When foreclosed real estate is received in full satisfaction of a
loan, the amount, if any, by which the recorded
amount of the loan exceeds the fair value less cost
to sell of the property is a loss which must be
recognized at the time of foreclosure. The amount
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FFIEC 002

of any senior debt (principal and interest) (to a
nonrelated party) to which foreclosed real estate is
subject at the time of foreclosure must be reported
as a liability in Schedule RAL, item 4(f), ‘‘Other
liabilities (to nonrelated parties).’’
(14) Customers’ liability for deferred payment letters of
credit.
(15) The right to receive payment from the short sales
of securities. (See also the instructions to Schedule RAL, item 4(f).)
(16) Historical cost of equity securities that do not have
readily determinable fair values. These securities
are outside the scope of FASB Statement No. 115,
‘‘Accounting for Certain Investments in Debt and
Equity Securities.’’
(17) All other assets not specifically mentioned herein
nor in Asset items 1(a) through 1(g), such as items
temporarily held in suspense accounts. See the
entry for ‘‘suspense accounts’’ in the Glossary.
Exclude the following from this item:
(1) All assets due from or claims upon related depository institutions which are to be reflected in ‘‘Net
due from’’ (item 2) or ‘‘Net due to’’ (item 5) depending upon the overall due from/to position of the
reporting branch or agency vis-a`-vis its related
depository institutions.
(2) Holdings of bills representing purchases of securities
or other assets that have not yet been delivered. Such
holdings are to be reported in Loans, item 1(e).
Item 1(i)

Total claims on nonrelated parties.

Report in this item the sum of items 1(a) through 1(h).
Item 2 Net due from related depository
institutions.
All balances and positions due from and due to the head
office and related depository institutions should be reported as a single net amount. If that single net amount is
a net due from, it should be entered in this item; if the
single net amount is a net due to, it should be entered in
Liability item 5. (Thus, there should be a positive amount
reported in either item 2 or item 5, but not in both items,
and neither item should show negative amounts.) The
positions reported in item 2 or 5 should reflect all balances due from and due to the head office and related
SCHEDULE RAL-10

depository institutions wherever located including unremitted profits, any statutory or regulatory capital requirement, and any reserve accounts.
Item 2(a) For the reporting branch or agency
including its IBF.
Report the net balances due from the head office and
other related depository institutions of the reporting
branch or agency, including its IBF. This balance is
calculated by subtracting item 1(i), column A, ‘‘Total
claims on nonrelated parties,’’ from item 4(g), column A,
‘‘Total liabilities to nonrelated parties,’’ if item 4(g) is
greater than item 1(i); otherwise, enter zero in this item.
Item 2(b)
agency.

For the IBF of the reporting branch or

Report the net balances due from the establishing entity,
head office, and other related depository institutions of
the IBF of the reporting branch or agency. This balance
is calculated by subtracting item 1(i), column B, from
item 4(g), column B, if item 4(g) is greater than item 1(i);
otherwise, enter zero in this item.
Item 3

Total assets.

Report the sum of items 1(i) and 2(a), for item 3, column A. For column B, item 3, report the sum of
items 1(i) and 2(b). These items must equal item 6,
column A or B, as appropriate, ‘‘Total liabilities.’’
NOTE: Because of the structure of this schedule and the
separate identification in item 2(b) and 5(b) of the net
due from or due to position of the reporting branch
or agency’s IBF (if any) vis-a`-vis its establishing entity,
head office, and other related depository institutions,
total assets of the IBF only, as reported in column B,
item 3, may not be a component of total assets of the
reporting branch or agency, including its IBF, as reported
in column A, item 3. However, the total of IBF claims
on unrelated parties or related nondepository institutions
as reported in item 1(i), column B, is a component of
item 1(i), column A.

LIABILITIES
Item 4(a)

Total deposits and credit balances.

Report in column A the sum of the amounts reported
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in Schedule E, item 7, columns A, C, and D. Report in
column B the amount reported in Schedule E, item 7,
column D. Detailed definitions of deposit items are to be
found in the instructions for Schedule E.

(4) Borrowing transactions in foreign offices involving
immediately available funds with an original maturity of one business day or under a continuing contract that are not security repurchase agreements
(report in Schedule RAL item 4.c.).

Item 4(b)(1)

For further information, see the Glossary entry for ‘‘federal funds transactions.’’

Federal funds purchased.

Federal funds purchased are immediately available funds
borrowed under agreements or contrats that mature in
one business day or roll over under a continuing contract,
excluding such funds borrowed in the form of securities
sold under agreements to repurchase (which should be
reported in Schedule RAL, item 4(b)(2)) and Federal
Home Loan Advances (which should be reported in
Schedule RAL item 4.c.). Transactions that are to be
reported as federal funds purchased ma be secured or
unsecured or may involved an agreement to repurchase
loans or other instruments that are not securities.
Immediately available funds are funds that the purchasing institution can either use or dispose of on the same
business day that the transaction giving rise to the receipt
or disposal of the funds is executed. A continuing contract, regardless of the terminology used, is an agreement
that remains in effect for more than one business day, but
has no specified maturity and does not require advance
notice of the lender or the borrower to terminate.
Report federal funds purchased on a gross basis; i.e., do
not net them against federal funds sold, except to the
extent permitted under FASB Interpretation No. 39.
Exclude from items 4(b)(1)a and 4(b)(1)b:’’
(1) Purchases of so-called ‘‘term federal funds’’ (as
defined in the Glossary entry for ‘‘federal funds
transactions’’) (report in Schedule RAL item 4.c.).
(2) Security repurchase agreements that have an original
matrity of one business day or roll over under a
continuing contract, if the agreement requires the
bank to repurchase the identical secruity sold or a
security that meet the definition of substantially the
same in the case of a dollar roll (report in Schedule
RAL, item 4(b)(2), ‘‘Securities sold under agreements to repurchase’’).
(3) Borrowings from a Federal Home Loan Bank or a
Federal Reserve Bank (report those in those in the
form of securities repurchase agreements in Schedule, RAL, item 4(b)(2), and all other borrowings in
Schedule RAL, item 4.c.
Instructions for Preparation of Reporting Form FFIEC 002
March 2004

Item 4(b)(1)a.
U.S.

With depository institutions in the

Report in column A all federal funds purchased (as
defined above) from all non-related depository institutions in the U.S., including nonrelated U.S. branches and
agencies of foreign banks (including their IBFs), which
are doing business in any one of the 50 states of the U.S.,
the District of Columbia, Puerto Rico, or the U.S. territories and possessions. Nonrelated U.S. branches and agencies of foreign banks include:
(1) the U.S. branches and agencies of other foreign
banks;
(2) the U.S. branches and agencies of foreign official
banking institutions, including central banks, nationalized banks, and other banking institutions owned
by foreign governments; and
(3) investment companies that are chartered under
Article XII of the New York State banking law and
that are majority-owned by one or more nonrelated
foreign banks.
Also report all federal funds purchased (as described
above) from the following U.S. offices of nonrelated
banking institutions domiciled in any state of the United
States, the District of Columbia, Puerto Rico, and U.S.
territories and possessions:
(1) national banks;
(2) state-chartered commercial banks;
(3) trust companies that perform a commercial banking
business;
(4) industrial banks;
(5) private or unincorporated banks;
(6) International Banking Facilities (IBFs) of U.S. banking institutions; and
(7) Edge and Agreement corporations.
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NOTE: IBFs are to report in column B only those federal
funds purchased from:
(1) IBFs of nonrelated depository institutions in the U.S.,
including IBFs of U.S. branches and agencies of
foreign banks; and
(2) nonrelated U.S. and foreign depository institutions
domiciled in Puerto Rico and the U.S. territories and
possessions, including branches and agencies of
other foreign banks located in Puerto Rico or the
U.S. territories and possessions.
Item 4(b)(1)b.

With others

In column A, report federal funds purchased (as defined
above) from nonrelated institutions not covered in
item 4(b)(1)a, such as other financial institutions, state
and local governments, agencies of the U.S. Government, banks in foreign countries (including branches and
subsidiaries of U.S. banks), and any other nonrelated
institution or organization located in the U.S. or abroad.
NOTE: In the IBF column, report federal funds
purchased from:
(1) persons or other nonbank entities domiciled in
Puerto Rico or the U.S. territories and possessions;
(2) persons or entities, including banks, domiciled in
foreign countries; and
(3) IBFs of all nonrelated depository institutions other
than commercial banks.
Item 4(b)(2)
repurchase.

Securities sold under agreements to

Securities sold under agreements to repurchase include:
(1) Securities repurchase agreements, regardless of maturity, if the agreement requires the bank to repurchase the identical security sold or a security that
meets the definition of substantially the same in the
case of a dollar roll.

(1) Repurchase agreements involving assets other than
securities (report in Schedule RAL, item 4(b)(1),
‘‘Federal funds purchased,’’ or Schedule RAL, item
4.c., ‘‘Other borrowed money,’’ as appropriate, depending on the maturity and office location of the
transaction).
(2) Borrowings from a Federal Home Loan Bank or a
Federal Reserve Bank other than in the form of
security repurchase agreements (report in Schedule
RAL, item 4.c. ).
(3) Obligations under due bills that resulted when the
bank sld securities or other assets and received payment, but has not yet delivered the assets, and similar obligations, whether collateralized or uncollateralized (report in Schedule RAL, item 4.c.). See the
Glossary entry for ‘‘due bills.’’
(4) Yield maintenance dollar repurchase agreements (see
the Glossary entry for ‘‘repurchase/resale agreements’’).
For further information, see the Glossary entry for
‘‘repurchase/resale agreements.’’
Item 4(b)(2)a
U.S.

With depository institutions in the

Report in column A all securities sold under agreements
to repurchase (as defined above) with all non-related
depository institutions in the U.S., including nonrelated
U.S. branches and agencies of foreign banks (including
their IBFs), which are doing business in any one of the
50 states of the U.S., the District of Columbia, Puerto
Rico, or the U.S. territories and possessions. Nonrelated
U.S. branches and agencies of foreign banks include:
(1) the U.S. branches and agencies of other foreign
banks;

(2) Sales of participations in pools of securities, regardless of maturity.

(2) the U.S. branches and agencies of foreign official
banking institutions, including central banks, nationalized banks, and other banking institutions owned
by foreign governments; and

Report securities sold under agreements to repurchase on
a gross basis, i.e., do not net them against securities
purchased under agreements to resell, except to the
extent permitted under FASB Interpretation No. 41.

(3) investment companies that are chartered under
Article XII of the New York State banking law and
that are majority-owned by one or more nonrelated
foreign banks.

Exclude from items 4(b)(2)a and 4(b)(2)b the following:

Also report all securities sold under agreements to repur-

SCHEDULE RAL-12

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March 2004

FFIEC 002

chase (as described above) with the following U.S.
offices of nonrelated banking institutions domiciled in
any state of the United States, the District of Columbia,
Puerto Rico, and U.S. territories and possessions:

Item 4(c)

(1) national banks;

Item 4(d) Branch or agency liability on
acceptances executed and outstanding.

(2) state-chartered commercial banks;
(3) trust companies that perform a commercial banking
business;
(4) industrial banks;
(5) private or unincorporated banks;
(6) International Banking Facilities (IBFs) of U.S. banking institutions; and
(7) Edge and Agreement corporations.
NOTE: IBFs are to report in column B only those securities sold under agreements to repurchase with:
(1) IBFs of nonrelated depository institutions in the U.S.,
including IBFs of U.S. branches and agencies of
foreign banks; and
(2) nonrelated U.S. and foreign depository institutions
domiciled in Puerto Rico and the U.S. territories and
possessions, including branches and agencies of
other foreign banks located in Puerto Rico or the
U.S. territories and possessions.
Item 4(b)(2)b.

With others

In column A, report securities sold under agreements to
repurchase (as defined above) with nonrelated institutions not covered in item 4(b)(2)a, such as other financial
institutions, state and local governments, agencies of the
U.S. Government, banks in foreign countries (including
branches and subsidiaries of U.S. banks), and any other
nonrelated institution or organization located in the U.S.
or abroad.
NOTE: In the IBF column, report the securities sold
under agreements to repurchase with:
(1) persons or other nonbank entities domiciled in
Puerto Rico or the U.S. territories and possessions;
(2) persons or entities, including banks, domiciled in
foreign countries; and
(3) IBFs of all nonrelated depository institutions other
than commercial banks.
Instructions for Preparation of Reporting Form FFIEC 002
March 2003

Other borrowed money.

Report the amount from Schedule P, item 4. For detailed
definitions, see the instructions to Schedule P.

Include the amount of drafts and bills of exchange
accepted by the reporting branch or agency, or by its
agents, that are outstanding and that are not owned by the
reporting branch or agency on the date of the report.
Amounts reportable in item 1(g), ‘‘Customers’ liability
to this branch or agency on acceptances outstanding,’’
cannot be netted against this item and vice versa. Similarly, participations in acceptances—regardless of form
or terminology—cannot be netted from this item. For
further information, see the Glossary entry for ‘‘bankers
acceptances.’’
Item 4(e)

Trading liabilities.

Report the amount of liabilities from the reporting branch
or agency’s trading activities. Include liabilities resulting
from sales of assets that the reporting branch or agency
does not own (see the Glossary entry for ‘‘short position’’) and revaluation losses from the ‘‘marking to market’’ of derivative contracts into which the reporting
branch or agency has entered for trading and similar
purposes.
Revaluation gains and losses (i.e., assets and liabilities)
from the ‘‘marking to market’’ of the reporting institution’s derivative contracts executed with the same counterparty that meet the criteria for a valid right of setoff
contained in FASB Interpretation No. 39 (e.g., those
contracts subject to a qualifying master netting arrangement) may be reported on a net basis using this item and
Schedule RAL, item 1(f), ‘‘Trading assets,’’ as appropriate. (For further information, see the Glossary entry for
‘‘offsetting.’’)
Item 4(f)

Other liabilities (to nonrelated parties).

For the reporting branch or agency, including its IBF,
report in column A the total of all other obligations to
related nondepository and nonrelated parties, and other
liabilities, which cannot properly be reported against
Liability items 4(a) through 4(e) of this schedule.
Some of the liabilities to be reported by the branch or
SCHEDULE RAL-13

FFIEC 002

agency in this item include:
(1) Expenses accrued and unpaid.
(2) Amounts in transit to other institutions. Report the
amount of drafts, or other authorizations to charge
the reporting institution’s account at another institution, until the date when the other institution would
ordinarily debit the reporting institution’s account.
(3) Liability for deferred payment letters of credit.
(4) The amount of mortgages, liens, or other encumbrances on premises and fixed assets and on other
real estate owned for which the reporting institution
is liable.
(5) The reporting institution’s liability on capitalized
leased property. (See ‘‘lease accounting’’ in the
Glossary.)
(6) Deferred gains from sale–leaseback transactions.

(1) All liabilities due to related depository institutions
which are to be reflected in net due from (item 2) or
net due to (item 5) depending upon the overall due
from/due to position of the reporting branch or
agency vis-a`-vis its related depository institutions.
(2) Due bills or similar instruments representing securities sold by the reporting institution but not yet
delivered to customers. (Report in Schedule P—
‘‘Other borrowed money.’’)
(3) Liabilities incurred by short sales of securities that
are not in the form of due bills or similar instruments. Report in Schedule RAL, item 4(e), ‘‘Trading
liabilities.’’ The right to receive payment on the sale
of the securities is to be reported in Schedule RAL,
item 1(h).
NOTE: For the branch or agency’s IBF, report in column B all IBF liabilities to related nondepository and
nonrelated depository institutions that are not reported in
items 4(a), 4(b), and 4(c) above.

(7) Accounts payable.
(8) Unamortized loan fees, other than those that represent an adjustment of the interest yield, if material.
(9) Derivative contracts with nonrelated parties that have
a negative fair value that are held for purposes other
than trading. For further information, see the Glossary entry for ‘‘derivative contracts.’’
Exclude the following accounts, which should be
reported as ‘‘deposit liabilities’’ in the appropriate Item
of Schedule E.
(1) Proceeds from the sale of savings bonds.
(2) Withheld taxes, social security taxes, sales taxes, and
similar items.
(3) Mortgage and other escrow funds, such as funds
received for payment of taxes, insurance, etc., sometimes described as mortgagors’ deposits, mortgage
credit balances, or suspense or escrow accounts.
(4) Undisbursed loan funds (proceeds of loans for which
borrowers are liable and pay interest thereon, including funds deposited by the borrowers in such
accounts).
(5) Funds held as dealer reserves. See the Glossary entry
for ‘‘dealer reserve account’’ for the definition of this
term.
Also exclude the following from this item:
SCHEDULE RAL-14

Item 4(g)

Total liabilities to nonrelated parties.

Report in this item the sum of items 4(a) through
4(f).
Item 5

Net due to related depository institutions.

All balances and positions due from and due to the
head office and related depository institutions should be
reported as a single net amount. If that single net amount
is a net due to, it should be entered in this item; if the
single net amount is a net due from, it should be entered
in Asset item 2. (Thus, there should be a positive amount
reported in either item 2 or 5, but not in both items, and
neither item should show negative amounts.) The positions reported in item 2 or 5 should reflect all balances
due from and due to the head office and related depository institutions wherever located including unremitted
profits, any statutory or regulatory capital requirement,
and any reserve accounts.
Item 5(a) For the reporting branch or agency
including its IBF.
Report the net balances due to the head office and other
related depository institutions of the reporting branch or
agency, including its IBF. This balance is calculated
by subtracting item 4(g), column A, ‘‘Total liabilities to
nonrelated parties,’’ from item 1(i), column A, ‘‘Total
claims on nonrelated parties,’’ if item 1(i) is greater than
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

FFIEC 002

item 4(g); otherwise, enter zero in this item.

acceptable valuation methods.

Item 5(b)
agency.

The sum of Memorandum items 2 and 3 must equal the
sum of items 1(b)(1), 1(b)(2), 1(c)(1), 1(c)(2), 1(c)(3),
and 1(c)(4) of Schedule RAL.

For the IBF of the reporting branch or

Report the net balances due to the establishing entity,
head office, and other related depository institutions of
the IBF of the reporting branch or agency. This balance
is calculated by subtracting item 4(g), column B, from
item 1(i), column B, if item 1(i) is greater than 4(g);
otherwise, enter zero in this item.
Item 6

Total liabilities.

Exclude from Memorandum items 1 through 4 all securities held for trading. Securities held for trading are to be
reported in Schedule RAL, item 1(f), ‘‘Trading assets.’’
Also exclude equity securities that do not have readily
determinable fair values. These equity securities are to
be reported in Schedule RAL, item 1(h), ‘‘Other assets
(including other claims or nonrelated parties).’’

Report the sum of items 4(g) and 5(a) for item 6, column A. For column B, item 6, report the sum of
items 4(g) and 5(b). These items must equal item 3,
‘‘Total assets,’’ column A or B, as appropriate.

Amortized cost must include amortization of premium
and accretion of discount on securities purchased at other
than par or face value (including U.S. Treasury bills).

NOTE: Because of the structure of this schedule and the
separate identification in item 2(b) and 5(b) of the net
due from or due to position of the reporting branch
or agency’s IBF (if any) vis-a`-vis its establishing entity,
head office, and other related depository institutions,
total liabilities of the IBF only, as reported in column B,
item 6, may not be a component of total liabilities of the
reporting branch or agency, including its IBF, as reported
in column A, item 6. However, the total of IBF claims on
unrelated parties as reported in item 4(g), column B, is a
component of item 4(g), column A.

Memoranda Item Instructions

Memoranda

Item M3

General Instructions for Memorandum Items 1, 2,
3, and 4

Report the fair (market) value of available-for-sale debt
securities and for those equity securities with readily
determinable fair values.

Memorandum items 1 through 4 are for additional information on the reporting branch or agency’s securities not
held for trading, i.e., those securities reported in Schedule RAL, items 1(b) and 1(c). Two items are for held-tomaturity securities and two items are for available-forsale securities. Report the current fair (market) value and
amortized cost of held-to-maturity securities in Memorandum items 1 and 2, respectively. Report the current
fair (market) value and amortized cost of availablefor-sale debt securities in Memorandum items 3 and 4,
respectively. For equity securities with readily determinable fair values, fair (market) value is reported in Memorandum item 3 and historical cost (not amortized cost) is
reported in Memorandum item 4. See the Glossary entry
for ‘‘market value of securities’’ for a discussion of
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Item M1

Fair value of held-to-maturity securities.

Report the fair (market) value of held-to-maturity
securities.
Item M2 Amortized cost of held-to-maturity
securities.
Report the amortized cost of held-to-maturity securities.
Fair value of available-for-sale securities.

Item M4 Amortized cost of available-for-sale
securities.
Report the amortized cost of available-for-sale debt securities and the historical cost of equity securities with
readily determinable fair values.
Items M5 and M6

Not applicable.

Items M7 and M8

Structured notes.

Report in Memorandum items 7 and 8 all structured
notes included in the held-to-maturity and available-forsale accounts and reported in Schedule RAL, Memorandum items 1 through 4 above. In general, structured
SCHEDULE RAL-15

FFIEC 002

notes are debt securities whose cash flow characteristics
(coupon rate, redemption amount, or stated maturity)
depend upon one or more indices and/or that have
embedded forwards or options or are otherwise commonly known as ‘‘structured notes.’’ Include as structured notes any asset-backed securities (other than
mortgage-backed securities) which possess the aforementioned characteristics. Exclude from structured notes
all ‘‘inflation indexed’’ securities issued by the U.S.
Treasury.
Structured notes include, but are not limited to, the
following common structures:
(1) Floating rate debt securities whose payment of
interest is based upon a single index of a Constant
Maturity Treasury (CMT) rate or a Cost of Funds
Index (COFI).
(2) Step-up Bonds. Step-up securities initially pay the
investor an above-market yield for a short noncall
period and then, if not called, ‘‘step up’’ to a higher
coupon rate (which will be below current market
rates). The investor initially receives a higher yield
because of having implicitly sold one or more call
options. A step-up bond may continue to contain call
options even after the bond has stepped up to the
higher coupon rate. A multistep bond has a series of
fixed and successively higher coupons over its life.
At each call date, if the bond is not called, the
coupon rate increases.

of the increase or decrease in a specified index, such
as the CMT rate or the prime rate. For example, the
coupon might be the 10-year CMT rate multiplied
by 0.5, plus 150 basis points. The de-leveraging
multiplier (0.5) causes the coupon to lag overall
movements in market yields. A leveraged bond
would involve a multiplier greater than 1.
(6) Range Bonds. Range bonds (or accrual bonds) pay
the investor an above-market coupon rate as long as
the reference rate is between levels established at
issue. For each day that the reference rate is outside
this range, the bonds earn no interest. For example,
if LIBOR is the reference rate, a bond might pay
LIBOR plus 75 basis points for each day that LIBOR
is between 3.5 and 5.0 percent. When LIBOR is less
than 3.5 percent or more than 5 percent, the bond
would accrue no interest.
(7) Inverse Floaters. These bonds have coupons that
increase as rates decline and decrease as rates rise.
The coupon is based upon a formula, such as 12 percent minus three-month LIBOR.

(3) Index Amortizing Notes (IANs). IANs repay principal
according to a predetermined amortization schedule
that is linked to the level of a specific index (usually
the London Interbank Offered Rate—LIBOR—or a
specified prepayment rate). As market interest rates
increase (or prepayment rates decrease), the maturity
of an IAN extends, similar to that of a collateralized
mortgage obligation.

Exclude from structured notes floating rate debt securities denominated in U.S. dollars whose payment of
interest is based upon a single index of a Treasury bill
rate, the prime rate, or LIBOR and which do not contain adjusting caps, adjusting floors, leverage, or variable
principal redemption. Furthermore, debt securities that
do not possess the aforementioned characteristics of a
structured note need not be reported as structured notes
solely because they are callable as of a specified date at a
specified price. In addition, debt securities that in the
past possessed the characteristics of a structured note,
but which have ‘‘fallen through’’ their structures (e.g., all
of the issuer’s call options have expired and there are no
more adjustments to the interest rate on the security),
need not be reported as structured notes.

(4) Dual Index Notes. These bonds have coupon rates
that are determined by the difference between two
market indices, typically the CMT rate and LIBOR.
These bonds often have a fixed coupon rate for a
brief period, followed by a longer period of variable
rates, e.g., 8 percent fixed for two years, then the
10-year CMT rate plus 300 basis points minus threemonth LIBOR.

Generally, municipal and corporate securities that have
periodic call options should not be reported as structured
notes. Although many of these securities have features
similar to those found in some structured notes (e.g.,
step-ups, which generally remain callable after a step-up
date), they are not commonly known as structured notes.
Examples of such callable securities that should not be
reported as structured notes include:

(5) De-leveraged Bonds. These bonds pay investors
according to a formula that is based upon a fraction

(1) Callable municipal and corporate bonds which have
single (or multiple) explicit call dates and then can

SCHEDULE RAL-16

Instructions for Preparation of Reporting Form FFIEC 002
June 2002

FFIEC 002

be called on any interest payment date after the
last explicit call date (i.e., they are continuously
callable).
(2) Callable federal agency securities that have continuous call features after an explicit call date, except
step-up bonds (which are structured notes).
The mere existence of simple caps and floors does not
necessarily make a security a structured note. Securities
with adjusting caps or floors (i.e., caps or floors that
change over time), however, are structured notes. Therefore, the following types of securities should not be
reported as structured notes:
(1) Variable rate securities, including Small Business
Administration ‘‘Guaranteed Loan Pool Certificates,’’ unless they have features of securities which
are commonly known as structured notes (i.e., they
are inverse, range, or de-leveraged floaters, index
amortizing notes, dual index or variable principal
redemption or step-up bonds), or have adjusting caps
or floors.
(2) Mortgage-backed securities.
Item M7

Fair value of structured notes.

Report the fair (market) value of structured notes
included in the held-to-maturity and available-for-sale
accounts. The fair value of these securities will have
been reported in Schedule RAL, Memorandum items 1
and 3 above. Do not combine or otherwise net the fair
value of any structured note with the fair or book value
of any related asset, liability, or derivative contract.
Item M8

Amortized cost of structured notes.

neither the branch or agency nor any subsidiary of the
branch or agency acts as investment adviser for a mutual
fund or annuity, the branch or agency should report a
zero or the word ‘‘none’’ in this item.
Mutual fund is the common name for an open-end investment company whose shares are sold to the investing
public. An annuity is an investment product, typically
underwritten by an insurance company, that pays either a
fixed or variable payment stream over a specified period
of time. Both proprietary and private label mutual funds
and annuities are established in order to be marketed
primarily to a branch or agency’s customers. A proprietary product is a product for which the reporting branch
or agency, or an affiliate of the reporting branch or
agency, acts as investment adviser and may perform
additional support services. In a private label product,
an unaffiliated entity acts as the investment adviser. The
identity of the investment adviser is normally disclosed
in the prospectus for a mutual fund or annuity. Mutual
funds and annuities that are not proprietary or private
label products are considered third party products.
For example, third party mutual funds and annuities
include products that are widely marketed by numerous
parties to the investing public and have investment advisers that are not affiliated with the reporting branch or
agency.

Item M10 Revaluation gains on interest rate,
foreign exchange rate, and other commodity and
equity contracts held for trading purposes.

Item M9 Assets under the reporting branch or
agency’s management in proprietary mutual funds
and annuities.

Report the amount of revaluation gains (i.e., assets)
from the ‘‘marking to market’’ of derivative contracts
held for trading purposes. Revaluation gains and losses
(i.e., assets and liabilities) from the ‘‘marking to market’’
of the reporting branch or agency’s derivative contracts
executed with the same counterparty that meet the criteria for a valid right of setoff contained in FASB Interpretation No. 39 (e.g., those contracts subject to a qualifying
master netting arrangement) may be reported on a net
basis using this Memorandum item and Memorandum
item 11 below, as appropriate.

Report the amount of assets (stated in U.S. dollars) held
by mutual funds and annuities as of the report date for
which the reporting branch or agency or a subsidiary
of the branch or agency acts as investment adviser. If

Item M11 Revaluation losses on interest rate,
foreign exchange rate, and other commodity and
equity contracts held for trading purposes.

Report the amortized cost of all structured notes included
in the held-to-maturity and available-for-sale accounts.
The amortized cost of these securities will have been
reported in Schedule RAL, Memorandum items 2 and 4
above.

Instructions for Preparation of Reporting Form FFIEC 002
June 2002

SCHEDULE RAL-17

FFIEC 002

Report the amount of revaluation losses (i.e., liabilities)
from the ‘‘marking to market’’ of derivative contracts
held for trading purposes. Revaluation gains and losses
(i.e., assets and liabilities) from the ‘‘marking to market’’
of the reporting branch or agency’s derivative contracts
executed with the same counterparty that meet the criteria for a valid right of setoff contained in FASB Interpretation No. 39 (e.g., those contracts subject to a qualifying
master netting arrangement) may be reported on a net
basis using this Memorandum item and Memorandum
item 10 above, as appropriate.
Item M12

Not applicable.

Item M13

Pledged U.S. Government securities.

Report the amortized cost of all held-to-maturity securities and the fair value of all available-for-sale securities
included in Schedule RAL, item 1(b), above that are
pledged to secure deposits, repurchase transactions, or
other borrowings (regardless of the balance of the deposits or other liabilities against which the securities are
pledged), as performance bonds under futures or forward
contracts, or for any other purpose.
Item M14 If other assets including other claims on
nonrelated parties (item 1(h)) exceed 5 percent of
total assets (item 3), itemize and describe amounts
that exceed 25 percent of item 1(h).
The description of each of these amounts should not
exceed 50 characters in length (including spacing
between words).
Item M15 If other liabilities to nonrelated parties
(item 4(f)) exceed 5 percent of total liabilities
(item 6), itemize and describe amounts that exceed
25 percent of item 4(f).
The description of each of these amounts should not
exceed 50 characters in length (including spacing
between words).

the branch or agency as of the report date (round to the
nearest whole number). For purposes of this item, a
branch or agency should include as employees individuals who, in form, are employed by an affiliate but who,
in substance, do substantially all of their work for the
reporting branch or agency. To convert the number of
part-time employees to full-time equivalent employees,
add the total number of hours all part-time and temporary employees worked during the quarter ending on the
report date and divide this amount by the number of
hours a full-time employee would have been expected to
work during the quarter. Round the result to the nearest
whole number and add it to the number of full-time
employees. (A full-time employee may be expected to
work more or less than 40 hours each week, depending
on the policies of the reporting branch or agency.)
Item M17 To be reported only with the March
Report of Assets and Liabilities.
Indicate in the box at the right the number of the statement below that best describes the most comprehensive
level of auditing work performed for the branch or
agency by, or on behalf of, the parent organization
during the preceding year. Report the number of the
statement listed on the report form that best describes the
most comprehensive level of auditing work performed
by any auditors during the preceding calendar year.
The term ‘‘any date during the preceding calendar year’’
refers to the date of the balance sheet reported on by the
auditor (or the date as of which certain agreed-upon
procedures were applied to selected records and transactions by the auditor) regardless of the actual date of the
commencement of the auditing work (audit, review, compilation, or specific procedures) and regardless of the
date of the report submitted by the auditor.
Exclude from ‘‘auditing work performed’’ any tax or
consulting work regardless of whether it was performed
by an independent certified public accounting firm or
others.

Item M16 Number of full-time equivalent
employees of the branch or agency at end of
current period.

STATUTORY OR REGULATORY
REQUIREMENT

Report the number of full-time equivalent employees of

Report in this item, where applicable, the amounts of

SCHEDULE RAL-18

As appropriate for the reporting institution.

Instructions for Preparation of Reporting Form FFIEC 002
June 2002

FFIEC 002

assets pledged and/or maintained as required by federal
or state regulation or statute. For example, if the respondent is subject to asset maintenance and asset pledge/
capital equivalency deposit requirements under state law
and the FDIC asset maintenance requirement, items 1, 2,
and 3 should be completed. If the respondent is not
subject to a requirement, ‘‘N/A’’ should be entered.

for deposit insurance purposes as required by the Federal
Deposit Insurance Corporation under Section 347.210 of
the FDIC’s Rules and Regulations or by similar regulation imposed by any state. Do not report here reserve
balances or special deposits maintained at the Federal
Reserve Bank under Regulation D.
Item S3

Item S1

Asset maintenance requirement.

Report the total amount of assets in the respondent’s
portfolio that is eligible to satisfy asset maintenance
requirements imposed by regulatory authorities other
than the FDIC. A state-chartered branch or agency must
report the amount required by state law or regulation.
(Where such requirements exist, the maintenance of eligible assets is often stated in terms of 108 or 110 percent
of a specific liability total.) FDIC-insured branches
should report assets maintained to satisfy the FDIC asset
maintenance requirement in item S3(b) below.
Item S2 Asset pledge requirement/Capital
equivalency deposit.
Report the total amount of assets pledged (principal
amount or market value, whichever is lower) or capital
equivalency deposit by the respondent to safeguard certain liabilities in accordance with federal or state requirements. A federally-licensed branch or agency must report
in this item the amount of assets pledged as specified by
Comptroller of the Currency regulation 12 C.F.R. 28.6.
A state-chartered branch or agency must report the
amount of assets pledged, security deposits or similar
segregation of assets as specified by the requirements of
state law or regulation.
Do not report here the amount of assets pledged solely

Instructions for Preparation of Reporting Form FFIEC 002
June 2002

FDIC asset maintenance requirement.

Items S3(a) and S3(b) are to be completed by FDICinsured branches only.
Item S3(a) Average liabilities for the preceding
calendar quarter.
Report the average book value of the liabilities of the
branch for the calendar quarter preceding the quarterending on the report date, calculated in accordance with
Section 347.211 of the FDIC’s Rules and Regulations.
The average book value for a quarter is exclusive of
liabilities due to the parent bank’s head office, other
branches, agencies, offices, or wholly owned subsidiaries
and shall be, at the branch or agency’s option, either an
average of the balances as of the close of business for
each day for the quarter or an average of the balances as
of the close of business on each Wednesday during the
quarter. For days on which the branch is closed, the
amount outstanding from the previous business day is to
be used.
Item S3(b)

Eligible assets as of the report date.

Report the total amount of assets in the respondent’s
portfolio as of the report date that is eligible to satisfy
theFDIC asset maintenance requirement. The exclusions
from eligibility are specified in Section 347.211(b) of the
FDIC’s Rules and Regulations.

SCHEDULE RAL-19

INSTRUCTIONS FOR THE PREPARATION OF THE

FFIEC 002
Schedule A—Cash and Balances Due From
Depository Institutions

General Instructions

Exclude from this schedule:

Amounts reported in this Schedule should exclude all
claims on the reporting institution’s head office and other
related depository institutions as defined under ‘‘related
institutions’’ in the Glossary.

(1) Deposit accounts ‘‘due to’’ other depository institutions that are overdrawn (report in Schedule C,
item 2, ‘‘Loans to depository institutions and acceptances of other banks,’’ as appropriate).

The amounts reported in column A are for the reporting
branch or agency including its IBF, and those reported in
column B are for the reporting branch or agency’s IBF
only. If the reporting branch or agency has no IBF, no
amounts are to be reported in column B. The shaded
items in the IBF column reflect the fact that certain types
of assets are not permissible for IBFs (refer to the Glossary entry for ‘‘International Banking Facility (IBF)’’ for
a further discussion). Unless otherwise specified, the
item instructions pertain to both the reporting branch or
agency, including its IBF, and the IBF only. At times the
instructions may discuss assets that are permissible for
the branch or agency but not for the IBF. Report in the
IBF column only those permissible IBF assets.

(2) Loans to depository institutions (report in Schedule C, item 2, as appropriate).

For purposes of this report, deposit accounts ‘‘due from’’
other depository institutions that are overdrawn are to be
reported as borrowings in Schedule P, ‘‘Other borrowed
money,’’ except overdrawn ‘‘due from’’ accounts arising
in connection with checks or drafts drawn by the reporting branch or agency and drawn on, or payable at or
through, another depository institution either on a zerobalance account or on an account that is not routinely
maintained with sufficient balances to cover checks or
drafts drawn in the normal course of business during the
period until the amount of the checks or drafts is remitted
to the other depository institution (in which case, report
the funds received or held in connection with such
checks or drafts as deposits in Schedule E until the funds
are remitted). For further information, refer to the Glossary entry for ‘‘overdraft.’’

Instructions for Preparation of Reporting Form FFIEC 002
June 2001

(3) Unavailable balances due from closed or liquidating
banks or other depository institutions (report in
Schedule RAL, item 1(h), ‘‘Other assets including
other claims on nonrelated parties’’).
(4) All balances maintained by the trust department of
the reporting institution in a fiduciary capacity with
other institutions.
(5) Claims on depository institutions that the reporting
institution holds for trading purposes (report in
Schedule RAL, item 1(f), ‘‘Trading assets.’’)

Item Instructions
NOTE: All the items exclude claims on the reporting
branch or agency’s head office and other related depository institutions.
Item 1 Cash items in process of collection and
unposted debits.
For purposes of this report, cash items in process of
collection include the following:
(1) Checks or drafts in process of collection that are
drawn on another depository institution (or on a
Federal Reserve Bank), and that are payable in cash
immediately upon presentation in the United States
and its territories and possessions. This includes
those checks or drafts drawn on other institutions

SCHEDULE A-1

FFIEC 002

that have already been forwarded for collection but
for which the reporting institution has not yet been
given credit (‘‘cash letters’’), and checks or drafts on
hand that will be presented for payment or forwarded
for collection on the following business day. However, if the reporting institution has been given
immediate credit for checks or drafts deposited with
its correspondent, report the amount of such checks
or drafts in item 3, ‘‘Balances due from depository
institutions in the U.S.,’’ or item 4, ‘‘Balances due
from banks in foreign countries and foreign central
banks,’’ as appropriate.
(2) Government checks drawn on the Treasurer of the
United States or any other government agency that
are payable immediately upon presentation and that
are in process of collection.
(3) Such other items in process of collection, payable
immediately upon presentation in the United States,
as are customarily cleared or collected by depository
institutions as cash items, including:
(a) Amounts associated with automated payment
arrangements in connection with payroll deposits, federal recurring payments, and other items
that are credited to a depositor’s account prior
to the payment date to ensure that the funds are
available on the payment date.
(b) Federal Reserve deferred account balances until
credit has been received in accordance with the
appropriate time schedules established by the
Federal Reserve Banks. At that time, such balances should be reported in item 5, ‘‘Balances
due from Federal Reserve Banks.’’
(c) Brokers’ security drafts and commodity or billof-lading drafts payable immediately upon presentation in the United States. (See the Glossary
entries for ‘‘broker’s security draft’’ and ‘‘commodity or bill-of-lading draft’’ for the definition
of these terms.)
Include in this item unposted debits to deposit liabilities
or credit balances of the reporting institution, as appropriate. Unposted debits are cash items in the reporting
institution’s possession, drawn on itself, that are immediately chargeable, but have not yet been charged, to the
General Ledger deposit control account at the close of
business on the report date.
SCHEDULE A-2

Where allowed by state statute or written agreement,
items payable at or through the reporting institution may,
at the discretion of the reporting institution, be immediately charged against the deposits of the drawer. Such
items may be regarded as drawn on the reporting institution and reported as unposted debits when they have
been paid or credited but have not yet been charged
against deposit liabilities at the close of business on a
given date.
Exclude from cash items in process of collection:
(1) Cash items for which the reporting institution has
already received credit (report in item 3, 4, or 5
below, as appropriate).
(2) Items handled as noncash collection items (to be
reported in Schedule RAL, item 1(h), ‘‘Other assets
including other claims on nonrelated parties’’).
(3) Such cash items in process of collection which are
included in item 3 of this schedule, ‘‘Balances due
from depository institutions in the U.S.’’
(4) Commodity or bill-of-lading drafts (including arrival
drafts) not yet payable (because the merchandise
against which the draft was drawn has not yet
arrived), whether or not deposit credit has been
given. (If deposit credit has been given, report as
loans in the appropriate item of Schedule C; if the
drafts were received on a collection basis, they
should be excluded entirely from Schedule RAL
until the funds have actually been collected.)
(5) Credit or debit card sales slips in process of collection (report as noncash items in Schedule RAL,
item 1(h), ‘‘Other assets including other claims on
nonrelated parties’’). However, when the reporting
institution has been notified that it has been given
credit, the amount of such sales slips should be
reported in item 3, ‘‘Balances due from depository
institutions in the U.S.,’’ or item 4, ‘‘Balances due
from banks in foreign countries and foreign central
banks,’’ as appropriate.
Item 2

Currency and coin (U.S. and foreign).

Report all currency and coin (both U.S. and foreign)
owned and held in the reporting institution’s vaults;
currency and coin in transit to a Federal Reserve Bank, a
foreign central bank, or any other depository institution
(other than related banking institutions) for which the
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

FFIEC 002

reporting institution has not yet received credit; and
currency and coin in transit from a Federal Reserve
Bank, a foreign central bank or from any other depository institution (other than related depository institutions) for which the reporting institution’s account has
already been charged.
Foreign currency and coin should be converted into U.S.
dollar equivalents as of the report date.
Item 3 Balances due from depository institutions
in the U.S.
Report in this item the balances due from depository
institutions in the U.S. (other than balances due from
related depository institutions, which are reported in
Schedule M), with a breakdown between balances due
from U.S. branches and agencies of other foreign banks
(item 3(a)), and balances due from other depository
institutions in the U.S. (item 3(b)).
For the reporting branch or agency, depository institutions in the U.S. cover:
(1) U.S. branches and agencies of other foreign banks;
and
(2) all other depository institutions in the U.S.
(Refer to the Glossary entry ‘‘depository institutions in
the U.S.’’ for a discussion.)
Balances due from such institutions cover all interestbearing and noninterest-bearing balances whether in the
form of demand, savings, or time balances, including
certificates of deposit. Balances, as reported in these
items, should reflect funds on deposit at other depository
institutions in the U.S. for which the reporting institution
has already received credit. Balances for which the
reporting institution has not yet received credit are to be
reported as ‘‘cash items in process of collection.’’
Include in the amounts to be reported here:
(1) balances due from the reporting institution’s correspondents, including amounts that its correspondent
is to pass through or already has passed through to
a Federal Reserve Bank on behalf of the reporting institution (see Glossary entry for ‘‘pass-through
reserve balances’’ for further discussion); and
(2) balances that reflect deposit credit received by the
reporting institution because of credit or debit card
sales slips that had been forwarded for collection.
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

(Until credit has been received, report as noncash
items in process of collection in Schedule RAL,
item 1(h), ‘‘Other assets including other claims on
nonrelated parties.’’)
Exclude from items 3(a) and 3(b):
(1) cash items in process of collection (unless the reporting institution has received immediate credit) and
unposted debits, including cash letters (report in
item 1 above);
(2) all balances that the reporting institution’s trust
department maintains in a fiduciary capacity with
other depository institutions;
(3) loans to depository institutions (report in Schedule C, item 2); and
(4) claims on depository institutions that the reporting
institution holds for trading purposes (report in
Schedule RAL, item 1(f), ‘‘Trading assets.’’
Treatment of reciprocal balances with other depository
institutions. Reciprocal balances arise when two depository institutions maintain deposit accounts with each
other, i.e., when the reporting branch or agency has both
a ‘‘due from’’ and a ‘‘due to’’ balance with another
depository institution. Reciprocal balances between the
reporting institution and another depository institution
may be reported on a net basis when a right of setoff
exists. See the Glossary entry for ‘‘offsetting’’ for the
conditions that must be met for a right of setoff to exist.
Reciprocal balances are to be reported in this item in
those cases where the net amount is a net ‘‘due from’’
balance. (When the net amount is a net ‘‘due to,’’ the net
amount is to be reported in Schedule E, items 2 or 3, as
appropriate.) For further information, see the Glossary
entry for ‘‘reciprocal balances.’’
For the reporting branch or agency’s IBF, report in
column B balances due from nonrelated depository institutions in the U.S. For purposes of this item, depository
institutions in the U.S. eligible to transact business with
an IBF are limited to:
(1) IBFs of nonrelated U.S. banks and of their Edge or
Agreement subsidiaries;
(2) IBFs of U.S. branches and agencies of nonrelated
foreign banks; and
(3) nonrelated U.S. and foreign banks domiciled in
Puerto Rico and in U.S. territories and possessions.
SCHEDULE A-3

FFIEC 002

Balances due from such institutions cover all interestbearing and noninterest-bearing balances whether in
the form of demand, savings, or time balances, including certificates of deposit, and should reflect funds on
deposit with them for which the IBF has already received
credit.

Banks in foreign countries include:

Item 3(a) U.S. branches and agencies of other
foreign banks (including their IBFs).

For purposes of this item, foreign central banks cover:

Report in this item all balances due from U.S. branches
and agencies of nonrelated foreign banks (including their
IBFs) in columns A and B, as appropriate. For purposes
of this schedule, the term ‘‘U.S. branches and agencies of
foreign banks’’ covers:

(2) departments of foreign central governments that
have, as an important part of their functions, activities similar to those of a central bank;

(1) the U.S. branches and agencies of other foreign
banks;
(2) the U.S. branches and agencies of foreign official
banking institutions, including central banks, nationalized banks, and other banking institutions owned
by foreign governments; and
(3) investment companies that are chartered under
Article XII of the New York State banking law and
that are majority-owned by one or more foreign
banks.
Item 3(b) Other depository institutions in the U.S.
(including their IBFs).

(1) foreign-domiciled branches of U.S. banks; and
(2) foreign-domiciled branches of other foreign banks.
See the Glossary entry for ‘‘banks, U.S. and foreign’’ for
a description of banks in foreign countries.

(1) central banks in foreign countries;

(3) nationalized banks and banking institutions owned
by central governments that have, as an important
part of their functions, activities similar to those of a
central bank; and
(4) the Bank for International Settlements (BIS).
Balances due from banks in foreign countries and foreign
central banks cover all interest-bearing and noninterestbearing balances excluding any balances that the reporting branch or agency holds for trading. Balances, as
reported in this item, should reflect funds on deposit at
nonrelated banks in foreign countries and at foreign
central banks for which the reporting institution has
already received credit. Balances with foreign central
banks should include all balances with such entities,
including reserve, operating, and investment balances.

For the reporting branch or agency, including its IBF,
report in column A all balances due from nonrelated
depository institutions in the U.S. (including their IBFs),
other than U.S. branches and agencies of foreign banks.

Reciprocal balances with banks in foreign countries and
foreign central banks may be reported on a net basis
when a right of setoff exists. See the Glossary entry for
‘‘offsetting’’ for the conditions that must be met for a
right of setoff to exist.

For the reporting institution’s IBF, report separately in
column B all balances due from any of the nonrelated
depository institutions in the U.S.

Exclude from items 4(a), 4(b), and 4(c):

Item 4 Balances due from banks in foreign
countries and foreign central banks.

(2) loans to foreign central banks (report in Schedule C,
item 6);

For the reporting branch or agency including its IBF,
report a breakdown between balances due from foreign
branches of nonrelated U.S. banks (item 4(a)), balances
due from nonrelated banks in the home country and the
home country central bank (item 4(b)), and balances due
from all other nonrelated banks in foreign countries and
foreign central banks (item 4(c)).

(3) loans to banks in foreign countries (report in Schedule C, item 2(c));

SCHEDULE A-4

(1) balances with U.S. branches and agencies of other
foreign banks (report in item 3(a) above);

(4) cash items in process of collection and unposted
debits (report in item 1 above); and
(5) any balances held for trading (report in Schedule RAL, item 1(f), ‘‘Trading assets.’’)
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

FFIEC 002

Item 4(a)

Foreign branches of U.S. banks.

Report in the appropriate column all balances due from
foreign-domiciled branches of nonrelated U.S. banks.
Item 4(b) Banks in home country and home
country central bank.
Report all balances due from foreign-domiciled branches
of nonrelated banks headquartered in the reporting
branch or agency’s home country and from the reporting
branch or agency’s home country central bank.
Item 4(c) All other banks in foreign countries and
foreign central banks.
Report all balances due from foreign-domiciled branches
of nonrelated banks headquartered in foreign countries
other than the reporting branch or agency’s home coun-

Instructions for Preparation of Reporting Form FFIEC 002
June 2001

try and from central banks in foreign countries other than
the reporting branch or agency’s home country.
Item 5

Balances due from Federal Reserve Banks.

Report balances due from Federal Reserve Banks as
shown by the reporting institution’s books. This amount
includes reserves and other balances. Include the amount
of reserve balances actually passed through to a Federal
Reserve Bank by the reporting institution on behalf of its
respondent depository institutions.
Item 6

Total.

Report the sum of items 1 through 5. The amount in
column A must agree with item 1(a), column A, of
Schedule RAL. The amount in column B must agree
with item 1(a), column B, of Schedule RAL.

SCHEDULE A-5

INSTRUCTIONS FOR THE PREPARATION OF THE

FFIEC 002
Schedule C—Loans

Part I Loans and Leases—
General Instructions
Loans (and lease financing receivables) are extensions of
credit resulting from either direct negotiation between
the bank and its customers or the purchase of such assets
from others. See the Glossary entries for ‘‘loan,’’ ‘‘placements,’’ and ‘‘lease accounting’’ for further information.
The amounts reported in Column A are for the reporting
branch or agency, including its IBF, and those reported in
Column B are for the reporting branch or agency’s IBF
only. If the reporting branch or agency has no IBF, no
amounts are to be reported in Column B. The shaded
items in the IBF column reflect the fact that certain types
of assets are not permissible for IBFs (refer to the Glossary entry ‘‘International Banking Facility (IBF)’’ for a
further discussion). Unless otherwise specified, the item
instructions pertain to both the reporting branch or
agency, including its IBF, and the IBF only. At times the
instructions may discuss assets that are permissible for
the branch or agency but not for the IBF. Report in the
IBF column only those permissible IBF assets.
Report the aggregate book value of all loans and leases
to nonrelated institutions (including related nondepository institutions) before deduction of any general
‘‘Allowance for loan losses,’’ which is to be reflected in
Schedule RAL, item 2(a) or 5(a) and is to be reported
in Schedule M, Part IV, item 1, but net of any specific
reserves established for specific loans, or portions
thereof, that available information confirms are uncollectible. Each item in this schedule should be reported
net of (1) unearned income (to the extent possible) and
(2) deposits accumulated for the payment of personal
loans (hypothecated deposits). Net unamortized loan fees
represent an adjustment of the loan yield and should
be reported in the same manner as unearned income on
loans, i.e., deducted from the related loan balances (to
the extent possible) or from total loans in item 10, ‘‘Less:
Instructions for Preparation of Reporting Form FFIEC 002
March 1999

Any unearned income on loans reflected in items 1–8
above,’’ of this schedule. Net unamortized direct loan
origination costs should be added to the related loan
balances in each item of this schedule. Loans held for
sale should be reported at the lower of cost or fair
market.
Exclude all loans and leases held for trading purposes
(report in Schedule RAL, item 1(f), ‘‘Trading assets’’).
Also exclude all intrabranch or intraagency transactions
and all transactions with related depository institutions.
However, include transactions with related nondepository institutions. See the Glossary entries for ‘‘related
institutions’’ and ‘‘transactions with related institutions’’
for additional discussion.
All loans are classified according to security, borrower,
or purpose. Loans covering two or more classifications
are sometimes difficult to classify. In such instances,
classify the entire loan according to the major criterion.
Report in this schedule all loans that the reporting institution has sold under repurchase agreements that mature in
more than one business day. Also report in this schedule
all loans and leases on the books of the reporting institution even if on the report date they are past due and
collection is doubtful. Exclude any loans or leases the
reporting branch or agency 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 branch or
agency 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 entry for ‘‘transfers of financial
assets’’ for a detailed discussion of this topic.
Exclude, for purposes of this schedule, the following:
(1) all loans of immediately available funds that mature
SCHEDULE C-1

FFIEC 002

in one business day or roll over under a continuing
contract, i.e., federal funds sold (report in Schedule
RAL, item 1(d), ‘‘Federal funds sold and securities
purchased under agreements to resell’’);
(2) all holdings of commercial paper (report in Schedule RAL, item 1(c), ‘‘Other bonds, notes, debentures,
and corporate stock,’’ if held for purposes other than
trading);
(3) interest earned not collected on loans (report in
Schedule RAL, item 1(h), ‘‘Other assets including
other claims on nonrelated parties’’);
(4) contracts of sale or other loans indirectly representing other real estate (report in Schedule RAL,
item 1(h), ‘‘Other assets including other claims on
nonrelated parties’’);
(5) undisbursed loan funds, sometimes referred to as
incomplete loans or loans in process, unless the
borrower is liable for and pays the interest thereon. If
interest is being paid by the borrower on the undisbursed proceeds, the amounts of such undisbursed
funds should be included in both loans and deposits;
(6) loan commitments that have not yet been taken
down, even if fees have been paid; see Schedule L,
item 1; and
(7) loans and leases held for trading (report in Schedule RAL, item 1(f), ‘‘Trading assets’’).

Item Instructions for Part I
Item 1

Loans secured by real estate.

For the reporting branch or agency, report in this item all
loans (other than those to states and political subdivisions in the U.S.), regardless of purpose and regardless of
whether originated by the branch or agency or purchased
from others, that are 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. See the Glossary
entry for ‘‘loans secured by real estate’’ for the definition
of this term.
Include as loans secured by real estate:
(1) Loans secured by residential properties that are
guaranteed by the Farmers Home Administration
SCHEDULE C-2

(FmHA) and extended, collected, and serviced by a
party other than the FmHA.
(2) Loans secured by properties and guaranteed by governmental entities in foreign countries.
(3) Particpations in pools of Federal Housing Administration (FHA) Title I home improvement loans that
are secured by liens (generally, junior liens) on residential properties.
Exclude from loans secured by real estate:
(1) Obligations (other than securities and leases) of
states and political subdivisions in the U.S. secured
by real estate (report in item 8 below).
(2) All loans and sales contracts indirectly representing
other real estate (report in Schedule RAL, item 1(h)).
(3) Loans to real estate companies, real estate investment trusts, mortgage lenders, and foreign nongovernmental entities that specialize in mortgage
loan originations and that service mortgages for other
lending institutions when the real estate mortgages
or similar liens on real estate are not sold to the
branch or agency but are merely pledged as collateral (report in item 2, ‘‘Loans to depository institutions and acceptances of other banks,’’ or in
item 3, ‘‘Loans to other financial institutions,’’ as
appropriate).
(4) Bonds issued by the Federal National Mortgage
Association or by the Federal Home Loan Mortgage
Corporation that are collateralized by residential
mortgages (report in Schedule RAL, item 1(b)(2)).
(5) Pooled residential mortgages against which certificates have been issued. Report such certificates purchased or held as mortgage-backed securities (report
in Schedule RAL, item 1(c)(2)).
(6) Loans to finance construction and land development
that are not secured by real estate (report in other
items, as appropriate).
For the branch or agency’s IBF, report in column B (and
as a component of column A) of this item all permissible
loans, regardless of purpose and regardless of whether
originated by the IBF or purchased from others, that are
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. Include those loans secured by properties
Instructions for Preparation of Reporting Form FFIEC 002
March 1999

FFIEC 002

and guaranteed by governmental agencies in foreign
countries.
Item 2 Loans to depository institutions and
acceptances of other banks.
For the reporting branch or agency, report in the appropriate subitems all loans (other than those secured by
real estate), including overdrafts to banks, other depository institutions, and other associations, companies, and
financial intermediaries whose primary business is to
accept deposits and to extend credit for business or for
personal expenditure purposes and the branch or agency’s holdings of all bankers acceptances accepted by
other banks that are not held for trading. Acceptances
accepted by other banks may be purchased in the open
market or discounted by the reporting branch or agency.
For further information, see the Glossary entry for
‘‘bankers acceptances.’’

Exclude from loans to depository institutions and acceptances of other banks:
(1) All transactions reportable in Schedule RAL,
item 1(d), ‘‘Federal funds sold and securities purchased under agreements to resell.’’
(2) Loans secured by real estate, even if extended to
depository institutions (report in item 1).
(3) Loans to holding companies of depository institutions (report as all other loans in item 3 or item 8,
as appropriate).
(4) Loans to real estate investment trusts and to mortgage companies that specialize in mortgage loan
originations and warehousing or in mortgage loan
servicing (report as all other loans in item 3).
(5) Loans to finance companies and insurance companies (report as all other loans in item 3).

Include as loans to depository institutions and acceptances of other banks:

(6) Loans to brokers and dealers in securities, investment companies, and mutual funds (report as loans
for purchasing or carrying securities in item 7).

(1) Loans to depository institutions for the purpose of
purchasing or carrying securities.

(7) Loans to Small Business Investment Companies
(report as all other loans in item 8).

(2) Loans to depository institutions for which the collateral is a mortgage instrument and not the underlying
real property. Report loans to depository institutions
where the collateral is the real estate itself, as evidenced by mortgages or similar liens, in item 1.
(3) Purchases of mortgages and other loans under agreements to resell that do not involve the lending of
immediately available funds or that mature in more
than one business day, if acquired from depository
institutions.
(4) Certain participations in pools of loans (other than
residential mortgages), if issued by depository institutions. (See the Glossary entry for ‘‘transfer of
financial assets’’ for further information.)
(5) The reporting institution’s own acceptances discounted and held in its portfolio when the account
party is another depository institution.
(6) Loans of immediately available funds to depository
institutions that mature in more than one business
day, other than security resale agreements (term federal funds sold).
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

(8) Loans to lenders other than brokers, dealers, and
banks whose principal business is to extend credit
for the purpose of purchasing or carrying securities (as described in Federal Reserve Regulation U)
and loans to ‘‘plan lenders’’ (as defined in Federal
Reserve Regulation G) (report as loans for purchasing or carrying securities in item 7).
(9) Loans to federally-sponsored lending agencies
(report as all other loans in item 8). Refer to the
Glossary entry for ‘‘federally-sponsored lending
agency’’ for the definition of this term.
(10) Loans to any related depository institutions (report
in Schedule M).
(11) Loans secured by production payments (e.g., shares
in future oil or mining production) (to be reported
in item 4, ‘‘Commercial and industrial loans’’).
(12) Acceptances accepted by the reporting branch or
agency, discounted, and held in its portfolio, when
the account party is not another depository institution. Such acceptances are reported in other items
of Schedule C according to the account party.
SCHEDULE C-3

FFIEC 002

Item 2(a) To commercial banks in the U.S.
(including IBFs).
Report this item broken down between loans to and
acceptances of U.S. branches and agencies of other foreign banks (item 2(a)(1)) and loans to and acceptances of
other commercial banks in the U.S. (item 2(a)(2)).
Commercial banks in the U.S. covers:
(1) U.S. branches and agencies of other foreign banks;
and
(2) all other commercial banks in the U.S., i.e., U.S.
branches of U.S. banks and all nonrelated international banking facilities (IBFs).
Refer to the Glossary entry for ‘‘banks, U.S. and foreign’’
and ‘‘international banking facility (IBF)’’ for further
discussion of these terms.
Loans to and acceptances of commercial banks in the
U.S. include all loans and all other instruments evidencing loans to operating commercial banks and their
branches in the U.S., including their IBFs. Loans to and
acceptances of U.S.-chartered banks that are owned by
foreign banks or by foreign official banking institutions
should be included in item 2(a)(2), ‘‘Loans to other
commercial banks in the U.S.’’
Exclude from items 2(a)(1) and 2(a)(2) loans to other
depository institutions such as mutual savings banks,
savings and loan associations, and credit unions (report
in item 2(b) below).

(3) investment companies that are chartered under
Article XII of the New York State banking law and
that are majority-owned by one or more foreign
banks.
NOTE: For its IBF, report in column B loans to IBFs of
nonrelated U.S. branches and agencies of foreign banks,
and to nonrelated U.S. branches and agencies of foreign
banks domiciled in Puerto Rico and in the U.S. territories
and possessions.
Item 2(a)(2)
U.S.

To other commercial banks in the

For the reporting branch or agency, report in column A
all loans to and acceptances of commercial banks in
the U.S. and to their IBFs, other than U.S. branches and
agencies of other foreign banks.
NOTE: For its IBF, report in column B (and include in
column A) all loans to IBFs of nonrelated commercial
banks domiciled in the U.S., other than U.S. branches and
agencies of foreign banks (report in item 2(a)(1) above),
and to nonrelated U.S. and foreign banks domiciled in
Puerto Rico and in the U.S. territories and possessions.
Item 2(b)
U.S.

To other depository institutions in the

Report only in column A those loans of the reporting
branch or agency to the following depository institutions,
other than commercial banks, domiciled in the U.S.:
(1) credit unions;

Item 2(a)(1) To U.S. branches and agencies of
other foreign banks.

(2) mutual or stock savings banks;

For the reporting branch or agency, report in column A
all loans to and acceptances of U.S. branches and agencies of other (nonrelated) foreign banks located in the
50 states of the U.S., the District of Columbia, Puerto
Rico, and U.S. territories and possessions.

(4) cooperative banks;

For purposes of this schedule, the term ‘‘U.S. branches
and agencies of foreign banks’’ covers:
(1) the U.S. branches and agencies of foreign banks;
(2) the U.S. branches and agencies of foreign official
banking institutions, including central banks, nationalized banks, and other banking institutions owned
by foreign governments; and
SCHEDULE C-4

(3) savings or building and loan associations;

(5) industrial banks; and
(6) other similar depository institutions.
Exclude from loans to other depository institutions in the
U.S.:
(1) All transactions reportable in Schedule RAL,
item 1(d), ‘‘Federal funds sold and securities purchased under agreements to resell.’’
(2) Loans to and acceptances of commercial banks
(including IBFs) in the U.S. (report in item 2(a)
above).
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FFIEC 002

(3) Loans to brokers and dealers in securities and loans
to investment trusts of the mutual fund or the closedend types that hold stock for investment purposes
(to be reported in item 7, ‘‘Loans for purchasing or
carrying securities’’).
NOTE: In the IBF column, report loans extended to IBFs
of nonrelated depository institutions, mentioned above,
that are domiciled in the U.S., and to the nonrelated
depository institutions mentioned above domiciled in
Puerto Rico and the U.S. territories and possessions.
Item 2(c)

To banks in foreign countries.

Report this item broken down between loans to and
acceptances of foreign branches of U.S. banks
(item 2(c)(1)) and loans to and acceptances of other
banks in foreign countries (item 2(c)(2)).
Banks in foreign countries cover:
(1) foreign-domiciled branches of U.S. banks; and
(2) foreign-domiciled non-U.S. banks, including foreign
commercial banks, savings banks, discount houses,
and other similar foreign institutions.
See the Glossary entry for ‘‘banks, U.S. and foreign’’ for
further discussion of these terms.
Loans to banks in foreign countries include all loans
(including overdrafts) and all other instruments that represent loans to operating banks and their branches domiciled outside the 50 states of the United States, the
District of Columbia, Puerto Rico, and U.S. territories
and possessions.
Exclude from items 2(c)(1) and 2(c)(2):
(1) Loans to U.S. branches and agencies of foreign banks
(report in item 2(a) above).
(2) Dollar exchange acceptances accepted by foreign
governments and official institutions (report in
item 6).
(3) Loans to foreign governments and official institutions, including foreign central banks (report in
item 6). See the Glossary entry for ‘‘foreign governments and official institutions’’ for the definition of
this term.
(4) Loans to related banks in foreign countries (report in
Schedule M).
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

Item 2(c)(1)

To foreign branches of U.S. banks.

Report in columns A and B, as appropriate, all loans to
and acceptances of foreign branches of U.S.-chartered
banks, including loans to ‘‘shell’’ branches such as those
in the Bahamas and Cayman Islands.
Item 2(c)(2)

To other banks in foreign countries.

Report in columns A and B, as appropriate, all loans to
and acceptances of banks in foreign countries, other than
foreign-domiciled branches of other U.S. banks and any
banks related to the reporting institution. Include loans to
and acceptances of foreign-domiciled banking subsidiaries of U.S. banks.
Item 3

Loans to other financial institutions.

Report in this item loans to nonbank financial institutions, associations, companies, and financial intermediaries whose primary business is to extend credit for business purposes or for financing personal expenditures.
Include those loans for which the collateral is the mortgage instrument, not the real estate property. Those loans
where the collateral is the real estate itself, as evidenced
by mortgages or similar liens, are to be reported in
item 1.
For the reporting branch or agency, including its IBF, and
for the IBF only (where applicable), include extensions of credit, as defined, to the following financial
institutions:
(1) Investment banks.
(2) Real estate investment trust (REITs) and mortgage
companies that specialize in mortgage loan originations and warehousing and that service mortgages
for other lending institutions. Include unsecured
loans, loans secured by mortgage instruments, and
loans secured by any other collateral except real
estate. (Loans secured by real estate are to be
reported in item 1 above.)
(3) Finance companies and foreign mortgage finance
companies. Include both direct loans and marketable
instruments of finance companies purchased either
directly from the issuing companies or from commercial paper dealers. Include such loans to the
following institutions:
(a) factors and other financial intermediaries,
SCHEDULE C-5

FFIEC 002

(b) short-term business credit institutions that extend
credit to finance inventories or to carry accounts
receivable, and
(c) institutions whose functions are predominantly
to finance personal expenditures.
(4) Bank holding companies.
(5) Insurance companies.
(6) Other domestic and foreign financial intermediaries
(excluding those institutions included in item 2
above) whose functions are predominantly extensions of credit for business purposes, such as investment companies that hold stock of operating companies for management or development purposes.
Exclude, for purposes of the reporting branch or agency,
including its IBF:
(1) All transactions that are included in Schedule RAL,
item 1(d), ‘‘Federal funds sold and securities purchased under agreements to resell.’’
(2) Loans to brokers and dealers in securities and loans
to investment trusts of the mutual fund or the closedend types that hold stock for investment purposes.
These should be reported against item 7, ‘‘Loans for
purchasing or carrying securities.’’
(3) 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.
Item 4

Commercial and industrial loans.

For the reporting branch or agency, report in the appropriate subitem loans for commercial and industrial purposes to sole proprietorships, partnerships, corporations,
and other business enterprises, whether secured (other
than by real estate) or unsecured, single-payment or
installment. These loans may take the form of direct or
purchased loans. Include the reporting institution’s own
acceptances that it holds in its portfolio when the account
party is a commercial or industrial enterprise. Also
include loans to individuals for commercial, industrial,
and professional purposes but not for investment or
personal expenditure purposes.
Include loans of the types listed below. These descriptions may overlap and are not all inclusive.
SCHEDULE C-6

(1) Loans for commercial, industrial, and professional
purposes to:
(a) mining, oil- and gas-producing, and quarrying
companies;
(b) manufacturing companies of all kinds, including those which process agricultural
commodities;
(c) construction companies;
(d) transportation and communications companies
and public utilities;
(e) wholesale and retail trade enterprises and other
dealers in commodities;
(f) cooperative associations including farmers’
cooperatives;
(g) service enterprises such as hotels, motels, laundries, automotive service stations, and nursing
homes and hospitals operated for profit;
(h) insurance agents; and
(i) practitioners of law, medicine, and public
accounting.
(2) Loans for the purpose of financing capital expenditures and current operations.
(3) Loans to business enterprises guaranteed by the
Small Business Administration.
(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 are not
secured by real estate.
(7) Loans to merchants or dealers on their own promissory notes secured by the pledge of their own
installment paper.
(8) Loans extended under credit cards and related plans
that are readily identifiable as being issued in the
name of a commercial or industrial enterprise.
(9) Dealer flooring or floor-plan loans.
(10) Loans collateralized by production payments (e.g.,
oil or mining production payments). Treat as a loan
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FFIEC 002

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 item 8 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.
Exclude from commercial and industrial loans:
(1) Loans secured by real estate, even if for commercial and industrial purposes (report in item 1).
(2) Loans to depository institutions (report in item 2).

Item 4(a)

To U.S. addressees (domicile).

Report all commercial and industrial loans to U.S.
addressees. For a detailed discussion of U.S. and nonU.S. addressees, see the Glossary entry for ‘‘domicile.’’
NOTE: In the IBF column, report all commercial and
industrial loans made to businesses located in Puerto
Rico and the U.S. territories and possessions.
Item 4(b)

To non-U.S. addressees (domicile).

For the reporting branch or agency, including its IBF,
report all commercial and industrial loans to non-U.S.
addressees. For a detailed discussion of U.S. and nonU.S. addressees, see the Glossary entry for ‘‘domicile.’’
For the branch or agency only, include all commercial
and industrial loans to U.S. addresses that have since
moved or relocated outside the 50 states of the United
States, the District of Columbia, Puerto Rico, and the
U.S. territories and possessions.

(3) Loans to nondepository financial institutions such
as real estate investment trusts, mortgage companies, and insurance companies (report as loans to
other financial institutions in item 3).

NOTE: Report in the IBF column all commercial and
industrial loans made to businesses located in foreign
countries.

(4) Loans for the purpose of purchasing or carrying
securities (report in item 7).

Item 5

(5) Loans for the purpose of financing agricultural production, whether made to farmers or to nonagricultural businesses (report in item 8).

Item 6 Loans to foreign governments and official
institutions (including foreign central banks).

(6) Loans to nonprofit organizations, such as hospitals
or educational institutions (report as all other loans
in item 8), except those for which oil or mining
production payments serve as collateral which are
to be reported in this item.
(7) Holdings of acceptances accepted by other banks
(report in item 2).
(8) Holdings of own acceptances when the account
party is another bank (report in item 2) or a foreign
government or official institution (report in item 6).
(9) Equipment trust certificates (report in Schedule RAL, item 1(c)(4)).
(10) Any commercial and industrial loans held for trading purposes (report on Schedule RAL, item 1(f),
‘‘Trading assets’’).
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

Not applicable.

Report all loans (other than those secured by real estate),
including planned and unplanned overdrafts, to governments in foreign countries, to their official institutions,
and to international and regional institutions. Include
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. See
the Glossary entry for ‘‘foreign governments and official
institutions’’ for the definition of this term.
Exclude from loans to foreign governments and official
institutions:
(1) Loans to nationalized banks and other banking institutions owned by foreign governments and not functioning as central banks, banks of issue, or development banks (report in the appropriate subitem of
item 2 above).
SCHEDULE C-7

FFIEC 002

(2) Loans to U.S. branches and agencies of foreign official banking institutions (report as a loan to a commercial bank in the U.S. in item 2(a)(1)).
(3) Loans to foreign-government-owned nonbank corporations and enterprises (report in item 3, 4, or 8 as
appropriate).

for the purpose of purchasing or carrying securities
(report in subitems of item 2, as appropriate).
(3) Transactions reportable in Schedule RAL, item 1(d),
‘‘Federal funds sold and securities purchased under
agreements to resell.’’
(4) Loans secured by real estate (report in item 1).

Item 7 Loans for purchasing or carrying securities
(secured and unsecured).
Report all loans extended by the reporting branch or
agency, or by the IBF only for the purpose of purchasing
or carrying securities.
Loans for purchasing or carrying securities include:
(1) All loans to brokers and dealers in securities (other
than those secured by real estate and those to depository institutions).
(2) All loans, whether secured (other than by real estate)
or unsecured, to any other borrower (except related
depository institutions, which are reported in Schedule M) for the purpose of purchasing or carrying
securities (debt or equity), 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 (reported in item 8).
(e) Loans to ‘‘plan lenders’’ as defined in Section 221.4(a) of Federal Reserve Regulation U.
(f) Loans to lenders other than brokers, dealers, and
banks whose principal business is to extend
credit for the purpose of purchasing or carrying
securities.
Exclude from loans for purchasing or carrying securities:
(1) Loans to nonrelated banks in foreign countries that
act as brokers and dealers in securities (report in
item 2(c)).
(2) Loans to depository institutions (other than related
depository institutions reported in Schedule M)
SCHEDULE C-8

Item 8

All other loans.

For the reporting branch or agency, including its IBF, and
for the IBF only, report in the appropriate column all
loans and discounts (other than loans for purchasing or
carrying securities) that cannot properly be reported in
one of the preceding items in this schedule, such as:
(1) Unplanned overdrafts to deposit accounts (except
overdrafts of depository institutions and foreign governments and official institutions, which are to be
reported in items 2 and 6 above, respectively, or
Schedule M if of related depository institutions).
(2) Loans (other than those 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 (report
in item 4).
(3) Loans to individuals for investment or personal
expenditure purposes (as distinct from commercial,
industrial, or professional purposes), other than those
secured by real estate.
(4) Loans to finance agricultural production, whether
made to farmers or to nonagricultural businesses,
and other loans to farmers except those secured by
real estate (report in item 1).
(5) Loans and advances made to the reporting institution’s own trust department.
(6) Loans to Small Business Investment Companies.
(7) Obligations (other than securities and leases) of
states and political subdivisions in the U.S. Report
here obligations of states and political subdivisions in the United States (including planned and
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FFIEC 002

unplanned overdrafts and obligations secured by real
estate), other than those obligations reported (a) as
securities issued by such entities in Schedule RAL,
item 1(c)(4), and (b) as lease financing receivables of
states and political subdivisions in the U.S. in Schedule C, part I, item 9. Exclude all such obligations
held for trading purposes.
States and political subdivisions in the U.S. include:
(a) the fifty states of the United States and the
District of Columbia and their counties, municipalities, school districts, irrigation districts, and
drainage and sewer districts; and
(b) the governments of Puerto Rico and of the U.S.
territories and possessions and their political
subdivisions.
Treatment of industrial development bonds (IDBs).
Industrial development bonds (IDBs), sometimes
referred to as ‘‘industrial revenue bonds,’’ are typically issued by local industrial development authorities to benefit private commercial and industrial
development. For purposes of this report, all IDBs
should be reported as securities issued by states and
political subdivisions in the U.S. in Schedule RAL,
item 1(c)(4), or as loans in this item, consistent with
the asset category in which the branch or agency
reports IDBs for other financial reporting purposes.
Regardless of whether they are reported as securities
in Schedule RAL, item 1(c)(4), or as loans in this
item, all IDBs that meet the definition of a ‘‘security’’ in FASB Statement No. 115 must be measured
in accordance with Statement No. 115.
Treatment of other obligations of states and political subdivisions in the U.S. In addition to those
IDBs that are reported in this item in accordance
with the preceding paragraph, include as obligations
(other than securities and leases) of states and political subdivisions in the U.S., all other obligations
except those that meet any of the following criteria:
(a) Industrial development bonds (IDBs) that are
reported as securities in accordance with the
reporting treatment described above (report as
securities in Schedule RAL, item 1(c)(4)).
(b) Notes, bonds, and debentures (including tax warrants and tax-anticipation notes) that are rated by
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

a nationally-recognized rating service (report as
securities in Schedule RAL, item 1(c)(4)).
(c) Mortgage-backed securities issued by state and
local housing authorities (report as securities in
Schedule RAL, item 1(c)(2)).
(d) Obligations of state and local governments that
are guaranteed by the U.S. government (report as
securities in Schedule RAL, item 1(c)(4)).
(e) Nonrated obligations of states and political subdivisions in the U.S. that the reporting institution
considers securities for other financial reporting
purposes (report as securities in Schedule RAL,
item 1(c)(4)).
(f) Lease financing receivables of states and political subdivisions in the U.S. (report as leases in
item 9 below).
(g) Obligations of states and political subdivisions
in the U.S. held in trading accounts (report in
Schedule RAL, item 1(f)).
(9) Loans to federally-sponsored lending agencies. Refer
to the Glossary entry for ‘‘federally-sponsored lending agency’’ for the definition of this term.
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 in other items, as appropriate). For example,
report advances to banks in foreign countries in the form
of ‘‘advance agreement’’ overdrafts as loans to banks in
foreign countries in item 2(c). Report both planned and
unplanned overdrafts on ‘‘due to’’ deposit accounts of
depository institutions in item 2.
Item 9 Lease financing receivables (net of
unearned income).
For the reporting branch or agency, including its IBF, and
for the IBF only, report in the appropriate column all
lease financing receivables of U.S. addressees (item 9(a))
and all lease financing receivables of non-U.S. addressees (item 9(b)). Include all outstanding receivable balances relating to direct financing and leveraged leases on
property acquired by the branch or agency for leasing
purposes. These balances should include the estimated
residual value of leased property and must be net of
SCHEDULE C-9

FFIEC 002

unearned income. For further discussion of leases where
the branch or agency is the lessor, refer to the Glossary
entry for ‘‘lease accounting.’’
Include all lease financing receivables of states and
political subdivisions in the U.S.
Item 9(a)

Of U.S. addressees (domicile).

Report all outstanding receivable balances relating to
direct financing and leveraged leases on property
acquired by the branch or agency for leasing to U.S.
addressees (see the Glossary entry for ‘‘domicile’’).
Item 9(b)

Of non-U.S. addressees (domicile)

Report all outstanding receivable balances relating to
direct financing and leveraged leases on property
acquired by the branch or agency for leasing to non-U.S.
addressees (see the Glossary entry for ‘‘domicile’’).
Item 10 LESS: Any unearned income on loans
reflected in items 1–8 above.
To the extent possible, report the specific loan categories
net of unearned income. A reporting institution (including its IBF) should enter here unearned income only to
the extent that it is included in (i.e., not deducted from)
the various loan items (items 1 through 8) of this schedule. If a reporting institution reports each loan item net
of unearned income, enter a zero. (Unearned income
includes income received but not yet earned, such as
prepaid interest and the unamortized portion of loan
origination fees.)
Do not include unearned income on lease financing
receivables in this item (deduct from Schedule C, part I,
item 9).
Item 11 Total loans and leases, net of unearned
income.
Report the sum of items 1 through 9 less the amount
reported in item 10. The amounts in columns A and B
must equal Schedule RAL, item 1(e), columns A and B,
respectively.

Memoranda
Item M1

Not applicable.

SCHEDULE C-10

Item M2 Holdings of own acceptances included in
Schedule C, part I, item 4.
Report holdings of own acceptances included in item 4,
column A, ‘‘Commercial and industrial loans.’’ Include
all holdings of own acceptances, whether purchased or
discounted. These acceptances, owned by the reporting
branch or agency, are bills or drafts of exchange that
have been accepted by the reporting institution or by
others for its account, are liabilities of the reporting
institution’s customer and are outstanding on the report
date.
Item M3 Commercial and industrial loans with
remaining maturity of one year or less (excluding
those in nonaccrual status).
Report in the proper subitems below the amount outstanding on report date of commercial and industrial
loans (sum of items 4(a) and 4(b) of this schedule,
column A) which have a remaining maturity (from the
report date until the final contractual maturity date) of
one year or less. Demand loans, loans with no stated
repayment schedule and no stated maturity, and overdrafts should be considered as having at maturity of one
year or less and included here. All other commercial and
industrial loans with remaining maturity of more than
one year are reported in Memorandum item 4 below.
Exclude those loans and leases that are reported as
nonaccrual in Schedule N, column C.
Item M3(a)

With predetermined interest rates.

Report in this item those commercial and industrial loans
with a remaining maturity of one year or less with fixed
or predetermined interest rates. A predetermined interest
rate is a rate that changes during the term of the loan on a
predetermined basis, with the exact rate of interest over
the life of the loan known with certainty to both the
borrower and the lender when the loan (or instrument) is
acquired.
Item M3(b)

With floating interest rates.

Report in this item those commercial and industrial loans
with a remaining maturity of one year or less with
floating or adjustable interest rates. A floating or adjustable interest rate is a rate that varies, or can vary, in
relation to an index, to some other interest rate such as
the rate on certain U.S. Government securities or the
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FFIEC 002

branch or agency’s ‘‘prime rate,’’ or to some other variable criterion the exact value of which cannot be known
in advance. Therefore, the exact rate the loan (or instrument) carries at any subsequent time cannot be known at
the time of origination. All demand loans should be
considered to have a floating interest rate, for purposes of
this report.
Item M4 Commercial and industrial loans with
remaining maturity of more than one year
(excluding those in nonaccrual status).
Report in the proper subitems below the amount outstanding on the report date of commercial and industrial
loans (the sum of items 4(a) and 4(b) of this schedule,
column A) which have a remaining maturity (from the
report date until the final contractual maturity date) of
more than one year. Exclude demand loans, loans with
no stated repayment schedule and no stated maturity, and
overdrafts, which should be reported in Memorandum
item 3 above. Exclude those loans and leases that are
reported as nonaccrual in Schedule N, column C.
Item M4(a)

With predetermined interest rates.

Report in this item those commercial and industrial loans
with remaining maturity of more than one year with
fixed or predetermined interest rates. The definition of
this type of rate is found in Memorandum item 3(a)
above.
Item M4(b)

With floating interest rates.

Report in this item those commercial and industrial loans
with a remaining maturity of more than one year with
floating interest rates. The definition of this type of rate is
found in Memorandum item 3(b) above.

Part II. Loans to Small Businesses
and Small Farms—General Instructions
Schedule C, part II, is to be completed only as of the
June 30 report date by branches whose deposits are
insured by the FDIC.
Schedule C, part II, requests information on the number
and amount currently outstanding of ‘‘loans to small
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

businesses’’ and ‘‘loans to small farms,’’ as defined
below. This information is being collected pursuant to
Section 122 of the Federal Deposit Insurance Corporation Improvement Act of 1991.
For purposes of this schedule, ‘‘loans to small businesses’’ consist of the following:
(1) Loans secured by nonfarm nonresidential properties
(excluding those held in the branch’s IBF) with
original amounts of $1 million or less that have been
reported in Schedule C, part I, item 1, column A,
‘‘Loans secured by real estate,’’ and
(2) Loans (excluding those held in the branch’s IBF)
with original amounts of $1 million or less that have
been reported in Schedule C, part I, item 4(a), column A, ‘‘Commercial and industrial loans to U.S.
addressees.’’
For purposes of this schedule, ‘‘loans to small farms’’
consist of the following:
(1) Loans secured by farmland (including farm residential and other improvements) (excluding those held
in the branch’s IBF) with original amounts of
$500,000 or less that have been reported in Schedule C, part I, item 1, column A, ‘‘Loans secured by
real estate,’’ and
(2) Loans to finance agricultural production and other
loans to farmers (excluding those held in the
branch’s IBF) with original amounts of $500,000 or
less that have been reported in Schedule C, part I,
item 8, column A, ‘‘All other loans.’’
The following guidelines should be used to determine
the ‘‘original amount’’ of a loan:
(1) For loans drawn down under lines of credit or loan
commitments, the ‘‘original amount’’ of the loan
isthe size of the line of credit or loan commitment
when the line of credit or loan commitment was most
recently approved, extended, or renewed prior to the
report date. However, if the amount currently outstanding as of the report date exceeds this size, the
‘‘original amount’’ is the amount currently outstanding on the report date.
(2) For loan participations and syndications, the ‘‘original amount’’ of the loan participation or syndication
is the entire amount of the credit originated by the
lead lender.
SCHEDULE C-11

FFIEC 002

(3) For all other loans, the ‘‘original amount’’ is the total
amount of the loan at origination or the amount
currently outstanding as of the report date, whichever is larger.

Item Instructions for Part II

The ‘‘amount currently outstanding’’ for a loan is its
carrying value, i.e., the amount at which the loan is
reported in Schedule C, part I, items 1, 4(a), or 8, above.

Item 1(a) Indicate in the appropriate box at the
right whether all or substantially all of the branch’s
‘‘Commercial and industrial loans to U.S.
addressees’’ (excluding those held in its IBF)
reported in Schedule C, part I, item 4(a), column A,
consist of loans with original amounts of $100,000
or less.

Except as noted below for ‘‘corporate’’ or ‘‘business’’
credit card programs, when determining ‘‘original
amounts’’ and reporting the number and amount currently outstanding for a category of loans in this part II,
multiple loans to one borrower should be combined and
reported on an aggregate basis rather than as separate
individual loans to the extent that the loan systems in
which the branch’s business and/or farm loan data are
maintained can provide aggregate individual borrower
data without undue cost to the reporting institution. However, if the burden of such aggregation would be excessive, the institution may report multiple loans to one
borrower as separate individual loans.
A branch that offers ‘‘corporate’’ or ‘‘business’’ credit
card programs under which credit cards are issued to one
or more of a company’s employees for business-related
use should treat each company’s program as a single
extension of credit to that company. The credit limits for
all of the individual credit cards issued to the company’s
employees should be totalled and this total should be
treated as the ‘‘original amount’’ of the ‘‘corporate’’ or
‘‘business’’ credit card program established for this company. The company’s program should be reported as one
loan and the amount currently outstanding would be the
sum of the credit card balances as of the June 30 report
date on each of the individual credit cards issued to the
company’s employees. However, when aggregated data
for each individual company in a ‘‘corporate’’ or ‘‘business’’ credit card program are not readily determinable
from the branch’s credit card records, the branch should
develop reasonable estimates of the number of ‘‘corporate’’ or ‘‘business’’ credit card programs in existence
as of the June 30 report date, the ‘‘original amounts’’ of
these programs, and the ‘‘amounts currently outstanding’’ for these programs and should then report information about these programs on the basis of its reasonable
estimates. In no case should the individual credit cards
issued to a company’s employees under a ‘‘corporate’’ or
‘‘business’’ credit card program be reported as separate
individual loans to small businesses.
SCHEDULE C-12

Loans to Small Businesses

If (a) the average size of the amount currently outstanding for your branch’s ‘‘Commercial and industrial loans
to U.S. addressees’’ (excluding those held in its IBF) as
reported in Schedule C, part I, above, is $100,000 or
less and (b) your lending officers’ knowledge of your
branch’s loans or other relevant information pertaining to
‘‘Commercial and industrial loans to U.S. addressees’’
(excluding those held in its IBF) indicates that all or
substantially all of the dollar volume of your branch’s
loans in this loan category have ‘‘original amounts’’ (as
described above in the General Instructions to this part II)
of $100,000 or less, place an ‘‘X’’ in the box marked
‘‘YES,’’ complete items 1(b) and 2 below, skip item 3,
and complete items 4 and 5. Otherwise, place an ‘‘X’’ in
the box marked ‘‘NO,’’ skip item 1(b) and complete
items 2 through 5 below.
Item 1(b) Number of ‘‘Commercial and industrial
loans to U.S. addressees’’ (excluding those held in
the branch’s IBF) reported in Schedule C, part I,
item 4(a), column A.
Count the number of individual ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in
the branch’s IBF) currently outstanding whose carrying
values add up to the amount reported in Schedule C,
part I, item 4(a), column A minus column B. Multiple
loans to one borrower should be combined and reported
on an aggregate basis rather than as separate individual
loans to the extent that the loan systems in which the
branch’s business and/or farm loan data are maintained
can provide aggregate individual borrower data without
undue cost to the reporting institution. However, if the
burden of such aggregation would be excessive, the
institution may report multiple loans to one borrower as
separate individual loans.
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

FFIEC 002

Item 2 Number and amount currently outstanding
of ‘‘Loans secured by nonfarm nonresidential
properties’’ (excluding those held in the branch’s
IBF) reported in Schedule C, part I, item 1,
column A, ‘‘Loans secured by real estate.’’
See the General Instructions to this part II for the guidelines for determining the ‘‘original amount’’ of a loan.
Multiple loans to one borrower should be combined and
reported on an aggregate basis rather than as separate
individual loans to the extent that the loan systems in
which the branch’s business and/or farm loan data are
maintained can provide aggregate individual borrower
data without undue cost to the reporting institution. However, if the burden of such aggregation would be excessive, the institution may report multiple loans to one
borrower as separate individual loans.
The sum of the amounts currently outstanding reported
in items 2(a) through 2(c), column B, must be less than
or equal to Schedule C, part I, item 1, column A minus
column B.
Item 2(a)
less.

With original amounts of $100,000 or

Add up the total carrying value of all currently outstanding ‘‘Loans secured by nonfarm nonresidential properties’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of $100,000 or less and report this
total amount in column B. Do not add up the ‘‘original
amounts’’ of each of these loans and report the total
original amount in column B.
Count the number of individual ‘‘Loans secured by nonfarm nonresidential properties’’ whose carrying values
were included in the amount reported in column B for
this item (i.e., those ‘‘Loans secured by nonfarm nonresidential properties’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of $100,000 or less).
Report this number in column A.
Item 2(b) With original amounts of more than
$100,000 through $250,000.
Add up the total carrying value of all currently outstanding ‘‘Loans secured by nonfarm nonresidential properties’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of more than $100,000 through
$250,000 and report this total amount in column B. Do
not add up the ‘‘original amounts’’ of each of these loans
and report the total original amount in column B.
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

Count the number of individual ‘‘Loans secured by nonfarm nonresidential properties’’ whose carrying values
were included in the amount reported in column B for
this item (i.e., those ‘‘Loans secured by nonfarm nonresidential properties’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of more than $100,000
through $250,000). Report this number in column A.
Item 2(c) With original amounts of more than
$250,000 through $1,000,000.
Add up the total carrying value of all currently outstanding ‘‘Loans secured by nonfarm nonresidential properties’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of more than $250,000 through
$1,000,000 and report this total amount in column B. Do
not add up the ‘‘original amounts’’ of each of these loans
and report the total original amount in column B.
Count the number of individual ‘‘Loans secured by nonfarm nonresidential properties’’ (excluding those held in
the branch’s IBF) whose carrying values were included
in the amount reported in column B for this item (i.e.,
those ‘‘Loans secured by nonfarm nonresidential properties’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of more than $250,000 through
$1,000,000). Report this number in column A.
Item 3 Number and amount currently outstanding
of ‘‘Commercial and industrial loans to U.S.
addressees’’ (excluding those held in the branch’s
IBF) reported in Schedule C, part I, item 4(a),
column A.
See the General Instructions to this part II for the guidelines for determining the ‘‘original amount’’ of a loan.
Multiple loans to one borrower should be combined and
reported on an aggregate basis rather than as separate
individual loans to the extent that the loan systems in
which the branch’s business and/or farm loan data are
maintained can provide aggregate individual borrower
data without undue cost to the reporting institution. However, if the burden of such aggregation would be excessive, the institution may report multiple loans to one
borrower as separate individual loans.
The sum of the amounts currently outstanding reported
in items 3(a) through 3(c), column B, must be less than
or equal to Schedule C, part I, item 4(a), column A
minus column B.
SCHEDULE C-13

FFIEC 002

Item 3(a)
less.

With original amounts of $100,000 or

Add up the total carrying value of all currently outstanding ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of $100,000 or less and report this
total amount in column B. Do not add up the ‘‘original
amounts’’ of each of these loans and report the total
original amount in column B.
Count the number of individual ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in
the branch’s IBF) whose carrying values were included
in the amount reported in column B for this item (i.e.,
those ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of $100,000 or less). Report this
number in column A.
Item 3(b) With original amounts of more than
$100,000 through $250,000.
Add up the total carrying value of all currently outstanding ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of more than $100,000 through
$250,000 and report this total amount in column B. Do
not add up the ‘‘original amounts’’ of each of these loans
and report the total original amount in column B.
Count the number of individual ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in
the branch’s IBF) whose carrying values were included
in the amount reported in column B for this item (i.e.,
those ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of more than $100,000 through
$250,000). Report this number in column A.
Item 3(c) With original amounts of more than
$250,000 through $1,000,000.
Add up the total carrying value of all currently outstanding ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of more than $250,000 through
$1,000,000 and report this total amount in column B. Do
not add up the ‘‘original amounts’’ of each of these loans
and report the total original amount in column B.
SCHEDULE C-14

Count the number of individual ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in
the branch’s IBF) whose carrying values were included
in the amount reported in column B for this item (i.e.,
those ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of more than $250,000 through
$1,000,000). Report this number in column A.
Item 4 Number and amount currently outstanding
of ‘‘Loans secured by farmland (including farm
residential and other improvements)’’ (excluding
those held in the branch’s IBF) reported in
Schedule C, part I, item 1, column A, ‘‘Loans
secured by real estate.’’
See the General Instructions to this part II for the guidelines for determining the ‘‘original amount’’ of a loan.
Multiple loans to one borrower should be combined and
reported on an aggregate basis rather than as separate
individual loans to the extent that the loan systems in
which the branch’s business and/or farm loan data are
maintained can provide aggregate individual borrower
data without undue cost to the reporting institution. However, if the burden of such aggregation would be excessive, the institution may report multiple loans to one
borrower as separate individual loans.
The sum of the amounts currently outstanding reported
in items 4(a) through 4(c), column B, must be less than
or equal to Schedule C, part I, item 1, column A minus
column B. In addition, the sum of the amounts currently
outstanding reported in items 2(a) through 2(c), column B, and items 4(a) through 4(c), column B, must
beless than or equal to Schedule C, part I, item 1, column
A minus column B.
Item 4(a)
less.

With original amounts of $100,000 or

Add up the total carrying value of all currently outstanding ‘‘Loans secured by farmland (including farm residential and other improvements)’’ (excluding those held in
the branch’s IBF) with ‘‘original amounts’’ of $100,000
or less and report this total amount in column B. Do not
add up the ‘‘original amounts’’ of each of these loans and
report the total original amount in column B.
Count the number of individual ‘‘Loans secured by farmland (including farm residential and other improvements)’’ (excluding those held in the branch’s IBF)
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

FFIEC 002

whose carrying values were included in the amount
reported in column B for this item (i.e., those ‘‘Loans
secured by farmland (including farm residential and other
improvements)’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of $100,000 or less).
Report this number in column A.
Item 4(b) With original amounts of more than
$100,000 through $250,000.
Add up the total carrying value of all currently outstanding ‘‘Loans secured by farmland (including farm residential and other improvements)’’ (excluding those held in
the branch’s IBF) with ‘‘original amounts’’ of more than
$100,000 through $250,000 and report this total amount
in column B. Do not add up the ‘‘original amounts’’ of
each of these loans and report the total original amount
in column B.
Count the number of individual ‘‘Loans secured by farmland (including farm residential and other improvements)’’ (excluding those held in the branch’s IBF)
whose carrying values were included in the amount
reported in column B for this item (i.e., those ‘‘Loans
secured by farmland (including farm residential and other
improvements)’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of more than $100,000
through $250,000). Report this number in column A.
Item 4(c) With original amounts of more than
$250,000 through $500,000.
Add up the total carrying value of all currently outstanding ‘‘Loans secured by farmland (including farm residential and other improvements)’’ (excluding those held in
the branch’s IBF) with ‘‘original amounts’’ of more than
$250,000 through $500,000 and report this total amount
in column B. Do not add up the ‘‘original amounts’’ of
each of these loans and report the total original amount
in column B.
Count the number of individual ‘‘Loans secured by farmland (including farm residential and other improvements)’’ (excluding those held in the branch’s IBF)
whose carrying values were included in the amount
reported in column B for this item (i.e., those ‘‘Loans
secured by farmland (including farm residential and other
improvements)’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of more than $250,000
through $500,000). Report this number in column A.
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

Item 5 Number and amount currently outstanding
of ‘‘Loans to finance agricultural production and
other loans to farmers’’ (excluding those held in the
branch’s IBF) reported in Schedule C, part I,
item 8, column A, ‘‘All other loans.’’
See the General Instructions to this part II for the guidelines for determining the ‘‘original amount’’ of a loan.
Multiple loans to one borrower should be combined and
reported on an aggregate basis rather than as separate
individual loans to the extent that the loan systems in
which the branch’s business and/or farm loan data are
maintained can provide aggregate individual borrower
data without undue cost to the reporting institution. However, if the burden of such aggregation would be excessive, the institution may report multiple loans to one
borrower as separate individual loans.
The sum of the amounts currently outstanding reported
in items 5(a) through 5(c), column B, must be less than
or equal to Schedule C, part I, item 8, column A minus
column B.
Item 5(a)
less.

With original amounts of $100,000 or

Add up the total carrying value of all currently outstanding ‘‘Loans to finance agricultural production and other
loans to farmers’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of $100,000 or less and
report this total amount in column B. Do not add up the
‘‘original amounts’’ of each of these loans and report the
total original amount in column B.
Count the number of individual ‘‘Loans to finance agricultural production and other loans to farmers’’ (excluding those held in the branch’s IBF) whose carrying
values were included in the amount reported in column B
for this item (i.e., those ‘‘Loans to finance agricultural
production and other loans to farmers’’ (excluding those
held in the branch’s IBF) with ‘‘original amounts’’ of
$100,000 or less). Report this number in column A.
Item 5(b) With original amounts of more than
$100,000 through $250,000.
Add up the total carrying value of all currently outstanding ‘‘Loans to finance agricultural production and other
loans to farmers’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of more than $100,000
through $250,000 and report this total amount in column B. Do not add up the ‘‘original amounts’’ of each of
SCHEDULE C-15

FFIEC 002

these loans and report the total original amount in column B.
Count the number of individual ‘‘Loans to finance agricultural production and other loans to farmers’’ (excluding those held in the branch’s IBF) whose carrying
values were included in the amount reported in column B
for this item (i.e., those ‘‘Loans to finance agricultural
production and other loans to farmers’’ (excluding those
held in the branch’s IBF) with ‘‘original amounts’’ of
more than $100,000 through $250,000). Report this number in column A.
Item 5(c) With original amounts of more than
$250,000 through $500,000.
Add up the total carrying value of all currently outstanding ‘‘Loans to finance agricultural production and other
loans to farmers’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of more than $250,000
through $500,000 and report this total amount in column B. Do not add up the ‘‘original amounts’’ of each
of these loans and report the total original amount in
column B.
Count the number of individual ‘‘Loans to finance agricultural production and other loans to farmers’’ (excluding those held in the branch’s IBF) whose carrying
values were included in the amount reported in column B
for this item (i.e., those ‘‘Loans to finance agricultural
production and other loans to farmers’’ (excluding those
held in the branch’s IBF) with ‘‘original amounts’’ of
more than $250,000 through $500,000). Report this number in column A.

Examples of Reporting in Schedule C,
Part II
(1) A branch has a ‘‘Loan secured by nonfarm nonresidential property’’ (not held in its IBF) which has a
carrying value on the June 30 report date of $70,000
and this amount is included in Schedule C, part I,
item 1, column A. The branch made this loan to the
borrower in the original amount of $75,000, so it
would be considered a ‘‘loan to a small business’’
and would be reported in Schedule C, part II.
Because the original amount of the loan is $100,000
or less, the branch would report the $70,000 amount
currently outstanding in part II, item 2(a), column B.
SCHEDULE C-16

(2) The branch has a second ‘‘Loan secured by nonfarm nonresidential property’’ (not held in its IBF)
which has a carrying value on the June 30 report
date of $60,000 and this amount is included in
Schedule C, part I, item 1, column A. The branch
made this loan to the borrower in the original
amount of $125,000, so it would be considered a
‘‘loan to a small business’’ and would be reported
in Schedule C, part II. Because the original amount
of the loan falls within the more than $100,000
through $250,000 range, the branch would report
the $60,000 amount currently outstanding in part II,
item 2(b), column B.
(3) The branch has a ‘‘Commercial and industrial loan
to a U.S. addressee’’ (not held in its IBF) which has
a carrying value on the June 30 report date of
$200,000 and this amount is included in Schedule C, part I, item 4(a), column A. The branch made
this loan to the borrower in the original amount of
$250,000, so it would be considered a ‘‘loan to a
small business’’ and would be reported in Schedule C, part II. Because the original amount of the
loan is exactly $250,000 which is the upper end of
the more than $100,000 through $250,000 range,
the branch would report the $200,000 amount currently outstanding in part II, item 3(b), column B.
(4) The branch has a second ‘‘Commercial and industrial loan to a U.S. addressee’’ (not held in its IBF)
which has a carrying value on the June 30 report
date of $90,000 and this amount is included in
Schedule C, part I, item 4(a), column A. The branch
made this loan to the borrower in the original
amount of $500,000 and sold loan participations for
$400,000 while retaining $100,000. Nevertheless,
based on the entire amount of the credit that was
originated by the branch, the loan would be considered a ‘‘loan to a small business’’ and would be
reported in Schedule C, part II. Because the original
amount of the entire loan is $500,000 which falls
within the more than $250,000 through $1,000,000
range, the branch would report the $90,000 amount
currently outstanding in part II, item 3(c), column B.
(5) The branch has a third ‘‘Commercial and industrial
loan to a U.S. addressee’’ (not held in its IBF)
which has a carrying value on the June 30 report
date of $55,000 and this amount is included in
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June 2001

FFIEC 002

Schedule C, part I, item 4(a), column A. This loan
represents a participation purchased by the branch
from another lender. The original amount of the
entire credit is $750,000 and the branch’s original
share of this credit was $75,000. Based on the
entire amount of the credit that was originated by
the other lender, the loan would be considered a
‘‘loan to a small business’’ and would be reported
in Schedule C, part II. Because the original amount
of the entire credit is $750,000 which falls within
the more than $250,000 through $1,000,000 range,
the branch would report the $55,000 amount currently outstanding in part II, item 3(c), column B.
(6) The branch has another ‘‘Commercial and industrial loan to a U.S. addressee’’ (not held in its IBF)
and it has a carrying value on the June 30 report
date of $120,000. This amount is included in
Schedule C, part I, item 4(a), column A. This loan
represents a participation purchased by the branch
from another lender. The original amount of the
entire credit is $1,250,000 and the branch’s original
share of this credit was $250,000. Because the
original amount of the entire credit exceeds
$1,000,000, the loan would not be considered a
‘‘loan to a small business’’ and would not be
reported in Schedule C, part II.
(7) The branch has a ‘‘Loan secured by nonfarm nonresidential property’’ (not held in its IBF) and
a ‘‘Commercial and industrial loan to a U.S.
addressee’’ (not held in its IBF) to the same borrower. The first loan has a carrying value on the
June 30 report date of $375,000 and this amount is
included in Schedule C, part I, item 1, column A.
This ‘‘Loan secured by nonfarm nonresidential
property’’ was made in the original amount of
$400,000. The second loan has a carrying value on
the June 30 report date of $650,000 and this amount
is included in Schedule C, part I, item 4(a), column A. This ‘‘Commercial and industrial loan to a
U.S. addressee’’ was made in the original amount of
$750,000.
Case I: The branch’s loan system can provide
aggregate individual borrower data without undue
cost to the reporting institution. The loan system
indicates that this borrower’s two loans have a
combined original amount of $1,150,000 and therefore the loans would not be considered ‘‘loans to a
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

small business’’ and would not be reported in
Schedule C, part II.
Case II: The branch’s loan system cannot provide
aggregate individual borrower data without undue
cost to the reporting institution. Therefore, the borrower’s two loans would be treated as separate
loans for purposes of Schedule C, part II. Based on
its $400,000 original amount, the ‘‘Loan secured by
nonfarm nonresidential property’’ would be considered a ‘‘loan to a small business’’ and would be
reported in Schedule C, part II. Because the original
amount of the loan falls within the more than
$250,000 through $1,000,000 range, the branch
would report the $375,000 amount currently outstanding in part II, item 2(c), column B, and count
this loan as one loan for purposes of part II,
item 2(c), column A. Since the ‘‘Commercial and
industrial loan to a U.S. addressee’’ is being handled
separately and its original amount is $750,000, it
would also be considered a ‘‘loan to a small business’’ and would be reported in Schedule C, part II.
Because the original amount of this loan falls
within the more than $250,000 through $1,000,000
range, the branch would report the $650,000
amount currently outstanding in part II, item 3(c),
column B, and count this loan as one loan for
purposes of part II, item 3(c), column A.
(8) The branch has a ‘‘Loan secured by farmland
(including farm residential and other improvements)’’ (not held in its IBF) which has a carrying
value on the June 30 report date of $225,000. The
branch made this loan to the borrower in the original amount of $260,000 and the loan is secured by
a first lien on the borrower’s farmland. The branch
has a second ‘‘Loan secured by farmland’’ (not held
in its IBF) to this same borrower and it is secured
by a second lien on the borrower’s property. This
second lien loan has a carrying value of $50,000
and the original amount of the loan is the same
as its carrying value. The carrying values of both
loans (the $225,000 first lien loan and the $50,000
second lien loan) are included in Schedule C, part I,
item 1, column A.
Case I: The branch’s loan system can provide
aggregate individual borrower data without undue
cost to the reporting institution. The loan system
indicates that this borrower’s two loans have a
SCHEDULE C-17

FFIEC 002

combined original amount of $310,000 and therefore the two loans together would be considered
a single ‘‘loan to a small farm’’ and would be
reported in Schedule C, part II. Because the original
amount of the two combined loans falls within the
more than $250,000 through $500,000 range, the
branch would report the $275,000 combined total
of the amounts currently outstanding for the two
loans in part II, item 4(c), column B, and count
these two loans to the same borrower as one loan
for purposes of part II, item 4(c), column A.
Case II: The branch’s loan system cannot provide
aggregate individual borrower data without undue
cost to the reporting institution. Therefore, the borrower’s two loans would be treated as separate
loans for purposes of Schedule C, part II. Based on
its $260,000 original amount, the first lien loan
would be considered a ‘‘loan to a small farm’’ and
would be reported in Schedule C, part II. Because
the original amount of the loan falls within the
more than $250,000 through $500,000 range, the
branch would report the $225,000 amount currently
outstanding in part II, item 4(c), column B, and
count this loan as one loan for purposes of part II,
item 4(c), column A. Since the second lien loan is
being handled separately and its original amount is
$50,000, it would also be considered a ‘‘loan to a
small farm’’ and would be reported in Schedule C,
part II. Because the original amount of this loan is
less than $100,000, the branch would report the
$50,000 amount currently outstanding in part II,
item 4(a), column B, and count this loan as one
loan for purposes of part II, item 4(a), column A.
(9) The branch has one final ‘‘Loan secured by farmland’’ (not held in its IBF) which has a carrying
value on the June 30 report date of $5,000 and this
amount is included in Schedule C, part I, item 1,
column A. The branch made this loan to the borrower in the original amount of $300,000, so it
would be considered a ‘‘loan to a small farm’’ and
would be reported in Schedule C, part II. Because
the original amount of the loan falls within the
more than $250,000 through $500,000 range, the
branch would report the $5,000 amount currently
outstanding in part II, item 4(c), column B.
(10) The branch has granted a $150,000 line of credit to
a farmer that is not secured by real estate. The
SCHEDULE C-18

farmer has received advances twice under this line
of credit and, rather than having signed a single
note for the entire $150,000 amount of the line of
credit, has signed separate notes for each advance.
One note is in the original amount of $30,000 and
the other is in the original amount of $50,000. The
carrying values of the two notes (which are not held
in the branch’s IBF) on the June 30 report date are
the same as their original amounts and these
amounts are included in Schedule C, part I, item 8,
column A. For loans drawn down under lines of
credit, the original amount of the loan is the size
of the line of credit when it was most recently
approved, extended, or renewed prior to the report
date. In this case, the line of credit was most
recently approved for $150,000.
Case I: The branch’s loan system can provide
aggregate individual borrower data for multiple
advances under lines of credit without undue cost to
the reporting institution. Thus, even though a separate note was signed each time the farmer borrowed
under the line of credit, the loan system combines
all information about the farmer’s separate borrowings under the line of credit. Therefore, the loan
system indicates that the farmer has a line of credit
for $150,000 and that the amount currently outstanding under the line of credit for the combined
carrying values of the two borrowings under the
line of credit is $80,000. Because the line of credit
was most recently approved for $150,000, this
$150,000 original amount for the line of credit
would be considered a ‘‘loan to a small farm’’ that
would be reported in Schedule C, part II. Therefore,
the original amount of the line of credit falls within
the more than $100,000 through $250,000 range
and the branch would report the $80,000 combined
total of the amounts currently outstanding for the
two notes in part II, item 5(b), column B, and count
these two notes to the farmer under the line of
credit as one loan for purposes of part II, item 5(b),
column A.
Case II: The branch’s loan system cannot provide
aggregate individual borrower data for lines of
credit without undue cost to the reporting institution. Therefore, the farmer’s two notes under the
line of credit would be treated as separate loans
for purposes of Schedule C, part II. The original
amount of the line of credit is $150,000 and each of
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

FFIEC 002

the two notes would be considered a ‘‘loan to a
small farm’’ that would be reported in Schedule C,
part II. Because each of the two notes indicates that
it is part of a $150,000 line of credit and the
$150,000 original amount of the line of credit falls
within the more than $100,000 through $250,000
range, the branch would report both the $30,000
and $50,000 amounts currently outstanding in
part II, item 5(b), column B, and count these as two
loans for purposes of part II, item 5(b), column A.
(11) The branch has one other ‘‘Loan to finance agricultural production and other loans to a farmer’’ (not

Instructions for Preparation of Reporting Form FFIEC 002
June 2001

held in its IBF) which has a carrying value on the
June 30 report date of $75,000 and this amount is
included in Schedule C, part I, item 8, column A.
The branch made this loan to the borrower in the
original amount of $100,000, so it would be considered a ‘‘loan to a small farm’’ and would be
reported in Schedule C, part II. Because the original
amount of the loan is exactly $100,000 which is the
upper end of the $100,000 or less range, the branch
would report the $75,000 amount currently outstanding in part II, item 5(a), column B.

SCHEDULE C-19

INSTRUCTIONS FOR THE PREPARATION OF THE

FFIEC 002
Schedule E—Deposit Liabilities and Credit Balances

General Instructions
A complete discussion of deposits is included in the
Glossary entry entitled ‘‘deposits.’’ That discussion
addresses the following topics and types of deposits in
detail:
(1) Federal Deposit Insurance Act definition of
deposits;
(2) transaction accounts;
(3) demand deposits;
(4) NOW accounts;
(5) ATS accounts;
(6) telephone or preauthorized transfer accounts;
(7) nontransaction accounts;
(8) savings accounts;
(9) time deposits;
(10) time certificates of deposit;
(11) time deposits, open account;
(12) interest-bearing deposit accounts; and
(13) noninterest-bearing deposit accounts.
Additional discussions pertaining to deposits will also be
found under separate Glossary entries for:
(1) brokered deposits;
(2) credit balances;
(3) letter of credit (for letters of credit sold for cash and
travelers’ letters of credit);
(4) overdraft;
(5) pass-through reserve balances; and
(6) reciprocal balances.
Instructions for Preparation of Reporting Form FFIEC 002
March 1999

This schedule covers the deposit liabilities and credit
balances of the reporting branch or agency, excluding its
IBF, in the first three columns and the deposit liabilities
of the IBF in the last column.
NOTE: Branches whose deposits are insured by the
FDIC should refer to Schedule O for information about
reporting of deposits for insurance assessment purposes.
Exclude all transactions with related depository institutions, which are to be reported in Schedule M.

Definitions
The term ‘‘deposits’’ is defined in the Glossary and
generally follows the definitions of deposits used in the
Federal Deposit Insurance Act and in Federal Reserve
Regulation D.
Reciprocal balances between the reporting branch or
agency and other depository institutions may be reported
on a net basis when a right of setoff exists. See the
Glossary entry for ‘‘offsetting’’ for the conditions that
must be met for a right of setoff to exist. For further
information, see the ‘‘Glossary’’ entry for ‘‘reciprocal
balances.’’
For the appropriate treatment of deposits of depository
institutions for which the reporting branch or agency
is serving as a pass-through agent for federal required
reserves, see the Glossary entry for ‘‘pass-through
reserve balances.’’
The following are not reported as deposits:
(1) Outstanding drafts (including advices or authorizations to charge the branch or agency’s balance in
another depository institution) drawn in the regular
course of business by the reporting branch or agency
on other depository institutions.
SCHEDULE E-1

FFIEC 002

(2) Overdrafts in deposit accounts. Overdrafts are to be
reported as loans in Schedule C and not as negative
deposits. Overdrafts in a single type of related
transaction accounts (e.g., related demand deposit
accounts or related NOW accounts, but not a combination of demand deposit accounts and NOW
accounts) of a single legal entity that are established under a bona fide cash management arrangement by this legal entity are not to be classified
as loans unless there is a net overdraft position in
the accounts taken as a whole. Such accounts are
regarded as, and function as, one account rather
than as multiple separate accounts.
(3) Trust funds held in the branch or agency’s own
trust department that the branch or agency keeps
segregated and apart from its general assets and
does not use in the conduct of its business.
(4) Time deposits sold (issued) by the reporting institution that it has subsequently purchased in the secondary market (typically as a result of the institution’s trading activities) and has not resold as of the
report date. For purposes of these reports, a branch
or agency that purchases a time deposit it has
issued is regarded as having paid the time deposit
prior to maturity. The effect of the transaction is
that the branch or agency has cancelled a liability
as opposed to having acquired an asset for its
portfolio.
The following are reported as deposits:
(1) Deposits of trust funds standing to the credit of
other banks and all trust funds held or deposited in
any department of the reporting branch or agency
other than the trust department.
(2) Escrow funds.
(3) Credit items not yet posted to deposit accounts that
are carried in suspense or similar nondeposit
accounts and are material in amount. As described
in the Glossary entry for ‘‘suspense accounts,’’ the
items included in such accounts should be reviewed
and material amounts reported in the appropriate
balance sheet accounts. Note: Deposits carried in
suspense accounts that have not been reclassified as
deposits and reported in Schedule E by insured
branches must be reported as unposted credits in
Schedule O, item 2.
SCHEDULE E-2

(4) Payments collected by the branch or agency on
loans secured by real estate and other loans serviced for others that have not yet been remitted to
the owners of the loans.
(5) Funds received from customers and held for the
eventual application to the reduction of outstanding
acceptances or where the receipt thereof does not
immediately reduce or extinguish the indebtedness.
(6) Credit balances, as defined in the Glossary, are those
liabilities held by U.S. agencies of foreign banks that
are defined as such by state law or federal regulation.
For purposes of this report, they are included as part
of transaction accounts.
(7) Funds received or held in connection with checks or
drafts drawn by the reporting branch or agency and
drawn on, or payable at or through, another depository institution either on a zero-balance account or
on an account that is not routinely maintained with
sufficient balances to cover checks drawn in the
normal course of business (including accounts where
funds are remitted by the reporting branch or agency
only when it has been advised that the checks or
drafts have been presented).
(8) Funds received or held in connection with traveler’s
checks and money orders sold (but not drawn) by the
reporting branch or agency, until the proceeds of the
sale are remitted to another party, and funds received
or held in connection with such other checks used
(but not drawn) by the reporting branch or agency,
until the amount of the checks is remitted to another
party.
(9) Checks drawn by the reporting branch or agency
on, or payable at or through, a Federal Reserve
Bank or a Federal Home Loan Bank.
(10) Refundable loan commitment fees received or held
by the reporting branch or agency prior to loan
closing.
In addition, the gross amount of debit items (‘‘throwouts,’’ ‘‘bookkeepers’ cutbacks,’’ or ‘‘rejects’’) that cannot be posted to the individual deposit accounts without
creating overdrafts or for some other reason (e.g., stop
payment, missing endorsement, post or stale date,
or account closed), but which have been charged to the
control accounts of the various deposit categories on
the general ledger, should be credited to (added back to)
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

FFIEC 002

the appropriate deposit control totals and reported in
Scedule RAL, item 1(h) ‘‘Other assets.’’
The Monetary Control Act of 1980 and the resulting
revision to Federal Reserve Regulation D, ‘‘Reserve
Requirements of Depository Institutions,’’ established,
for purposes of federal reserve requirements on deposit
liabilities, a category of deposits identified as ‘‘transaction accounts.’’ The distinction between transaction and
nontransaction accounts is discussed in detail in the
Glossary entry for ‘‘deposits.’’ In particular, money market deposit accounts (MMDAs) are regarded as savings
deposits and are specifically excluded from the ‘‘transaction account’’ classification.

Summary of Transaction Account
Classifications
(See the Glossary entry for ‘‘deposits’’ for detailed definitions and further information.)
Always regarded as transaction accounts:
(1) Demand deposits.
(2) NOW accounts.
(3) ATS accounts.
(4) Accounts (other than savings deposits) from which
payments may be made to third parties by means of
an automated teller machine (ATM), a remote service unit (RSU), or another electronic device, including by debit card.
(5) Accounts (other than savings deposits) that permit third party payments through use of checks,
drafts, negotiable instruments, or other similar
instruments.
Deposits or accounts that are regarded as transaction
accounts if the following specified conditions exist:
(1) Accounts that otherwise meet the definition of savings deposits but that authorize or permit the depositor to exceed the transfer and withdrawal rules for a
savings deposit.
(2) Any deposit or account that otherwise meets the
definition of a time deposit but that allows withdrawals within the first six days after the date of deposit
and that does not require an early withdrawal penalty
of at least seven days’ simple interest on amounts
withdrawn within those first six days, unless the
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

deposit or account meets the definition of a savings
deposit. Any such deposit or account that meets the
definition of a savings deposit shall be reported as a
savings deposit, otherwise it shall be reported as a
demand deposit, which is a transaction account.
(3) The remaining balance of a time deposit from which
a partial early withdrawal is made, unless the remaining balance either (a) is subject to additional early
withdrawal penalties of at least seven days’ simple
interest on amounts withdrawn within six days after
each partial withdrawal (in which case the deposit
or account continues to be reported as a time
deposit) or (b) is placed in an account that meets the
definition of a savings deposit (in which case the
deposit or account shall be reported as a savings
deposit). Otherwise, the deposit or account shall be
reported as a demand deposit, which is a transaction
account.
Not regarded as transaction accounts (unless specified
above):
(1) Savings deposits (including accounts commonly
known as money market deposit accounts
(MMDAs)).
(2) Accounts that permit telephone or preauthorized
transfers or transfers by ATMs or RSUs to repay
loans made or serviced by the same depository
institution.
(3) Accounts that permit telephone or preauthorized
withdrawals where the proceeds are to be mailed to
or picked up by the depositor.
(4) Accounts that permit transfers to other accounts of
the depositor at the same institution through ATMs
or RSUs.

Column Instructions
Deposits as summarized above are divided into two
general categories, ‘‘Transaction Accounts’’ (columns A
and B) and ‘‘Nontransaction Accounts’’ (column C).
Deposits of the branch or agency’s IBF are excluded
from columns A, B, and C, and are reported separately in
column D.
Column A, Total Transaction Accounts and Credit Balances (excluding IBF): Report in column A the total of
all transaction accounts and credit balances (excluding
SCHEDULE E-3

FFIEC 002

IBF) as summarized above and fully defined in the
Glossary entries for ‘‘deposits’’ and ‘‘credit balances.’’
With the exceptions noted in the item instructions and
Glossary entries, the term ‘‘transaction account’’ is
defined as a deposit or account from which the depositor
or account holder is permitted to make transfers or
withdrawals by negotiable or transferable instruments,
payment orders of withdrawal, telephone transfers, or
other similar devices for the purpose of making payments or transfers to third persons or others, or from
which the depositor may make third party payments at an
automated teller machine (ATM), a remote service unit
(RSU), or another electronic device, including by debit
card.
Column B, Memo—Total Demand Deposits (included
in column A): Report in column B all demand deposits,
including any matured time or savings deposits without
automatic renewal provisions, unless the deposit agreement specifically provides for the funds to be transferred
at maturity to another type of account (i.e., other than a
demand deposit) (see the Glossary entry for ‘‘deposits’’).
Demand deposits do not include MMDAs, NOW
accounts or credit balances. In addition, any deposit
liabilities held by the IBF are excluded from this column
and are included in column D.
NOTE: Demand deposits are, of course, one type of
transaction account and, therefore, amounts reported in
this column should be included in the total of all transaction accounts that is reported in column A.
Column C, Total Nontransaction Accounts (including
MMDAs) (excluding IBF): Report in column C all
deposits other than transaction accounts as summarized
above and defined in the Glossary entry for ‘‘deposits.’’
Include in column C all interest-bearing and noninterestbearing savings deposits and time deposits together with
all interest paid by crediting savings and time deposit
accounts. Exclude all nontransaction accounts of the
branch or agency’s IBF, which are reported in column D, and all credit balances, which are reported in
column A.
Column D, IBF Deposit Liabilities: Report in column D
all deposit liabilities of the branch or agency’s International Banking Facility liabilities, regardless of whether
they are transaction or nontransaction accounts. For purposes of this report, IBF deposit liabilities include deposits, placements, borrowings and similar obligations represented by promissory notes, acknowledgements of
SCHEDULE E-4

advance, or similar instruments that are not issued in
negotiable or bearer form and that are issued to other
IBFs or to nonrelated non-U.S. addressees, including
banks.
NOTE: Balances due from IBFs of related depository
institutions are excluded from this schedule and reported
in Schedule M. Amounts in this column should exclude
federal funds purchased and securities sold under agreements to repurchase (which are reported in Schedule RAL, item 4(b), as appropriate).

Item Instructions
In items 1 through 5 of Schedule E, institutions report
separate breakdowns of their transaction and nontransaction accounts by category of depositor. When reporting
brokered deposits in these items, the funds should be
categorized based on the beneficial owners of the funds
that the broker has placed in the institution. The business
structure of the deposit broker (i.e., whether the broker
is, for example, a bank, an individual, a partnership, or a
nonbank corporation) has no bearing on the categorization of the deposit. Thus, deposits placed in an institution
by a deposit broker that is a nonbank corporation should
not be reported in their entirety as deposits of ‘‘individuals, partnerships, and corporations’’ when in fact the
beneficial owners of the deposits are, for example, individuals, foreign governments, and other commercial
banks. Instead, the institution should report these deposits in items 1 through 5 of Schedule E according to the
appropriate beneficial owner categories as deposits of
‘‘Individuals, partnerships, and corporations,’’ ‘‘Foreign
governments and Official institutions,’’ and ‘‘Commercial banks in the U.S.’’ based on the proportionate amount
of funds from each category of depositor included in
the brokered deposits the institution has received. For
further information, see the Glossary entry for ‘‘brokered
deposits.’’
Item 1 Deposits of individuals, partnerships, and
corporations (include all certified and official
checks).
Report in the appropriate column all deposits and credit
balances of individuals, partnerships, and corporations,
wherever located, as well as all certified and official
checks.
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

FFIEC 002

Include in this item:
(1) Deposits related to the personal, household, or family activities of both farm and nonfarm individuals
and to the business activities of sole proprietorships.
(2) Deposits of corporations and organizations (other
than depository institutions), regardless of whether
or not they are operated for profit, including but not
limited to:

(5) Deposits of trust funds standing to the credit of other
banks and all trust funds held or deposited in any
department (except the trust department) of the
reporting branch or agency, if the beneficiary is an
individual, partnership, or corporation.
(6) Credit balances on credit cards and related plans as a
result of customer overpayment.

(a) mutual funds and other nondepository financial
institutions;

(7) Deposits of a federal or state court held for the
benefit of individuals, partnerships, or corporations,
such as bankruptcy funds and escrow funds.

(b) foreign government-owned nonbank commercial
and industrial enterprises; and

(8) Certified and official checks, which include the
following:

(c) quasi-governmental organizations such as post
exchanges on military posts and deposits of a
company, battery, or similar organization (unless
the reporting branch or agency has been designated by the U.S. Treasury as a depository for
such funds and appropriate security for the
deposits has been pledged, in which case, report
in item 5).

(a) Unpaid depositors’ checks that have been
certified.

(3) Dealer reserve accounts. Exclude dealer differential
accounts, which are to be reported in Schedule RAL,
item 4(e).
(4) Deposits of U.S. Government agencies and instrumentalities such as the:
(a) Banks for Cooperatives,
(b) Export–Import Bank of the U.S.,
(c) Federal Deposit Insurance Corporation,
(d) Federal Financing Bank,
(e) Federal Home Loan Banks,
(f) Federal Home Loan Mortgage Corporation,
(g) Federal Intermediate Credit Banks,
(h) Federal Land Banks,
(i) Federal National Mortgage Association,
(j) National Credit Union Administration Central
Liquidity Facility,

(b) Cashiers’ checks, money orders, or other officers’ checks issued for any purpose including
those issued in payment for services, dividends,
or purchases that are drawn on the reporting
branch or agency by any of its duly authorized
officers and that are outstanding on the report
date.
(c) Funds received or held in connection with checks
or drafts drawn by the reporting branch or
agency and drawn on, or payable at or through,
another depository institution either on a zerobalance account or on an account that is not
routinely maintained with sufficient balances to
cover checks drawn in the normal course of
business (including accounts where funds are
remitted by the reporting branch or agency only
when it has been advised that the checks or
drafts have been presented).
(d) Funds received or held in connection with traveler’s checks and money orders sold (but not
drawn) by the reporting branch or agency, until
the proceeds of the sale are remitted to another
party, and funds received or held in connection
with such other checks used (but not drawn) by
the reporting branch or agency, until the amount
of the checks is remitted to another party.

(l) Office of Thrift Supervision, and

(e) Checks drawn by the reporting branch or agency
on, or payable at or through, a Federal Reserve
Bank or a Federal Home Loan Bank.

(m) Student Loan Marketing Association.

(f) Outstanding travelers’ checks, travelers’ letters

(k) National Credit Union Share Insurance Fund,

Instructions for Preparation of Reporting Form FFIEC 002
June 2002

SCHEDULE E-5

FFIEC 002

of credit, or other letters of credit (less any
outstanding drafts accepted thereunder) sold for
cash or its equivalent by the reporting branch or
agency or its agents.
(g) Outstanding drafts and bills of exchange
accepted by the reporting branch or agency or its
agents for money or its equivalent, including
drafts accepted against a letter of credit issued
for money or its equivalent.
(h) Checks or drafts drawn by the reporting branch
or agency on itself on behalf of the head office
and other foreign related institutions. Such drafts
are, for purposes of this report and federal
deposit insurance assessments, the same as
officers’ checks. This would include ‘‘London
checks,’’ ‘‘Eurodollar bills payable checks,’’ and
any other credit items that the branch or agency
issues in connection with such transactions.

Glossary entry for ‘‘domicile’’ for further discussion of
‘‘addressee.’’) Exclude all certified and official checks,
which are to be reported in item 1(a), above.
NOTE: Report in column D all deposits of individuals,
partnerships, and corporations domiciled outside of the
50 states of the U.S., Puerto Rico, and the U.S. territories
and possessions.
Item 2 Deposits and credit balances of commercial
banks in the U.S. (including their IBFs).
Report in the appropriate column (as described above
under ‘‘Column Instructions’’) all deposit liabilities and
credit balances of commercial banks in the U.S. (including IBFs). For purposes of this item, commercial banks
in the U.S. include:
(1) U.S. branches and agencies of other foreign banks;

Exclude from this item deposits of:

(2) all other commercial banks in the U.S., i.e., U.S.
domiciled branches of U.S. banks; and

(1) The U.S. Government and states and political subdivisions in the U.S. (report in item 5).

(3) IBFs of U.S. branches and agencies of foreign banks
and other commercial banks in the U.S.

(2) Commercial banks in the U.S. (report in item 2).

Exclude any of these institutions that are related to the
reporting institution (report in Schedule M). Refer to
the Glossary entries for ‘‘banks, U.S. and foreign’’ and
‘‘international banking facilities (IBF)’’ for further discussion of these terms.

(3) Other depository institutions in the U.S. (report in
item 5).
(4) Banks in foreign countries (report in item 3).
(5) The head office or other related depository institutions (report in Schedule M).
Item 1(a)

U.S. addressees (domicile).

Report in the appropriate column all deposits of individuals, partnerships, and corporations domiciled in the
U.S., i.e., U.S. addressees (as well as all certified and
official checks). (See the Glossary entry for ‘‘domicile’’
for further discussion of ‘‘addressee.’’)
NOTE: Report in column D (IBF deposit liabilities) all
deposits of individuals, partnerships, and corporations
domiciled in Puerto Rico and the U.S. territories and
possessions.
Item 1(b)

Non-U.S. addressees (domicile).

Report in the appropriate column all deposits of individuals, partnerships, and corporations domiciled in
foreign countries, i.e., non-U.S. addressees. (See the
SCHEDULE E-6

For purposes of this schedule, U.S. branches and agencies of other foreign banks include U.S. branches and
agencies of foreign official banking institutions (including central banks and nationalized banking and other
banking institutions owned by foreign governments that
have as an important part of their function activities
similar to those of a central bank) and investment companies that are chartered under Article XII of the New York
State banking law and that are majority-owned by one or
more nonrelated foreign banks.
Exclude from this item, and from items 2(a) and 2(b)
below, deposits of the following depository institutions:
(1) Building or savings and loan associations, home
stead associations, cooperative banks, credit unions,
and mutual or stock savings banks (report in item 5
below).
(2) Banks in foreign countries (report in item 3 below).
(See the Glossary entry for ‘‘banks, U.S. and foreign’’ for the definition of this term.)
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

FFIEC 002

Item 2(a) U.S. branches and agencies of other
foreign banks.
Report in the appropriate column deposits and credit
balances of U.S. branches and agencies of other foreign
banks and deposits of U.S.-domiciled offices of New
York State (Article XII) investment companies that are
majority-owned by one or more other foreign banks.
Also included in this item are deposits of IBFs of U.S.
branches and agencies of foreign banks. Exclude deposits and credit balances of institutions that are related to
the reporting institution (to be reported in Schedule M).
Exclude deposits of U.S.-chartered banks owned by foreign banks or by foreign official banking institutions (to
be reported in item 2(b) below).
Item 2(b)

Other commercial banks in the U.S.

Report in the appropriate column (as described above
under ‘‘Column Instructions’’) deposits of U.S.domiciled offices of other commercial banks. Exclude
deposits of any of these institutions that are related to the
reporting institution (report in Schedule M).
For purposes of this item, ‘‘banks’’ include national
banks, state-chartered commercial banks, trust companies performing a commercial banking business, industrial banks, IBFs of commercial banks other than U.S.
branches and agencies of foreign banks, private banks
(including regulated-certificated banks) performing a
commercial banking business, and Edge and Agreement
corporations that are domiciled in the 50 states of the
United States, District of Columbia, Puerto Rico, or U.S.
territories and possessions. Include all U.S.-chartered
banks owned by foreign banks or by foreign official
banking institutions (but not their U.S.-domiciled
branches and agencies, which are included in item 2(a)
above). Reciprocal demand balances of these other commercial banks should be reported net.
Item 3

Deposits of banks in foreign countries.

Report in the appropriate column all deposits of nonrelated banks located in foreign countries. For purposes of
this item, nonrelated banks in foreign countries include:

below, deposits of foreign official institutions and foreign central banks (to be reported in item 4 below),
deposits of U.S. branches and agencies of other foreign
banks and of New York State investment companies (to
be reported in item 2(a) above), and deposits of related
banking institutions (to be reported in Schedule M).
Reciprocal demand balances with nonrelated banks in
foreign countries should be reported gross.
See the Glossary entry for ‘‘banks, U.S. and foreign’’ for
further discussion of these terms.
Item 3(a)

Foreign branches of U.S. banks.

Report in the appropriate column all deposits of foreign
(non-U.S.) branches of nonrelated (1) U.S. banks and
(2) Edge and Agreement corporations.
Exclude deposits of foreign-domiciled banking subsidiaries of nonrelated U.S. banks and Edge and Agreement
corporations (report in item 3(b) below).
Item 3(b)

Other banks in foreign countries.

Report in the appropriate column all deposits of nonrelated foreign-domiciled commercial banks, savings
banks, discount houses, and other similar foreigndomiciled institutions that accept deposits. Include
deposits of foreign-domiciled banking subsidiaries (but
not branches which are reported in item 3(a) above) of
both nonrelated U.S. banks and nonrelated Edge and
Agreement corporations.
Item 4 Deposits of foreign governments and
official institutions.
Report in the appropriate column all deposits of foreign
governments and official institutions (including foreign
central banks). (See the Glossary entry for ‘‘foreign
governments and official institutions’’ for the definition
of this term.)
Exclude from this item deposits and credit balances of:
(1) U.S. branches and agencies of foreign official banking institutions (report in item 2(a) above).

(2) foreign-domiciled branches of other foreign banks.

(2) Nationalized banks and other banking institutions
that are owned by foreign governments and that do
not function as central banks, banks of issue, or
development banks (report in item 3(b) above).

Exclude from this item and from items 3(a) and 3(b)

(3) Foreign government-owned nonbank commercial

(1) foreign-domiciled branches of U.S. banks; and

Instructions for Preparation of Reporting Form FFIEC 002
June 2002

SCHEDULE E-7

FFIEC 002

and industrial enterprises (report in item 1(a) or 1(b)
above).

agencies and instrumentalities. (Such deposits are to
be reported in item 1 above.)

(4) Deposits of the reporting institution’s parent if the
parent is a foreign government or official institution.
Such transactions are reported in Schedule M.

(2) States and political subdivisions in the U.S. Deposits
of these entities include deposits of public funds
standing to the credit of states, counties, municipalities, and local housing authorities; school, irrigation,
drainage, and reclamation districts; or other instrumentalities of one or more states of the United
States, the District of Columbia, Puerto Rico, and
U.S. territories and possessions.

Item 5

All other deposits and credit balances.

Report in the appropriate column, all other deposits and
credit balances due to nonrelated institutions not covered
in items 1 through 4 above. Included in this item are
deposits of:
(1) The United States Government. Such deposits
include:
(a) U.S. Treasury Tax and Loan Accounts, including
deposits of federal income tax withheld from
employee salaries, from interest and dividend
payments, and from distributions or payments
from pensions, annuities, and other deferred
income including IRAs; social security tax
deposits and other federal tax payments; and the
proceeds from sales of U.S. Savings Bonds.
NOTE: Only deposits credited to the U.S. Treasury Tax and Loan demand deposit accounts that
represent funds received as of the close of business of the ‘‘current’’ day should be reported as
Treasury Tax and Loan Demand Deposits. (The
‘‘current’’ day’s deposits should reflect those
deposits on the branch or agency’s books standing to the credit of the U.S. Treasury’s Tax and
Loan Account as of the report date.) Funds credited to Tax and Loan Demand Deposit Accounts
as of the close of business on previous days
should already have been remitted to the Federal
Reserve Bank (and thus excluded from this
report) or automatically converted into openended interest-bearing notes (to be reported
in Schedule RAL, item 4(c)), depending on the
option selected by the reporting institution.

Also include deposits of funds advanced to states
and political subdivisions by U.S. Government agencies and corporations and deposits of withheld
income taxes of states and political subdivisions.
(3) Other depository institutions in the U.S. Included
herein are deposits of the following depository institutions in the U.S., other than commercial banks:
(a) building or savings and loan associations, homestead associations, and cooperative banks;
(b) mutual and stock savings banks; and
(c) credit unions.
Refer to Glossary entry for ‘‘depository institutions
in the U.S.’’ for complete discussion of this term.
For the appropriate treatment of deposits of depository institutions for which the reporting branch or
agency is serving as a pass-through agent for federal
required reserves, see the Glossary entry for ‘‘passthrough reserve balances.’’
Item 6

Not applicable.

Item 7

Total deposits and credit balances.

Report in columns A, C, and D the sums of items 1
through 5 above. Report in column B the total of all
demand deposits. The sum of columns A, C and D must
equal Schedule RAL, item 4(a), column A. The sum
of column D must equal Schedule RAL, item 4(a),
column B.

(b) Deposits standing to the credit of certain quasigovernmental institutions when the reporting
branch or agency has been designated by the
U.S. Treasury as a depository for such funds.

Memoranda

(c) Deposits of the U.S. Postal Service and local
post offices.

Item M1 Components of total nontransaction
accounts.

Exclude from this item deposits of U.S. Government

The amounts to be reported in items 1(a) and 1(c) below

SCHEDULE E-8

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FFIEC 002

are included as components of total nontransaction
accounts (excluding IBF) in item 7, column C above.
(See the Glossary entry for ‘‘deposits’’ for a discussion
of nontransaction accounts).
NOTE: These amounts exclude amounts outstanding to
the head office and related depository institutions (to be
reported in Schedule M, as appropriate).
Item M1(a)

Time deposits of $100,000 or more.

Report in this item all time deposits included in item 7,
column C, with balances of $100,000 or more, regardless
of negotiability or transferability. Include in this item
time certificates of deposit and open-account time deposits with balances of $100,000 or more, including brokered deposits issued to brokers or dealers in the form of
large ($100,000 or more) certificates of deposit, regardless of whether the underlying depositors’ shares are in
denominations of less than $100,000. (See the Glossary

Instructions for Preparation of Reporting Form FFIEC 002
June 2002

entry for ‘‘deposits’’ for the definition of time certificates
of deposit.)
Item M1(b)

Not applicable.

Item M1(c) Time certificates of deposit in
denominations of $100,000 or more with remaining
maturity of more than 12 months.
Enter the dollar amount outstanding of all time certificates of deposit included in item 7, column C, both
negotiable and nonnegotiable, issued in denominations
of $100,000 or more with remaining maturity of more
than 12 months.
So called ‘‘roll-over’’ negotiable certificates of deposit
should be reported according to the remaining maturity
of the overall long-term deposit contract, or master contract, rather than that of the shorter-term certificates of
deposit actually issued.

SCHEDULE E-9

INSTRUCTIONS FOR THE PREPARATION OF THE

FFIEC 002
Schedule K—Quarterly Averages

General Instructions
The amounts reported in this schedule are for the reporting branch or agency including its IBF. All of the items
for which quarterly averages are to be reported relate to
assets and liabilities reported on a spot one-day basis in
Schedules RAL, A, C, or E. These corresponding items,
as cross-referenced in Schedule K, are definitionally
consistent between these schedules and Schedule K.
For each specified item report either the average of the
balances as of the close of business for each day of
the calendar quarter, or an average of the balances as of
the close of business on each Wednesday during the
calendar quarter. For days that the branch or agency (or
its IBF, if applicable) is closed (e.g., Saturdays, Sundays,
or holidays), the amount outstanding from the previous
business day is to be used. The branch or agency is
considered to have been closed if there are no transactions posted to the general ledger as of that date.
NOTE: Exclude from these averages all transactions of
the reporting branch or agency, including its IBF, with
related depository institutions.

Item 2 Federal funds sold and securities
purchased under agreements to resell.
This item corresponds directly to the sum of
items 1(d)(1), ‘‘Federal funds sold and securities purchased under agreements to resell with depository institutions in the U.S.,’’ and 1(d)(2), ‘‘Federal funds sold and
securities purchased under agreements to resell with
others,’’ of Schedule RAL.
Item 3

This item corresponds directly to item 1(e) of Schedule RAL, ‘‘Loans, net of unearned income.’’
Item 4 Loans to and acceptances of banks
in foreign countries.
This item corresponds directly to the sum of
items 2(c)(1), ‘‘Loans to and acceptances of foreign
branches of U.S. banks,’’ and 2(c)(2), ‘‘Loans to and
acceptances of other banks in foreign countries,’’ of
Schedule C.
Item 5

Assets
Item 1 Interest-bearing balances due from
depository institutions.
This item corresponds in definition to the interest-bearing
component of Schedule RAL, item 1(a), and to detail in
Schedule A—‘‘Cash and Balances Due from Depository
Institutions.’’ For purposes of this item, ‘‘interest-bearing
balances due from depository institutions’’ corresponds
to the total of items 3 and 4, column A, of Schedule A,
i.e., ‘‘Balances due from depository institutions in the
U.S.,’’ and ‘‘Balances due from banks in foreign countries and foreign central banks,’’ minus all noninterestbearing balances due from these entities.
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

Total loans, net of unearned income.

Total claims on nonrelated parties.

Report the quarterly average for total claims on nonrelated parties. This item corresponds to item 1(i) of Schedule RAL, except that this quarterly average should reflect
all securities not held for trading on an amortized cost
basis. This item is not the sum of items 1 through 4
above.
Item 6 Time certificates of deposit in
denominations of $100,000 or more.
Report the quarterly average of all large time certificates
of deposit held by the reporting branch or agency. (See
the Glossary entry for ‘‘Deposits’’ for the definition of
time certificates of deposit.)
SCHEDULE K-1

FFIEC 002

Item 7 Interest-bearing deposits and credit
balances.

Item 8 Federal funds purchased and securities
sold under agreements to repurchase.

This item corresponds to the interest-bearing component
of Schedule RAL, item 4(a), ‘‘Total deposits and credit
balances,’’ and may be derived from detail reported in
Schedule E. For purposes of this report, ‘‘interest-bearing
deposits and credit balances’’ is the total of the amounts
reported for item 7 of Schedule E, Columns A, plus C,
plus D, minus the amount reported for item 7 in Column B, i.e., ‘‘Total transaction accounts and credit balances (excluding IBF),’’ plus ‘‘Total non-transaction
accounts (excluding IBF),’’ plus ‘‘IBF deposit liabilities,’’ minus ‘‘Demand deposit component of total transaction accounts.’’

This item corresponds directly to the sum of
items 4(b)(1), ‘‘Federal funds purchased and securities
sold under agreements to repurchase with depository
institutions in the U.S.,’’ and 4(b)(2), ‘‘Federal funds
purchased and securities sold under agreements to repurchase with others,’’ of Schedule RAL.

SCHEDULE K-2

Item 9

Other borrowed money.

This item corresponds directly to item 4(c) of Schedule RAL, the detail of which is contained in Schedule P.

Instructions for Preparation of Reporting Form FFIEC 002
June 2001

INSTRUCTIONS FOR THE PREPARATION OF THE

FFIEC 002
Schedule L—Derivatives and
Off-Balance Sheet Items

General Instructions
The amounts reported in this schedule are for the reporting branch or agency including its IBF, if any. Exclude
from this schedule: commitments not yet drawn down
under retail credit cards, check credit, and related plans;
and contingencies arising in connection with litigation.
Exclude all transactions with related depository institutions. Report derivatives and off-balance sheet items
with related depository institutions in Schedule M,
Part V.

Item Instructions
Item 1

Commitments to make or purchase loans.

Report the unused portions of commitments that obligate
the reporting branch or agency, including its IBF, to
make or purchase extensions of credit in the form of
loans or participations in loans, lease financing receivables, or similar transactions. Exclude commitments that
obligate the reporting branch or agency to extend credit
in the form of retail credit cards, check credit, and related
plans. Also, exclude commitments that meet the definition of a derivative and must be accounted for in accordance with FASB Statement No. 133, which should be
reported in Schedule L, item 9.
Report the unused portions of commitments for which
the branch or agency, including its IBF, has charged a
commitment fee or other consideration, or otherwise has
a legally binding commitment. Such commitments are to
be reported regardless of whether they contain ‘‘material
adverse change’’ clauses or other provisions that are
intended to relieve the issuer of its funding obligations
under certain conditions and regardless of whether they
are unconditionally cancellable at any time. In the case
of commitments for syndicated loans or participated
loans, report only the branch or agency’s (or IBF’s)
proportional share of the commitment.
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Include loan proceeds that the branch or agency, including its IBF, is obligated to advance, such as loan draws,
construction progress payments, seasonal or living
advances to farmers under prearranged lines of credit,
rotating or revolving credit arrangements (other than
retail credit card, check credit, and related plans), or
similar transactions.
Item 2

Spot foreign exchange contracts.

Report the gross amount (stated in U.S. dollars) of all
spot contracts committing the reporting branch or agency
to purchase foreign (non-U.S.) currencies and U.S. dollar
exchange that are outstanding as of the report date.
A spot contract is an agreement for the immediate delivery, usually within two business days, of a foreign currency at the prevailing cash market rate. Spot contracts
are considered outstanding (i.e., open) until they have
been cancelled by acquisition or delivery of the underlying currencies.
Only one side of a spot foreign exchange contract is to be
reported. In those transactions where foreign (non-U.S.)
currencies are bought or sold against U.S. dollars, report
only that side of the transaction that involves the foreign
(non-U.S.) currency. For example, if the reporting branch
or agency enters into a spot contract which obligates the
branch or agency to purchase U.S. dollar exchange
against which it sells Japanese yen, then the branch or
agency would report (in U.S. dollar equivalent values)
the amount of Japanese yen sold in this item. In crosscurrency spot foreign exchange transactions, which
involve the purchase and sale of two non-U.S. currencies,
only the purchase side is to be reported (in U.S. dollar
equivalent values).
Item 3

Standby letters of credit.

Report in item 3(a) the total amount outstanding and
unused as of the report date of all standby letters of credit
SCHEDULE L-1

FFIEC 002

(and all legally binding commitments to issue standby
letters of credit) issued by the reporting branch or agency,
including it IBF, or acquired from others. Include those
standby letters of credit that are collateralized by cash on
deposit and those in which participations have been
conveyed to others where (a) the originating branch or
agency, including IBF, is to pay the full amount of any
draft drawn under the terms of the standby letter of credit
and (b) the participating institutions have an obligation
to partially or wholly reimburse the originating branch
or agency, including its IBF, either directly in cash or
through a participation in a loan to the account party.
(See the Glossary entry for ‘‘letter of credit’’ for the
definition of standby letter of credit.)
Originating branches or agencies, including their IBFs,
also must report the amount of standby letters of credit
conveyed to others through participations in item 3(b).
Branches or agencies, including their IBFs, participating
in such arrangements must report in item 3(a) the full
amount of their contingent liabilities to participate in
such standby letters of credit without deducting any
amounts that they may have reparticipated to others.
Participating branches or agencies, including their IBFs,
also must report the amount of participation interests in
such transactions they have reparticipated to others, if
any, in item 3(b).
For syndicated standby letters of credit where each institution or branch or agency has a direct obligation to the
beneficiary, each financial institution must report only its
share in the syndication. Similarly, if several financial
institutions 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 participant is only liable for a certain
portion of the entire amount, each bank or branch or
agency shall report only its proportional share of the total
standby letter of credit.
For a standby letter of credit that is in turn backed by a
standby letter of credit issued by another financial institution, each branch or agency, including its IBF, must
report the entire amount of the standby letter of credit it
has issued in item 3(a) The amount of the branch or
agency’s standby letter of credit must be included in
item 3(b) since the backing of a standby letter of credit
SCHEDULE L-2

has substantially the same effect as the conveying of
participations in standby letters of credit.
Exclude from standby letters of credit signature or
endorsement guarantees of the type associated with the
clearing of negotiable instruments or securities in the
normal course of business.
Item 3(a)

Total.

Report the total amount of all standby letters of credit
issued by the reporting branch or agency, including its
IBF, or acquired from others.
Item 3(a)(1)

To U.S. addressees (domicile).

Report the amount of standby letters of credit (as defined
in item 3) to U.S. addressees. The distinction between
U.S. addressees and non-U.S. addressees is determined
by the domicile of the account party, not the domicile of
the beneficiary. See the Glossary entry for ‘‘domicile.’’
Item 3(a)(2)

To non-U.S. addressees (domicile).

Report the amount of standby letters of credit (as defined
in item 3) to foreign (non-U.S.) addressees. The distinction between U.S. addressees and non-U.S. addressees is
determined by the domicile of the account party, not the
domicile of the beneficiary. See the Glossary entry for
‘‘domicile.’’
Item 3(b) Amount of total standby letters of credit
in item 3(a) conveyed to others through
participations.
Report that portion of the branch or agency’s (including
its IBF’s) total contingent liability for standby letters of
credit reported in items 3(a)(1) and 3(a)(2) that the
branch or agency has conveyed to others. Participations
and backings may be for any part or all of a given
obligation. Also, include that portion of the branch or
agency’s standby letters of credit reported in
items 3(a)(1) and 3(a)(2) that are backed by other banks’
standby letters of credit.
Item 4

Commercial and similar letters of credit.

Report the amount outstanding and unused as of the
report date of issued or confirmed commercial letters of
credit, travelers’ letters of credit not issued for money or
its equivalent, and all similar letters of credit, but excluding standby letters of credit (which are to be reported in
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

FFIEC 002

item 3 above). Legally binding commitments to issue
commercial letters of credit are also to be reported in this
item. (See the Glossary entry for ‘‘letter of credit.’’)
Travelers’ letters of credit or other letters of credit issued
for money or its equivalent by the reporting branch or
agency or its agents should be reported as demand
deposit liabilities in Schedule E.
Item 5 Participations in acceptances conveyed to
others by the reporting branch or agency.
Report the amount of all participations conveyed to
others by the reporting (accepting) branch or agency in
its acceptances that are outstanding regardless of the
nature of the participation agreement and regardless
of the system of debits and credits used to reflect the
agreement on the reporting branch or agency’s books.
Thus, participations in acceptances conveyed to others
by the reporting branch or agency are to include both
those that provide for participation in the risk of loss in
the event of default by the account party at the time of
maturity and those that provide for participation in putting the holder of the acceptance in funds at the maturity
of the acceptance. Also report the amount of participations in acceptances of other (accepting) banking institutions that the reporting branch or agency has acquired
and subsequently conveyed to others.
Do not reduce the reporting branch or agency’s ‘‘Branch
or agency liability on acceptances executed and outstanding’’ (Schedule RAL, item 4(d) or ‘‘Customers’ liability
to this branch or agency on acceptances outstanding’’
(Schedule RAL, item 1(g) by the amount of such participations regardless of the nature of the agreement and
regardless of the system of debits and credits used to
reflect the agreement on the reporting branch or agency’s
books. (See the Glossary entry for ‘‘bankers acceptances’’ for a detailed description of the required treatment of bankers acceptances in this report.)
Item 6

Not applicable.

Item 7 All other off-balance sheet contingent
liabilities greater than or equal to 1⁄2 percent of total
claims on nonrelated parties as reported on
Schedule RAL, item 1(i).
Report all significant types of off-balance sheet contingent liabilities not covered in other items of this
schedule.
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Report only the aggregate amount of those types of
‘‘other off-balance sheet contingent liabilities’’ that individually equal or exceed one half percent of the reporting
institution’s total claims on nonrelated parties (Schedule RAL, item 1(I), column A). If the branch or agency
has no types of ‘‘other off-balance sheet contingent
liabilities’’ that individually equal or exceed one half
percent of total claims on nonrelated parties, report a
zero or the word ‘‘none.’’
In addition, itemize with clear but concise captions those
types of ‘‘other off-balance sheet contingent liabilities’’
reportable in this item that individually equal or exceed
one percent of the institution’s total claims on nonrelated
parties (Schedule RAL, item 1(I), column A). Enter such
items in the inset boxes provided.
Include as
liabilities’’:

‘‘other

off-balance

sheet

contingent

(1) The unsold portion of the reporting branch or agency’s own takedown in syndicated securities underwriting transactions, including revolving underwriting facilities (RUFs), note issuance facilities (NIFs),
and other similar arrangements. These are facilities
under which a borrower can issue on a revolving
basis short-term paper in its own name, but for
which the underwriting institutions have a legally
binding commitment either to purchase any notes the
borrower is unable to sell by the roll-over date or to
advance funds to the borrower.
(2) Letters of indemnity other than those issued in connection with the replacement of lost or stolen official
checks.
(3) Shipside or dockside guarantees or similar guarantees relating to missing bills-of-lading or title documents and other document guarantees that facilitate
the replacement of lost or destroyed documents and
negotiable instruments.
(4) Securities borrowed against collateral (other than
cash), or on an uncollateralized basis. For borrowed
securities that are fully collateralized by similar securities of equivalent value, report the market value of
the borrowed securities at the time they were borrowed. For other borrowed securities, report their
market value as of the report date.
(5) Commitments to purchase when-issued securities
that are excluded from the requirements of FASB
SCHEDULE L-3

FFIEC 002

Statement No. 133 (and therefore not reported as
forward contracts in Schedule L, item 9(b) below).
(6) Risk participations that the reporting branch or
agency has aquired in acceptances of other (accepting) banking institutions.
Exclude from ‘‘other off-balance sheet contingent
liabilities’’:
(1) All liabilities to nonrelated parties which are required to be reported in Schedule RAL, such as
repurchase and resale agreements and loans sold
with recourse.
(2) Commitments to purchase property being acquired
for lease to others (report in Schedule L, item 1,
above).
(3) Contingent liabilities arising in connection with litigation in which the reporting branch or agency,
including its IBF, is involved.
(4) Any unused portion of retail credit cards, check
credit, and related plans.
(5) Signature or endorsement guarantees of the type
associated with the regular clearing of negotiable
instruments or securities in the normal course of
business.

Report only the aggregate amount of those types of
‘‘other off-balance sheet contingent claims’’ that individually equal or exceed one half percent of the reporting
institution’s total claims on nonrelated parties (Schedule
RAL, item 1(i), column A). If the branch or agency has
no types of ‘‘other off-balance sheet contingent claims’’
that individually equal or exceed one half percent of total
claims on nonrelated parties for which the reporting
is feasible and practicable, report a zero or the word
‘‘none.’’
In addition, itemize with clear but concise captions those
types of ‘‘other off-balance sheet contingent claims’’
reportable in this item that individually equal or exceed
one percent of the institution’s total claims on nonrelated
parties (Schedule RAL, item 1(i), column A). Enter such
items in the inset boxes provided.
Include as ‘‘other off-balance sheet contingent claims’’
such items as (a) securities lent against collateral (other
than cash) or on an uncollateralized basis, (b) internally
developed intangible assets, and (c) commitments to
sell when-issued securities that are excluded from the
requirements of FASB Statement No. 133 (and therefore
not reported as forward contracts in Schedule L,
item 9(b) below).

(6) Commitments to sell foreign currencies and U.S.
dollar exchange (spot and forward).

Item 9 Gross amounts (e.g., notional amounts) of
derivatives.

(7) Commitments that meet the definition of a derivative
and must be accounted for in accordance with FASB
Statement No. 133, which should be reported in
Schedule L, item 9.

Report in the appropriate column and subitem the gross
par value (stated in U.S. dollars) (e.g., for futures, forwards, and option contracts) or the notional amount
(stated in U.S. dollars) (e.g., for forward rate agreements
and swaps), as appropriate, of all contracts that meet the
definition of a derivative and must be accounted for in
accordance with FASB Statement No. 133. Report each
contract according to its underlying risk exposure: interest rate, foreign exchange, equity, and commodity and
other. Contracts with multiple risk characteristics should
be classified based upon the predominant risk characteristics at the origination of the derivative. However,
exclude all credit derivatives, which should be reported
in Schedule L, Memorandum item 1 or 2.

Item 8 All other off-balance sheet contingent
claims (assets) greater than or equal to 1⁄2 percent
of total claims on nonrelated parties as reported
on Schedule RAL, item 1(i).
Report to the extent feasible and practicable all significant types of off-balance sheet contingent claims (assets)
not covered in other items of this schedule. Exclude all
items which are required to be reported as claims on
nonrelated parties on the schedule of assets and liabilities
in this report (Schedule RAL) and contingent claims
arising in connection with litigation in which the reporting branch or agency is involved, and assets held in or
administered by the reporting branch or agency’s trust
department.
SCHEDULE L-4

The notional amount to be reported for a derivative
contract with a multiplier component is the contract’s
effective notional amount or par value. For example,
a swap contract with a stated notional amount of
$1,000,000 whose terms called for quarterly settlement
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

FFIEC 002

of the difference between 5% and LIBOR multiplied by
10 has an effective notional amount of $10,000,000.

exchange contracts which are to be reported in Schedule L, item 2.

No netting of contracts is permitted for purposes of this
item. Therefore, do not net: (1) obligations of the reporting branch or agency to purchase from third parties
against the branch or agency’s obligations to sell to third
parties, (2) written options against purchased options, or
(3) contracts subject to bilateral netting agreements.

Only one side of a foreign currency transaction is to be
reported. In those transactions where foreign (non-U.S.)
currencies are bought or sold against U.S. dollars, report
only that side of the transaction that involves the foreign
(non-U.S.) currency. For example, if the reporting branch
or agency enters into a futures contract which obligates
the branch or agency to purchase U.S. dollar exchange
against which it sells Japanese yen, then the branch or
agency would report (in U.S. dollar equivalent values)
the amount of Japanese yen marks sold in Schedule L,
item 9(a). In cross-currency transactions, which involve
the purchase and sale of two non-U.S. currencies, only
the purchase side is to be reported.

For each column, the sum of items 9(a) through 9(e)
must equal the sum of items 10 and 11.

Column Instructions
Column A, Interest Rate Contracts: Interest rate contracts are contracts related to an interest-bearing financial
instrument or whose cash flows are determined by referencing interest rates or another interest rate contract
(e.g., an option on a futures contract to purchase a
Treasury bill). These contracts are generally used to
adjust the branch or agency’s interest rate exposure or, if
the branch or agency is an intermediary, the interest rate
exposure of others. Interest rate contracts include interest
rate futures, single currency interest rate swaps, basis
swaps, forward rate agreements, and interest rate options,
including caps, floors, collars, and corridors.
Exclude contracts involving the exchange of one or more
foreign currencies (e.g., cross-currency swaps and currency options) and other contracts whose predominant
risk characteristic is foreign exchange risk, which are to
be reported in column B as foreign exchange contracts.
Unsettled securities transactions that exceed the regular
way settlement time limit that is customary in each
relevant market must be reported as forward contracts in
Schedule L, item 9(b).
Column B, Foreign Exchange Contracts: Foreign
exchange contracts are contracts to purchase foreign
(non-U.S.) currencies and U.S. dollar exchange in the
forward market, i.e., on an organized exchange or in
an over-the-counter market. A purchase of U.S. dollar
exchange is equivalent to a sale of foreign currency.
Foreign exchange contracts include cross-currency interest rate swaps where there is an exchange of principal,
forward foreign exchange contracts (usually settling
three or more business days from trade date), and currency futures and currency options. Exclude spot foreign
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

All amounts in column B are to be reported in U.S. dollar
equivalent values.
Column C, Equity Derivative Contracts: Equity derivative contracts are contracts that have a return, or a
portion of their return, linked to the price of a particular
equity or to an index of equity prices, such as the
Standard and Poor’s 500.
The contract amount to be reported for equity derivative
contracts is the quantity, e.g., number of units, of the
equity instrument or equity index contracted for purchase
or sale multiplied by the contract price of a unit.
Column D, Commodity and Other Contracts: Commodity contracts are contracts that have a return, or a portion
of their return, linked to the price of or to an index of
precious metals, petroleum, lumber, agricultural products, etc. Commodity and other contracts also include
any other contracts that are not reportable as interest rate,
foreign exchange, or equity derivative contracts.
The contract amount to be reported for commodity and
other contracts is the quantity, e.g., number of units, of
the commodity or product contracted for purchase or sale
multiplied by the contract price of a unit.
The notional amount to be reported for commodity contracts with multiple exchanges of principal is the contractual amount multiplied by the number of remaining payments (i.e., exchanges of principal) in the contract.
Item 9(a)

Futures contracts.

Futures contracts represent agreements for delayed delivery of financial instruments or commodities in which the
SCHEDULE L-5

FFIEC 002

buyer agrees to purchase and the seller agrees to deliver,
at a specified future date, a specified instrument at a
specified price or yield. Futures contracts are standardized and are traded on organized exchanges.
Report, in the appropriate column, the aggregate par
value of futures contracts that have been entered into by
the reporting branch or agency and are outstanding (i.e.,
open contracts) as of the report date. Do not report the
par value of financial instruments intended to be delivered under such contracts if this par value differs from
the par value of the contracts themselves.
Contracts are outstanding (i.e., open) until they have
been cancelled by acquisition or delivery of the underlying financial instruments or by offset. Offset is the
liquidating of a purchase of futures through the sale of an
equal number of contracts of the same delivery month on
the same underlying instrument on the same exchange,
or the covering of a short sale of futures through the
purchase of an equal number of contracts of the same
delivery month on the same underlying instrument on the
same exchange.
Column A, Interest Rate Futures: Report futures contracts committing the reporting branch or agency to
purchase or sell financial instruments and whose predominant risk characteristic is interest rate risk. Some of
the more common interest rate futures include futures on
90-day U.S. Treasury bills; 12-year GNMA pass-through
securities; and 2-, 4-, 6-, and 10-year U.S. Treasury
notes.
Column B, Foreign Exchange Futures: Report the
gross amount (stated in U.S. dollars) of all futures contracts committing the reporting branch or agency to
purchase foreign (non-U.S.) currencies and U.S. dollar
exchange and whose predominant risk characteristic is
foreign exchange risk.
A currency futures contract is a standardized agreement
for delayed delivery of a foreign (non-U.S.) currency or
U.S. dollar exchange in which the buyer agrees to purchase and the seller agrees to deliver, at a specified future
date, a specified amount at a specified exchange rate.
Column C, Equity Derivative Futures: Report futures
contracts committing the reporting branch or agency to
purchase or sell equity securities or instruments based on
equity indexes such as the Standard and Poor’s 500 or
the Nikkei.
SCHEDULE L-6

Column D, Commodity and Other Futures: Report the
contract amount for all futures contracts committing the
reporting branch or agency to purchase or sell commodities such as agricultural products (e.g., wheat, coffee),
precious metals (e.g., gold, platinum), and non-ferrous
metals (e.g., copper, zinc). Include any other futures
contract that is not reportable as an interest rate, foreign
exchange, or equity derivative contract in column A, B,
or C.
Item 9(b)

Forward contracts.

Forward contracts represent agreements for delayed
delivery of financial instruments or commodities in
which the buyer agrees to purchase and the seller agrees
to deliver, at a specified future date, a specified instrument or commodity at a specified price or yield. Forward
contracts are not traded on organized exchanges and their
contractual terms are not standardized.
Report the aggregate par value of forward contracts that
have been entered into by the reporting branch or
agency and are outstanding (i.e., open contracts) as
of the report date. Do not report the par value of financial
instruments intended to be delivered under such contracts if this par value differs from the par value of the
contracts themselves.
Contracts are outstanding (i.e., open) until they have
been cancelled by acquisition or delivery of the underlying financial instruments or settled in cash. Such contracts can only be terminated, other than by receipt of the
underlying asset, by agreement of both buyer and seller.
Include commitments to purchase and sell when-issued
securities that are not excluded from the requirements
of FASB Statement No. 133 as a regular security trade.
Report commitments to purchase when-issued securities
that are excluded from the requirements of FASB Statement No. 133 as ‘‘All other off-balance sheet contingent
liabilities’’ in Schedule L, item 7, and commitments
to sell when-issued securities that are excluded from
the requirements of FASB Statement No. 133 as ‘‘Other
off-balance sheet contingent claims’’ in Schedule L,
item 8, subject to the existing reporting thresholds for
these two items.
Column A, Interest Rate Forwards: Report forward
contracts committing the reporting branch or agency to
purchase or sell financial instruments and whose predominant risk characteristic is interest rate risk. Include
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

FFIEC 002

in this item firm commitments (i.e., commitments that
have a specific interest rate, selling date, and dollar
amount) to sell loans secured by 1-to-4 family residential
properties that meet the definition of a derivative contract
under FASB Statement No. 133.
Column B, Foreign Exchange Forwards: Report the
gross amount (stated in U.S. dollars) of all forward
contracts committing the reporting branch or agency to
purchase foreign (non-U.S.) currencies and U.S. dollar
exchange and whose predominant risk characteristic is
foreign exchange risk.
A forward foreign exchange contract is an agreement for
delayed delivery of a foreign (non-U.S.) currency or U.S.
dollar exchange in which the buyer agrees to purchase
and the seller agrees to deliver, at a specified future date,
a specified amount at a specified exchange rate.
Column C, Equity Derivative Forwards: Report forward
contracts committing the reporting branch or agency to
purchase or sell equity instruments.
Column D, Commodity and Other Forwards: Report
the contract amount for all forward contracts committing
the reporting branch or agency to purchase or sell commodities such as agricultural products (e.g., wheat, coffee), precious metals (e.g., gold, platinum), and nonferrous metals (e.g., copper, zinc). Include any other
forward contract that is not reportable as an interest rate,
foreign exchange, or equity derivative contract in column A, B, or C.
Item 9(c) Exchange-traded option contracts.
Option contracts convey either the right or the obligation, depending upon whether the reporting branch or
agency is the purchaser or the writer, respectively, to buy
or sell a financial instrument or commodity at a specified
price by a specified future date. Some options are traded
on organized exchanges.
The buyer of an option contract has, for compensation
(such as a fee or premium), acquired the right (or option)
to sell to, or purchase from, another party some financial
instrument or commodity at a stated price on a specified
future date. The seller of the contract has, for such
compensation, become obligated to purchase or sell the
financial instrument or commodity at the option of the
buyer of the contract. A put option contract obligates the
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

seller of the contract to purchase some financial instrument or commodity at the option of the buyer of the
contract. A call option contract obligates the seller of the
contract to sell some financial instrument or commodity
at the option of the buyer of the contract.
Item 9(c)(1)

Written options.

Report in this item the aggregate par value of the financial instruments or commodities that the reporting branch
or agency has, for compensation (such as a fee or premium), obligated itself to either purchase or sell under
exchange-traded option contracts that are outstanding as
of the report date.
Column A, Written Exchange-Traded Interest Rate
Options: For exchange-traded option contracts obligating the reporting branch or agency to either purchase or
sell an interest rate futures contract and whose predominant risk characteristic is interest rate risk, report the par
value of the financial instrument underlying the futures
contract. An example of such a contract is a Chicago
Board Options Exchange option on the 13-week Treasury bill rate.
Column B, Written Exchange-Traded Foreign Exchange Options: Report in this item the gross amount
(stated in U.S. dollars) of foreign (non-U.S.) currency
and U.S. dollar exchange that the reporting branch or
agency has, for compensation, obligated itself to either
purchase or sell under exchange-traded option contracts
whose predominant risk characteristic is foreign
exchange risk. In the case of option contracts obligating
the reporting branch or agency to either purchase or sell
a foreign exchange futures contract, report the gross
amount (stated in U.S. dollars) of the foreign (non-U.S.)
currency underlying the futures contract. Exchangetraded options on major currencies such as the Japanese
Yen, British Pound Sterling and Euro and options on
futures contracts of major currencies are examples of
such contracts.
Column C, Written Exchange-Traded Equity Derivative
Options: Report the contract amount for those exchangetraded option contracts where the reporting branch or
agency has obligated itself, for compensation, to purchase or sell an equity instrument or equity index.
Column D, Written Exchange-Traded Commodity and
Other Exchange-Traded Options: Report the contract
amount for those exchange-traded option contracts where
SCHEDULE L-7

FFIEC 002

the reporting branch or agency has obligated itself, for
compensation, to purchase or sell a commodity or product. Include any other written, exchange-traded option
that is not reportable as an interest rate, foreign exchange,
or equity derivative contract in column A, B, or C.
Item 9(c)(2)

Purchased options.

Report in this item the aggregate par value of the financial instruments or commodities that the reporting branch
or agency has, for a fee or premium, purchased the right
to either purchase or sell under exchange-traded option
contracts that are outstanding as of the report date.
Column A, Purchased Exchange-Traded Interest Rate
Options: For exchange-traded option contracts giving
the reporting branch or agency the right to either purchase or sell an interest rate futures contract and whose
predominant risk characteristic is interest rate risk, report
the par value of the financial instrument underlying the
futures contract. An example of such a contract is a
Chicago Board Options Exchange option on the 13-week
Treasury bill rate.
Column B, Purchased Exchange-Traded Foreign
Exchange Options: Report in this item the gross amount
(stated in U.S. dollars) of foreign (non-U.S.) currency
and U.S. dollar exchange that the reporting branch or
agency has, for a fee, purchased the right to either
purchase or sell under exchange-traded option contracts
whose predominant risk characteristic is foreign
exchange risk. In the case of option contracts giving the
reporting branch or agency the right to either purchase or
sell a currency futures contract, report the gross amount
(stated in U.S. dollars) of the foreign (non-U.S.) currency
underlying the futures contract. Exchange-traded options
on major currencies such as the Japanese Yen, British
Pound Sterling and Euro and options on futures contracts
of major currencies are examples of such contracts.
Column C, Purchased Exchange-Traded Equity
Derivative Options: Report the contract amount of those
exchange-traded option contracts where the reporting
branch or agency has, for a fee, purchased the right to
purchase or sell an equity instrument or equity index.
Column D, Purchased Exchange-Traded Commodity
and Other Exchange-Traded Options: Report the contract amount for those exchange-traded option contracts
where the reporting branch or agency has, for a fee
or premium, purchased the right to purchase or sell a
SCHEDULE L-8

commodity or product. Include any other purchased,
exchange-traded option that is not reportable as an interest rate, foreign exchange, or equity derivative contract
in column A, B, or C.
Item 9(d)

Over-the-counter option contracts.

Option contracts convey either the right or the obligation, depending upon whether the reporting branch or
agency is the purchaser or the writer, respectively, to buy
or sell a financial instrument or commodity at a specified
price by a specified future date. Options can be written to
meet the specialized needs of the counterparties to the
transaction. These customized option contracts are
known as over-the-counter (OTC) options. Thus, overthe-counter option contracts include all option contracts
not traded on an organized exchange.
The buyer of an option contract has, for compensation
(such as a fee or premium), acquired the right (or option)
to sell to, or purchase from, another party some financial
instrument or commodity at a stated price on a specified
future date. The seller of the contract has, for such
compensation, become obligated to purchase or sell the
financial instrument or commodity at the option of the
buyer of the contract. A put option contract obligates
the seller of the contract to purchase some financial
instrument or commodity at the option of the buyer of
the contract. A call option contract obligates the seller
of the contract to sell some financial instrument or commodity at the option of the buyer of the contract.
In addition, swaptions, i.e., options to enter into a swap
contract, and contracts known as caps, floors, collars, and
corridors should be reported as options. A cap is a
contract under which the purchaser has, for compensation (such as a fee or premium), acquired the right to
receive a payment from the seller if a specified index
rate, e.g., LIBOR, rises above a designated strike rate.
Payments are based on the principal amount or notional
amount of the cap, although no exchange of principal
takes place. A floor is similar to a cap except that the
purchaser has, for compensation (such as a fee or premium), acquired the right to receive a payment from the
seller if the specified index rate falls below the strike
rate. A collar is the simultaneous purchase of a cap (with
a strike rate at one index rate) and sale of a floor (with
the strike rate at a lower index rate), designed to maintain
interest rates within a specified range. The premium
income from the sale of the floor reduces or offsets the
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

FFIEC 002

cost of buying the cap. A corridor is the simultaneous
purchase of a cap (with a strike rate at one index rate)
and sale of a cap (with a strike rate at a higher index
rate), designed to reduce the cost of the lower strike cap.
The premium income from the sale of one cap reduces or
offsets the cost of buying the other cap.
Commitments to lend that meet the definition of a derivative and must be accounted for in accordance with FASB
Statement No. 133 are considered options for purposes
of Schedule L, item 9. All other commitments to lend
should be reported in Schedule L, item 1.

itself, for compensation, to purchase or sell an equity
instrument or equity index.
Column D, Written OTC Commodity and Other OTC
Options: Report the contract amount for those OTC
option contracts where the reporting branch or agency
has obligated itself, for compensation, to purchase or sell
a commodity or product. Include any other written, OTC
option that is not reportable as an interest rate, foreign
exchange, or equity derivative contract in column A, B,
or C.
Item 9(d)(2)

Item 9(d)(1)

Written options.

Report in this item the aggregate par value of the financial instruments or commodities that the reporting branch
or agency has, for compensation (such as a fee or premium), obligated itself to either purchase or sell under
OTC option contracts that are outstanding as of the
report date. Also report an aggregate notional amount for
written caps, floors, and swaptions and for the written
portion of collars and corridors.
Column A, Written OTC Interest Rate Options: Interest
rate options include options to purchase and sell interestbearing financial instruments and whose predominant
risk characteristic is interest rate risk as well as contracts
known as caps, floors, collars, corridors, and swaptions.
Include in this item the notional principal amount for
interest rate caps and floors that the reporting branch or
agency sells. For interest rate collars and corridors,
report a notional amount for the written portion of the
contract in Schedule L, item 9(d)(1), column A, and for
the purchased portion of the contract in Schedule L,
item 9(d)(2), column A.
Column B, Written OTC Foreign Exchange Options: A
written currency option contract conveys the obligation
to exchange two different currencies at a specified
exchange rate. Report in this item the gross amount
(stated in U.S. dollars) of foreign (non-U.S.) currency
and U.S. dollar exchange that the reporting branch or
agency has, for compensation, obligated itself to either
purchase or sell under OTC option contracts whose predominant risk characteristic is foreign exchange risk.
Column C, Written OTC Equity Derivative Options:
Report the contract amount for those OTC option contracts where the reporting branch or agency has obligated
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Purchased options.

Report in this item the aggregate notional value of the
financial instruments or commodities that the reporting
branch or agency has, for a fee or premium, purchased
the right to either purchase or sell under OTC option
contracts that are outstanding as of the report date. Also
report an aggregate notional amount for purchased caps,
floors, and swaptions and for the purchased portion of
collars and corridors.
Column A, Purchased OTC Interest Rate Options:
Interest rate options include options to purchase and sell
interest-bearing financial instruments and whose predominant risk characteristic is interest rate risk as well as
contracts known as caps, floors, collars, corridors, and
swaptions. Include in this item the notional amount for
interest rate caps and floors that the reporting branch or
agency purchases. For interest rate collars and corridors,
report a notional amount for the written portion of the
contract in Schedule L, item 9(d)(1), column A, and
for the purchased portion of the contract in Schedule L,
item 9(d)(2), column A.
Column B, Purchased OTC Foreign Exchange
Options: Report in this item the gross amount (stated in
U.S. dollars) of foreign (non-U.S.) currency and U.S.
dollar exchange that the reporting branch or agency has,
for a fee, purchased the right to either purchase or sell
under option contracts whose predominant risk characteristic is foreign exchange risk.
Column C, Purchased OTC Equity Derivative Options:
Report the contract amount of those OTC option contracts where the reporting branch or agency has, for a
fee, purchased the right to purchase or sell an equity
instrument or equity index.
Column D, Purchased OTC Commodity and Other
OTC Options: Report the contract amount for those
SCHEDULE L-9

FFIEC 002

option contracts where the reporting branch or agency
has, for a fee or premium, purchased the right to purchase or sell a commodity or product. Include any other
purchased OTC option that is not reportable as an interest rate, foreign exchange or equity derivative contract in
column A, B, or C.

contracts with multiple exchanges of principal is the
contractual amount multiplied by the number of remaining payments (or exchanges of principal) in the contract.

Item 9(e)

Report, in the appropriate column, the total notional
amount or par value of those derivative contracts in
Schedule L, item 9 above that are held for trading
purposes. Contracts held for trading purposes include
those used in dealing and other trading activities. Derivative instruments used to hedge trading activities should
also be reported in this item.

Swaps.

Swaps are contracts in which two parties agree to
exchange payment streams based on a specified notional
amount for a specified period. Forward starting swap
contracts should be reported as swaps. The notional
amount of a swap is the underlying principal amount
upon which the exchange of interest, foreign exchange or
other income or expense is based. The notional amount
to be reported for a swap contract with a multiplier
component is the contract’s effective notional amount. In
those cases where the reporting branch or agency is
acting as an intermediary, both sides of the transaction
are to be reported.
Column A, Interest Rate Swaps: Report the notional
amount of all outstanding interest rate and basis swaps
whose predominant risk characteristic is interest rate
risk.
Column B, Foreign Exchange Swaps: Report the
notional principal amount (stated in U.S. dollars) of all
outstanding cross-currency interest rate swaps.
A cross-currency interest rate swap is a contract in which
two parties agree to exchange principal amounts of
different currencies, usually at the prevailing spot rate, at
the inception of an agreement which lasts for a certain
number of years. At defined intervals over the life of the
swap, the counterparties exchange payments in the different currencies based on specified rates of interest. When
the agreement matures, the principal amounts will be
re-exchanged at the same spot rate. The notional amount
of a cross-currency interest rate swap is generally the
underlying principal amount upon which the exchange is
based.
Column C, Equity Swaps: Report the notional amount of
all outstanding equity or equity index swaps.
Column D, Commodity and Other Swaps: Report the
notional principal amount of all other swap contracts
that are not reportable as either interest rate, foreign
exchange, or equity derivative contracts in column A, B,
or C. The notional amount to be reported for commodity
SCHEDULE L-10

Item 10 Total gross notional amount of derivative
contracts held for trading.

Derivative trading activities include (a) regularly dealing
in interest rate contracts, foreign exchange contracts,
equity derivative contracts, and other commodity contracts, (b) acquiring or taking positions in such items
principally for the purpose of selling in the near term or
otherwise with the intent to resell (or repurchase) in
order to profit from short-term price movements, or
(c) acquiring or taking positions to make a market for
customers.
Item 11 Total gross notional amount of derivative
contracts held for purposes other than trading.
Report, in the appropriate column, the total notional
amount or par value of those contracts reported in Schedule L, item 9 above, that are held for purposes other than
trading.
Item 12

Gross fair values of derivative contracts.

Report in the appropriate column and subitem below the
fair (or market) value of all derivative contracts reported
in Schedule L, items 10 and 11 above. For each of the
four types of underlying risk exposure in columns A
through D, the gross positive and gross negative fair
values will be reported separately for (i) contracts held
for trading purposes (in item 12(a)) and (ii) contracts
held for purposes other than trading (in item 12(b)).
Guidance for reporting by type of underlying risk exposure is provided in the instructions for Schedule L, item 9
above. Guidance for reporting by purpose and accounting methodology is provided in the instructions for
Schedule L, items 10 and 11 above.
No netting of contracts is permitted for purposes of this
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March 2004

FFIEC 002

item. Therefore, do not net (1) obligations of the reporting branch or agency to buy against the branch or agency’s obligations to sell, (2) written options against purchased options, (3) positive fair values against negative
fair values, or (4) contracts subject to bilateral netting
agreements.
As defined in FASB Statement No. 133, fair value is the
amount at which an asset (liability) could be bought
(incurred) or sold (settled) in a current transaction
between willing parties, that is, other than in a forced or
liquidation sale. Quoted market prices in active markets
are the best evidence of fair value and should be used as
the basis for the measurement, if available. If a quoted
market price is available, the fair value is the product of
the number of trading units times that market price. If a
quoted market price is not available, the estimate of fair
value should be based on the best information available
in the circumstances. The estimate of fair value should
consider prices for similar assets or similar liabilities and
the results of valuation techniques to the extent available
in the circumstances. For purposes of item 12, the reporting branch or agency should determine the fair value of
its derivative contracts in the same manner that it determines the fair value of these contracts for other financial
reporting purposes.
Item 12(a)

Contracts held for trading.

Report in the appropriate column and subitem the gross
positive and gross negative fair values of those contracts
held for trading reported in Schedule L, item 10 above.
Item 12(a)(1)

Gross positive fair value.

Report in the appropriate column the total fair value of
those contracts in Schedule L, item 10 above with positive fair values.
Item 12(a)(2)

Gross negative fair value.

Report in the appropriate column the total fair value of
those contracts in Schedule L, item 10 above with negative fair values. Report the total fair value as an absolute value, do not enclose the total fair value in parentheses or use a minus (−) sign.
Item 12(b)
trading.

Contracts held for purposes other than

Report in the appropriate column and subitem the gross
positive and gross negative fair values of those contracts
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

held for purposes other than trading that are reported in
Schedule L, item 11 above.
Item 12(b)(1)

Gross positive fair value.

Report in the appropriate column the total fair value of
those contracts in Schedule L, item 11 above with positive fair values.
Item 12(b)(2)

Gross negative fair value.

Report in the appropriate column the total fair value of
those contracts in Schedule L, item 11 above with negative fair values. Report the total fair value as an absolute value, do not enclose the total fair value in parentheses or use a minus (−) sign.

Memoranda
Items M1 and M2
derivatives.

Notional amount of credit

Report in items M1 and M2, as appropriate, the notional
amount of all credit derivatives with nonrelated parties.
Credit derivatives are arrangements that allow one party
(the ‘‘beneficiary’’) to transfer the credit risk of a ‘‘reference asset’’ to another party (the ‘‘guarantor’’). Branches
and agencies should include the notional amounts of
credit default swaps, total rate of return swaps, and other
credit derivative instruments.
No netting of contracts with nonrelated parties is permitted for purposes of this item. Therefore, do not net:
(1) credit derivatives with nonrelated third parties on
which the reporting branch or agency is the beneficiary
against credit derivatives with nonrelated third parties on
which the reporting branch or agency is the guarantor, or
(2) contracts subject to bilateral netting agreements. The
notional amount should not be included in items 9
through 12 of this schedule.
Item M1 Notional amount of all credit derivatives
on which the reporting branch or agency is the
guarantor.
Report the notional amount (stated in U.S. dollars) of all
credit derivatives on which the branch or agency has
extended credit protection to other parties.
SCHEDULE L-11

FFIEC 002

Item M1a

Gross positive fair value

Item M2a

Gross positive fair value

Report the total fair value of those credit derivatives
reported in Schedule L, Memorandum item 1, above,
with positive fair values.

Report the total fair value of those credit derivatives
reported in Schedule L, Memorandum item 2, above,
with positive fair values.

Item M1b

Item M2b

Gross negative fair value

Report the total fair value of those credit derivatives
reported in Schedule L, Memorandum item 1, above,
with negative fair values. Report the total fair value as an
absolute value; do not enclose the total fair value in
parentheses or use a minus (-) sign.

Gross negative fair value

Report the total fair value of those credit derivatives
reported in Schedule L, Memorandum item 2, above,
with negative fair values. Report the total fair value as an
absolute value; do not enclose the total fair value in
parentheses or use a minus (-) sign.

Item M2 Notional amount of all credit derivatives
on which the reporting branch or agency is the
beneficiary.
Report the notional amount (stated in U.S. dollars) of all
credit derivatives on which the branch or agency has
obtained a guarantee against credit losses from other
parties.

SCHEDULE L-12

Instructions for Preparation of Reporting Form FFIEC 002
March 2003

INSTRUCTIONS FOR THE PREPARATION OF THE

FFIEC 002
Schedule M—Due from/Due to Related Institutions
in the U.S. and in Foreign Countries

General Instructions
Schedule M covers transactions of the reporting branch
or agency with related institutions, both in the U.S. and
in foreign countries. (For the definition of ‘‘related institutions,’’ see the entry for ‘‘related institutions’’ in the
Glossary section of these Instructions.) Parts I and II of
the schedule deal with due from/due to relationships of
the reporting branch or agency, including its IBF, with
related depository institutions (with Part I covering such
relationships of the entire reporting branch or agency
including its IBF and Part II covering only those of its
IBF). Part III deals with the transactions of the reporting
institution (including its IBF) with related nondepository
institutions. Part IV, item 1, reflects the amount of the
general allowance for loan losses, if any, carried on the
books of the reporting branch or agency, including its
IBF. Part IV, item 2, reflects the amount of other real
estate owned. Although this information does not relate
specifically to due from/due to transactions, it is collected in Schedule M as confidential information. Part V
collects data on derivatives and off-balance sheet items
with related depository institutions.
Parts I, II, and III require the reporting of the due
from/due to relationships on a gross basis, i.e., without
netting due from and due to items against each other.
The detail required in Parts I, II, and III is by location
and type of related institution, not by type of claim or
liability. In the information required on the schedule, a
distinction is made between related institutions ‘‘domiciled in the United States’’ and those ‘‘domiciled outside
the United States.’’ For purposes of this schedule (and
only this schedule), domiciled in the United States means
offices domiciled in the 50 states of the United States
and the District of Columbia; domiciled outside the
United States (non-U.S.) means offices domiciled in a
foreign country, in Puerto Rico, or in a U.S. territory or
possession.
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

All of the items in this schedule require the reporting of
amounts outstanding as of the report date, with the
exception of Memoranda items 1(a) and 1(b) in Part I,
which call for averages of daily amounts outstanding
during the preceding quarter.
All individual branch or agency data reported on this
schedule are regarded as confidential by the Federal
Financial Institutions Examination Council.

Instructions for Part I
Part I covers the gross due from/due to relationships of
the reporting institution (including its IBF) with its head
office and other related depository institutions (including
any related U.S. bank’s nondepository subsidiaries that
are consolidated on the related U.S. bank’s Consolidated
Report of Condition) both in the U.S. and in foreign
countries. Exclude from Part I transactions between the
reporting branch or agency and its own IBF (report in
Part II, item 2).
The scope of Part I is determined by the scope of the net
due from/due to items that are shown in column A of
Schedule RAL—Asset item 2(a) or Liability item 5(a).
That is, report on the appropriate lines of Part I all the
gross due from relationships (column A) and all the
gross due to relationships (column B) with related
depository institutions that are reflected in Schedule RAL
in Asset item 2(a), column A (Net due from related
depository institutions) or in Liability item 5(a), column A (Net due to related depository institutions).
Include all such due from and due to items regardless of
how they arose and regardless of the nature of any
instrument involved. Thus, the gross due from and gross
due to items to be reported will include claims between
the reporting branch or agency and any related depository institutions arising in connection with:
(1) deposits of any kind;
SCHEDULE M-1

FFIEC 002

(2) loans and borrowings of any kind;
(3) overdrafts, federal funds and repurchase and resale
agreements;
(4) claims resulting from clearing activities, foreign
exchange transactions, bankers acceptance transactions (see Glossary entry for ‘‘bankers acceptances’’), and other activities;
(5) capital flows and contributions;
(6) gross unremitted profits and any accounting or regulatory allocation entered on the books of the reporting branch or agency (or its IBF) that ultimately
affect unremitted profits such as statutory or regulatory capital requirements, reserve accounts, net
unrealized gains or losses on available-for-sale securities, accumulated gains (losses) on cash flow
hedges, and allowance for loan losses;
NOTE: Consistent with FASB Statement No. 133
and its implementation guidance, intercompany
derivatives between a U.S. branch or agency and a
related party, including the reporting branch or agency’s parent bank, may qualify for hedge accounting
if it meets the criteria outlined in the guidance.
(7) accrued interest receivable and payable;
(8) fair value of derivatives; and
(9) any other transactions or entries (including onbalance sheet debit and credit amounts associated
with off-balance sheet items) resulting in claims
between the reporting branch or agency (including
its IBF) and its head office and other related depository institutions.
The coverage and reporting of the gross due from items
and the gross due to items must be such that their net
amount as calculated and reported on item 4 of Part I
equals the entry for net due from or for net due to, as
appropriate, as calculated from Schedule RAL and
reported on item 2(a), column A, or item 5(a), column A,
of Schedule RAL.

items 1 and 2 of Part I with detail by location and type of
the related depository institutions. Separate reporting of
such relations with related institutions domiciled in the
U.S. and with those domiciled outside the U.S. is required in items 1 and 2: item 1 (and its subitems) requires
reporting of such relations with offices ‘‘domiciled in the
United States’’ of related depository institutions; item 2
(and its subitems) requires reporting of such relations
with offices ‘‘domiciled outside the United States’’ (nonU.S.) of related depository institutions.
Include in items 1 and 2, as appropriate, the fair value of
all derivatives with related depository institutions. Report
positive values in column A, negative values in column B.
The reporting in item 1 of gross due from and gross due
to relations with related depository institutions domiciled
in the United States (item 1) is further divided into two
parts:
Item 1(a)
Item 1(a) covers such relations with related branches
and agencies in the U.S. (including their IBFs). For
purposes of this schedule, ‘‘related branches and agencies in the U.S.’’ includes:
(1) other U.S. branches and agencies of the reporting
branch or agency’s parent foreign bank, and
(2) U.S. branches and agencies of other related foreign
banks.
Item 1(a) is further subdivided into two geographic
components—
Item 1(a)(1) Related branches and agencies in the
U.S. domiciled in the same state as the reporting
office; and
Item 1(a)(2) Related branches and agencies in the
U.S. domiciled in other states.
Item 1(b)

Item Instructions for Part I
Items 1 and 2
The gross due from and gross due to relations with
related depository institutions are to be reported on
SCHEDULE M-2

Item 1(b) covers the gross due from/due to relations with
offices in the U.S. of other related U.S. depository
institutions (including their IBFs). The related U.S.
depository institutions include related U.S. banks (including U.S.-domiciled offices of nondepository subsidiaries
of related banks that are consolidated on the related U.S.
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

FFIEC 002

banks’ Consolidated Report of Condition), Edge and
Agreement subsidiaries of related banks (both U.S. and
non-U.S.), and related New York State (Article XII)
investment companies. (Transactions with related U.S.
banks’ offices (both branches and depository subsidiaries) that are in foreign countries, Puerto Rico, and
U.S. territories and possessions and transactions with
non-U.S. branches and subsidiaries of related Edge
and Agreement corporations and with non-U.S. offices
of related New York investment companies are to be
reported in item 2(c))
The reporting in item 2 of gross due from and gross due
to relations with non-U.S. domiciled offices of related
depository institutions is further divided into three parts:
Item 2(a)
Item 2(a) covers such relations with the head office of
the parent bank of the reporting branch or agency,
including unremitted profits and losses. Unremitted
profits and losses should be netted and, if a net profit,
reported in column B of this item or, if a net loss,
reported as an adjustment to any capital contribution
received from the foreign bank parent that is reported in
column B. However, if the net unremitted loss exceeds
the capital contribution, report the amount of the net loss
in excess of the capital contribution in column A. Also
include any general allowance established for loan losses
(specific reserves should be netted from individual
loans).
Item 2(b)
Item 2(b) covers such relations with the non-U.S.
branches and agencies of the parent bank of the
reporting branch or agency. Item 2(b) is further subdivided into two geographic components—
Item 2(b)(1)
Caribbean.

Offices of the parent bank in the

Item 2(b)(1) includes offices domiciled in Puerto Rico
and the U.S. territories and possessions located in the
Caribbean; and
Item 2(b)(2)
bank.

Other non-U.S. offices of the parent

Item 2(b)(2) includes those offices of the parent bank
domiciled in foreign countries outside the Caribbean and
in U.S. territories and possessions outside the Caribbean.
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

Item 2(c)
Item 2(c) covers such relations with other non-U.S.
offices of related depository institutions, including
offices in Puerto Rico and the U.S. territories and possessions; that is, all non-U.S. offices of related depository
institutions other than the reporting branch or agency’s
head office (reported in item 2(a)) and its branches and
agencies (reported in item 2(b)). Transactions with foreign, Puerto Rican, and U.S. territorial branches and
depository subsidiaries of related U.S. banks, of related
Edge and Agreement corporations, and of related New
York State (Article XII) investment companies are also
to be reported in this item.
Also report in item 2(c) transactions with the foreigndomiciled offices of those U.S. nondepository subsidiaries of related U.S. banks that are consolidated in the
related U.S. bank’s Consolidated Report of Condition.
Transactions with related U.S. banks’ nondepository subsidiaries that are domiciled outside the U.S. that are not
consolidated in the U.S. bank’s Consolidated Report of
Condition are excluded entirely from Part I of Schedule M since such subsidiaries are treated similarly to
unrelated institutions and are not reflected in items 2(a)
or 5(a) of Schedule RAL (net due from or net due to
related depository institutions).
Item 3

Total.

Report, in columns A and B, the sums of the amounts
reported for the preceding items as indicated on the form.
Item 4 Net due from head office and other related
depository institutions.
Report the difference between columns A and B on
item 3 above (i.e., item 3, column A, minus item 3,
column B). Item 4 can be either positive or negative; if
negative, a minus sign (−) must be entered preceding the
amount. The reporting branch or agency’s net due from
or net due to position vis-a`-vis its head office and other
related depository institutions as given by the difference
reported on item 4 must equal the net due from or net
due to position given in Schedule RAL, item 2(a) or
item 5(a), as appropriate. If these Schedule RAL and
Schedule M net amounts are not the same, the coverage
and reporting of transactions with related depository
institutions on items 1 and 2 of Schedule M has not been
consistent with the reporting of items in Column A of
Schedule RAL and must be corrected to make them
consistent.
SCHEDULE M-3

FFIEC 002

Memoranda
Item M1 Average of daily (or weekly) amounts for
the quarter ending with the report date.
Report in the appropriate subitem and appropriate column the quarterly average gross balances due from and
gross balances due to related depository institutions. The
reporter is given the option, as in Schedule K, of reporting either (1) an average of the daily figures for the
preceding calendar quarter ending with the report date or
(2) an average of weekly figures (i.e., the Wednesday of
each week of the preceding quarter). The figures to be
averaged are the amounts outstanding at the close of
business for each day, or each Wednesday. For those
days when the branch or agency is not open for business
(e.g., Saturdays, Sundays or holidays), use the figure
from the preceding business day. An office is considered
closed if there are no transactions posted to the general
ledger as of that date. If the amounts to be averaged are
maintained in a currency other than U.S. dollars, the
average should be calculated for the amounts stated in
that currency and then the average so calculated should
be converted to U.S. dollars at the exchange rate used for
other items on the report.

from and gross due to related depository institutions
in item 3 of Part I above. Include in columns A and B
the amounts of revaluation gains (assets) and revaluation losses (liabilities), respectively, from the ‘‘marking
to market’’ of derivative contracts held for trading purposes. Revaluation gains and losses (i.e., assets and
liabilities) from the ‘‘marking to market’’ of the reporting branch or agency’s derivative contracts with the
same counterparty that meet the criteria for a valid right
of setoff contained in FASB Interpretation No. 39
(e.g., those contracts subject to a qualifying master netting agreement) may be reported on a net basis in this
Memorandum item.

Instructions for Part II
Part II covers the due from/due to relationships of the
IBF of the reporting institution with related depository
institutions. Separate reporting is required, in item 1 of
Part II, for the gross due from/due to relationships with
related depository institutions other than the IBF’s establishing entity (the reporting branch or agency) and, in
item 2, for the net due from position of the reporting
institution’s IBF vis-a`-vis the establishing entity.

The averages are to be reported separately for:

Item Instructions for Part II

Item M1(a)
the U.S.

Item 1

Related depository offices domiciled in

Item M1(a) corresponds to item 1 of Part I above, and
Item M1(b) Related depository offices domiciled
outside the U.S.
Item M1(b) corresponds to item 2 in Part I above.
Item M2 Sum of those parts of the amounts
reported in items 1(b) and 2(c) in Part I above that
are with related depository subsidiaries that are
wholly-owned by the reporting branch or agency’s
parent bank or bank holding company.
Item M3
parties.

Trading assets and liabilities, related

Report in the appropriate column the amounts of trading
assets and trading liabilities included in the gross due
SCHEDULE M-4

Within item 1, the gross due from and gross due to
relations of the reporting institution’s IBF with related
depository institutions other than its establishing entity
are to be reported with detail by location and type of
related depository institution in items 1(a) and 1(b). The
amounts reported in the appropriate subitems and appropriate columns of items 1(a) and 1(b) of Part II are the
IBF components of the corresponding items and columns
of Part I of the schedule, which covers the transactions of
this type for the entire reporting institution including its
IBF.
Item 1(a) IBF transactions with the IBFs of
related depository institutions domiciled in the U.S.
The only type of institution domiciled in the 50 States of
the United States and the District of Columbia that an
IBF can have transactions with is, by law and regulation,
another IBF.
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

FFIEC 002

Item 1(b) IBF transactions with related depository
institutions domiciled outside the U.S.
The reporting of these transactions is further subdivided
into:
Item 1(b)(1)

Head office of parent bank; and

depository institutions, Schedule RAL, column B, cannot be used to derive this item.) Item 2 can be either
positive or negative; if negative, a minus sign (−) must
be entered preceding the amount. (This net position
between the reporting branch or agency and its own IBF
is not included in Part I above.)

Item 1(b)(2) Non-U.S. branches and agencies of
the parent bank.

Item 3 IBF net due from all related depository
institutions (including its establishing entity).

Item 1(b)(2) is further subdivided in reporting into:

Report the sum of the amounts (with the correct signs) in
items 1(d) and 2. Item 3 can be either positive or negative; if negative, a minus sign (−) must be entered
preceding the amount. The net due from or net due
to position of the reporting institution’s IBF vis-a`-vis
related depository institutions (including its establishing
entity), as given by the amount reported on item 3, must
equal the net due from or net due to position in Schedule RAL, item 2(b) or item 5(b), as appropriate. If these
corresponding Schedule RAL and Schedule M net
amounts are not the same, the coverage and reporting
of transactions with related depository institutions on
items 1(a) and 1(b) of Schedule M, Part II, and/or the
calculation of the IBF net due from establishing entity as
reported in item 2 of Part II have not been consistent
with the reporting of items in column B of Schedule RAL and must be corrected to make them consistent.

Item 1(b)(2)(a)

Offices in the Caribbean, and

Item 1(b)(2)(b)

Other offices.

Item 1(b)(3) Other related depository institutions
domiciled outside the U.S.
Item 1(c)

Total.

Report in columns A and B the sums of the amounts
reported for the preceding items of Part II as indicated on
the form.
Item 1(d) IBF net due from related depository
institutions in the U.S. and in foreign countries
other than its establishing entity.
Report the difference between columns A and B on
item 1(c) above (i.e., item 1(d), column A, minus
item 1(c), column B). Item 1(d) can be either positive or
negative; if negative, a minus sign (−) must be entered
preceding the amount.
Item 2

IBF net due from establishing entity.

Report the net amount due from the IBF’s establishing
entity (i.e., from the reporting institution) to the IBF.
(This item is the only item in Schedule M in which
transactions between the reporting branch or agency and
its own IBF are reported.) This amount must be derived
from the accounts of the reporting institution’s IBF by
subtracting the sum of the IBF’s permissible assets,
including claims on related institutions other than the
reporting branch or agency, from the sum of the IBF’s
permissible liabilities, including liabilities to related
institutions other than the reporting branch or agency.
(Since the individual asset and liability items in column B of Schedule RAL exclude claims on or by related
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

Instructions for Part III
Part III covers the gross due from/due to relationships of
the reporting institution (including its IBF) with related
nondepository majority-owned subsidiaries (both in the
U.S. and in foreign countries and both direct and indirect) of the reporting institution’s parent bank or of its
bank holding company.
(The activities of these related nondepository majorityowned subsidiaries should also be included in Schedule RAL and related schedules.) Exclude from Part III
any transactions with related U.S. banks’ nondepository
subsidiaries that are consolidated in the related U.S.
banks’ Consolidated Report of Condition. The amounts
for transactions with related nondepository institutions
that are to be reported in Part III are components of
amounts reported on the individual line items of Schedule RAL other than items 2(a) and 5(a) of Schedule RAL
(which the reporting institution’s net due from/due to
relationship with related depository institutions).
SCHEDULE M-5

FFIEC 002

The gross due from and gross due to relations with
related nondepository institutions are required to be
reported with a breakdown between:

Item Instructions for Part III
Item 1 Related nondepository majority-owned
subsidiaries in the U.S.; and,
Item 2 Related nondepository majority-owned
subsidiaries in foreign countries.

Memorandum
Item M1
Part III also requires the reporting of gross due from/due
to relations with those related nondepository subsidiaries
included in items 1 and 2 of Part III that are whollyowned, directly or indirectly, by the reporting institution’s parent bank or by its bank holding company.

Item Instructions for Part IV
Item 1 Amount of allowance for loan losses, if any,
carried on the books of the reporting branch or
agency including its IBF.
If the reporting branch or agency chooses to establish a
general allowance for loan losses, it can do so by establishing a separate account which should be included in
the amount reported in Schedule M, Part I, item 2(a),
column B. Report in this item the total amount of the
allowance carried on the books of the reporting institution, even if part of that allowance is applicable to other
branches. If no allowance is carried on the books of the
reporting institution, report a zero or the word ‘‘none,’’
even if an allowance applicable to the loans of the
reporting institution is carried on the books of the head
office of the parent bank or of another branch. Exclude
specific reserves on loans.
Item 2

Other real estate owned.

Report the net book value of all other real estate owned.
(NOTE: This information does not relate to due from/due
to related depository institutions transactions.) Include as
all other real estate owned:
(1) Foreclosed real estate, i.e.,
SCHEDULE M-6

(a) Real estate acquired in any manner for debts
previously contracted (including, but not limited
to, real estate acquired through foreclosure and
real estate acquired by deed in lieu of foreclosure), even if the branch or agency has not yet
received title to the property.
(b) Real estate collateral underlying a loan when the
branch or agency has obtained physical possession of the collateral, regardless of whether formal foreclosure proceedings have been instituted
against the borrower.
Foreclosed real estate received in full or partial satisfaction of a loan should be recorded at the fair value
less cost to sell of the property at the time of foreclosure. This amount becomes the ‘‘cost’’ of the foreclosed real estate. When foreclosed real estate is
received in full satisfaction of a loan, the amount, if
any, by which the recorded amount of the loan
exceeds the fair value less cost to sell of the property
is a loss which must be charged to the allowance for
loan and lease losses at the time of foreclosure. The
amount of any senior debt (principal and accrued
interest) to which foreclosed real estate is subject
at the time of foreclosure must be reported as a
liability in Schedule RAL, item 4(c), ‘‘Other borrowed money.’’
After foreclosure, each foreclosed real estate asset
must be carried at the lower of (1) the fair value of
the asset minus the estimated costs to sell the asset or
(2) the cost of the asset (as defined in the preceding
paragraph). This determination must be made on an
asset-by-asset basis. If the fair value of a foreclosed
real estate asset minus the estimated costs to sell the
asset is less than the asset’s cost, the deficiency must
be recognized as a valuation allowance against the
asset which is created through a charge to expense.
The valuation allowance should thereafter be
increased or decreased (but not below zero) through
charges or credits to expense for changes in the
asset’s fair value or estimated selling costs.
(2) Property originally acquired for future expansion but
no longer intended to be used for that purpose.
(3) Foreclosed real estate sold under contract and accounted for under the deposit method of accounting in accordance with FASB Statement No. 66,
‘‘Accounting for Sales of Real Estate.’’ Under this
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

FFIEC 002

method, the seller does not record notes receivable,
but continues to report the real estate and any related
existing debt on its balance sheet. The deposit
method is used when a sale has not been consummated and is commonly used when recovery of the
carrying value of the property is not reasonably
assured. If the full accrual, installment, cost recovery, reduced profit, or percentage-of-completion
method of accounting under FASB Statement No. 66
is being used to account for the sale, the receivable
resulting from the sale of the foreclosed real estate
should be reported as a loan in Schedule C and any
gain on the sale should be recognized in accordance
with FASB Statement No. 66.
Property formerly but no longer used for banking may be
reported in this item as ‘‘Other real estate owned.’’ In
addition, regardless of whether such property is reported
in this item, it should be reported in Schedule RAL,
item 1(h), ‘‘Other assets including other claims on nonrelated parties.’’

Item Instructions for Part V
The amounts reported in Part V are for the reporting
branch or agency including its IBF, if any. Except for
derivative transactions with related depository institutions, transactions that are reportable in Schedule RAL
or in Parts I through III of Schedule M are not to be
reported in this part of Schedule M. Also exclude from
Part V: commitments not yet drawn down under retail
credit cards, check credit, and related plans; and contingencies arising in connection with litigation.
Exclude all transactions with unrelated parties, including
unrelated depository institutions, and related nondepository institutions. Report off-balance sheet transactions
with unrelated parties and related nondepository institutions in Schedule L.
Item 1

Commitments to make or purchase loans.

Report the unused portions of commitments that obligate
the reporting branch or agency, including its IBF, to
extend credit to related depository institutions in the
form of loans or participations in loans, lease financing
receivables, or similar transactions. Exclude commitments that obligate the reporting branch or agency to
extend credit in the form of retail credit cards, check
credit, and related plans. Also exclude commitments that
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

meet the definition of a derivative and must be accounted
for in accordance with FASB Statement No. 133, which
should be reported in Schedule M, Part V, item 9.
Report only those commitments to related depository
institutions for which the reporting branch or agency,
including its IBF, has charged a commitment fee or other
consideration, or otherwise has a legally binding commitment. Such commitments are to be reported regardless of
whether they contain ‘‘material adverse change’’ clauses
or other provisions that are intended to relieve the issuer
of its funding obligations under certain conditions and
regardless of whether they are unconditionally cancellable at any time. In the case of commitments for
syndicated loans or participated loans, report only the
branch or agency’s (or IBF’s) proportional share of the
commitment.
Include loan proceeds that the branch or agency, including its IBF, is obligated to advance to related depository
institutions.
Item 2

Spot foreign exchange contracts.

Report the gross amount (stated in U.S. dollars) of all
spot contracts with related depository institutions committing the reporting branch or agency to purchase foreign (non-U.S.) currencies and U.S. dollar exchange that
are outstanding as of the report date.
A spot contract is an agreement for the immediate delivery, usually within two business days, of a foreign currency at the prevailing cash market rate. Spot contracts
are considered outstanding (i.e., open) until they have
been cancelled by acquisition or delivery of the underlying currencies.
Only one side of a spot foreign exchange contract is to be
reported. In those transactions where foreign (non-U.S.)
currencies are bought or sold against U.S. dollars, report
only that side of the transaction that involves the foreign
(non-U.S.) currency. For example, if the reporting branch
or agency enters into a spot contract which obligates the
branch or agency to purchase U.S. dollar exchange
against which it sells Japanese yen, then the branch or
agency would report (in U.S. dollar equivalent values)
the amount of Japanese yen sold in this item. In crosscurrency spot foreign exchange transactions, which
involve the purchase and sale of two non-U.S. currencies,
only the purchase side is to be reported (in U.S. dollar
equivalent values).
SCHEDULE M-7

FFIEC 002

Item 3

Total standby letters of credit.

Report the total amount outstanding and unused as of the
report date of all standby letters of credit (and all legally
binding commitments to issue standby letters of credit)
issued to related depository institutions that have been
originated by the reporting branch or agency, including
its IBF, or acquired from others. Include those standby
letters of credit that are collateralized by cash on deposit
and those in which participations have been conveyed to
others where (a) the originating branch or agency, including its IBF, is obligated to pay the full amount of any
draft drawn under the terms of the standby letter of credit
and (b) the participating institutions have an obligation
to partially or wholly reimburse the originating branch
or agency, including its IBF, either directly in cash or
through a participation in a loan to the account party.
Branches or agencies, including their IBFs, participating
in standby letters of credit issued to related depository
institutions must report the full amount of their contingent liabilities to participate in such standby letters of
credit without deducting any amounts that they may have
reparticipated to others. (See the Glossary entry for ‘‘letter of credit’’ for the definition of standby letter of
credit.)
For syndicated standby letters of credit issued to related
depository institutions where each institution or branch
or agency has a direct obligation to the beneficiary, each
financial institution must report only its share in the
syndication. Similarly, if several financial institutions
participate in the issuance of a standby letter of credit to
a related depository institution 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 participant is only
liable for a certain portion of the entire amount, each
bank or branch or agency shall report only its proportional share of the total standby letter of credit.
For a standby letter of credit issued to a related depository institution that is in turn backed by a standby letter
of credit issued by another bank, each branch or agency,
including its IBF, must report the entire amount of the
standby letter of credit it has issued to the related depository institution in this item.
Exclude from standby letters of credit signature or
endorsement guarantees issued to related depository
SCHEDULE M-8

institutions that are of the type associated with the clearing of negotiable instruments or securities in the normal
course of business.
Item 4

Commercial and similar letters of credit.

Report the amount outstanding and unused as of the
report date of issued or confirmed commercial letters of
credit, travelers’ letters of credit not issued for money or
its equivalent, and all similar letters of credit issued
to related depository institutions, but excluding standby
letters of credit issued to related depository institutions
(which are to be reported in item 3 above). (See the
Glossary entry for ‘‘letter of credit.’’)
Travelers’ letters of credit or other letters of credit issued
to related depository institutions for money or its equivalent by the reporting branch or agency or its agents
should be included in the calculation of the ‘‘Net due
from/due to related depository institutions,’’ items 2 and
5 of Schedule RAL.
Item 5 Participations in acceptances conveyed to
related depository institutions by the reporting
branch or agency.
Report the amount of all participations conveyed to
related depository institutions by the reporting (accepting) branch or agency in its acceptances that are outstanding regardless of the nature of the participation
agreement and regardless of the system of debits and
credits used to reflect the agreement on the reporting
branch or agency’s books. Thus, participations in acceptances conveyed to related depository institutions by the
reporting branch or agency are to include both those that
provide for participation in the risk of loss in the
event of default by the account party at the time of
maturity and those that provide for participation in putting the holder of the acceptance in funds at the maturity
of the acceptance. Also report the amount of participations in acceptances of other (accepting) banking
institutions that the reporting branch or agency has
acquired and subsequently conveyed to related depository institutions.
Do not reduce the reporting branch or agency’s ‘‘Branch
or agency liability on acceptances executed and outstanding’’ (Schedule RAL, item 4(d)) or ‘‘Customers’ liability
to this branch or agency on acceptances outstanding’’
(Schedule RAL, item 1(g)) by the amount of such participations regardless of the nature of the agreement and
Instructions for Preparation of Reporting Form FFIEC 002
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FFIEC 002

regardless of the system of debits and credits used to
reflect the agreement on the reporting branch or agency’s
books. (See the Glossary entry for ‘‘bankers acceptances’’ for a detailed description of the required treatment of bankers acceptances in this report.)
Item 6

Not applicable.

Item 7 All other off-balance sheet contingent
liabilities to related depository institutions greater
than or equal to 1⁄2 percent of total claims on
related depository institutions as reported in
Schedule M, Part I, Item 3, Column A.
Report all significant types of off-balance sheet contingent liabilities to related depository institutions not covered in other items in Part V of this schedule.
Report only the aggregate amount of those types of
‘‘other off-balance sheet contingent liabilities’’ to related
depository institutions that individually equal or exceed
one half percent of the reporting institution’s total claims
on related depository institutions (Schedule M, Part I,
item 3, column A). If the branch or agency has no types
of ‘‘other off-balance sheet contingent liabilities’’ to
related depository institutions that individually equal or
exceed one half percent of total claims on related depository institutions, report a zero or the word ‘‘none.’’
In addition, itemize with clear but concise captions those
types of ‘‘other off-balance sheet contingent liabilities’’
to related depository institutions reportable in this item
that individually equal or exceed one percent of the
institution’s total claims on related depository institutions (Schedule M, Part I, item 3, column A). Enter such
items in the inset boxes provided.
Include as ‘‘other off-balance sheet contingent liabilities’’ to related depository institutions:
(1) The unsold portion of the reporting branch or agency’s own takedown in syndicated securities underwriting transactions in which the borrower is a
related depository institution, including revolving
underwriting facilities (RUFs), note issuance facilities (NIFs), and other similar arrangements. These
are facilities under which a borrower can issue on a
revolving basis short-term paper in its own name,
but for which the underwriting institutions have a
legally binding commitment either to purchase any
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

notes the borrower is unable to sell by the roll-over
date or to advance funds to the borrower.
(2) Letters of indemnity, other than those issued in connection with the replacement of lost or stolen official
checks, where the party being indemnified is a
related depository institution.
(3) Shipside or dockside guarantees or similar guarantees relating to missing bills-of-lading or title documents and other document guarantees that facilitate
the replacement of lost or destroyed documents and
negotiable instruments where the party being guaranteed is a related depository institution.
(4) Securities borrowed against collateral (other than
cash), or on an uncollateralized basis, from related
depository institutions. For borrowed securities that
are fully collateralized by similar securities of
equivalent value, report the market value of the
borrowed securities at the time they were borrowed.
For other borrowed securities, report their market
value as of the report date.
(5) Commitments to purchase when-issued securities
from related depository institutions that are excluded
from the requirements of FASB Statement No. 133
(and therefore not reported as forward contracts in
Schedule M, Part V, item 9(b) below).
(6) Risk participations that the reporting branch or
agency has aquired in acceptances of related (accepting) depository institutions.
Exclude from ‘‘other off-balance sheet contingent liabilities’’ to related depository institutions:
(1) All liabilities to related depository institutions which
are required to be reported in Schedule RAL as part
of the reporting institution net due from/due to relationship with related depository institutions, such
as repurchase agreements with related depository
institutions.
(2) Commitments to related depository institutions to
purchase property being acquired for lease to others
(report in Schedule L, item 1, above).
(3) Contingent liabilities arising in connection with litigation in which the reporting branch or agency,
including its IBF, is involved.
(4) Any unused portion of retail credit cards, check
credit, and related plans.
(5) Signature or endorsement guarantees of the type
SCHEDULE M-9

FFIEC 002

associated with the regular clearing of negotiable
instruments or securities in the normal course of
business.
(6) Commitments to sell foreign currencies and U.S.
dollar exchange (spot and forward) to related depository institutions.

Item 8 All other off-balance sheet contingent
claims (assets) on related depository institutions
greater than or equal to 1⁄2 percent of total claims
on related depository institutions as reported on
Schedule M, Part I, item 3, column A.
Report to the extent feasible and practicable all significant types of off-balance sheet contingent claims (assets)
on related depository institutions not covered in other
items in Part V of this schedule. Exclude all items which
are required to be reported as claims on related depository institutions in Schedule RAL as part of the reporting
institution net due from/due to relationship with related
depository institutions, such as resale agreements with
related depository institutions, and assets held in or
administered by the reporting branch or agency’s trust
department.
Report only the aggregate amount of those types of
‘‘other off-balance sheet contingent claims’’ on related
depository institutions that individually equal or exceed
one half percent of the reporting institution’s total claims
on related depository institutions (Schedule M, Part I,
item 3, column A). If the branch or agency has no types
of ‘‘other off-balance sheet contingent claims’’ on related
depository institutions that individually equal or exceed
one half percent of total claims on related depository
institutions, report a zero or the word ‘‘none.’’
In addition, itemize with clear but concise captions those
types of ‘‘other off-balance sheet contingent claims’’ on
related depository institutions reportable in this item that
individually equal or exceed one percent of the institution’s total claims on related depository institutions
(Schedule M, Part I, item 3, column A). Enter such items
in the inset boxes provided.
Include as ‘‘other off-balance sheet contingent claims’’
such items as (1) securities lent to related depository
institutions against collateral (other than cash) or on
an uncollateralized basis, and (2) commitments to sell
SCHEDULE M-10

when-issued securities to related depository institutions,
that are excluded from the requirements of FASB Statement No. 133 (and therefore not reported as forward
contracts in Schedule M, Part V, item 9(b) below).
Item 9 Gross amounts (e.g., notional amounts)
of derivatives.
Report in the appropriate column and subitem the gross
par value (stated in U.S. dollars) (e.g., for futures, forwards, and option contracts) or the notional amount
(stated in U.S. dollars) (e.g., for forward rate agreements
and swaps), as appropriate, of all contracts between the
reporting branch or agency and related depository institutions that meet the definition of a derivative and must
be accounted for in accordance with FASB Statement
No. 133. Report the contract according to its underlying
risk exposure: interest rate, foreign exchange, equity,
and commodity and other. Contracts with multiple risk
characteristics should be classified based upon the predominant risk characteristics at the origination of the
derivative. However, exclude all credit derivatives with
related depository institutions, which should be reported
in Schedule M, Part V, Memorandum items 1 or 2.
The notional amount to be reported for a derivative
contract with a multiplier component is the contract’s
effective notional amount. For example, a swap contract
with a stated notional amount of $1,000,000 whose terms
called for quarterly settlement of the difference between
5% and LIBOR multiplied by 10 has an effective
notional amount of $10,000,000.
Consistent with FASB Statement No. 133 and its implementation guidance, intercompany derivatives between a
U.S. branch or agency and a related party, including the
reporting branch or agency’s parent bank, may qualify
for hedge accounting if it meets the criteria outlined in
the guidance.
No netting of contracts with related depository institutions is permitted for purposes of this item. Therefore, do
not net: (1) obligations of the reporting branch or agency
to purchase from third parties against the branch or
agency’s obligations to sell to third parties, (2) written
options against purchased options, or (3) contracts subject to bilateral netting agreements.
For each column, the sum of items 9(a) through 9(e)
must equal the sum of items 10 and 11.
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

FFIEC 002

Column Instructions
Column A, Interest Rate Contracts: Interest rate contracts are contracts related to an interest-bearing financial
instrument or whose cash flows are determined by
referencing interest rates or another interest rate contract (e.g., an option on a futures contract to purchase a
Treasury bill). These contracts are generally used to
adjust the branch or agency’s interest rate exposure or, if
the branch or agency is an intermediary, the interest rate
exposure of others. Interest rate contracts include interest
rate futures, single currency interest rate swaps, basis
swaps, forward rate agreements, and interest rate options,
including caps, floors, collars, and corridors.
Exclude contracts involving the exchange of one or more
foreign currencies (e.g., cross-currency swaps and currency options) and other contracts whose predominant
risk characteristic is foreign exchange risk, which are to
be reported in column B as foreign exchange contracts.
Unsettled securities transactions that exceed the regular
way settlement time limit that is customary in each
relevant market must be reported as forward contracts in
Schedule M, Part V, item 9(b).
Column B, Foreign Exchange Contracts: Foreign
exchange contracts are contracts to purchase foreign
(non-U.S.) currencies and U.S. dollar exchange in the
forward market, i.e., on an organized exchange or in an
over-the-counter market. A purchase of U.S. dollar
exchange is equivalent to a sale of foreign currency.
Foreign exchange contracts include cross-currency interest rate swaps where there is an exchange of principal,
forward foreign exchange contracts (usually settling
three or more business days from trade date), and currency futures and currency options. Exclude spot foreign
exchange contracts which are to be reported in Schedule M, Part V, item 2.
Only one side of a foreign currency transaction is to be
reported. In those transactions where foreign (non-U.S.)
currencies are bought or sold against U.S. dollars, report
only that side of the transaction that involves the foreign
(non-U.S.) currency. For example, if the reporting branch
or agency enters into a futures contract which obligates
the branch or agency to purchase U.S. dollar exchange
against which it sells Japanese yen, then the branch or
agency would report (in U.S. dollar equivalent values)
the amount of Japanese yen sold in Schedule M, Part V,
item 9(a). In cross-currency transactions, which involve
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

the purchase and sale of two non-U.S. currencies, only
the purchase side is to be reported.
All amounts in column B are to be reported in U.S. dollar
equivalent values.
Column C, Equity Derivative Contracts: Equity derivative contracts are contracts that have a return, or a
portion of their return, linked to the price of a particular
equity or to an index of equity prices, such as the
Standard and Poor’s 500.
The contract amount to be reported for equity derivative
contracts is the quantity, e.g., number of units, of the
equity instrument or equity index contracted for purchase
or sale multiplied by the contract price of a unit.
Column D, Commodity and Other Contracts: Commodity contracts are contracts that have a return, or a portion
of their return, linked to the price of or to an index of
precious metals, petroleum, lumber, agricultural products, etc. Commodity and other contracts also include
any other contracts that are not reportable as interest rate,
foreign exchange, or equity derivative contracts.
The contract amount to be reported for commodity and
other contracts is the quantity, e.g., number of units, of
the commodity or product contracted for purchase or sale
multiplied by the contract price of a unit.
The notional amount to be reported for commodity contracts with multiple exchanges of principal is the contractual amount multiplied by the number of remaining payments (i.e., exchanges of principal) in the contract.
Item 9(a)

Futures contracts.

Futures contracts represent agreements for delayed delivery of financial instruments or commodities in which the
buyer agrees to purchase and the seller agrees to deliver,
at a specified future date, a specified instrument at a
specified price or yield. Futures contracts are standardized and are traded on organized exchanges.
Report, in the appropriate column, the aggregate par
value of futures contracts that have been entered into
between the reporting branch or agency and related
depository institutions and are outstanding (i.e., open
contracts) as of the report date. Exclude all futures contracts that are traded on organized exchanges that act as
the counterparty to each contract (report such futures in
Schedule L, item 9(a)). Do not report the par value of
financial instruments intended to be delivered under such
SCHEDULE M-11

FFIEC 002

contracts if this par value differs from the par value of
the contracts themselves.
Contracts are outstanding (i.e., open) until they have
been cancelled by acquisition or delivery of the underlying financial instruments or by offset. Offset is the
liquidating of a purchase of futures through the sale of an
equal number of contracts of the same delivery month on
the same underlying instrument on the same exchange,
or the covering of a short sale of futures through the
purchase of an equal number of contracts of the same
delivery month on the same underlying instrument on the
same exchange.
Column A, Interest Rate Futures: Report futures contracts committing the reporting branch or agency to
purchase or sell financial instruments and whose predominant risk characteristic is interest rate risk.
Column B, Foreign Exchange Futures: Report the
gross amount (stated in U.S. dollars) of all futures contracts committing the reporting branch or agency to
purchase foreign (non-U.S.) currencies and U.S. dollar
exchange and whose predominant risk characteristic is
foreign exchange risk.
A currency futures contract is a standardized agreement
for delayed delivery of a foreign (non-U.S.) currency or
U.S. dollar exchange in which the buyer agrees to purchase and the seller agrees to deliver, at a specified future
date, a specified amount at a specified exchange rate.
Column C, Equity Derivative Futures: Report futures
contracts committing the reporting branch or agency to
purchase or sell equity securities or instruments based on
equity indexes.
Column D, Commodity and Other Futures: Report the
contract amount for all futures contracts committing the
reporting branch or agency to purchase or sell commodities such as agricultural products (e.g., wheat, coffee),
precious metals (e.g., gold, platinum), and non-ferrous
metals (e.g., copper, zinc). Include any other futures
contract that is not reportable as an interest rate, foreign
exchange, or equity derivative contract in column A, B,
or C.
Item 9(b)

Forward contracts.

Forward contracts represent agreements for delayed
delivery of financial instruments or commodities in
which the buyer agrees to purchase and the seller agrees
SCHEDULE M-12

to deliver, at a specified future date, a specified instrument or commodity at a specified price or yield. Forward
contracts are not traded on organized exchanges and their
contractual terms are not standardized.
Report the aggregate par value of forward contracts that
have been entered into between the reporting branch
or agency and are outstanding (i.e., open contracts) as of
the report date. Do not report the par value of financial
instruments intended to be delivered under such contracts if this par value differs from the par value of the
contracts themselves.
Contracts are outstanding (i.e., open) until they have
been cancelled by acquisition or delivery of the underlying financial instruments or settled in cash. Such contracts can only be terminated, other than by receipt of the
underlying asset, by agreement of both buyer and seller.
Include commitments to purchase and sell when-issued
securities that are not excluded from the requirements of
FASB Statement No. 133 as a regular-way security trade.
Report commitments to purchase when-issed securities
that are excluded from the requirements of FASB Statement No. 133 as ‘‘All other off-balance sheet contingent
liabilities’’ in Schedule M, Part V, item 7, and commitments to sell when-issued securities that are excluded
from the requirements of FASB Statement No. 133 as
‘‘Other off-balance sheet contingent claims’’ in Schedule M, Part V, item 8, subject to the existing reporting
thresholds for these two items.
Column A, Interest Rate Forwards: Report forward
contracts committing the reporting branch or agency to
purchase or sell financial instruments and whose predominant risk characteristic is interest rate risk. Include
in this item firm commitments (e.g., commitments that
have a specified interest rate, selling date, and dollar
amount) to sell loans secured by 1-to-4 family residential
properties that meet the definition of a derivative contract
under FASB Statement No. 133.
Column B, Foreign Exchange Forwards: Report the
gross amount (stated in U.S. dollars) of all forward
contracts committing the reporting branch or agency to
purchase foreign (non-U.S.) currencies and U.S. dollar
exchange and whose predominant risk characteristic is
foreign exchange risk.
A forward foreign exchange contract is an agreement for
delayed delivery of a foreign (non-U.S.) currency or U.S.
dollar exchange in which the buyer agrees to purchase
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

FFIEC 002

and the seller agrees to deliver, at a specified future date,
a specified amount at a specified exchange rate.

party to each contract (report such options in Schedule L,
item 9(c)(1)).

Column C, Equity Derivative Forwards: Report forward
contracts committing the reporting branch or agency to
purchase or sell equity instruments.

Column A, Written Exchange-Traded Interest Rate
Options: For exchange-traded option contracts obligating the reporting branch or agency to either purchase or
sell an interest rate futures contract and whose predominant risk characteristic is interest rate risk, report the par
value of the financial instrument underlying the futures
contract.

Column D, Commodity and Other Forwards: Report
the contract amount for all forward contracts committing
the reporting branch or agency to purchase or sell commodities such as agricultural products (e.g., wheat,
coffee), precious metals (e.g., gold, platinum), and nonferrous metals (e.g., copper, zinc). Include any other
forward contract that is not reportable as an interest rate,
foreign exchange, or equity derivative contract in column A, B, or C.
Item 9(c)

Exchange-traded option contracts.

Option contracts convey either the right or the obligation, depending upon whether the reporting branch or
agency is the purchaser or the writer, respectively, to buy
or sell a financial instrument or commodity at a specified
price by a specified future date. Some options are traded
on organized exchanges.
The buyer of an option contract has, for compensation
(such as a fee or premium), acquired the right (or option)
to sell to, or purchase from, another party some financial
instrument or commodity at a stated price on a specified
future date. The seller of the contract has, for such
compensation, become obligated to purchase or sell the
financial instrument or commodity at the option of the
buyer of the contract. A put option contract obligates
the seller of the contract to purchase some financial
instrument or commodity at the option of the buyer of
the contract. A call option contract obligates the seller of
the contract to sell some financial instrument or commodity at the option of the buyer of the contract.
Item 9(c)(1)

Written options.

Report in this item the aggregate par value of the financial instruments or commodities that the reporting branch
or agency has, for compensation (such as a fee or premium), obligated itself to either purchase from or sell to
a related depository institution under exchange-traded
option contracts that are outstanding as of the report date.
Exclude all written exchange-traded options that are
traded on organized exchanges that act as the counterInstructions for Preparation of Reporting Form FFIEC 002
June 2001

Column B, Written Exchange-Traded Foreign Exchange Options: Report in this item the gross amount
(stated in U.S. dollars) of foreign (non-U.S.) currency
and U.S. dollar exchange that the reporting branch or
agency has, for compensation, obligated itself to either
purchase or sell under exchange-traded option contracts whose predominant risk characteristic is foreign
exchange risk. In the case of option contracts obligating
the reporting branch or agency to either purchase or sell
a foreign exchange futures contract, report the gross
amount (stated in U.S. dollars) of the foreign (non-U.S.)
currency underlying the futures contract.
Column C, Written Exchange-Traded Equity Derivative
Options: Report the contract amount for those exchangetraded option contracts where the reporting branch or
agency has obligated itself, for compensation, to purchase or sell an equity instrument or equity index.
Column D, Written Exchange-Traded Commodity and
Other Exchange-Traded Options: Report the contract
amount for those exchange-traded option contracts where
the reporting branch or agency has obligated itself, for
compensation, to purchase or sell a commodity or product. Include any other written, exchange-traded option
that is not reportable as an interest rate, foreign exchange,
or equity derivative contract in column A, B, or C.
Item 9(c)(2)

Purchased options.

Report in this item the aggregate par value of the financial instruments or commodities that the reporting branch
or agency has, for a fee or premium, purchased the right
to either purchase from or sell to a related depository
institution under exchange-traded option contracts that
are outstanding as of the report date. Exclude all purchased exchange-traded options that are traded on
organized exchanges that act as the counterparty to
each contract (report such options in Schedule L,
item 9(c)(2)).
SCHEDULE M-13

FFIEC 002

Column A, Purchased Exchange-Traded Interest Rate
Options: For exchange-traded option contracts giving
the reporting branch or agency the right to either purchase or sell an interest rate futures contract and whose
predominant risk characteristic is interest rate risk, report
the par value of the financial instrument underlying the
futures contract.
Column B, Purchased Exchange-Traded Foreign
Exchange Options: Report in this item the gross amount
(stated in U.S. dollars) of foreign (non-U.S.) currency
and U.S. dollar exchange that the reporting branch or
agency has, for a fee, purchased the right to either
purchase or sell under exchange-traded option contracts whose predominant risk characteristic is foreign
exchange risk. In the case of option contracts giving the
reporting branch or agency the right to either purchase or
sell a currency futures contract, report the gross amount
(stated in U.S. dollars) of the foreign (non-U.S.) currency
underlying the futures contract.
Column C, Purchased Exchange-Traded Equity Derivative Options: Report the contract amount of those
exchange-traded option contracts where the reporting
branch or agency has, for a fee, purchased the right to
purchase or sell an equity instrument or equity index.
Column D, Purchased Exchange-Traded Commodity
and Other Exchange-Traded Options: Report the contract amount for those exchange-traded option contracts
where the reporting branch or agency has, for a fee
or premium, purchased the right to purchase or sell a
commodity or product. Include any other purchased,
exchange-traded option that is not reportable as an interest rate, foreign exchange, or equity derivative contract
in column A, B, or C.
Item 9(d)

Over-the-counter option contracts.

Option contracts convey either the right or the obligation, depending upon whether the reporting branch or
agency is the purchaser or the writer, respectively, to buy
or sell a financial instrument or commodity at a specified
price by a specified future date. Options can be written
to meet the specialized needs of the counterparties to
the transaction. These customized option contracts are
known as over-the-counter (OTC) options. Thus, overthe-counter option contracts include all option contracts
not traded on an organized exchange.
The buyer of an option contract has, for compensation
SCHEDULE M-14

(such as a fee or premium), acquired the right (or option)
to sell to, or purchase from, another party some financial
instrument or commodity at a stated price on a specified
future date. The seller of the contract has, for such
compensation, become obligated to purchase or sell the
financial instrument or commodity at the option of the
buyer of the contract. A put option contract obligates
the seller of the contract to purchase some financial
instrument or commodity at the option of the buyer of
the contract. A call option contract obligates the seller of
the contract to sell some financial instrument or commodity at the option of the buyer of the contract.
In addition, swaptions, i.e., options to enter into a swap
contract, and contracts known as caps, floors, collars, and
corridors should be reported as options. A cap is a
contract under which the purchaser has, for compensation (such as a fee or premium), acquired the right to
receive a payment from the seller if a specified index
rate, e.g., LIBOR, rises above a designated strike rate.
Payments are based on the principal amount or notional
amount of the cap, although no exchange of principal
takes place. A floor is similar to a cap except that the
purchaser has, for compensation (such as a fee or premium), acquired the right to receive a payment from the
seller if the specified index rate falls below the strike
rate. A collar is the simultaneous purchase of a cap (with
a strike rate at one index rate) and sale of a floor (with
the strike rate at a lower index rate) and sale of a cap
(with a strike rate at a higher index rate), designed to
reduce the cost of the lower strike cap. The premium
income from the sale of one cap reduces or offets the cost
of buying the other cap. A corridor is the simultaneous
purchase of a cap (with a strike rate at a higher index
rate), designed to reduce the cost of the lower strike cap.
The premium income from the sale of one cap reduces or
offsets the cost of buying the other cap.
Commitments to lend to related depository institutions
that meet the definition of a derivative and must be
accounted for in accordance with FASB Statement
No. 133 are considered options for purposes of Schedule M, Part V, item 9. All other commitments to lend
to related depository institutions should be reported in
Schedule M, Part V, item 1.
Item 9(d)(1)

Written options.

Report in this item the par value of the financial instruments or commodities that the reporting branch or
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June 2001

FFIEC 002

agency has, for compensation (such as a fee or premium), obligated itself to either purchase from or sell to
a related depository institution under OTC option contracts that are outstanding as of the report date. Also
report an aggregate notional amount for written caps,
floors, and swaptions and for the written portion of
collars and corridors.
Column A, Written OTC Interest Rate Options: Interest
rate options include options to purchase and sell interestbearing financial instruments and whose predominant
risk characteristic is interest rate risk as well as contracts
known as caps, floors, collars, corridors, and swaptions.
Include in this item the notional principal amount for
interest rate caps and floors that the reporting branch or
agency sells. For interest rate collars and corridors, report
a notional amount for the written portion of the contract
in Schedule M, Part V, item 9(d)(1), column A, and for
the purchased portion of the contract in Schedule M,
Part V, item 9(d)(2), column A.
Column B, Written OTC Foreign Exchange Options:
A written currency option contract conveys the obligation to exchange two different currencies at a specified
exchange rate. Report in this item the gross amount
(stated in U.S. dollars) of foreign (non-U.S.) currency
and U.S. dollar exchange that the reporting branch or
agency has, for compensation, obligated itself to either
purchase or sell under OTC option contracts whose predominant risk characteristic is foreign exchange risk.
Column C, Written OTC Equity Derivative Options:
Report the contract amount for those OTC option contracts where the reporting branch or agency has obligated
itself, for compensation, to purchase or sell an equity
instrument or equity index.
Column D, Written OTC Commodity and Other OTC
Options: Report the contract amount for those OTC
option contracts where the reporting branch or agency
has obligated itself, for compensation, to purchase or sell
a commodity or product. Include any other written, OTC
option that is not reportable as an interest rate, foreign
exchange, or equity derivative contract in column A, B,
or C.
Item 9(d)(2)

Purchased options.

Report in this item the aggregate par value of the financial instruments or commodities that the reporting branch
or agency has, for a fee or premium, purchased the right
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

to either purchase from or sell to a related depository
institution under OTC option contracts that are outstanding as of the report date. Also report an aggregate notional amount for purchased caps, floors, and swaptions
and for the purchased portion of collars and corridors.
Column A, Purchased OTC Interest Rate Options:
Interest rate options include options to purchase and sell
interest-bearing financial instruments and whose predominant risk characteristic is interest rate risk as well as
contracts known as caps, floors, collars, corridors, and
swaptions. Include in this item the notional principal
amount for interest rate caps and floors that the reporting
branch or agency purchases. For interest rate collars and
corridors, report a notional amount for the written portion of the contract in Schedule M, Part V, item 9(d)(1),
column A, and for the purchased portion of the contract
in Schedule M, Part V, item 9(d)(2), column A.
Column B, Purchased OTC Foreign Exchange
Options: Report in this item the gross amount (stated
in U.S. dollars) of foreign (non-U.S.) currency and U.S.
dollar exchange that the reporting branch or agency has,
for a fee, purchased the right to either purchase or sell
under option contracts whose predominant risk characteristic is foreign exchange risk.
Column C, Purchased OTC Equity Derivative Options:
Report the contract amount of those OTC option contracts where the reporting branch or agency has, for a
fee, purchased the right to purchase or sell an equity
instrument or equity index.
Column D, Purchased OTC Commodity and Other
OTC Options: Report the contract amount for those
option contracts where the reporting branch or agency
has, for a fee or premium, purchased the right to purchase or sell a commodity or product. Include any other
purchased OTC option that is not reportable as an interest rate, foreign exchange or equity derivative contract in
column A, B, or C.
Item 9(e)

Swaps.

Swaps are contracts in which two parties agree to
exchange payment streams based on a specified notional
amount for a specified period. Forward starting swap
contracts should be reported as swaps. The notional
amount of a swap is the underlying principal amount
upon which the exchange of interest, foreign exchange or
other income or expense is based. The notional amount
SCHEDULE M-15

FFIEC 002

to be reported for a swap contract with a multiplier
component is the contract’s effective notional amount. In
those cases where the reporting branch or agency is
acting as an intermediary, both sides of the transaction
are to be reported.
Column A, Interest Rate Swaps: Report the notional
amount of all outstanding interest rate and basis swaps
between the reporting branch or agency and related
depository institutions whose predominant risk characteristic is interest rate risk.
Column B, Foreign Exchange Swaps: Report the
notional principal amount (stated in U.S. dollars) of all
outstanding cross-currency interest rate swaps between
the reporting branch or agency and related depository
institutions.
A cross-currency interest rate swap is a contract in which
two parties agree to exchange principal amounts of different currencies, usually at the prevailing spot rate, at
the inception of an agreement which lasts for a certain
number of years. At defined intervals over the life of the
swap, the counterparties exchange payments in the different currencies based on specified rates of interest. When
the agreement matures the principal amounts will be
re-exchanged at the same spot rate. The notional amount
of a cross-currency interest rate swap is generally the
underlying principal amount upon which the exchange is
based.
Column C, Equity Swaps: Report the notional amount
of all outstanding equity or equity index swaps between
the reporting branch or agency and related depository
institutions.
Column D, Commodity and Other Swaps: Report the
notional principal amount of all other swap agreements
between the reporting branch or agency and related
depository institutions that are not reportable as either
interest rate, foreign exchange, or equity derivative contracts in column A, B, or C. The notional amount to be
reported for commodity contracts with multiple
exchanges of principal is the contractual amount multiplied by the number of remaining payments (or
exchanges of principal) in the contract.
Item 10 Total gross notional amount of derivative
contracts held for trading.
Report, in the appropriate column, the total notional
amount or par value of those derivative contracts with
related depository institutions in Schedule M, Part V,
SCHEDULE M-16

item 9 above that are held for trading purposes. Contracts
held for trading purposes include those used in dealing
and other trading activities. Derivative instruments used
to hedge trading activities should also be reported in this
item.
Derivative trading activities include (a) regularly dealing
in interest rate contracts, foreign exchange contracts,
equity derivative contracts, and other derivative commodity contracts, (b) acquiring or taking positions
in such items principally for the purpose of selling in
the near term or otherwise with the intent to resell (or
repurchase) in order to profit from short-term price
movements, or (c) acquiring or taking positions to make
a market for customers.
Item 11 Total gross notional amount of derivative
contracts held for purposes other than trading.
Report, in the appropriate column, the total notional
amount or par value of those contracts with related
depository institutions reported in Schedule M, Part V,
item 9 above that are held for purposes other than
trading.
Item 12

Gross fair values of derivative contracts.

Report in the appropriate column and subitem below the
fair (or market) value of all derivative contracts with
related depository institutions reported in Schedule L,
items 10 and 11 above. For each of the four types of
underlying risk exposure in columns A through D, the
gross positive and gross negative fair values will be
reported separately for (i) contracts held for trading
purposes (in item 12(a)), and (ii) contracts held for
purposes other than trading (in item 12(b)). Guidance for
reporting by type of underlying risk exposure is provided
in the instructions for Schedule M, Part V, item 9 above.
Guidance for reporting by purpose and accounting methodology is provided in the instructions for Schedule M,
Part V, items 10 and 11 above.
No netting of contracts with related depository institutions is permitted for purposes of this item. Therefore, do
not net (1) obligations of the reporting branch or agency
to buy against the branch or agency’s obligations to sell,
(2) written options against purchased options, (3) positive fair values against negative fair values, or (4) contracts subject to bilateral netting agreements.
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March 2004

FFIEC 002

As defined in FASB Statement No. 133, fair value is the
amount at which an asset (liability) could be bought
(incurred) or sold (settled) in a current transaction
between willing parties, that is, other than in a forced or
liquidation sale. Quoted market prices in active markets
are the best evidence of fair value and should be used as
the basis for the measurement, if available. If a quoted
market price is available, the fair value is the product of
the number of trading units times that market price. If a
quoted market price is not available, the estimate of fair
value should be based on the best information available
in the circumstances. The estimate of fair value should
consider prices for similar assets or similar liabilities and
the results of valuation techniques to the extent available
in the circumstances. For purposes of item 12, the reporting branch or agency should determine the fair value of
its derivative contracts in the same manner that it determines the fair value of these contracts for other financial
reporting purposes.
Item 12(a)

Contracts held for trading.

Report in the appropriate column and subitem the gross
positive and gross negative fair values of those contracts
held for trading reported in Schedule M, Part V, item 10
above.
Item 12(a)(1)

Gross positive fair value.

Report in the appropriate column the total fair value of
those contracts in Schedule M, Part V, item 10 above
with positive fair values.
Item 12(a)(2)

Gross negative fair value.

Report in the appropriate column the total fair value of
those contracts in Schedule M, Part V, item 10 above
with negative fair values. Report the total fair value as
an absolute value, do not enclose the total fair value in
parentheses or use a minus (−) sign.
Item 12(b)
trading.

those contracts in Schedule M, Part V, item 11 above
with positive fair values.
Item 12(b)(2)

Gross negative fair value.

Report in the appropriate column the total fair value of
those contracts in Schedule M, Part V, item 11 above
with negative fair values. Report the total fair value as
an absolute value, do not enclose the total fair value in
parentheses or use a minus (−) sign.

Memoranda
Items M1 and M2—Notional amount of credit derivatives. Report in items M1 and M2, as appropriate, the
notional amount of all credit derivatives between the
reporting branch or agency and related depository institutions. Credit derivatives are arrangements that allow
one party (the ‘‘beneficiary’’) to transfer the credit risk
of a ‘‘reference asset’’ to another party (the ‘‘guarantor’’). Branches and agencies should include the notional
amounts of credit default swaps, total rate of return
swaps, and other credit derivative instruments.
No netting of contracts is permitted for purposes of this
item. Therefore, do not net: (1) credit derivatives with
third parties on which the reporting branch or agency is
the beneficiary against credit derivatives with third parties on which the reporting branch or agency is the
guarantor, or (2) contracts subject to bilateral netting
agreements. The notional amount should not be included
in items 9 through 12 of Part V of this schedule.
Item M1 Notional amount of all credit derivatives
on which the reporting branch or agency is the
guarantor.
Report the notional amount (stated in U.S. dollars) of all
credit derivatives on which the branch or agency has
extended credit protection to other parties.

Contracts held for purposes other than
Item M1a

Report in the appropriate column and subitem the gross
positive and gross negative fair values of those contractsheld for purposes other than trading that are reported in
Schedule M, Part V, item 11 above.

Report the total fair value of those credit derivatives
reported in Schedule M, Memorandum item 1, above,
with positive fair values.
Item M1b

Item 12(b)(1)

Gross positive fair value.

Report in the appropriate column the total fair value of
Instructions for Preparation of Reporting Form FFIEC 002
March 2004

Gross positive fair value

Gross negative fair value

Report the total fair value of those credit derivatives
reported in Schedule M, Memorandum item 1, above,
SCHEDULE M-17

FFIEC 002

with negative fair values. Report the total fair value as an
absolute value; do not enclose the total fair value in
parentheses or use a minus (-) sign.
Item M2 Notional amount of all credit derivatives
on which the reporting branch or agency is the
beneficiary.
Report the notional amount (stated in U.S. dollars) of all
credit derivatives on which the branch or agency has
obtained a guarantee against credit losses from other
parties.

SCHEDULE M-18

Item M2a

Gross positive fair value

Report the total fair value of those credit derivatives
reported in Schedule M, Memorandum item 2, above,
with positive fair values.
Item M2b

Gross negative fair value

Report the total fair value of those credit derivatives
reported in Schedule M, Memorandum item 2, above,with negative fair values. Report the total fair value as
an absolute value; do not enclose the total fair value in
parentheses or use a minus (-) sign.

Instructions for Preparation of Reporting Form FFIEC 002
March 2004

INSTRUCTIONS FOR THE PREPARATION OF THE

FFIEC 002
Schedule N—Past Due, Nonaccrual, and
Restructured Loans

General Instructions
Report all loans, including lease financing receivables,
that are past due, are in nonaccrual status, or have been
restructured because of a deterioration in the financial
position of the obligor. All such loans and lease financing
receivables held in the reporting branch or agency and its
IBF should be distributed by category and reported net of
any specific reserves. Loan amounts should be reported
net of unearned income to the extent that the same
categories of loans are reported net of unearned income
in Schedule C. Report the full outstanding balances of
past due, nonaccrual, and restructured loans and lease
financing receivables, as reported for purposes of Schedule C, not simply the delinquent payments.
For report dates through March 31, 2001, the information reported in this schedule will be treated as confidential on an individual branch or agency basis by
the Federal bank supervisory agencies. Beginning with
the June 30, 2001, report date, all of the information
reported in Schedule N for each branch or agency will be
publicly available.
Exclude interest earned but not collected on loans (report
in Schedule RAL, item 1(h), ‘‘Other assets including
other claims on nonrelated parties’’).
NOTE: Exclude all transactions of the branch or agency,
including its IBF, with related depository institutions
(report in Schedule M). However, include transactions
with related nondepository institutions.

Definitions
Past due. For purposes of this schedule, grace periods
allowed by the branch or agency, including its IBF, after
a loan technically has become past due, but before the
imposition of late charges, are not to be taken into
account in determining past due status. Furthermore,
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

loans and lease financing receivables are to be reported
as past due when either interest or principal is unpaid in
the following circumstances:
(1) Closed-end installment loans, amortizing loans
secured by real estate, and any other loans and lease
financing receivables with payments scheduled
monthly are to be reported as past due when the
borrower is in arrears two or more monthly payments. (Branches or agencies may use 30 days as a
proxy for a month if they prefer.) Other multipayment obligations with payments scheduled other than
monthly are to be reported as past due when one
scheduled payment is due and unpaid for 30 days or
more.
(2) Open-end credit such as charge-card plans, check
credit, and other revolving credit plans are to be
reported as past due when the customer has not made
the minimum payment for two or more billing
cycles.
(3) Single payment and demand notes providing for the
payment of interest at stated intervals are to be
reported as past due after one interest payment is due
and unpaid for 30 days or more.
(4) Single payment notes providing for the payment of
interest at maturity are to be reported as past due
after maturity if interest or principal remains unpaid
for 30 days or more.
(5) Unplanned overdrafts are to be reported as past due
if the account remains continuously overdrawn for
30 days or more.
For purposes of this schedule, branches or agencies
should use one of two methods to recognize partial
payments on ‘‘retail credit,’’ i.e., open-end and closedend credit extended to individuals for household, family,
and other personal expenditures, including consumer
loans and credit cards, and loans to individuals secured
SCHEDULE N-1

FFIEC 002

by their personal residence, including home equity
and home improvement loans. A payment equivalent to
90 percent or more of the contractual payment may be
considered a full payment in computing delinquency.
Alternatively, a branch or agency may aggregate payments and give credit for any partial payment received.
For example, if a regular monthly installment is $300
and the borrower makes payments of only $150 per
month for a six-month period, the loan would be $900
($150 shortage times six payments), or three monthly
payments past due. A branch or agency may use either or
both methods for its retail credit but may not use both
methods simultaneously with a single loan.
Nonaccrual. For purposes of this schedule, loans and
lease financing receivables are to be reported as being in
nonaccrual status if: (1) they are maintained on a cash
basis because of deterioration in the financial position of
the borrower, (2) payment in full of interest or principal
is not expected, or (3) principal or interest has been in
default for a period of 90 days or more unless the
obligation is both well secured and in the process of
collection.
A debt 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. A debt is ‘‘in the process of collection’’ if collection of the debt is proceeding in due course
either (1) through legal action, including judgment
enforcement procedures, or (2) in appropriate circumstances, through collection efforts not involving legal
action which are reasonably expected to result in repayment of the debt or in its restoration to a current status in
the near future.
For purposes of applying the third test for nonaccrual
status listed above, the date on which a loan reaches
nonaccrual status is determined by its contractual terms.
If the principal or interest on a loan becomes due and
unpaid for 90 days or more on a date that falls between
report dates, the loan 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, a loan need not be placed in
nonaccrual status:
SCHEDULE N-2

(1) The criteria for amortization (i.e., accretion of discount) specified in AICPA Practice Bulletin No. 6
are met with respect to a loan or other debt instrument acquired at a discount (because there is uncertainty as to the amounts or timing of future cash
flows) from an unaffiliated third party (such as
another institution or the receiver of a failed institution), including those that the seller had maintained
in nonaccrual status.
(2) The loan upon which principal or interest is due and
unpaid for 90 days or more is a consumer loan
secured by a 1-to-4 family residential property.
Nevertheless, such loans should be subject to other
alternative methods of evalution to assure that the
reporting institution’s net income is not materially
affected. To the extent that the reporting institution
has elected to carry such a loan in nonaccrual status
on its books, the loan must be reported as nonaccrual
in this schedule.
As a general rule, a nonaccrual loan may be restored to
accrual status when (1) none of its principal and interest
is due and unpaid, and the reporting institution 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 reporting
institution must have received repayment of the past due
principal and interest unless, as discussed in the Glossary
entry for ‘‘nonaccrual status,’’ (1) the loan has been
formally restructured and qualifies for accrual status,
(2) the loan has been acquired at a discount (because
there is uncertainty as to the amounts or timing of future
cash flows) from an unaffiliated third party and meets
the criteria for amortization (i.e., accretion of discount)
specified in AICPA Practice Bulletin No. 6, or (3) the
borrower has resumed paying the full amount of the
scheduled contractural interest and principal payments
on a loan that is past due and in nonaccrual status, even
though the loan has not been brought fully current, and
certain repayment criteria are met. For further information, see the Glossary entry for ‘‘nonaccrual status.’’
Restructured and in compliance with modified terms.
For purposes of this schedule, restructured loans and
leases are those loans and leases whose terms have been
modified, because of a deterioration in the financial
condition of the borrower, to provide for a reduction of
either interest or principal, regardless of whether such
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

FFIEC 002

loans and leases are secured or unsecured, regardless of
whether such credits are guaranteed by the government
or by others, and (except as noted in the following
paragraph) regardless of the effective interest rate on
such credits.
Once a loan or lease has been restructured because of
such credit problems, it continues to be considered restructured until paid in full. However, a restructured loan
or lease that is in compliance with its modified terms and
yields a market rate (i.e., the recorded amount of the
obligation bears an effective interest rate that at the time
of the restructuring is greater than or equal to the rate
that the branch or agency is willing to accept for a new
extension of credit with comparable risk) need not continue to be reported as ‘‘restructured and in compliance
with modified terms’’ 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 restructured loan. Also, a loan to a purchaser of
‘‘other real estate owned’’ by the reporting branch or
agency for the purpose of facilitating the disposal of such
real estate is not considered a restructured loan. For
further information, see Financial Accounting Standards
Board Statement No. 15, ‘‘Accounting by Debtors and
Creditors for Troubled Debt Restructurings’’ (FASB 15).
Report as ‘‘restructured and in compliance with modified
terms’’ all restructured loans and leases as defined above
that are in compliance with their modified terms, that is,
restructured loans and leases (1) on which no contractual
payments of principal or interest scheduled under the
modified repayment terms are due and unpaid or (2) on
which contractual payments of both principal and interest scheduled under the modified repayment terms are
less than 30 days past due. Exclude from ‘‘restructured
and in compliance with modified terms’’ all restructured
loans secured by 1-to-4 family residential properties
and all restructured loans to individuals for household,
family, and other personal expenditures. (However, any
restructured loans of these two types that subsequently
become past due 30 days or more or are placed in
nonaccrual status should be reported accordingly.)

Column Instructions
Report in columns A and B (except for Memoranda
item 2) the full outstanding balances (not just delinquent
Instructions for Preparation of Reporting Form FFIEC 002
June 2001

payments) of loans, including lease financing receivables, that are past due and upon which the branch or
agency, including its IBF, continues to accrue interest, as
follows:
(1) In column A, report closed-end monthly installment
loans, amortizing loans secured by real estate, lease
financing receivables, and open-end credit in arrears
two or three monthly payments; other multipayment
obligations, with payments scheduled other than
monthly, when one scheduled payment is due and
unpaid for 30 through 89 days; single payment and
demand notes providing for payment of interest at
stated intervals after one interest payment is due and
unpaid for 30 through 89 days; single payment notes
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 branch or agency is accruing interest on them, if the account remains continuously overdrawn for 30 through 89 days.
(2) In column B, report the loans, including lease financing receivables, as specified above on which payment is due and unpaid for 90 days or more.
Report in columns A and B of Memoranda item 2 the fair
value, if positive, of all interest rate, foreign exchange
rate, equity, and commodity and other contracts or which
a required payment by the branch or agency’s counterparty is due and unpaid for 30 through 89 days and due
and unpaid for 90 days or more, respectively.
Exclude from columns A and B all loans and lease
financing receivables that are in nonaccrual status and all
loans and leases that are restructured and in compliance
with their modified terms.
Report in column C the outstanding balances of loans,
including lease financing receivables, that the branch or
agency, including its IBF, has placed in nonaccrual status. Also include in this column all restructured loans
and leases that are in nonaccrual status.
Report in column D the outstanding balances of loans,
including lease financing receivables, that have been
restructured and are in compliance with their modified
terms.
Exclude from column D (1) those restructured loans and
leases on which under the modified repayment terms
either principal or interest is 30 days or more past due
SCHEDULE N-3

FFIEC 002

(report in Schedule N, column A or B, as appropriate)
and (2) those restructured loans and leases that are in
nonaccrual status under the modified repayment terms
(report in Schedule N, column C).
NOTE: Columns A, B, C, and D are mutually exclusive.
The full outstanding balance of any loan, including any
lease financing receivable, should be reported in no more
than one of these four columns. Information reported for
any derivative contract should be reported in only column A or column B.

Item Instructions
The loan categories specified in this schedule (except for
Memorandum item 1) correspond to the loan category
definitions for Schedule C, Part I, including the treatment
of leases.
Item 1

Total loans to U.S. addressees (domicile).

See the Glossary entry for ‘‘domicile’’ for further
information.
Item 1(a)

Commercial and industrial loans.

Corresponds to Schedule C, Part I, item 4(a), column A.
Item 1(b)

Loans secured by real estate.

Corresponds to Schedule C, Part I, item 1, column A,
consisting of loans to U.S. addressees.
Item 1(c)

All other loans.

Corresponds to Schedule C, Part I, items 2(a)(1), 2(a)(2),
2(b), 9(a), column A, and to that portion of Schedule C,
Part I, items 3, 7, and 8, column A, consisting of loans to
U.S. addressees.
Item 2 Total loans to non-U.S. addressees
(domicile).

Item 3

Total.

Report the sum of items 1(a), 1(b), 1(c), and 2.

Memoranda
Item M1 Book value of loans sold or otherwise
transferred to head office or to related institutions
and still serviced by the reporting branch or
agency.
Report in this item in the appropriate column the book
value of any past due, nonaccrual, or renegotiated asset
of a type reportable in Schedule C that was originated or
otherwise acquired by the reporting branch or agency
(and its IBF) and was subsequently sold or transferred to
the reporting branch or agency’s head office or to any
related institution, provided such asset is still being serviced by the reporting branch or agency. For purposes of
this item, the phrase ‘‘being serviced’’ means that the
reporting branch or agency (and its IBF) does not actually carry the asset on its books and so cannot actually
report it in Schedule C, but continues to collect loan
payments or otherwise maintain borrower contact in such
manner so as to have knowledge of the repayment status
on the assets.
Item M2 Interest rate, foreign exchange rate,
and other commodity and equity contracts:
Fair value of amounts carried as assets.
Report the fair value, if positive, of all interest rate,
foreign exchange rate, and other off-balance sheet commodity and equity contracts (as defined for Schedule L,
item 9) on which a required payment by the branch or
agency’s counterparty is past due 30 days or more as of
the report date. Report in column A the specified information for those contracts that are past due 30 through
89 days. Report in column B the specified information
for those contracts that are past due 90 days or more.

Corresponds to Schedule C, Part I, item 2(c)(1), 2(c)(2),
4(b), 9(b), column A, and to that portion of Schedule C,
Part I, items 1, 3, 6, 7, 8, column A, consisting of loans
to non-U.S. addressees.

SCHEDULE N-4

Instructions for Preparation of Reporting Form FFIEC 002
June 2001

INSTRUCTIONS FOR THE PREPARATION OF THE

FFIEC 002
Schedule O—Other Data for Deposit Insurance
Assessments

This schedule is to be completed only by branches whose
deposits are insured by the FDIC. Exclude amounts in
the reporting branch’s IBF.
For purposes of FDIC insurance assessments and this
schedule, ‘‘time and savings deposits’’ consists of all
transaction accounts other than demand deposits—i.e.,
NOW accounts, ATS accounts, and telephone and preauthorized transfer accounts—and all nontransaction
accounts.

insurance assessment purposes, all transaction accounts
other than demand deposits—i.e., NOW accounts, ATS
accounts, and telephone and preauthorized transfer
accounts—are considered savings deposits and must be
added to total nontransaction accounts to produce the
‘‘total time and savings deposits’’ figure for this item.
See the Glossary entry for ‘‘deposits’’ for the definitions
of transaction accounts, time deposits, and savings
deposits.

Item Instructions

Item 1(c) Interest accrued and unpaid on deposits
(excluding IBF).

Item 1
IBF).

Report in this item the amount of interest accrued and
unpaid on the deposit liabilities of the reporting branch
(excluding its IBF) included in the amount reported in
Schedule RAL, item 4(f), column A, ‘‘Other liabilities to
nonrelated parties.’’

Total deposits of the branch (excluding

Report in the appropriate subitem the deposit liabilities
of the reporting branch (excluding its IBF) and interest
accrued and unpaid on such deposits. The sum of
items 1(a) and 1(b) must equal the sum of item 7,
column A, and item 7, column C, from Schedule E,
‘‘Deposit Liabilities and Credit Balances.’’
Item 1(a) Total demand deposits of the branch
(excluding IBF).
Report in this item the amount from Schedule E, item 7,
column B, ‘‘Total demand deposits.’’ Demand deposit
accounts are noninterest-bearing and therefore exclude
interest-bearing transaction accounts such as NOW and
ATS accounts. Demand deposits also exclude money
market deposit accounts (MMDAs).
See the Glossary entry for ‘‘deposits’’ for the definition
of demand deposits.
Item 1(b) Total time and savings deposits of the
branch (excluding IBF).
Report in this item the sum of item 7, columns A and C,
minus item 7, column B, from Schedule E. For FDIC
Instructions for Preparation of Reporting Form FFIEC 002
March 1999

Item 2

Unposted debits.

Report the actual amount of cash items in the reporting
branch’s possession (excluding those in its IBF’s possession), drawn on itself, that are immediately chargeable
but that have not been charged to the general ledger
deposit controlling account at the close of business on
the report date. For purposes of this schedule, report only
those items the branch elects to take as deductions on the
deposit insurance assessment form (Certified Statement).
However, report all unposted debits in Schedule A,
item 1, ‘‘Cash items in process of collection and
unposted debits’’ whether or not they are reported in this
item.
Drafts or warrants that are ‘‘payable at’’ or ‘‘payable
through’’ the reporting branch may be reported as
unposted debits if allowed under applicable state statute
or if a written authorization, on file at the branch, allows
the branch, at its discretion, to charge such items to the
demand deposit account of the drawee. Such drafts and
SCHEDULE O-1

FFIEC 002

warrants that have already been charged to the general
ledger deposit controlling account at the close of business on the report date or that the drawee does not have
sufficient funds on deposit to pay, shall not be reported as
unposted debits.

accounts, have not been reclassified as deposits on the
reporting bank’s balance sheet (refer to the Glossary
entry for ‘‘suspense accounts’’).

Exclude cash items drawn on other banks, overdrafts,
nonsufficient funds (NSF) items, and cash items that are
returned unpaid to the last endorser for any reason (e.g.,
stop payment, missing endorsement, post or stale date, or
account closed).

Item 3(a)

Report either item 2(a) or items 2(b)(1) and 2(b)(2).

Item 3(b)

Item 2(a)

Actual amount of all unposted debits.

Report all unposted debits the reporting branch elects to
take as deductions.

Report either item 3(a) or items 3(b)(1) and 3(b)(2).
Actual amount of all unposted credits.

Report all unposted credits.
OR
Separate amount of unposted credits:

Item 3(b)(1) Actual amount of unposted credits to
demand deposits.
Report unposted demand deposit credits.

OR
Item 2(b)

Separate amount of unposted debits:

Item 3(b)(2) Actual amount of unposted credits to
time and savings deposits.

Item 2(b)(1) Actual amount of unposted debits to
demand deposits.

Report unposted time and savings deposit credits.

Report unposted debits to demand deposits that the
reporting branch elects to take as deductions.

Item 4 Deposits of majority-owned depository
subsidiaries of the parent foreign bank (not
included in total deposits).

Item 2(b)(2) Actual amount of unposted debits to
time and savings deposits.

Report in the appropriate subitem deposits held in the
reporting branch (excluding its IBF) by majority-owned
depository subsidiaries of the parent foreign bank and
interest accrued and unpaid on such deposits. In accordance with the General Instructions, these deposits and
accrued interest payable have been included in the calculation of the ‘‘Net due from/due to related depository
institutions,’’ items 2 and 5 of Schedule RAL. As a
consequence, these deposits are not reflected as deposit
liabilities of the reporting branch in Schedule RAL,
item 4(a), column A, and Schedule E, ‘‘Deposit Liabilities and Credit Balances.’’ The accrued interest
payable on these deposits is not reflected as other liabilities to nonrelated parties in Schedule RAL, item 4(f),
column A.

Report unposted debits to time and savings accounts that
the reporting branch elects to take as deductions.
Item 3

Unposted credits.

Report the actual amount of unposted credits to deposit
accounts. Unposted credits are those deposits that the
reporting branch (excluding its IBF) had received but not
posted to its general ledger deposit control account at the
close of business on the report date which have not
otherwise been reported as deposits in Schedule RAL,
item 4(a), column A, and in Schedule E, ‘‘Deposit Liabilities and Credit Balances.’’
Unposted credits do not include any deposits that have
been credited to the general ledger deposit control
account as of the close of business on the report date
(even if the deposits have not been posted to individual
customer accounts). Rather, unposted credits are deposits
carried in suspense or similar nondeposit accounts that,
following a review of the items included in these
SCHEDULE O-2

Do not include deposits held in the reporting branch by
and accrued interest payable to:
(1) wholly-owned depository subsidiaries of the parent
foreign bank, and
(2) nondepository subsidiaries of the parent foreign
bank.
Instructions for Preparation of Reporting Form FFIEC 002
March 1999

FFIEC 002

Item 4(a) Demand deposits of majority-owned
depository subsidiaries

Item 5(b) Time and savings deposits of
wholly-owned nondepository subsidiaries.

Report all demand deposits held in the reporting branch
(excluding its IBF) by majority-owned depository subsidiaries of the parent foreign bank.

Report all time and savings deposits held in the reporting
branch (excluding its IBF) by wholly-owned nondepository subsidiaries of the parent foreign bank.

Item 4(b) Time and savings deposits of
majority-owned depository subsidiaries.

Item 5(c) Interest accrued and unpaid on deposits
of wholly-owned nondepository subsidiaries.

Report all time and savings deposits held in the reporting
branch (excluding its IBF) by majority-owned depository
subsidiaries of the parent foreign bank.

Report interest accrued and unpaid on deposits held
in the reporting branch (excluding its IBF) by whollyowned nondepository subsidiaries of the parent foreign
bank.

Item 4(c) Interest accrued and unpaid on deposits
of majority-owned depository subsidiaries.
Report interest accrued and unpaid on deposits held in
the reporting branch (excluding its IBF) by majorityowned depository subsidiaries of the parent foreign bank.
Item 5 Deposits of wholly-owned nondepository
subsidiaries of the parent foreign bank (included in
total deposits).
Report in the appropriate subitem deposits held in the
reporting branch (excluding its IBF) by wholly-owned
nondepository subsidiaries of the parent bank and interest accrued and unpaid on such deposits. In accordance
with the General Instructions, these deposits are reflected
as deposit liabilities of the reporting branch in Schedule
RAL, item 4(.a), column A, and Schedule E, ‘‘Deposit
Liabilities and Credit Balances,’’ and are included in
item 1 above. The accrued interest payable on these
deposits is reflected as other liabilities to nonrelated
parties in Schedule RAL, item 4(e), column A, and
included in item 1(c) above.

Item 6 Reserve balances actually passed through
to the Federal Reserve by the reporting branch on
behalf of its respondent depository institutions that
are also reflected as deposit liabilities of the
reporting branch.
If the reporting branch is the correspondent in a passthrough reserve balance relationship, report in the appropriate subitem the amount of such reserve balances actually passed through to the Federal Reserve on behalf of
respondent depository institutions that are also reflected
as deposit liabilities of the reporting branch (excluding
its IBF) in item 1 above. Report a zero or the word
‘‘none’’ in items 6(a) and 6(b) if the reporting branch
does not act as a correspondent in any pass-through
reserve balance relationship.
For further information, see the Glossary entry for ‘‘passthrough reserve balances.’’
Item 6(a)

Amount reflected in demand deposits.

(2) majority-owned nondepository subsidiaries of the
parent foreign bank.

If the reporting branch is the correspondent in a passthrough reserve balance relationship, report the amount
of reserve balances the reporting branch has actually
passed through to the Federal Reserve on behalf of its
respondent depository institutions that are also reflected
as demand deposit liabilities of the reporting branch in
item 1(a) above.

Item 5(a) Demand deposits of wholly-owned
nondepository subsidiaries.

Item 6(b)
deposits.

Report all demand deposits held in the reporting branch
(excluding its IBF) by wholly-owned nondepository subsidiaries of the parent foreign bank.

If the reporting branch is the correspondent in a passthrough reserve balance relationship, report the amount
of reserve balances the reporting branch has actually

Do not include deposits held in the reporting branch by
and accrued interest payable to:
(1) wholly-owned depository subsidiaries of the parent
foreign bank, and

Instructions for Preparation of Reporting Form FFIEC 002
March 1999

Amount reflected in time and savings

SCHEDULE O-3

FFIEC 002

passed through to the Federal Reserve on behalf of its
respondent depository institutions that are also reflected
as time and savings deposit liabilities of the reporting
branch in item 1(b) above.
Item 7

Deposits in lifeline accounts.

Report the amount of deposits in lifeline accounts for
which the reporting branch seeks a reduced deposit insurance assessment rate. Lifeline accounts are transaction
accounts which meet certain minimum requirements
established by the Federal Reserve Board pursuant to
Section 232 of the Federal Deposit Insurance Corporation Improvement Act of 1991.
NOTE: The minimum requirements for lifeline accounts
will be established by the Federal Reserve Board.
Branches will not be required to submit information on
such accounts in this Schedule O item until these requirements are established.

$100,000 or less. This amount should represent the total
of the balances of the accounts enumerated in Memorandum item 1(a)(2) below.
Item M1(a)(2) Number of deposit accounts of
$100,000 or less.
(To be completed for the June report only.) Report the
total number of deposit accounts (demand, savings, and
time) with balances on the report date of $100,000 or
less. Count each certificate, passbook, account, and other
evidence of deposit which has a balance of $100,000 or
less.
Item M1(b)
$100,000.

Deposit accounts of more than

Report in the appropriate subitem the amount outstanding and the number of accounts held in the reporting
branch (excluding its IBF) with a balance of more than
$100,000 as of the report date.

Memoranda

Item M1(b)(1) Amount of deposit accounts of
more than $100,000.

Item M1
IBF).

Report the aggregate balance of all deposit accounts,
certificates, and other evidences of deposit (demand,
savings, and time) with a balance on the report date of
more than $100,000. This amount should represent the
total of the balances of the accounts enumerated in
Memorandum item 1(b)(2) below.

Total deposits of the branch (excluding

Memorandum items 1(a)(1), 1(b)(1), and 1(b)(2) are to
be completed each quarter. Memorandum item 1(a)(2) is
to be completed for the June report only.
The dollar amounts used as the basis for reporting the
number and amount of deposit accounts in these four
Memorandum items reflect the deposit insurance limits
in effect on the report date.
The sum of Memorandum items 1(a)(1) and 1(b)(1) must
equal the sum of Schedule O, items 1(a) and 1(b), above.
Item M1(a)

Deposit accounts of $100,000 or less.

Report in the appropriate subitem the amount outstanding and the number of accounts held in the reporting
branch (excluding its IBF) with a balance of $100,000 or
less as of the report date.
Item M1(a)(1) Amount of deposit accounts of
$100,000 or less.
Report the aggregate balance of all deposit accounts,
certificates, or other evidences of deposit (demand, savings, and time) with balances on the report date of
SCHEDULE O-4

Item M1(b)(2) Number of deposit accounts of
more than $100,000.
Report the total number of deposit accounts (demand,
savings, and time) with balances on the report date of
more than $100,000. Count each certificate, passbook,
account, and other evidence of deposit which has a
balance of more than $100,000.
Item M2 Estimated amount of uninsured deposits
in the branch (excluding IBF).
The information in this Memorandum item is requested
pursuant to Section 141 of the Federal Deposit Insurance
Corporation Improvement Act of 1991.
An estimate of your branch’s uninsured deposits (excluding IBF deposit liabilities) can be determined by
multiplying the number of deposit accounts of more
than $100,000 reported in Schedule O, Memorandum
Instructions for Preparation of Reporting Form FFIEC 002
March 2003

FFIEC 002

item 1(b)(2) above, by $100,000 and subtracting the
result from the amount of deposit accounts of more
than $100,000 reported in Schedule O, Memorandum
item 1(b)(1) above. For example, a branch reports in
Memorandum item 1(b)(1) that it has $12,345,000 of
deposit accounts of more than $100,000. The branch
also reports in Memorandum item 1(b)(2) that it has
76 deposit accounts of more than $100,000. Based on
these data, an estimate of the branch’s uninsured deposits
as determined by this simple method is:
$12,345,000
−7,600,000 (76 × $100,000)
$ 4,745,000
Item M2(a) Indicate in the appropriate box at the
right whether your branch has a method or
procedure for determining a better estimate of
uninsured deposits than the estimate described
above.
If your branch has an internal method or procedure that it
uses for management information purposes to obtain an
estimate of the amount of uninsured deposits that is
better (i.e., believed to be more accurate) than an estimate that simply considers the number and amount of
deposit accounts of more than $100,000 (as described
above), place an ‘‘X’’ in the box marked ‘‘YES’’ and
complete Memorandum item 2(b) below. Otherwise,
place an ‘‘X’’ in the box marked ‘‘NO’’ and do not
complete Memorandum item 2(b).
Item M2(b) If the box marked YES has been
checked, report the estimate of uninsured deposits
determined by using your branch’s method or
procedure.
If the response to Memorandum item 2(a) above is
‘‘YES,’’ apply the internal method or procedure that your
branch uses for management information purposes and
determine the estimated amount of uninsured deposits at
your branch as of the report date. Report this estimated
amount in this Memorandum item.
Item M3

Preferred deposits.

Report in this item all deposits of states and political
subdivisions in the U.S. included in Schedule E, item 5,
columns A and C, which are secured or collateralized
as required under state law. Exclude deposits of the U.S.
Instructions for Preparation of Reporting Form FFIEC 002
March 1999

Government which are secured or collateralized as required under federal law. Also exclude deposits of trust
funds which are secured or collateralized as required
under state law unless the beneficiary is a state or political subdivision in the U.S. The amount reported in this
memorandum item must be less than or equal to the sum
of Schedule E, item 5, column A, and item 5, column C.
Deposits of states and political subdivisions in the U.S.
include deposits of public funds standing to the credit
of states, counties, municipalities, and local housing
authorities; school, irrigation, drainage, and reclamation
districts; or other instrumentalities of one or more states
of the United States, the District of Columbia, Puerto
Rico, and U.S. territories and possessions. Deposits of
states and political subdivisions in the U.S. also include
deposits of funds advanced to states and political subdivisions by U.S. Government agencies and corporations and
deposits of withheld income taxes of states and political
subdivisions.
State law may require an institution to pledge securities
(or other readily marketable assets) to cover the uninsured portion of the deposits of a state or political subdivision. If the institution has pledged securities with a
value that exceeds the amount of the uninsured portion
of the state or political subdivision’s deposits, only the
uninsured amount (and none of the insured portion of the
deposits) should be reported as a ‘‘preferred deposit.’’
For example, a political subdivision has $350,000 in
deposits at an institution which, under state law, is
required to pledge securities to cover only the uninsured
portion of such deposits ($250,000 in this example). The
institution has pledged securities with a value of
$300,000 to secure these deposits. Only $250,000 of
the political subdivision’s $350,000 in deposits (the uninsured amount) would be considered ‘‘preferred deposits.’’
In other states, institutions must participate in a state
public deposits program in order to receive deposits from
the state or from political subdivisions within the state in
amounts that would not be covered by federal deposit
insurance. Under state law in such states, the value of the
securities an institution must pledge to the state is calculated annually, but represents only a percentage of the
uninsured portion of its public deposits. Institutions
participating in the state program may potentially be
required to share in any loss to public depositors incurred
in the failure of another participating institution. As long
as the value of the securities pledged to the state exceeds
SCHEDULE O-5

FFIEC 002

the calculated requirement, all of the institution’s uninsured public deposits are protected from loss under the
operation of the state program if the institution fails and,
therefore, all of the uninsured public deposits are considered ‘‘preferred deposits.’’ For example, an institution
participating in a state public deposits program has
$1,000,000 in public deposits under the program and
$700,000 of this amount is uninsured. The institution’s
most recent calculation indicates that it must pledge
securities with a value of at least $77,000 to the state in
order to participate in the state program. The institution
has pledged securities with an actual value of $80,000.
The institution should report the $700,000 in uninsured
public deposits as ‘‘preferred deposits’’ in Schedule O.
Item M4 Adjustments to demand deposits
(excluding IBF) reported in Schedule E for certain
reciprocal demand balances.
Reciprocal balances arise when two depository institutions maintain deposit accounts with each other; that is,
when a depository institution has both a due to and a due
from balance with another depository institution. When
reporting deposit liabilities in Schedule E, reciprocal
balances may be reported on a net basis when a right of
setoff exists. However, the Federal Deposit Insurance
Act (FDI Act) limits the extent to which reciprocal
balances may be netted for deposit insurance and FICO
assessment purposes. Thus, the reporting branch (excluding its IBF) may have reported its reciprocal balances, if
any, in Schedule E differently than required for assessment purposes. The following three items capture these
differences.
Item M4(a) Amount by which demand deposits
would be reduced if the reporting branch’s
reciprocal demand balances with the domestic
offices of U.S. banks and savings associations (and
insured branches in Puerto Rico and U.S. territories
and possessions) that were reported on a gross basis
in Schedule E had been reported on a net basis.
For assessment purposes under the FDI Act, reciprocal
demand balances with the domestic offices of U.S. banks
and savings associations (and insured branches in Puerto
Rico and U.S. territories and possessions) are to be
reported on a net basis. If the reporting branch reported
any reciprocal demand balances with these domestic
offices and insured branches on a gross basis in Schedule E, report in this item the amount by which demand
SCHEDULE O-6

deposits would be reduced if these reciprocal demand
balances had instead been reported on a net basis in
Schedule E, column B, Demand deposits. For each reciprocal demand balance relationship with one of these
domestic offices or insured branches that was reported on
a gross basis, the amount of this reduction is equal to the
lesser of the demand balances ‘‘due from’’ or ‘‘due to’’
that domestic office or insured branch. Overdrawn balances cannot be included in this calculation.
Item M4(b) Amount by which demand deposits
would be increased if the reporting branch’s
reciprocal demand balances with foreign banks and
foreign offices of other U.S. banks (other than
insured branches in Puerto Rico and U.S. territories
and possessions) that were reported on a net basis
in Schedule E had been reported on a gross basis.
For assessment purposes under the FDI Act, reciprocal
demand balances between the reporting branch and foreign banks and foreign offices of other U.S. banks (other
than insured branches in Puerto Rico and U.S. territories
and possessions) are to be reported on a gross basis. If
the reporting branch reported any reciprocal demand
balances with these foreign banks and foreign offices on
a net basis in Schedule E, report in this item the amount
by which demand deposits would be increased if these
reciprocal demand balances had instead been reported on
a gross basis in Schedule E, column B, Demand deposits.
For each reciprocal demand balance relationship with
one of these foreign banks or foreign offices that was
reported on a net basis, the amount of this increase is
equal to the amount by which the gross ‘‘due to’’ demand
balance for that bank or office was reduced before it was
reported on Schedule E, column B, i.e., the lesser of the
demand balances ‘‘due from’’ or ‘‘due to’’ that foreign
bank or foreign office.
Item M4(c) Amount by which demand deposits
would be reduced if cash items in process of
collection were included in the calculation of the
reporting branch’s net reciprocal demand balances
with the domestic offices of U.S. banks and savings
associations (and insured branches in Puerto Rico
and U.S. territories and possessions) in Schedule E.
For purposes of this report, balances due from other
depository institutions reflect only those funds on deposit
for which the reporting branch has already received
credit and which are subject to immediate withdrawal.
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March 1999

FFIEC 002

Therefore, ‘‘due from’’ balances and calculations of net
reciprocal demand balances for purposes of Schedule E
exclude cash items in process of collection. However, for
deposit insurance assessment purposes under the FDIAct, cash items in process of collection should be
included in the net reciprocal calculation.
Report in this item the amount by which demand deposits would be reduced if cash items in process of collection were included in the calculation of net reciprocal
demand balances between the reporting branch and the
domestic offices of U.S. banks and savings associations
(and insured branches in Puerto Rico and U.S. territories
and possessions) in Schedule E, column B, Demand
deposits.
Item M5 Amount of assets netted against deposit
liabilities of the branch (excluding IBF) on the
balance sheet (Schedule RAL) in accordance with
generally accepted accounting principles.
Under generally accepted accounting principles,
branches and agencies are permitted to offset or net
assets and liabilities when a right of setoff exists. However, under the Federal Deposit Insurance Act (FDI Act),
only certain specified assets may be netted against
deposit liabilities for deposit insurance and FICO assessment purposes. Thus, the reporting branch may have
reported its deposits on Schedule RAL and in Schedule E
differently than required for assessment purposes. The
following items capture these differences, but exclude
information for assessment purposes on the netting of
reciprocal demand balances which is covered in Schedule O, Memorandum item 4, above. Exclude amounts
netted against deposit liabilities in the reporting branch’s
IBF.
The following examples illustrate the amounts to be
reported in Memorandum items 5(a) and 5(b):

Instructions for Preparation of Reporting Form FFIEC 002
March 1999

Example: Branch A has a $200,000 asset and a $500,000
deposit liability for which a right of setoff exists under
generally accepted accounting principles. Branch A nets
the asset and liability on Schedule RAL and reports a
(net) $300,000 deposit liability. Branch A should report
$200,000 in Memorandum item 5(a) or 5(b), depending
on the type of deposit involved in the netting.
Example: Branch B has a $400,000 asset and a $250,000
deposit liability for which a right of setoff exists under
generally accepted accounting principles. Branch B nets
the asset and liability on Schedule RAL and reports a
(net) $150,000 asset. Branch B should report $250,000 in
Memorandum item 5(a) or 5(b), depending on the type of
deposit involved in the netting.
Item M5(a) Amount of assets netted against
demand deposits.
If the reporting branch has netted any assets and demand
deposit liabilities on Schedule RAL and in Schedule E
in accordance with generally accepted accounting principles, report in this item the amount by which this
netting reduced the branch’s reported demand deposits.
Exclude hypothecated demand deposits (see the Glossary
entry for ‘‘hypothecated deposit’’ for the definition of
this term). Also exclude reciprocal demand balances that
have been reported on a net basis.
Item M5(b) Amount of assets netted against time
and savings deposits.
If the reporting branch has netted any assets and time and
savings deposit liabilities on Schedule RAL and in
Schedule E in accordance with generally accepted
accounting principles, report in this item the amount by
which this netting reduced the branch’s reported time
and savings deposits. Exclude hypothecated time and
savings deposits (see the Glossary entry for ‘‘hypothecated deposit’’ for the definition of this term).

SCHEDULE O-7

INSTRUCTIONS FOR THE PREPARATION OF THE

FFIEC 002
Schedule P—Other Borrowed Money

General Instructions
The amounts reported in column A are for the reporting
branch or agency, including its IBF, and those reported in
column B are for the reporting branch or agency’s IBF
only. If the reporting branch or agency has no IBF, no
amounts are to be reported in column B. Exclude borrowings from related depository institutions as defined in the
Glossary for this report (report in Schedule M).
Report in column A and B, as appropriate, the total
amount borrowed by the reporting branch or agency,
including its IBF, or by the IBF only,

received or held in connection with such checks or
drafts as deposits in Schedule E until the funds are
remitted);
(7) on purchases of ‘‘term federal funds’’ (as defined
in the Glossary entry for ‘‘federal funds
transactions’’);
(8) on subordinated notes and debentures;
(9) on interest-bearing demand notes (note balances)
issued by the reporting institution to the U.S. Treasury; and

(1) on its promissory notes;

(10) on any other obligation for the purpose of borrowing money and that is not reported elsewhere.

(2) on notes and bills rediscounted (including commodity drafts rediscounted);

Exclude from this item the following:

(3) on financial assets (other than securities) sold under
repurchase agreements that have an original maturity of more than one business day and sales of
participations in pools of loans that have an original
maturity of more than one business day;
(4) by the creation of due bills representing the reporting institution’s receipt of payment and similar
instruments, whether collateralized or uncollateralized (see the Glossary entry for ‘‘due bills’’);
(5) from Federal Reserve Banks;
(6) by overdrawing ‘‘due from’’ balances with depository institutions, except overdrafts arising from
transactions with related parties (report in Schedule M), or through another depository institution
either on a zero-balance account or on an account
that is not routinely maintained with sufficient balances to cover checks drawn in the normal course
of business during the period until the amount of
the checks or drafts is remitted to the other depository institution (in which case, report the fund
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

(1) Federal funds purchased and securities sold under
agreements to repurchase (report in Schedule RAL,
item 4(b); and
(2) liabilities resulting from sales of assets that the
reporting institution does not own (see Glossary
entry for ‘‘short position’’) (report in Schedule RAL,
item 4(e)).

Item Instructions
Item 1 Owed to nonrelated commercial banks in
the U.S. (including their IBFs).
Report all other liabilities for borrowed money that are
owed to (borrowed from) nonrelated commercial banks
in the U.S., including their IBFs, with a breakdown
between the amounts which are owed to U.S. offices of
nonrelated U.S. banks (item 1(a)) and the amounts which
are owed to U.S. branches and agencies of nonrelated
foreign banks (item 1(b)).
SCHEDULE P-1

FFIEC 002

Item 1(a)
banks.

Owed to U.S. offices of nonrelated U.S.

Item 2(a) Owed to foreign branches of nonrelated
U.S. banks.

Report the amount owed to (borrowed from) U.S. offices
of nonrelated U.S. banks, including their IBFs.

Report the amounts owed to (borrowed from) foreign
branches of nonrelated U.S. banks.

Item 1(b) Owed to U.S. branches and agencies of
nonrelated foreign banks.

Item 2(b) Owed to foreign offices of nonrelated
foreign banks.

Report the amount owed to (borrowed from) U.S.
branches and agencies of nonrelated foreign banks,
including their IBFs. For purposes of this schedule, the
term ‘‘U.S. branches and agencies of foreign banks’’
covers:

Report the amounts owed to (borrowed from) foreign
offices of nonrelated foreign banks.

(1) the U.S. branches and agencies of other foreign
banks;
(2) the U.S. branches and agencies of foreign official
banking institutions, including central banks, nationalized banks, and other banking institutions owned
by foreign governments; and

Item 3

Owed to others.

Report all other liabilities for borrowed money owed to
any lender other than a bank that cannot properly be
reported in items 1 and 2, above.
Item 4

Total.

Report the sum of items 1 through 3.

(3) investment companies that are chartered under
Article XII of the New York State banking law and
that are majority-owned by one or more foreign
banks.

Memorandum

Item 2 Owed to nonrelated banks in foreign
countries.

Report the amount borrowed in the form of immediately
available funds with a maturity greater than one day that
is included in item 4 above. For a discussion of immediately available funds, see the Glossary entry for ‘‘federal
funds transactions.’’

Report all other liabilities for borrowed money that are
owed to (borrowed from) nonrelated banks in foreign
countries, with a breakdown between the amounts which
are owed to foreign branches of nonrelated U.S. banks
(item 2(a)), and the amounts which are owed to foreign
offices of nonrelated foreign banks (item 2(b)).

SCHEDULE P-2

Item M1 Immediately available funds with a
maturity greater than one day included in other
borrowed money.

Instructions for Preparation of Reporting Form FFIEC 002
June 2002

INSTRUCTIONS FOR THE PREPARATION OF THE

FFIEC 002
Schedule S—Servicing, Securitization and
Asset Sale Activities

General Instructions
Schedule S includes information on assets that have been
securitized or sold and are not reportable on Schedule RAL, except for certain on-balance-sheet retained
interest-only strips (which are reported in item 2(a) of
this schedule), subordinated securities and other enhancements (which are reported in items 2(b) and 9 and
Memorandum items 1(a)(1) and (2)), and seller’s interests (which are reported in items 6(a) and 6(b)).

Column Instructions
Column A, 1–4 Family Residential Loans: 1–4 family residential loans are permanent closed-end loans
secured by first or junior liens on 1-to-4 family residential properties.
Column B, Home Equity Lines: Home equity lines
are revolving, open-end lines of credit secured by
1-to-4 family residential properties.
Column C, Credit Card Receivables: Credit card
receivables are extensions of credit to individuals for
household, family, and other personal expenditures arising from credit cards.
Column D, Auto Loans: Auto loans are loans to individuals for the purpose of purchasing private passenger
vehicles, including minivans, vans, sport-utility vehicles,
pickup trucks, and similar light trucks for personal use.
Column E, Other Consumer Loans: Other consumer
loans are loans to individuals for household, family, and
other personal expenditures, excluding credit card receivables and auto loans as described in Columns C and D of
this schedule.
Column F, Commercial and Industrial Loans: Commercial and industrial loans are loans for commercial and
industrial purposes to sole proprietorships, partnerships,
corporations, and other business enterprises, whether
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

secured (other than by real estate) or unsecured, singlepayment or installment.
Column G, All Other Loans and All Leases: All
other loans are loans that cannot properly be reported
in Columns A through F of this schedule and all lease
financing receivables.
For purposes of items 1 through 10 of Schedule S on
securitization activities and other securitization facilities,
information about each separate securitization should be
included in only one of the seven columns of this schedule. The appropriate column for a particular securitization should be based on the predominant type of loan
included in the securitization and this column should be
used consistently over time. For example, a securitization may include auto loans to individuals and to business enterprises. If these auto loans are predominantly
loans to individuals, all of the requested information
about this securitization should be included in Column D, Auto Loans.

Definitions
For purposes of this schedule, the following definitions
of terms are applicable.
Recourse or other seller-provided credit enhancement
means an arrangement in which the reporting branch or
agency retains, in form or in substance, any risk of credit
loss directly or indirectly associated with a transferred
(sold) asset that exceeds its pro rata claim on the asset. It
also includes a representation or warranty extended by
the reporting branch or agency when it transfers an asset,
or assumed by the branch or agency when it services a
transferred asset, that obligates the branch or agency to
absorb credit losses on the transferred asset. Such an
arrangement typically exists when the branch or agency
transfers assets and agrees to protect purchasers or some
other party, e.g., investors in securitized assets, from
SCHEDULE S-1

FFIEC 002

losses due to default by or nonperformance of the obligor
on the transferred assets or some other party. The branch
or agency provides this protection by retaining:
(1) an interest in the transferred assets, e.g., creditenhancing interest-only strips receivable, ‘‘spread’’
accounts, subordinated interests or securities, collateral invested amounts, and cash collateral accounts,
that absorbs losses, or
(2) an obligation to repurchase the transferred assets
in the event of a default of principal or interest on the
transferred assets or any other deficiency in the performance of the underlying obligor or some other party.
Subordinated interests and subordinated securities
retained by a branch or agency when it securitizes assets
expose the branch or agency to more than its pro rata
share of loss and thus are considered a form of credit
enhancement to the securitization structure.
Credit-enhancing interest-only strip, (i) represents the
contractual right to receive some or all of the interest due
on transferred assets; and (ii) exposes the institution to
credit risk directly or indirectly associated with the transferred assets that exceeds a pro rata share of the institution’s claim on the assets, whether through subordination
provisions or other credit enhancement techniques.
Credit-enhancing interest-only strips include other
similar ‘‘spread’’ assets and can be either retained or
purchased.
Liquidity facility means any arrangement, including servicer cash advances, in which the reporting branch or
agency is obligated to provide funding to a securitization
structure to ensure investors of timely payments on
issued securities, e.g., by smoothing timing differences in
the receipt of interest and principal payments on the
underlying securitized assets, or to ensure investors of
payments in the event of market disruptions. Advances
under such a facility are typically reimbursed from subsequent collections by the securitization structure and are
not subordinated to other claims on the cash flows from
the underlying assets and, therefore, should generally not
be construed to be a form of credit enhancement. However, if the advances under such a facility are subordinated to other claims on the cash flows, the facility
should be treated as a credit enhancement for purposes of
this schedule.
Seller’s interest means the reporting branch or agency’s
ownership interest in loans that have been securitized,
SCHEDULE S-2

except an interest that is a form of recourse or other
seller-provided credit enhancement. Seller’s interests
should be reported on Schedule RAL as securities or as
loans depending on the form in which the interest is held.
However, seller’s interests differ from the securities
issued to investors by the securitization structure. The
principal amount of a seller’s interest is generally equal
to the total principal amount of the pool of assets
included in the securitization structure less the principal
amount of those assets attributable to investors, i.e., in
the form of securities issued to investors.

Line Item Instructions
Securitization Activities
Item 1 Outstanding principal balance of assets
sold and securitized by the reporting institution
with servicing retained or with recourse or other
seller-provided credit enhancements.
Report in the appropriate column the principal balance
outstanding as of the report date of loans and leases
which the reporting branch or agency has sold and securitized while:
(1) retaining the right to service these assets or
(2) when servicing has not been retained, retaining
recourse or providing other seller-provided credit
enhancements to the securitization structure.
Include in column C the amount outstanding of any
credit card fees and finance charges that the reporting
bank has securitized and sold in connection with its
securitization and sale of credit card receivable balances.
Exclude the principal balance of loans underlying seller’s interests owned by the reporting institution; report
the amount of seller’s interests in Schedule S, item 6.
Do not report in this item the outstanding balance of
1–4 family residential mortgages sold to the Federal
National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac)
that the government-sponsored agency in turn securitizes. Report 1–4 family residential mortgages sold to
Fannie Mae or Freddie Mac with recourse or other sellerprovided credit enhancements in Schedule S, item 11,
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

FFIEC 002

column A, and report the maximum credit exposure
arising from the enhancements in item 12, column A.
Exclude securitizations that the reporting institution has
accounted for as secured borrowings because the transactions do not meet the criteria for sale accounting under
generally accepted accounting principles. The securitized
loans and leases should continue to be carried as assets
on the reporting institution’s balance sheet.
Item 2 Maximum amount of credit exposure
arising from recourse or other seller-provided credit
enhancements provided to structures reported in
item 1.
Report in the appropriate subitem the maximum contractual credit exposure remaining as of the report date under
recourse arrangements and other seller-provided credit
enhancements provided by the reporting branch or
agency to securitization structures reported in Schedule S, item 1, above. Do not report as the remaining
maximum contractual exposure a reasonable estimate of
the probable loss under the recourse arrangements or
credit enhancement provisions or the fair value of any
liability incurred under such provisions. Furthermore,
do not reduce the remaining maximum contractual exposure by the amount of any associated recourse liability
account. Report exposure amounts gross rather than
net of any tax effects, e.g., any associated deferred tax
liability.
Do not include unused portions of commitments that
function as liquidity facilities (report such unused commitments in Schedule S, item 3).
Item 2(a)

or agency has retained in connection with the securitization structures reported in Schedule S, item 1, above.
Exclude retained credit-enhancing interest-only strips,
which are to be reported in Schedule S, item 2(a), above.
Item 2(c) Standby letters of credit and other
enhancements.
Report in the appropriate column the unused portion of
standby letters of credit and the maximum contractual
amount of recourse or other credit exposure not in the
form of an on-balance sheet asset that the reporting
branch or agency has provided or retained in connection
with the securitization structures reported in Schedule S,
item 1, above.
Item 3 Reporting institution’s unused
commitments to provide liquidity to structures
reported in item 1.
Report in the appropriate column the unused portions of
commitments provided by the reporting institution to the
securitization structures reported in Schedule S, item 1,
above that function as liquidity facilities.
Item 4

Past due loan amounts included in item 1.

Report in the appropriate subitem the outstanding principal balance of loans and leases reported in Schedule S,
item 1, above that are 30 days or more past due as of the
report date. For purposes of determining whether a loan
or lease reported in item 1 above is past due, the reporting criteria to be used are the same as those for columns A and B of Schedule N.

Retained interest-only strips.

Report in the appropriate column the carrying value of
credit-enhancing interest-only strips included as securities, as other assets, or as trading assets in Schedule RAL, that the reporting branch or agency has
retained as credit enhancements in connection with the
securitization structures reported in Schedule S, item 1,
above.
Item 2(b) Subordinated securities and other
residual interests.
Report in the appropriate column the carrying value of
subordinated securities and other residual interests carried as on-balance sheet assets that the reporting branch
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Item 4(a)

30–89 days past due.

Report in the appropriate column the outstanding principal balance of loans and leases reported in Schedule S,
item 1, above that are 30 to 89 days past due as of the
report date.
Item 4(b)

90 days or more past due.

Report in the appropriate column the outstanding principal balance of loans and leases reported in Schedule S,
item 1, above that are 90 days or more past due as of the
report date.
Item 5

Not applicable.
SCHEDULE S-3

FFIEC 002

Item 6 Amount of ownership (or seller’s) interests
carried as securities or loans.

Item 8

Report in the appropriate subitem the carrying value of
the reporting institution’s ownership (or seller’s) interests associated with the securitization structures reported
in Schedule S, item 1, above.

For Securitization Facilities Sponsored
By or Otherwise Established By Other
Institutions

Item 6(a)

Item 9 Maximum amount of credit exposure
arising from credit enhancements provided by
the reporting institution to other institutions’
securitization structures in the form of standby
letters of credit, purchased subordinated securities,
and other enhancements.

Securities.

Report in the appropriate column the carrying value of
seller’s interests in the form of a security that are
included as asset-backed securities in Schedule RAL,
item 1(c)(3), ‘‘Other asset-backed securities,’’ or as trading securities in Schedule RAL, item 1(f), ‘‘Trading
assets.’’
Item 6(b)

Loans.

Report in the appropriate column the carrying value of
seller’s interests not in the form of a security. Such
seller’s interests are to be reported as loans and included
in Schedule C, Part I, Loans and Leases.
Item 7 Past due loan amounts included in interests
reported in item 6(a).
Report in the appropriate subitem the outstanding principal balance of loans included in the reporting branch
or agency’s seller’s interests reported in Schedule S,
item 6(a), above that are 30 days or more past due as of
the report date. For purposes of determining whether a
loan underlying a seller’s interests reported in item 6(a)
is past due, the reporting criteria to be used are the same
as those for columns A and B of Schedule N.
Item 7(a)

30–89 days past due.

Report in the appropriate column the outstanding principal balance of loans underlying a seller’s interests
reported in Schedule S, item 6(a), above that are 30–89
days past due as of the report date.
Item 7(b)

90 days or more past due.

Report in the appropriate column the outstanding principal balance of loans underlying a seller’s interests
reported in Schedule S, item 6(a), above that are 90 or
more days past due as of the report date.
SCHEDULE S-4

Not applicable.

Report in the appropriate column the maximum contractual credit exposure remaining as of the report date under
credit enhancements provided by the reporting branch or
agency to securitization structures sponsored by or otherwise established by other institutions or entities, i.e.,
securitizations not reported in Schedule S, item 1, above.
Report the unused portion of standby letters of credit, the
carrying value of purchased subordinated securities, and
the maximum contractual amount of credit exposure
arising from other on- and off-balance sheet credit
enhancements that provide credit support to these securitization structures. Do not report as the remaining maximum contractual exposure a reasonable estimate of the
probable loss under credit enhancement provisions or the
fair value of any liability incurred under such provisions.
Furthermore, do not reduce the remaining maximum
contractual exposure by the amount of any associated
recourse liability account. Report exposure amounts
gross rather than net of any tax effects, e.g., any associated deferred tax liability.
Exclude the amount of credit exposure arising from loans
and leases that the reporting branch or agency has sold
with recourse or other seller-provided credit enhancements to other institutions or entities, which then securitized the loans and leases purchased from the branch or
agency (report this exposure in Schedule S, item 12,
below).
Also exclude the amount of credit exposure arising from
credit enhancements provided to asset-backed commercial paper conduits (report this exposure in Schedule S,
Memorandum item 1(a)).
Instructions for Preparation of Reporting Form FFIEC 002
March 2003

FFIEC 002

Item 10 Reporting institution’s unused
commitments to provide liquidity to other
institutions’ securitization structures.
Report in the appropriate column the unused portions of
commitments provided by the reporting branch or agency
that function as liquidity facilities to securitization structures sponsored by or otherwise established by other
institutions or entities, i.e., securitizations not reported in
Schedule S, item 1, above.
Exclude the amount of unused commitments to provide
liquidity to asset-backed commercial paper conduits
(report this amount in Schedule S, Memorandum
item 1(b)).

Asset Sales
Item 11 Assets sold with recourse or other
seller-provided credit enhancements and not
securitized by the reporting institution.
Report in the appropriate column the unpaid principal
balance as of the report date of loans and leases, which
the reporting branch or agency has sold with recourse or
other seller-provided credit enhancements, but which
were not securitized by the reporting branch or agency.
Include loans and leases that the reporting branch or
agency has sold with recourse or other seller-provided
credit enhancements to other institutions or entities,
whether or not the purchaser has securitized the loans
and leases purchased from the institution. Include 1–4
family residential mortgages that the reporting institution
has sold to the Federal National Mortgage Association
(Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac) with recourse or other sellerprovided credit enhancements.

Item 12 Maximum amount of credit exposure
arising from recourse or other seller-provided credit
enhancements provided to assets reported in
item 11.
Report in the appropriate column the maximum contractual credit exposure remaining as of the report date under
recourse arrangements or other seller-provided credit
enhancements provided by the reporting branch or
agency in connection with its sales of the loans and
leases reported in Schedule S, item 11, above. Report the
Instructions for Preparation of Reporting Form FFIEC 002
March 2003

unused portion of standby letters of credit, the carrying
value of retained interests, and the maximum contractual
amount of recourse or other credit exposure arising from
other on- and off-balance sheet credit enhancements that
the reporting branch or agency has provided. Do not
report as the remaining maximum contractual exposure
a reasonable estimate of the probable loss under the
recourse arrangements or credit enhancement provisions
or the fair value of any liability incurred under such
provisions. Furthermore, do not reduce the remaining
maximum contractual exposure by the amount of any
associated recourse liability account. Report exposure
amounts gross rather than net of any tax effects, e.g., any
associated deferred tax liability.

Memoranda
Item M1

Asset-backed commercial paper conduits:

Item M1(a) Maximum amount of credit exposure
arising from credit enhancements provided to
conduit structures in the form of standby letters
of credit, subordinated securities, and other
enhancements.
Report in the appropriate subitem the maximum contractual credit exposure remaining as of the report date under
standby letters of credit, subordinated securities, and
other credit enhancements provided by the reporting
branch or agency to asset-backed commercial paper conduit structures. Do not report in these subitems a reasonable estimate of the probable loss under the credit
enhancement provisions or the fair value of any liability
incurred under such provisions. For the definition of
‘‘related institution,’’ as that term is used in Memorandum items 1(a) and 1(b), see the entry for ‘‘related
institutions’’ in the Glossary section of these instructions.
Item M1(a)(1) Conduits sponsored by the
reporting institution or a related institution.
Report the unused portion of standby letters of credit, the
carrying value of subordinated securities, and the maximum contractual amount of credit exposure arising from
other credit enhancements that the reporting branch or
agency has provided to asset-backed commercial paper
conduit structures sponsored by the reporting branch or
agency or a related institution.
SCHEDULE S-5

FFIEC 002

Item M1(a)(2) Conduits sponsored by other
unrelated institutions.

Item M1(b)(1) Conduits sponsored by the
reporting institution or a related institution.

Report the unused portion of standby letters of credit, the
carrying value of subordinated securities, and the maximum contractual amount of credit exposure arising from
other credit enhancements that the reporting branch or
agency has provided to asset-backed commercial paper
conduit structures other than those sponsored by the
reporting branch or agency or a related institution.

Report the unused portions of commitments provided by
the reporting branch or agency that function as liquidity
facilities to asset-backed commercial paper conduit structures sponsored by the reporting institution or a related
institution.

Item M1(b) Unused commitments to provide
liquidity to conduit structures.
Report in the appropriate subitem the unused portions
ofcommitments provided by the reporting branch or
agency that function as liquidity facilities to asset-backed
commercial paper conduit structures. Typically, these
facilities take the form of a Backstop Line (Loan Agreement) or an Asset Purchase Agreement. Under a backstop
line, the reporting branch or agency advances funds to
the conduit when a draw is required under the liquidity
facility. The advance is secured by the cash flow of the
underlying asset pools. Under an asset purchase agreement, the reporting branch or agency purchases a specific
pool of assets from the conduit when a draw is required
under the liquidity facility. Typically, the reporting
branch or agency is repaid from the cash flow on the
purchased assets or from the sale of the purchased pool
of assets.

SCHEDULE S-6

Item M3(b)(2) Conduits sponsored by other
unrelated institutions.
Report the unused portions of commitments provided by
the reporting branch or agency that function as liquidity
facilities to asset-backed commercial paper conduit structures other than those sponsored by the reporting institution or a related institution.

Instructions for Preparation of Reporting Form FFIEC 002
March 2003

INSTRUCTIONS FOR THE PREPARATION OF THE

FFIEC 002
Schedule T—Fiduciary and Related Services

General Instructions
NOTE: Schedule T is to be completed annually as of
December 31 beginning with the December 31, 2001,
reporting date.

Line Item Instructions
Line Item 1
powers?

Does the institution have fiduciary

Federally-chartered institutions granted trust powers by
the OCC to administer accounts in a fiduciary capacity
should answer ‘‘Yes.’’ State-chartered institutions should
answer ‘‘Yes’’ if (a) the state has granted trust powers to
the institution to offer fiduciary services as defined by the
state and (b) the institution’s federal supervisory agency
(the FDIC or the Federal Reserve) has granted consent to
exercise the trust powers (see Sections 333.2 and 333.101
of the FDIC’s regulations and Federal Reserve Regulation H). Institutions with trust company subsidiaries
should also answer ‘‘Yes.’’ Institutions responding ‘‘No’’
should not complete the remainder of this schedule.
Fiduciary capacity generally means trustee, executor,
administrator, registrar of stocks and bonds, transfer
agent, guardian, assignee, receiver, custodian under a
uniform gifts to minors act, investment adviser (if the
institution receives a fee for its investment advice), any
capacity in which the institution possesses investment
discretion on behalf of another, or any other similar
capacity.
Line Item 2 Does the institution exercise the
fiduciary powers it has been granted?
Institutions exercising their fiduciary powers should
respond ‘‘Yes.’’ Exercising fiduciary powers means that
an institution serves in a fiduciary capacity as defined in
the instructions for item 1 of this schedule.
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Line Item 3 Does the institution have fiduciary or
related activity (in the form of assets or accounts)?
Institutions with fiduciary assets, accounts, income, or
other reportable fiduciary related services should respond
‘‘Yes.’’ Institutions responding ‘‘No’’ should not complete the remainder of this schedule.
Reportable fiduciary and related services include activities that do not require trust powers but are incidental
to fiduciary services. Specifically, this includes custodial
services for assets held by the institution in a fiduciary
capacity. An institution should report custodial activities
that are offered through the fiduciary business unit or
through another distinct business unit that is devoted
to institutional custodial services. Institutions should
exclude those custodial and escrow activities related to
banking services such as retail and institutional brokerage assets, escrow assets held for the benefit of third
parties, safety deposit box assets, and any other similar
commercial arrangement.
Institutions with fiduciary activities that are limited to
only land trusts and/or custodial activity for mortgagebacked securities (such as GNMA or FNMA) should
respond ‘‘No.’’
If the answer to item 3 is ‘‘Yes,’’ complete the applicable
items of Schedule T.

Fiduciary and Related Assets
Institutions should generally report fiduciary and related
assets using their market value as of the report date.
While market value quotations are readily available for
marketable securities, many financial and physical assets
held in fiduciary accounts are not widely traded or easily
valued. If the methodology for determining market values is not set or governored by applicable law (including
the terms of the prevailing fiduciary agreement), the
institution may use any reasonable method to establish
SCHEDULE T-1

FFIEC 002

values for fiduciary and related assets for purposes of
reporting on this schedule. Reasonable methods include
appraised values, book values, or reliable estimates.
Valuation methods should be consistent from reporting
period to reporting period. This ‘‘reasonable method’’
approach to reporting market values applies both to
financial assets that are not marketable and to physical
assets. Common physical assets held in fiduciary
accounts include real estate, equipment, collectibles, and
household goods.
Institutions that have Individual Retirement Accounts,
Keogh Plan accounts, and similar accounts that consist
solely of deposits in the branch or agency itself and are
not administered by the institution’s trust department or
other fiduciary activity should not report these accounts
in Schedule T.
If two institutions are named co-fiduciary in the governing instrument, both institutions should report the
account. In addition, where one institution contracts with
another for fiduciary or related services (i.e., Branch A
provides custody services to the trust accounts of
Branch B, or Branch A provides investment management
services to the trust accounts of Branch B), both institutions should report the accounts in their respective
capacities.
Exclude unfunded insurance trusts, testamentary executor appointments, and any other arrangements representing potential future fiduciary accounts.
Asset values reported on this schedule should generally
exclude liabilities. For example, an employee benefit
account with associated loans against account assets
should be reported gross of the outstanding loan balances. As another example, an account with a real estate
asset and other corresponding mortgage loan should be
reported gross of the mortgage liability. However, there
are two exceptions. First, for purposes of this schedule,
overdrafts should be netted against gross fiduciary assets.
Second, the fair value of derivative instruments, as
defined in FASB Statement No. 133, should be included
in (i.e., netted against) gross assets even if the fair value
is negative.
Securities borrowing/lending transactions should be
reflected as sales or as secured borrowings according to
FASB Statement No. 140. A transferee (‘‘borrower’’) of
securities generally is required to provide ‘‘collateral’’ to
SCHEDULE T-2

the transferor (‘‘lender’’) of securities. When such transactions do not qualify as sales, securities ‘‘lenders’’ and
‘‘borrowers’’ should account for the transactions as
secured borrowings in which cash (or securities that
the holder is permitted by contract or custom to sell or
repledge) received as ‘‘collateral’’ by the securities
‘‘lender’’ is considered the amount borrowed and the
securities ‘‘loaned’’ are considered pledged against the
amount borrowed. For purposes of this schedule, securities held in fiduciary accounts that are ‘‘loaned’’ in
securities lending transactions (that are accounted for as
secured borrowings) should be reported as an asset of the
fiduciary account that ‘‘loaned’’ the securities, but the
‘‘collateral’’ received should not also be reported as an
asset of this fiduciary account.
In the Fiduciary and Related Assets section, the market
value of Collective Investment Fund (CIF) units should
be reported along with individual participant accounts in
the Column and Item that corresponds to each participant. The aggregate amount of a CIF that is operated by
an institution should NOT also be reported as a separate,
additional account in the Fiduciary and Related Assets
section of this schedule.
Column A, Managed Assets: Report the total market
value of assets held in managed fiduciary accounts. An
account should be categorized as managed if the institution has investment discretion. Investment discretion is
defined as the sole or shared authority (whether or not
that authority is exercised) to determine what securities
or other assets to purchase or sell on behalf of the
fiduciary related account. An institution that delegates
its authority over investments and an institution that
receives delegated authority over investments are BOTH
deemed to have investment discretion. An entire account
should be reported as either managed or non-managed
based on the predominant responsibility of the reporting
institution.
Column B, Non-managed Assets: Report the total
market value of assets held in non-managed fiduciary
accounts. An account should be categorized as nonmanaged if the institution does not have investment
discretion. Those accounts for which the institution provides a menu of investment options but the ultimate
selection authority remains with the account holder or an
external manager should be categorized as non-managed.
For example, an institution that offers a choice of sweep
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

FFIEC 002

vehicles is not necessarily exercising investment discretion. The process of narrowing investment options from
a range of alternatives does not create a managed fiduciary account for the purposes of this schedule.

plans administered rather than the number of plan participants. Employee benefit accounts that are solely custody
and safekeeping accounts should be reported in Schedule T, item 10.

Column C, Number of Managed Accounts: Report the
total number of managed fiduciary accounts.

Line Item 5(c)

Column D, Number of Non-managed Accounts:
Report the total number of non-managed fiduciary
accounts.
Line Item 4

Personal trust and agency accounts.

Report the market value and number of accounts for all
testamentary trusts, revocable and irrevocable living
trusts, other personal trusts, and non-managed personal
agency accounts. Include accounts in which the institution serves as executor, administrator, guardian, or
conservator. Exclude personal investment management
agency accounts, which should be reported in Schedule T, item 7. Also exclude Keogh Act plans, Individual
Retirement Accounts (IRAs), and other pension or profitsharing plans for self-employed individuals which should
be reported in Schedule T, item 5(c). Personal accounts
that are solely custody or safekeeping should be reported
in item 10 of this schedule.
Line Item 5
accounts:

Retirement related trust and agency

Line Item 5(a)
contribution.

Employee benefit-defined

Report the market value and number of accounts for all
employee benefit defined contribution accounts in which
the institution serves as either trustee or agent. Include
401(k) plans, 403(b) plans, profit-sharing plans, money
purchase plans, target benefit plans, stock bonus plans,
employee stock ownership plans, and thrift/savings
plans. The number of accounts reported should reflect
the total number of plans administered rather than the
number of plan participants. Employee benefit accounts
that are solely custody and safekeeping accounts should
be reported in Schedule T, item 10.
Line Item 5(b)

Employee benefit-defined benefit.

Report the market value and number of accounts for all
employee benefit defined benefit plans in which the
institution serves as either trustee or agent. The number
of accounts reported should reflect the total number of
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Other retirement accounts.

Report the market value and number of accounts for all
other retirement related fiduciary accounts in which the
institution serves as trustee or agent. Include Keogh Act
plans, Individual Retirement Accounts, and other pension or profit-sharing plans for self-employed individuals. Exclude accounts, originated by fiduciary or nonfiduciary personnel, that are solely administered to hold
deposits of the reporting institution. Also exclude those
retirement accounts that are originated and managed
through a brokerage account. Other retirement accounts
that are solely custody and safekeeping accounts should
be reported in Schedule T, item 10.
Line Item 6

Corporate trust and agency accounts.

Report the market value of assets held by the institution
for all corporate trust and agency accounts. Report assets
that are the responsibility of the institution to manage or
administer in accordance with the corporate trust agreement. Include assets relating to unpresented bonds or
coupons relating to issues that have been called or
matured. Do NOT report the entire market value of the
associated securities or the outstanding principal of associated debt issues. Include accounts for which the institution is trustee for corporate securities, tax-exempt
and other municipal securities, and other debt securities
including unit investment trusts. Also include accounts
for which the institution is dividend or interest paying
agent, and any other type of corporate trustee or agent
appointment. Accounts that are solely custodial or safekeeping should be reported in Schedule T, item 10.
Line Item 7
accounts.

Investment mangement agency

Report the market value and number of accounts for all
individual and institutional investment management
agency accounts that are administered within the fiduciary area of the institution. Investment management
agencies are those agency accounts in which the institution has investment discretion; however, title to the assets
remain with the client. Include accounts in which the
institution serves as a sub-advisor. Exclude investment
management agency accounts that are administered in
SCHEDULE T-3

FFIEC 002

subsidiaries that are SEC registered investment advisors.
Include those mutual funds that are advised by the fiduciary area that is a separately identifiable department or
division (as defined in section 217 of the Gramm–Leach–
Bliley Act). Classes of the same mutual fund should be
combined and reported as a single account.
Line Item 8

Other fiduciary accounts.

Report the market value and number of accounts for all
other trusts and agencies not reported in Schedule T,
items 4 through 7. Custody and safekeeping accounts
should be reported in Schedule T, item 10.
Line Item 9

Total fiduciary accounts.

Report the sum of items 4 through 8.
Line Item 10

Custody and safekeeping accounts.

Report the market value and number of accounts for all
personal and institutional custody and safekeeping
accounts held by the institution. Safekeeping and custody accounts are a type of agency account in which the
reporting institution performs one or more specified
agency functions but the institution is not a trustee and
also is not responsible for managing the asset selection
for account assets. These agency services may include
holding assets, processing income and redemptions, and
other recordkeeping and customer reporting services. For
employee benefit custody or safekeeping accounts, the
number of accounts reported should reflect the total
number of plans administered rather than the number of
plan participants. Include accounts in which the institution serves in a sub-custodian capacity. For example,
where one institution contracts with another for custody
services, both institutions should report the accounts in
their respective capacity.
Accounts in which the institution serves as trustee or in
an agency capacity in addition to being custodian should
be reported in the category of the primary relationship.
For example, personal trust accounts in which the institution also serves as custodian should be reported as personal trust accounts and not as custodian accounts. An
institution should report an account only once in Schedule T, items 4 through 8 and 10.
Report custodian accounts that are incidental to fiduciary
services. Include those custody and safekeeping accounts
that are administered by the trust department, and those
SCHEDULE T-4

that are administered in other areas of the institution
through an identifiable business unit that focuses on
offering fiduciary related custodial services to institutional clients. Exclude those custodial and escrow activities related to banking services such as retail and institutional brokerage assets, securities safekeeping services
for correspondent banks, escrow assets held for the benefit of third parties, safety deposit box assets, and any
other similar commercial arrangement.

Memoranda
Line Item M1 Managed assets held in personal
trust and agency accounts.
Report in Memorandum items 1(a) through 1(k) the
market value of managed assets held in the Personal
Trust and Agency Accounts included in Schedule T,
item 4, column A. For common trust funds and collective
investment funds that are held for both managed and
non-managed participating accounts, the proportionate
share of the assets of these funds that are held for
the participating accounts that are managed should be
reported in Memorandum items 1(a) through 1(k), as
appropriate. The proportionate share of fund assets held
for non-managed participating accounts should not be
included in these Memorandum items. To avoid duplication, the value of units of participation in collective
investment funds should not be reported as assets of participating accounts. Where several institutions in the
same affiliated group participate accounts in a collective
investment fund maintained by one member of the affiliated group, each participating institution should report its
proportionate share of the assets in the appropriate item.
To compute the proportionate share of assets, multiply
the total market value of the various asset groupings in
the collective investment fund by the percentage of units
of participation held to total units outstanding.
Securities held in fiduciary accounts that are ‘‘loaned’’ in
securities lending transactions (that are accounted for as
secured borrowings) should be reported as an asset of the
fiduciary account that ‘‘loaned’’ the securities, but the
‘‘collateral’’ received should not also be reported as an
asset of this fiduciary account.
Line Item M1(a)

Noninterest-bearing deposits.

Report all noninterest-bearing deposits. Report
noninterest-bearing deposits of both principal and
income cash.
Instructions for Preparation of Reporting Form FFIEC 002
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FFIEC 002

Line Item M1(b)

Interest-bearing deposits.

Report all interest-bearing saving and time deposits.
Include NOW accounts, MMDA accounts, ‘‘BICs’’ (bank
investment contracts) which are insured by the FDIC,
and certificates of deposit. Report interest-bearing deposits of both principal and income cash.
Line Item M1(c) U.S. Government and U.S.
Government agency obligations.
Report all securities of and/or loans to the U.S. Government and U.S. Government corporations and agencies.
Include certificates or other obligations, however named,
that represent pass-through participations in pools of real
estate loans when the participation instruments: (1) are
issued by FHA approved mortgagees and guaranteed
by the Government National Mortgage Association, or
(2) are issued, insured, or guaranteed by a U.S. Government agency or corporation (e.g., the Federal Home
Loan Mortgage Corporation’s Mortgage Participation
Certificates). Collateralized mortgage obligations
(CMOs) and real estate mortgage investment conduits
(REMICs) issued by the Federal National Mortgage
Association (FNMA) (‘‘Fannie Mae’’) and the Federal
Home Loan Mortgage Corporation (FHLMC) (‘‘Freddie
Mac’’) should be included.
Line Item M1(d)
obligations.

State, county, and municipal

Report all short and long-term obligations of state and
local governments, and political subdivisions of the
United States. Include obligations of U.S. territories and
insular possessions and their political subdivisions and
all Federal income tax exempt obligations of authorities
such as local housing and industrial development authorities that derive their tax-exempt status from relationships
with State or local governments. Tax-exempt money
market mutual funds should be reported with money
market mutual fund in Schedule T, Memorandum
item 1(e).
Line Item M1(e)

Money market mutual funds.

Report all holdings of open-end registered investment
companies—mutual funds—which attempt to maintain
net asset values at $1.00 per share. Include taxable and
tax-exempt money market mutual funds. Exclude shortterm collective investment funds.
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Line Item M1(f)

Other short-term obligations.

Report all short-tem obligations (i.e., original maturities
of less than 1 year, or 13 months in the case of the time
portion of master notes). In addition to short-term notes,
this would include such money market instruments as
master note arrangements, commercial paper, bankers
acceptances, securities repurchase agreements, and other
short-term liquidity investments. Exclude state, county,
and municipal obligations.
Line Item M1(g)

Other notes and bonds.

Report all other bonds, notes (except personal notes), and
debentures. Include corporate debt, insurance annuity
contracts, ‘‘GICs’’ (guaranteed investment contracts),
‘‘BICs’’ (bank investment contracts) which are not
insured by the FDIC, and obligations of foreign governments. Also include certificates or other obligations,
however named, representing pass-through participations
in pools of real estate loans when the participation instruments are issued by financial institutions and guaranteed
in whole or in part by private guarantors. Collateralized
mortgage obligations (CMOs) and real estate mortgage
investment conduits (REMICs) which are not issued by
the Federal National Mortgage Association (FNMA)
(‘‘Fannie Mae’’) and the Federal Home Loan Mortgage
Corporation (FHLMC) (‘‘Freddie Mac’’) should be
reported here, even if the collateral consists of GNMA
(‘‘Ginnie Mae’’) or FNMA pass-throughs or FHLMC
participation certificates. Exclude short-term obligations
which should be reported in Schedule T, Memorandum
item 1(f), above.
Line Item M1(h)

Common and preferred stocks.

Report all holdings of domestic and foreign common and
preferred equities, including warrants and options.
Include holdings of all mutual funds (open-end and
closed-end) except money market funds which are
reported in Schedule T, Memorandum item 1(e), above.
Also include all unit investment trusts, regardless of the
securities they are invested in (e.g., stocks, corporate
bonds, and municipal bonds). Include ownership interests in private equity investments, limited liability companies, and any other pooled investment vehicle except
those that are primarily invested in real estate which
should be included in Schedule T, Memorandum
item 1(j).
SCHEDULE T-5

FFIEC 002

Line Item M1(i)

Real estate mortgages.

Report real estate mortgages, real estate contracts, land
trust certificates, and ground rents. These assets may be
reported at unpaid balance if that figure is a fair approximation of market value.
Line Item M1(j)

Real estate.

Report real estate, mineral interests, royalty interests,
leaseholds, and other similar assets. Land and buildings
associated with farm management accounts should be
reported in this item. Investments in limited partnerships
that are solely or primarily invested in real estate should
also be reported here.
Line Item M1(k)

Miscellaneous assets.

Report personal notes, tangible personal property, and
other miscellaneous assets that cannot properly be
reported in Schedule T, Memorandum items 1(a) through
1(j), above. Crops, equipment and livestock associated
with farm management accounts should be reported in
this item.
Line Item M1(l) Total managed assets held in
personal trust and agency accounts.
Report the sum of Memorandum items 1(a) through 1(k).
This item must equal Schedule T, item 4, column A.
Line Item M2
accounts:

Corporate trust and agency

Line Item M2(a)
trusteeships.

Corporate and municipal

Report in column A the total number of corporate and
municipal issues, as well as other debt issues such as unit
investment trusts, for which the institution serves as
trustee. If more than one institution is trustee for an
issue, each institution should report the issue. Securities
with different CUSIP numbers should be considered
separate issues; however, serial bond issues should be
considered as a single issue. When an institution serves
as trustee of a bond issue, it may also perform agency
functions for the issue such as registrar (transfer agent)
or interest and principal paying agent. In those cases,
report the issue only in Memorandum item 2(a), ‘‘Corporate and Municipal Trusteeships,’’ as the trustee appointment is considered the primary function. Consider the
primary function of the appointment when selecting the
SCHEDULE T-6

item in which to report the appointment. Exclude issues
that have been called in their entirety or have matured
even if there are unpresented bonds or coupons for which
funds are being held.
Report in column B the total par value of outstanding
debt securities for the issues reported in column A for
which the institution serves as trustee. For zero-coupon
bonds, report the final maturity amount. Exclude assets
(i.e., cash, deposits, and investments) that are being held
for corporate trust purposes; they should be reported in
Schedule T, item 6, above.
Line Item M2(b) Transfer agent, registrar, paying
agent, and other corporate agency.
Report in column A the total number of issues for which
the institution acts in a corporate agency capacity.
Include the total number of equity, debt, and mutual fund
issues for which the institution acts as transfer agent
or registrar. Separate classes of a mutual fund should
be consolidated and reflected as a single issue. Include
the total number of stock or bond issues for which the
institution disburses dividend or interest payments. Also
include the total number of issues of any other corporate
appointments that are performed by the institution
through its fiduciary capacity. Issues for which the institution serves in a dual capacity should be reported once.
Corporate and Municipal Trusteeships reported in Schedule T, Memorandum item 2(a), above in which the institution also serves as transfer agent, registrar, paying
agent, or other corporate agency capacity should not be
included in Memorandum item 2(b). Include only those
agency appointments that do not relate to issues reported
in Schedule T, Memorandum item 2(a), above.
Line Item M3 Collective investment funds and
common trust funds.
Report the number and market value of the assets held in
Collective Investment Funds (CIFs) and Common Trust
Funds operated by the reporting institution. If an institution operates a CIF that is used by more than one
institution, the entire CIF should be reported in this
section only by the institution which operates the CIF.
Exclude mutual funds from this section. Each CIF should
be categorized in the one item that best fits the fund type.
Line Item M3(a)

Domestic equity.

Report funds investing primarily in U.S. equities. Include
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

FFIEC 002

those seeking growth, income, growth and income, U.S.
index funds and those concentrating on small, mid, or
large cap domestic stocks. Exclude funds specializing in
a particular sector (e.g., technology, health care, financial, and real estate), which should be reported in Schedule T, Memorandum item 3(g), ‘‘Specialty/other.’’
Line Item M3(b)

International/Global equity.

Report funds investing exclusively in equities of issuers
located outside the U.S. and those funds representing a
combination of U.S. and foreign issuers. Include funds
that specialize in a particular country, region, or emerging market.
Line Item M3(c)

Stock/Bond blend.

Report funds investing in a combination of equity and
bond instruments. Include funds with a fixed allocation
along with those having the flexibility to shift assets
between stocks, bonds, and cash.
Line Item M3(d)

Taxable bond.

Report funds investing in taxable debt securities. Include
funds that specialize in U.S. Treasury and U.S. Government agency debt, investment grade corporate bonds,
high-yield debt securities, mortgage-related securities,
and global, international, and emerging market debt
funds. Exclude funds that invest in municipal bonds,
which should be reported in Schedule T, Memorandum
item 3(e), and funds that qualify as short-term investments, which should be reported in Schedule T, Memorandum item 3(f).

Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Line Item M3(e)

Municipal bond.

Report funds investing in debt securities issued by states
and political subdivisions in the U.S. Such securities may
be taxable or tax-exempt. Include funds that invest in
municipal debt issues from a single state. Exclude funds
that qualify as short-term investments, which should be
reported in Schedule T, Memorandum item 3(f).
Line Item M3(f)
market.

Short term investments/Money

Report funds that invest in short-term money market
instruments with an average portfolio maturity that is
limited to 90 days with individual securities limited to
maturities of 13 months or less. Money market instruments may include U.S. Treasury bills, commercial
paper, bankers acceptances, and repurchase agreements.
Include taxable and nontaxable funds.
Line Item M3(g)

Specialty/Other.

Include funds that specialize in equity securities of particular sectors (e.g., technology, health care, financial,
and real estate). Also include funds that do not fit into
any of the above categories.
Line Item M3(h)

Total collective investment funds.

Report the sum of Memorandum items 3(a) through 3(g).

SCHEDULE T-7

Glossary

The definitions in this Glossary apply to the Report of
Assets and Liabilities of U.S. Branches and Agencies
of Foreign Banks (FFIEC 002) and are not necessarily
applicable for other regulatory or legal purposes. Similarly, the accounting discussions in this Glossary are
those relevant to the preparation of this report and are not
intended to constitute a comprehensive presentation on
bank accounting.

Accrual of Loss Contingencies: An estimated loss (or
expense) from a loss contingency (for example, pending
or threatened litigation) should be accrued if it is probable that an asset had been impaired or a liability
incurred as of the end of the reporting period and the
amount of the loss can be reasonably estimated. Contingencies which might result in gains should not be recognized prior to their realization.

Accounting Errors, Corrections of: A branch or agency
may become aware of an error in a report after it has
been submitted to the appropriate federal bank regulatory
agency through either its own or its regulator’s discovery
of the error. An error in a report for a prior period may
result from:

Agreement Corporation: See ‘‘Edge and Agreement
corporation.’’

(1) mathematical mistake;
(2) a mistake in applying accounting principles; or
(3) the improper use of information that existed when
the reports for prior periods were prepared.
When a material error of one of these types is discovered
in a report, the branch or agency may be directed to file
amended report data.
Accounting Principles, Changes in: Changes in
accounting principles should be made only if such
changes result in the adoption of preferable accounting
practices. Most changes in accounting principles will
require an adjustment of the net due from/due to account
balance.
Accretion of Discount on Securities: Accretion of discount on securities purchased below par or face value is
required of all reporting institutions. The discount on
securities should be accreted from date of purchase to
maturity, not to call or put date.
Instructions for Preparation of Reporting Form FFIEC 002
September 2001

Allowance for Loan Losses: Branches and agencies
may choose to, but are not required to, maintain an
allowance for loan losses on an office level. As of the
end of each quarter, or more frequently if warranted, the
management of each branch or agency must evaluate,
subject to examiner review, the collectibility of the loan
and lease portfolio, including any recorded accrued and
unpaid interest (i.e., not already reversed or charged off).
When available information confirms that specific loans
and leases, or portions thereof, are uncollectible, the U.S.
branch or agency should promptly charge off, or establish specific reserves for, these uncollectible amounts.
Management must maintain reasonable records in support of their evaluations and entries.
When a branch or agency makes a full or partial direct
write-down of a loan or lease through a charge-off, the
institution establishes a new cost basis for the asset.
Consequently, once a new cost basis has been established
for a loan or lease, this cost basis may not be ‘‘written
up’’ at a later date. Reversing the previous write-down
and ‘‘re-booking’’ the charged-off asset after the institution concludes that the prospects for recovering the
charge-off have improved, regardless of whether the
institution assigns a new account number to the asset or
the borrower signs a new note, is not an acceptable
accounting practice.
GL-1

Glossary

Amortization of Premiums on Securities: Amortization on securities purchased above par or face value is
required. The premium on securities should be amortized
from date of purchase to maturity, not to call or put date.
Bankers Acceptances: A bankers acceptance, for purposes of this report, is a draft or bill of exchange that has
been drawn on and accepted by a banking institution (the
‘‘accepting bank’’), or its agent, for payment by the
institution at a future date that is specified in the instrument. Drafts accepted by a banking institution are
referred to as ‘‘acceptances executed’’ by that institution.
The customer named in the draft as responsible for
payment to the accepting banking institution is referred
to as the ‘‘account party.’’ Funds are advanced to the
drawer of the acceptance by the discounting of the
accepted draft either by the accepting banking institution
or by others. The accepted draft is negotiable and may be
sold and resold subsequent to its original discounting. At
the maturity date specified, the holder or owner of the
acceptance at that date presents the acceptance to the
accepting banking institution for payment.
The accepting banking institution has an unconditional
obligation to pay the holder of the acceptance the fare
amount of the draft or presentation on the specified
maturity date. The account party (customer) has an
unconditional obligation to put the accepting banking
institution in funds at or before the maturity date specified in the instrument.
The following description covers the treatment in this
report of:
(1) acceptances that have been executed by the reporting
branch or agency, that is, those drafts that have been
drawn on and accepted by it;
(2) ‘‘participations’’ in acceptances, that is, ‘‘participations’’ in the accepting branch or agency’s obligation to put the holder of the acceptance in funds at
maturity, or ‘‘participations’’ in the accepting branch
or agency’s risk of loss in the event of default by the
account party;
(3) bankers acceptances owned and held by the reporting branch or agency, whether executed by it or by
others, that the branch or agency has discounted or
purchased; and
GL-2

(4) ‘‘refinancing’’ of acceptances.
In the following discussion, the term ‘‘acceptances’’ is
used to mean ‘‘bankers acceptances.’’ Where, as in section 4(c) below, ‘‘trade acceptances’’ are referred to, that
term is used explicitly.
(1) Acceptances executed by the reporting branch or
agency: With the exceptions described below, the
accepting branch or agency must report on its Report
of Assets and Liabilities the full amount of the
outstanding acceptances that it has executed both
in (i) the liability item, ‘‘Branch or agency liability
on acceptances executed and outstanding’’ (Schedule RAL, item 4(d)), reflecting the accepting branch
or agency’s obligation to put the holder of the
acceptance in funds at maturity, and in (ii) the
asset item, ‘‘Customers’ liability to this branch or
agency on acceptances outstanding’’ (Schedule RAL,
item 1(g)), reflecting the account party’s liability to
put the accepting branch or agency in funds at or
before maturity of the acceptance.
The reporting of the full amount of an acceptance
executed by the reporting branch or agency in both
the acceptance asset and acceptance liability items
also applies to the situation where a branch or agency
accepts a draft on it drawn by a customer of its head
office and where as a matter of internal control the
head office shows the claim on the account party on
head office books rather than on the branch or
agency’s books. For purposes of this report, if the
branch or agency has accepted the draft, it should
report both the acceptance liability and the acceptance asset (customers’ liability on acceptances)
rather than only the acceptance liability balanced by
a due from item on the head office.
Exceptions to the mandatory reporting by the accepting branch or agency of the full amount of all outstanding drafts accepted by the reporting branch
or agency in both Liability item 4(d) and Asset
item 1(g) on schedule RAL of this report occur only
in the following situations:
(a) One exception occurs in situations where the
accepting branch or agency acquires—through
initial discounting or subsequent purchase—and
holds its own acceptance (i.e., draft that it has
itself accepted). In this case, acceptances executed by the reporting branch or agency that are
Instructions for Preparation of Reporting Form FFIEC 002
September 2001

Glossary

held by it are not to be reported in ‘‘Branch or
agency liability on acceptances executed and
outstanding’’ and ‘‘Customers’ liability to this
branch or agency on acceptances outstanding’’
as noted above. Instead, the branch or agency’s
holdings of its own acceptances will be reported
as loans (in item 1(e) of Schedule RAL and in
Schedule C in item 4, ‘‘Commercial and industrial loans,’’ item 2, ‘‘Loans to depository institutions and acceptances of other banks,’’ item 3,
‘‘Loans to other financial institutions,’’ or item 6,
‘‘Loans to foreign governments and official institutions,’’ depending upon the type of customer.)
(NOTE: Holdings of acceptances of other banks
(nonrelated) are reported in Schedule C in
item 2, ‘‘Loans to depository institutions and
acceptances of other banks.’’)
(b) Another exception occurs in situations where
the account party anticipates its liability to the
accepting branch or agency on an acceptance
outstanding by making payment to the branch or
agency that reduces the customer’s liability in
advance of maturity of the acceptance. In this
case, the reporting branch or agency will
decrease the asset item ‘‘Customers’ liability to
this branch or agency on acceptances outstanding’’ (item 1(g) of Schedule RAL) by the amount
of such prepayment; however, the prepayment
will not affect the liability item ‘‘Branch or
agency liability on acceptances executed and
outstanding’’ (item 4(d) of Schedule RAL),
which would continue to reflect the full amount
of the acceptance until the branch or agency has
paid the holder of the acceptance at the maturity
date specified in the instrument. If the account
party’s payment to the accepting branch or
agency before the maturity date is not for the
purpose of immediate reduction of its indebtedness to the reporting branch or agency or if
receipt of the payment does not immediately
reduce or extinguish that indebtedness, such
advance payment will not reduce item 1(g)
of Schedule RAL but should be reflected in
the branch or agency’s deposit liabilities
(item 4(a) of Schedule RAL and in Schedule E,
as appropriate).
(c) A third exception occurs in the case of accepInstructions for Preparation of Reporting Form FFIEC 002
September 2001

tance transactions of the reporting branch oragency with related banking institutions. In
such instances, the reporting treatment specified below is consistent with the general reporting requirements for transactions with related
depository institutions. When the account party
is the reporting branch or agency’s head office or
another related banking institution, the reporting
institutions’s claim on the account party in connection with an acceptance executed by it should
be reported as an item due from a related party
and be reflected in Schedule RAL either in
item 2 (‘‘Net due from related depository institutions’’) or in item 5 (‘‘Net due to related depository institutions’’); it would not be reported in
item 1(g) (‘‘Customers’ liability to this branch or
agency on acceptances outstanding’’). However,
as in the case of other acceptances executed by
the reporting institution, the reporting institution’s liability for such an acceptance would be
reported in item 4(d) (‘‘Branch or agency liability on acceptances executed and outstanding’’).
In all situations other than those exceptions discussed above, the accepting branch or agency must
report the full amount of its acceptances both in its
liability item, ‘‘Branch or agency liability on acceptances executed and outstanding,’’ and in its asset
item, ‘‘Customers’ liability to this branch or agency
on acceptances outstanding.’’ There are no other
circumstances in which the accepting branch or
agency can report as a liability in Schedule RAL
anything less than the full amount of the obligation
to put the holder of the acceptance in funds at
maturity. Moreover, there are no circumstances in
which the reporting branch or agency can net its
acceptance assets against its acceptance liabilities.
(2) ‘‘Participations’’ in acceptances: The general
requirement for the accepting branch or agency to
report on its balance sheet the full amount of its
obligation to put the holder of the acceptance in
funds at maturity applies in particular to any situation in which the accepting branch or agency enters
into any kind of arrangement with others (whether
with a related or a nonrelated institution) for the
purpose of having the latter share, or participate, in
GL-3

Glossary

the risk of loss in the event of default on the part of
the account party.1
The existence of any such sharing arrangement or
participation agreement does not reduce the accepting branch or agency’s obligation to pay to the
holder of the acceptance the full amount of the
acceptance at maturity and does not change the
requirement for the accepting branch or agency to
report the full amount of the acceptance in the liability and asset items described above; the amount of
the participation is not to be deducted from either the
acceptance liability or the acceptance asset. This is
the case in any such sharing arrangement or participation agreement, regardless of the form of the
participation agreement or its contract provisions,
regardless of the terminology (e.g., ‘‘funded,’’
‘‘risk,’’ ‘‘unconditional,’’ or ‘‘contingent’’) used to
describe it and the relationships under it, regardless
of whether it is described as a participation in the
risk of default by the account party, in the customer’s
liability or in the accepting branch or agency’s obligation, and regardless of the system of debits and
credits used by the accepting branch or agency to
reflect the participation arrangement. Such participations are not to be reported in Schedule RAL either
by an accepting branch or agency that conveys
shares in its risk of loss in the event of default on the
part of the account party or by a branch or agency
that acquires such participations. However, a branch
or agency that has conveyed to others such participations in acceptances it has executed must report the
outstanding amount of such participations in Schedule L, Off-Balance Sheet Items, item 5, ‘‘Participations in acceptances conveyed to others by the
reporting (accepting) branch or agency.’’
(3) Bankers acceptances owned by the reporting branch
or agency: The treatment of bankers acceptances
owned or held by the reporting branch or agency
(whether acquired by initial discount or subsequent
purchase) depends upon whether the acceptances
held have been accepted by the reporting branch or
agency, by a banking institution related to the reporting branch or agency, or by nonrelated banks, and, in
1. This discussion does not deal with participations in holdings of
bankers acceptances, which are reportable as loans. Such participations are
treated like any participations in loans as described in the Glossary entry
for ‘‘transfers of financial assets.’’

GL-4

some cases, upon whether the account party is a
banking institution related to the reporting branch or
agency.
(a) All acceptances held in trading accounts that
were executed by the reporting branch or agency
and for which the account party is not a related
banking institution and all acceptances held in
trading accounts that were executed by nonrelated banking institutions are to be reported in
Schedule RAL, item 1(f), ‘‘Trading assets.’’
(b) Acceptances held by the reporting branch or
agency that were executed by it and for which
the account party is not a related banking institution are to be reported in Schedule RAL,
item 1(e), ‘‘Loans,’’ and in Schedule C, part I,
Loans, according to the account party of the
draft. Thus, holdings of own acceptances are to
be reported in Schedule C in ‘‘Commercial
and industrial loans’’ (item 4) if the account
parties are commercial or industrial enterprises;
in the appropriate subitem of ‘‘Loans to depository institutions and acceptances of other banks’’
(item 2) if the account parties are nonrelated
banking institutions (e.g., in connection with the
refinancing of another acceptance or with the
financing of dollar exchange); in ‘‘Loans to other
financial institutions’’ (item 3) if the account
parties are finance companies, etc.; or in ‘‘Loans
to foreign governments and official institutions’’
(item 6) if the account parties are foreign governments or official institutions (e.g., for the financing of dollar exchange).
(c) Acceptances held by the reporting branch or
agency that were executed by it and for which
the account party is a banking institution related
to the reporting branch or agency, are to be
treated as an item due from a related banking
institution. Consistent with the general treatment
in this report of transactions with related depository institutions, holdings of such acceptances
are not to be reported under loans but are to be
reflected in Schedule RAL either in item 2 (‘‘Net
due from related depository institutions’’) or in
item 5 (‘‘Net due to related depository institutions’’), and are also to be reported in the appropriate items of Schedule M.
Instructions for Preparation of Reporting Form FFIEC 002
September 2001

Glossary

(d) Acceptances held by the reporting branch or
agency that were executed by nonrelated banking institutions are to be reported in Schedule RAL in ‘‘Loans’’ (item 1(e)) and in the
appropriate subitem of ‘‘Loans to depository
institutions and acceptances of other banks’’
(item 2) of Schedule C. The difference in treatment in Schedule C between holdings of own
acceptances (according to account party) as set
forth in subparagraph (a) above and holdings of
nonrelated banks’ acceptances (according to the
accepting institution) as set forth in this subparagraph reflects the fact that, for other banks’
acceptances, the holding branch or agency’s
immediate claim is on the accepting bank,
regardless of the account party or of the purpose
of the loan. On the other hand, for its holdings
of its own acceptances, the branch or agency’s
immediate claim is on the account party named
in the accepted draft.
(e) Acceptances held by the reporting branch or
agency that were executed by its head office or
any other related banking institution represent
claims of the reporting branch or agency against
a related banking institution. Consistent with the
general treatment of transactions with related
depository institutions, the holding of such
acceptances are not to be reported under loans
but are to be reflected in Schedule RAL either in
item 2, ‘‘Net due from related depository institutions,’’ or in item 5, ‘‘Net due to related depository institutions,’’ depending on the overall net
position of the reporting branch or agency vis-a`vis its head office and other related depository
institutions and are also to be reported in the
appropriate items of Schedule M.
(4) Refinancing of acceptances: In some cases, a banking institution may refinance an acceptance that it
has discounted and holds as an asset by itself, drawing a draft on another banking institution and obtaining these funds from the discounting of the latter
acceptances. In these cases, the latter ‘‘refinancing’’
acceptance is to be reported as a transaction separate
and distinct from the underlying original acceptance
that is being financed in this way. The original acceptance that is being refinanced will continue to be
reported in accordance with the requirements of
paragraph 3 above if a bankers acceptance and as a
Instructions for Preparation of Reporting Form FFIEC 002
September 2001

loan if it is a trade acceptance. (See the discussion in
subparagraph (c) below for the treatment of a different form of trade acceptance refinancing.) The
reporting of the ‘‘refinancing’’ acceptance will
depend upon the characteristics of the acceptance
transaction and of the parties to it:
(a) If the reporting institution has refinanced its
holdings of acceptances by drafting a draft on
a nonrelated banking institution, it must report
its liability to the accepting bank in item 4(c)
(‘‘Other borrowed money’’) of Schedule RAL
and also in the appropriate item of Schedule P.
The nonrelated banking institution executing the
refinancing acceptance will report as it would
any other acceptance executed by it (as described
in previous paragraphs) with no reference to the
original underlying acceptance.
(b) If the reporting branch or agency’s refinancing
draft is drawn on and accepted by a related
banking institution (either a related U.S. bank or
a related branch or agency), then, in accordance
with the instructions on the treatment of transactions with related banking institutions, its liability, as the drawer of the bankers acceptance,
to the accepting banking institution would be
an item due to related banking institutions and
be reflected in Schedule RAL, not in the ‘‘Other
borrowing’’ item, but either in ‘‘Net due to
related depository institutions’’ (item 5) or in
‘‘Net due from related depository institutions’’
(item 2) depending on the overall net position
vis-a`-vis related banking institutions and also be
reported in the appropriate item of Schedule M.
Similarly, the related institution would report the
acceptance it had executed for its related banking institution as it would any acceptance
executed for a related banking institution as provided by the appropriate instructions above.
(c) A somewhat different kind of ‘‘refinancing’’ of
trade acceptances involving not the drawing of a
draft by the reporting branch or agency on
another bank but its execution of an acceptance
drawn on it by a trade customer, arises in the
case where (a) a reporting branch or agency has
acquired, through discounting, trade acceptances
of a trading company and (b) the trading company ‘‘subsequently’’ (which may be fairly
GL-5

Glossary

immediate) consolidates the trade acceptances
by drawing on the same branch or agency a draft
(a so-called ‘‘accommodation draft’’) collateralized by the original trade acceptances (which
also serves as part of the documentation permitting the latter bankers acceptance to be treated as
an eligible acceptance.) The ‘‘accommodation
draft’’ is then accepted by the reporting branch
or agency and sold into the secondary market. In
this circumstance (in which the trading company
does not realize any new funds), the use of the
original trade acceptances as collateral for the
subsequent bankers acceptance constitutes, in
effect, a reversal of the original discounting of
the trade acceptances by the branch or agency.
Thus, once the reporting branch or agency
executes such a ‘‘consolidating’’ bankers acceptance, there will be no further reflection in the
reporting branch or agency’s Schedule RAL of
the holding of the original trade acceptances;
and the ‘‘consolidating’’ bankers acceptance
executed by the reporting branch or agency will
be reported as provided in the basic instructions,
i.e., in items 1(g) and 4(d) of Schedule RAL. If
the report date falls after the original discounting
of the trade acceptances but before the execution
of the consolidating bankers acceptance, the
holding of the trade acceptances would be
reflected in ‘‘Loans’’ and there would, of course,
be no reflection of the execution of the bankers
acceptance in the report for that date.
Banks, U.S. and Foreign: In the classification of banks
as customers of the reporting branch or agency, distinctions are drawn for purposes of this report between ‘‘U.S.
banks’’ and ‘‘commercial banks in the U.S.’’ and between
‘‘foreign banks’’ and ‘‘banks in foreign countries.’’ Some
report items call for one set of these categories and other
items call for the other set. The distinctions center around
the inclusion or exclusion of foreign branches of U.S.
banks and U.S. branches and agencies of foreign banks.
For purposes of describing the office location of banks as
customers of the reporting branch or agency, the term
‘‘United States’’ covers the 50 states of the United States,
the District of Columbia, Puerto Rico, and U.S. territories and possessions. (However, for the coverage of the
term ‘‘United States’’ in Schedule M, see the instructions
for that schedule.)
GL-6

U.S. banks—The term ‘‘U.S. banks’’ covers both the U.S.
and foreign branches of banks chartered and headquartered in the U.S. (including U.S.-chartered banks owned
by foreigners), but excluding U.S. branches and agencies
of foreign banks. On the other hand, the term ‘‘banks in
the U.S.’’ or ‘‘commercial banks in the U.S.’’ (the institutional coverage of which is described in detail later in
this entry) covers the U.S. offices of U.S. banks (including their IBFs) and the U.S. branches and agencies of
foreign banks, but excludes the foreign branches of U.S.
banks.
Foreign banks—Similarly, the term ‘‘foreign banks’’
covers all branches of banks chartered and headquartered
in foreign countries (including foreign banks owned by
U.S. nationals and institutions), including their U.S.domiciled branches and agencies, but excluding the foreign branches of U.S. banks. In contrast, the term ‘‘banks
in foreign countries’’ covers foreign-domiciled branches
of banks, including the foreign branches of U.S. banks,
but excluding the U.S. branches and agencies of foreign
banks.
The following table summarizes these contrasting categories of banks considered as customers as used in this
report. (‘‘X’’ indicates inclusion; no entry indicates
exclusion.)

U.S.
banks

U.S. branches
of U.S. banks
(including
IBFs) ...............
Foreign branches
of U.S. banks .....
Foreign branches
of foreign banks ..
U.S. branches and
agencies of
foreign banks .....

X

Commercial
banks in
Foreign
the U.S.
banks

Banks in
foreign
countries

X

X

X
X

X

X

X

Commercial banks in the U.S.—The detailed institutional
composition of ‘‘commercial banks in the U.S.’’ includes:
(1) the U.S.-domiciled head offices and branches of:
(a) national banks;
(b) state-chartered commercial banks;
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September 2001

Glossary

(c) trust companies that perform a commercial banking business;
(d) industrial banks;
(e) private or unincorporated banks;
(f) International Banking Facilities (IBFs) of U.S.
banking institutions;
(g) Edge and Agreement corporations; and
(2) the U.S.-domiciled branches and agencies of foreign
banks (as defined below).
This coverage includes the U.S. institutions listed above
that are owned by foreigners. Excluded from commercial
banks in the U.S. are branches located in foreign countries of U.S. banks.
U.S. savings and loan associations and savings banks are
treated as ‘‘other depository institutions in the U.S.’’ for
purposes of this report.
U.S. branches and agencies of foreign banks—U.S.
branches of foreign banks include any offices or places
of business of foreign banks that are located in the
United States at which deposits are accepted. U.S. agencies of foreign banks include any offices or places of
business of foreign banks that are located in the United
States at which credit balances are maintained incidental
to or arising out of the exercise of banking powers but at
which deposits may not be accepted from citizens or
residents of the United States.
Banks in foreign countries—The institutional composition of ‘‘banks in foreign countries’’ includes:
(1) the foreign-domiciled head offices and branches of:
(a) foreign commercial banks (including foreigndomiciled banking subsidiaries of U.S. banks
and Edge and Agreement corporations);
(b) foreign savings banks or discount houses;
(c) nationalized banks not functioning either as central banks, as foreign development banks, or as
banks of issue;
(d) other similar foreign institutions that accept
short-term deposits; and
(2) the foreign-domiciled branches of U.S. banks.
See also ‘‘International Banking Facility (IBF).’’
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Banks in Foreign Countries: See ‘‘banks, U.S. and
foreign.’’
Bill-of-Lading Draft: See ‘‘commodity or bill-of-lading
draft.’’
Brokered Deposits: Brokered deposits represent funds
which the reporting branch obtains, directly or indirectly,
by or through any deposit broker for deposit into one or
more deposit accounts. Thus, brokered deposits include
both those in which the entire beneficial interest in a
given bank deposit account or instrument is held by a
single depositor and those in which the deposit broker
sells participations in a given bank deposit account or
instrument to one or more investors.
In some cases, brokered deposits are issued in the name
of the depositor whose funds have been placed in an
institution by a deposit broker. In other cases, an institution’s deposit account records may indicate that the
funds have been deposited in the name of a third party
custodian for the benefit of others (e.g., ‘‘XYZ Corporation as custodian for the benefit of others,’’ or ‘‘Custodial
account of XYZ Corporation’’). Unless the custodian
meets one of the specific exemptions from the ‘‘deposit
broker’’ definition in Section 29 of the Federal Deposit
Insurance Act and this Glossary entry, these custodial
accounts should be reported as brokered deposits in
Schedule E, Deposit Liabilities.
A deposit listing service whose only function is to
provide information on the availability and terms of
accounts is not facilitating the placement of deposits and
therefore is not a deposit broker per se. However, if a
deposit broker uses a deposit listing service to identify an
institution offering a high rate on deposits and then
places its customers’ funds at that institution, the deposits would be brokered deposits and the institution should
report them as such in Schedule E. The designation of
these deposits as brokered deposits is based not on the
broker’s use of the listing service but on the placement of
the deposits in the institution by the deposit broker.
Broker’s Security Draft: A broker’s security draft is a
draft with securities or title to securities attached that is
drawn to obtain payment for the securities. This draft is
sent to a bank for collection with instructions to release
the securities only on payment of the draft.
Call Option: See ‘‘derivative contracts.’’
GL-7

Glossary

Certificate of Deposit: See ‘‘deposits.’’
Commercial Banks in the U.S.: See ‘‘banks, U.S. and
foreign.’’

ing branch or agency held in custody accounts at other
banks’ branches or agencies are to be reported on the
reporting branch or agency balance sheet in the appropriate asset categories as if held in the physical custody of
the reporting branch or agency.

Commercial Letter of Credit: See ‘‘letter of credit.’’
Demand Deposits: See ‘‘deposits.’’
Commercial Paper: Commercial paper consists of
short-term negotiable promissory notes issued in the
United States by commercial businesses, including
finance companies and banks. Commercial paper usually
matures in 270 days or less and is not collateralized.
Commercial paper may be backed by a standby letter of
credit from a bank, as in the case of documented discounted notes. Holdings of commercial paper are to be
reported as ‘‘securities’’ in Schedule RAL, item 1(c)(3),
‘‘Other asset-backed securities,’’ or item 1(c)(4), ‘‘All
other’’ bonds, notes, debentures, and corporate stock,
unless held for trading and therefore reportable in Schedule RAL, item 1(f), ‘‘Trading assets.’’

Depository Institutions in the U.S.: Depository institutions in the U.S. consist of:
(1) U.S. branches and agencies of foreign banks;
(2) U.S.-domiciled head offices and branches of U.S.
banks, i.e.,
(a) national banks,
(b) state-chartered commercial banks,
(c) trust companies that perform a commercial banking business,
(d) industrial banks,

Commodity or Bill-of-Lading Draft: A commodity or
bill-of-lading draft is a draft that is issued in connection
with the shipment of goods. If the commodity or bill-oflading draft becomes payable only when the shipment of
goods against which it is payable arrives, it is an arrival
draft. Arrival drafts are usually forwarded by the shipper
to the collecting depository institution with instructions
to release the shipping documents (e.g., bill of lading)
conveying title to the goods only upon payment of the
draft. Payment, however, cannot be demanded until the
goods have arrived at the drawee’s destination. Arrival
drafts provide a means of insuring payment of shipped
goods at the time that the goods are released.
Credit Balances: Credit balances are balances booked
by the reporting institution as credit balances or maintained by the reporting institution and owed to third
parties that are incidental to or that arise from the exercise of banking powers.
Custody Account: A custody account is one in which
securities or other assets are held by a branch or agency
on behalf of a customer under a safekeeping arrangement. Assets held in such capacity are not to be reported
in the balance sheet of the reporting branch or agency
nor are such accounts to be reflected as a liability.
However, these assets may be reportable on Schedule T,
Fiduciary and Related Services. Assets of the reportGL-8

(e) private or unincorporated banks,
(f) Edge and Agreement corporations, and
(g) International Banking Facilities (IBFs) of U.S.
banking institutions;
(3) U.S.-domiciled head offices and branches of other
depository institutions in the U.S., i.e.,
(a) mutual or stock savings banks,
(b) savings or building and loan associations,
(c) cooperative banks,
(d) credit unions,
(e) homestead associations,
(f) other similar depository institutions in the U.S.,
and
(g) International Banking Facilities (IBFs) of other
depository institutions in the U.S.
(4) the U.S. branches and agencies of foreign official
banking institutions, including central banks, nationalized banks, and other banking institutions owned
by foreign governments; and
(5) investment companies that are chartered under
Article XII of the New York State banking law and
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June 2002

Glossary

that are majority-owned by one or more foreign
banks.

held or deposited in any other department of such
bank,

Deposits: The basic statutory and regulatory definitions
of ‘‘deposits’’ are contained in Section 3(1) of the Federal Deposit Insurance Act (FDI Act) and in Federal
Reserve Regulation D. The definitions in these two legal
sources differ in certain respects. Furthermore, for purpose of this report, the reporting standards for deposits
specified in these instructions do not strictly follow the
precise legal definitions in these two sources. The definitions of deposits to be reported in the deposit items
of this report are discussed below under the following
headings:

(3) money received or held by a bank, or the credit given
for money or its equivalent received or held by a
bank, in the usual course of business for a special or
specific purpose, regardless of the legal relationship
thereby established, including without being limited
to, escrow funds, funds held as security for an obligation due to the bank or others (including funds
held as dealers reserves) or for securities loaned by
the bank, funds deposited by debtor to meet maturing obligations, funds deposited as advance payment
on subscriptions to United States Government securities, funds held for distribution or purchase of
securities, funds held to meet its acceptances or
letters of credit, and withheld taxes: Provided, that
there shall not be included funds which are received
by the bank for immediate application to the reduction of an indebtedness to the receiving bank, or
under condition that the receipt thereof immediately
reduces or extinguishes such an indebtedness,

(I) FDI Act definition of deposits.
(II) Transaction–nontransaction deposit
distinction.
(III) Interest-bearing–noninterest-bearing deposit
distinction.
(I) FDI Act definition of deposits:
that the term ‘‘deposit’’ means—

Section 3(1) states

(1) the unpaid balance of money or its equivalent
received or held by a bank or savings association in
the usual course of business and for which it has
given or is obligated to give credit, either conditionally or unconditionally, to a commercial, checking,
savings, time, or thrift account, or which is evidenced by its certificate of deposit, thrift certificate,
investment certificate, certificate of indebtedness, or
other similar name, or a check or draft drawn against
a deposit account and certified by the bank or savings association, or a letter of credit or a traveler’s
check on which the bank or savings association is
primarily liable: Provided, That, without limiting the
generality of the term ‘‘money or its equivalent,’’
any such account or instrument must be regarded as
evidencing the receipt of the equivalent of money
when credited or issued in exchange for checks
or drafts or for a promissory note upon which the
person obtaining any such credit or instrument is
primarily or secondarily liable, or for a charge
against a deposit account, or in settlement of checks,
drafts, or other instruments forwarded to such bank
for collection,
(2) trust funds as defined in this Act received or held by
such bank, whether held in the trust department or
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

(4) outstanding draft (including advice or authorization
to charge bank’s or savings association’s balance in
another bank or savings association), cashier’s
check, money order, or other officer’s check issued
in the usual course of business for any purpose,
including without being limited to those issued in
payment for services, dividends, or purchases, and
(5) such other obligations of a bank or savings association as the Board of Directors, after consultation
with the Comptroller of the Currency, Director of the
Office of Thrift Supervision, and the Board of Governors of the Federal Reserve System, shall find and
prescribe by regulation to be deposit liabilities by
general usage, except that the following shall not be
a deposit for any of the purposes of this Act or be
included as part of the total deposits or of an insured
deposit:
(a) any obligation of a depository institution which
is carried on the books and records of an office
of such bank or savings association located outside of and State, unless—
(i) such obligation would be a deposit if it were
carried on the books and records of the
depository institution, and would be payable
at, an office located in any State; and
GL-9

Glossary

(ii) the contract evidencing the obligation provides by express terms, and not by implication, for payment at an office of the depository institution located in any State; and
(b) any international banking facility deposit,
including an international banking facility time
deposit, as such term is from time to time defined
by the Board of Governors of the Federal
Reserve System in Regulation D or any successor regulation issued by the Board of Governors
of the Federal Reserve System; and
(c) any liability of an insured depository institution
that arises under an annuity contract, the income
of which is tax deferred under section 72 of the
Internal Revenue Code of 1986.
(II) Transaction-nontransaction deposit distinction:
The Monetary Control Act of 1980 and the current
Federal Reserve Regulation D, ‘‘Reserve Requirements
of Depository Institutions,’’ establish, for purposes of
federal reserve requirements on deposit liabilities, a category of deposits designated as ‘‘transaction accounts.’’
All deposits that are not transaction accounts are ‘‘nontransaction accounts.’’
(1) Transaction accounts—With the exceptions noted
below, a ‘‘transaction account,’’ as defined in Regulation D and in these instructions, is a deposit or
account from which the depositor or account holder
is permitted to make transfers or withdrawals by
negotiable or transferable instruments, payment
orders of withdrawal, telephone transfers, or other
similar devices for the purpose of making payments
or transfers to third persons or others or from which
the depositor may make third party payments at an
automated teller machine (ATM), a remote service
unit (RSU), or another electronic device, including
by debit card.
Excluded from transaction accounts are savings
deposits (both money market deposit accounts
(MMDAs) and other savings deposits) as defined
below in the nontransaction account category, even
though such deposits permit some third-party transfers. However, an account that otherwise meets the
definition of a savings deposit but that authorizes or
permits the depositor to exceed the transfer limitations specified for that account shall be reported as a
GL-10

transaction account. (Please refer to the definition of
savings deposits for further detail.)
NOTE: Under the Federal Reserve’s current Regulation D, no transaction account, regardless of its
other characteristics, is classified either as a savings
deposit or as a time deposit. Thus, those transaction
accounts that are not demand deposits—NOW
accounts, ATS (Automatic Transfer Service)
accounts, and telephone and preauthorized transfer
accounts—are excluded from Regulation D time
and savings deposits. However, for FDIC-insured
branches, for FDIC insurance assessment purposes
as set forth in the FDI Act, all such transaction
accounts that are not demand deposits are included
in ‘‘time and savings deposits.’’ This FDIC usage is
to be followed by FDIC-insured branches only when
completing Schedule O. For all other items in this
report involving time or savings deposits, a strict
distinction, based on Regulation D definitions, is to
be maintained between transaction accounts and time
and savings accounts.
Transaction accounts consist of the following types
of deposits: (a) demand deposits; (b) NOW accounts
(including accounts previously designated as ‘‘Super
NOWs’’); (c) ATS accounts; and (d) telephone and
preauthorized transfer accounts, all as defined below.
Interest that is paid by the crediting of transaction
accounts is also included in transaction accounts.
(a) Demand deposits are noninterest-bearing deposits that are payable immediately on demand, or
that are issued with an original maturity or
required notice period of less than seven days,
or that represent funds for which the depository
institution does not reserve the right to require
at least seven days’ written notice of an intended
withdrawal. Demand deposits include any
matured time deposits without automatic renewal
provisions, unless the deposit agreement provides for the funds to be transferred at maturity
to another type of account. Demand deposits do
not include: (i) money market deposit accounts
(MMDAs) or (ii) NOW accounts, as defined
below in this entry.
(b) NOW accounts are interest-bearing deposits
(i) on which the depository institution has
reserved the right to require at least seven days’
written notice prior to withdrawal or transfer
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Glossary

of any funds in the account and (ii) that can
be withdrawn or transferred to third parties
by insurance of a negotiable or transferable
instrument.

(i) Individuals or sole proprietorships;

reporting institution and the depositor, withdrawals may be made automatically through payment
to the depository institution itself or through
transfer of credit to a demand deposit or other
account in order to cover checks or drafts drawn
upon the institution or to maintain a specified
balance in, or to make periodic transfers to, such
other accounts.

(ii) Organizations that are operated primarily
for religious, philanthropic, charitable, educational, or other similar purposes and that
are not operated for profit. These include
organizations, partnerships, corporations, or
associations that are not organized for profit
and are described in section 501(c)(3)
through (13) and (19) and section 528 of
the Internal Revenue Code, such as church
organizations; professional associations;
trade associations; labor unions; fraternities, sororities and similar social organizations; and nonprofit recreational clubs; or

Some institutions may have entered into agreements with their customers providing that in the
event the customer should overdraw a demand
deposit (checking) or NOW account, the institution will transfer from that customer’s savings
account an amount sufficient to cover the overdraft. The availability of the overdraft protection
plan would not in and of itself require that such a
savings account be regarded as a transaction
account provided that the overall transfer and
withdrawal restrictions of a savings deposit are
not exceeded. Please refer to the definition of
savings deposit for further detail.

NOW accounts, as authorized by federal law, are
limited to accounts held by:

(iii) Governmental units including the federal
government and its agencies and instrumentalities; state governments; county and
municipal governments and their political
subdivisions; the District of Columbia; the
Commonwealth of Puerto Rico, American
Samoa, Guam, and any territory or possession of the United States and their political
subdivisions.
Also included are the balances of all NOW
accounts of certain other nonprofit organizations
that may not fall within the above description but
that had established NOW accounts with the
reporting institution prior to September 1, 1981.
NOTE: There are no regulatory requirements
with respect to minimum balances to be maintained in a NOW account or to the amount of
interest that may be paid on a NOW account.
(c) ATS accounts are deposits or accounts of individuals or sole proprietorships on which the
depository institution has reserved the right to
require at least seven days’ written notice prior
to withdrawal or transfer of any funds in the
account and from which, pursuant to written
agreement arranged in advance between the
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

(d) Telephone or preauthorized transfer accounts
consist of deposits or accounts, other than savings deposits, (1) in which the entire beneficial
interest is held by a party eligible to hold a NOW
account, (2) on which the reporting institution
has reserved the right to require at least seven
days’ written notice prior to withdrawal or transfer of any funds in the account, and (3) under the
terms of which, or by practice of the reporting
institution, the depositor is permitted or authorized to make more than six withdrawals per
month or statement cycle (or similar period) of
at least four weeks for purposes of transferring
funds to another account of the depositor at the
same institution (including a transaction account)
or for making payment to a third party by means
of preauthorized transfer, or telephonic (including data transmission) agreement, order or
instruction. An account that permits or authorizes more than six such withdrawals in a
‘‘month’’ (a calendar month or any period
approximating a month that is at least four weeks
long, such as a statement cycle) is a transaction
account whether or not more than six such withdrawals actually are made in the ‘‘month.’’
GL-11

Glossary

A ‘‘preauthorized transfer’’ includes any
arrangement by the reporting institution to pay
a third party from the account of a depositor
(1) upon written or oral instruction (including an
order received through an automated clearing
house (ACH), or (2) at a predetermined time or
on a fixed schedule.
Telephone and preauthorized transfer accounts
also include:
(i) Deposits or accounts maintained in connection with an arrangement that permits the
depositor to obtain credit directly or indirectly through the drawing of a negotiable
or nonnegotiable check, draft, order or
instruction or other similar device (including telephone or electronic order or instruction) on the issuing institution that can be
used for the purpose of making payments or
transfers to third parties or others, or to
another deposit account of the depositor.
(ii) The balance of deposits or accounts that
otherwise meet the definition of time deposits, but from which payments may be made
to third parties by means of a debit card, an
automated teller machine, remote service
unit or other electronic device, regardless of
the number of payments made.
However, an account is not a transaction account
merely by virtue of arrangements that permit
the following types of transfer or withdrawals,
regardless of the number:
(i) Transfers for the purpose of repaying loans
and associated expenses at the same depository institution (as originator or servicer).
(ii) Transfers of funds from this account to
another account of the same depositor at the
same depository institution when made by
mail, messenger, automated teller machine,
or in person.
(iii) Withdrawals for payment directly to the
depositor when made by mail, messenger,
automated teller machine, in person, or
by telephone (via check mailed to the
depositor).
(2) Nontransaction accounts—All deposits that are not
GL-12

transaction accounts (as defined above) are nontransaction accounts. Nontransaction accounts include:
(a) savings deposits ((i) money market deposit
accounts (MMDAs) and (ii) other savings deposits
and (b) time deposits ((i) time certificates of deposit
and (ii) time deposits, open account). Regulation D
no longer distinguishes between money market
deposit accounts (MMDAs) and other savings deposits. However, these two types of accounts are defined
below for purposes of this report.
NOTE: Under the Federal Reserve’s current Regulation D, no transaction accounts, regardless of other
characteristics, are defined as savings or time deposits. Thus, savings deposits as defined here, under
the heading nontransaction accounts, constitute the
entire savings deposit category. Likewise, time
deposits, also defined here under nontransaction
accounts, constitute the entire time deposits category. However, for FDIC insurance assessment purposes, as set forth in the FDI Act, all transaction
accounts other than demand deposits—i.e., NOW
accounts, ATS accounts, and telephone and preauthorized transfer accounts—are included in ‘‘time and
savings deposits.’’ This FDIC usage is to be followed by FDIC-Insured branches only when completing Schedule O.
(a) Savings deposits are deposits with respect to
which the depositor is not required by the deposit
contract but may at any time be required by the
depository institution to give written notice of an
intended withdrawal not less than seven days
before withdrawal is made, and that is not payable on a specified date or at the expiration of a
specified time after the date of deposit.
The term savings deposit also means a deposit or
account, such as an account commonly known as
a passbook savings account, a statement savings
account, or a money market deposit account
(MMDA), that otherwise meets the requirements
of the preceding paragraph and from which,
under the terms of the deposit contract or by
practice of the depository institution, the depositor is permitted or authorized to make no more
than six transfers and withdrawals, or a combination of such transfers and withdrawals, per
calendar month or statement cycle (or similar
period) of at least four weeks, to another account
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June 2002

Glossary

(including a transaction account) of the depositor
at the same institution or to a third party by
means of a preauthorized or automatic transfer,
or telephonic (including data transmission)
agreement, order, or instruction, and no more
than three of the six such transfers may be made
by check, draft, debit card, or similar order made
by the depositor and payable to third parties.
Transfers from savings deposits for purposes of
covering overdrafts (overdraft protection plans)
are included under the withdrawal limits specified for savings deposits.

six-transfer/withdrawal rule or three-draft rule
shall be reported as a transaction account, as
follows:

There are no regulatory restrictions on the following types of transfers or withdrawals from
a savings deposit account, regardless of the
number:

(a) If withdrawals or transfers by check,
draft, or similar instrument are permitted or authorized, the account is considered a NOW account.

(i) Transfers for the purpose of repaying loans
and associated expenses at the same depository institution (as originator or servicer).

(b) If withdrawals or transfers by check,
draft, or similar instrument are not
permitted or authorized, the account is
considered either an ATS account or
a telephone or preauthorized transfer
account.

(ii) Transfers of funds from this account to
another account of the same depositor at the
same institution when made by mail, messenger, automated teller machine, or in
person.
(iii) Withdrawals for payment directly to the
depositor when made by mail, messenger
automated teller machine, in person, or
by telephone (via check mailed to the
depositor).
Further, for a savings deposit account, no minimum balance its required by regulation, there is
no regulatory limitation on the amount of interest that may be paid, and no minimum maturity
is required (although depository institutions must
reserve the right to require at least seven days’
written notice prior to withdrawal as stipulated
above for a savings deposit).
Any depository institution may place restrictions
and requirements on savings deposits in addition
to those stipulated above. In the case of such
further restrictions, the account would still be
reported as a savings deposit.
On the other hand, an account that otherwise
meets the definition of a savings deposit but that
authorizes or permits the depositor to exceed the
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

(i) If the depositor is ineligible to hold a NOW
account, such an account is considered a
demand deposit.
(ii) If the depositor is eligible to hold a NOW
account, the account will be considered
either a NOW account, a telephone or preauthorized transfer account, or an ATS
account:

Regulation D no longer distinguishes between
money market deposit accounts (MMDAs) and
other savings deposits. However, these two types
of accounts are defined as follows for purposes
of this report.
(i) Money market deposit accounts (MMDAs)
are deposits or accounts that meet the above
definition of a savings deposit and that permit up to (but no more than) three of the six
allowable transfers to be made by check,
draft, debit card or similar order made by the
depositor and payable to third parties.
(ii) Other savings deposits are deposits or
accounts that meet the above definition of a
savings deposit but that permit no transfers
by check, draft, debit card, or similar order
made by the depositor and payable to third
parties. Other savings deposits are commonly known as passbook savings or statement savings accounts.
Examples illustrating distinctions between
MMDAs and other savings deposits for purposes
of this report are provided at the end of this
Glossary entry.
GL-13

Glossary

(b) Time deposits are deposits that the depositor
does not have a right, and is not permitted, to
make withdrawals from within six days after the
date of deposit unless the deposit is subject to an
early withdrawal penalty of at least seven days’
simple interest on amounts withdrawn within the
first six days after deposit. A time deposit from
which partial early withdrawals are permitted
must impose additional early withdrawal penalties of at least seven days’ simple interest on
amounts withdrawn within six days after each
partial withdrawal. If such additional early withdrawal penalties are not imposed, the account
ceases to be a time deposit. The account may
become a savings deposit if it meets the requirements for a savings deposit; otherwise it
becomes a demand deposit.
NOTE: The above prescribed penalties are the
minimum required by Federal Reserve Regulation D. Institutions may choose to require
penalties for early withdrawal in excess of the
regulatory minimums.
Time deposits take two forms:
(i) Time certificates of deposit (including rollover certificates of deposit) are deposits evidenced by a negotiable or nonnegotiable
instrument, or a deposit in book entry form
evidenced by a receipt or similar acknowledgment issued by the branch or agency,
that provides, on its face, that the amount of
such deposit is payable to the bearer, to any
specified person, or to the order of a specified person, as follows:
(a) on a certain date not less than seven
days after the date of deposit,

(a) the date of maturity which shall be not
less than seven days after the date of the
deposit, or
(b) the expiration of a specified period of
written notice of not less than seven
days.
These deposits include those club accounts,
such as Christmas club and vacation club
accounts, that are made under written contracts that provide that no withdrawal shall
be made until a certain number of periodic
deposits has been made during a period of
not less than three months, even though
some of the deposits are made within six
days of the end of such period.
Time deposits do not include the following categories of liabilities even if they have an original
maturity of seven days or more:
(i) Any deposit or account that otherwise meets
the definition of a time deposit but that
allows withdrawals within the first six days
after deposit and that does not require an
early withdrawal penalty of at least seven
days’ simple interest on amounts withdrawn
within those first six days. Such deposits or
accounts that meet the definition of a savings deposit shall be reported as savings
deposits; otherwise they shall be reported as
demand deposits.

(c) upon written notice to the branch or
agency which is to be given not less
than seven days before the date of
withdrawal.

(ii) The remaining balance of a time deposit if
a partial early withdrawal is made and the
remaining balance is not subject to additional early withdrawal penalties of at least
seven days’ simple interest on amounts
withdrawn within six days after each partial
withdrawal. Such time deposits that meet
the definition of a savings deposit shall be
reported as savings deposits; otherwise they
shall be reported as demand deposits.

(ii) Time deposits, open account are deposits
(other than time certificates of deposit) for
which there is in force a written contract

Reporting of Retail Sweep Arrangements Affecting Transaction and Nontransaction Accounts—In an effort to
reduce their reserve requirements, some branches and

(b) at the expiration of a specified period
not less than seven days after the date of
the deposit, or

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with the depositor that neither the whole nor
any part of such deposit may be withdrawn
prior to:

Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Glossary

agencies have established sweep arrangements that
involve transfers of retail customers’ deposits between
two subaccounts. In a typical arrangement, a branch or
agency creates a master account and two subaccounts:
a transaction subaccount (either a demand deposit
account or a NOW account), which is subject to reserve
requirements, and a nontransaction savings subaccount
(a special-purpose money market deposit account
(MMDA)), which is not subject to reserve requirements.
Depending upon the balances in the two subaccounts
on a particular day, the branch or agency will shift
funds from the transaction subaccount to the MMDA
subaccount or vice versa. On some days, the balance
in the MMDA subaccount may be zero. (For purposes of the Federal Reserve’s Regulation D, there is
no distinction between an MMDA and any other form
of savings account in terms of legally required restrictions on transfers.) For purposes of this report, the transaction subaccount and MMDA subaccount must be
treated separately when a branch or agency reports its
quarter-end deposit information in Schedules RAL, E,
and O.
(III)

Interest-bearing-noninterest-bearing deposit
distinction:

Examples Illustrating Distinctions Between
MONEY MARKET DEPOSIT ACCOUNTS
(MMDAs) and
OTHER SAVINGS DEPOSITS
Example 1
A savings deposit account permits no transfers of any
type to other accounts or to third parties.
Report this account as an other savings deposit.
Example 2
A savings deposit permits up to six, but no more than six,
‘‘preauthorized, automatic, or telephonic’’ transfers to
other accounts or to third parties. None of the third-party
payments may be made by check, draft, or similar order
(including debit card).
Report this account as an other savings deposit.
Example 3
A savings deposit permits no more than six ‘‘preauthorized, automatic, or telephonic’’ transfers to other
accounts or to third parties. Up to three, but no more than
three, of the six transfers may be by check, draft, debit
card or similar order made by the depositor and payable
to third parties.

(1) Interest-bearing deposit accounts consist of deposit
accounts on which the issuing depository institution
pays compensation to the holder for the use of the
funds. Such compensation may be in the form of
cash, merchandise, or property or as a credit to an
account. Deposits with a zero percent interest rate
that are issued on a discount basis are to be treated as
interest-bearing.

Report this account as an MMDA.

(2) Noninterest-bearing deposit accounts consist of
deposit accounts on which the issuing depository
institution pays no compensation to the holder for
the use of the funds.

Report this account as an MMDA.

Noninterest-bearing deposit accounts include (i) matured time deposits that are not automatically renewable (unless the deposit agreement provides for the
funds to be transferred at maturity to another type of
account) and (ii) deposits with a zero percent stated
interest rate that are issued at face value.
See also ‘‘brokered deposits’’ and ‘‘hypothecated
deposits.’’
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Example 4
A savings deposit permits up to three but no more than
three ‘‘preauthorized, automatic, or telephonic’’ transfers
to other accounts or to third parties, any or all which may
be by check, draft, debit card or similar order made by
the depositor and payable to third parties.

Derivative Contracts: Branches and agencies commonly use derivative instruments for managing (positioning or hedging) their exposure to market risk (including
interest rate risk and foreign exchange risk), cash flow
risk, and other risks in their operations and for trading.
The accounting and reporting standards for derivative
instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities
are set forth in FASB Statement No. 133, ‘‘Accounting
for Derivative Instruments and Hedging Activities,’’ as
amended. Statement No. 133 requires all derivatives to
be recognized on the balance sheet as either assets or
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Glossary

liabilities at their fair value. A summary of the principal
provisions of Statement No. 133 follows. For further
information, see Statement No. 133 and the implementation guidance issued by the FASB’s Derivatives Implementation Group, which may be found at the FASB’s
Web site at www.fasb.org.
Statement No. 133 is effective for fiscal years beginning
after June 15, 2000. For purposes of this report, branches
and agencies must adopt Statement No. 133 upon the
statement’s effective date based on their fiscal year, with
earlier application permitted consistent with the statement. Branches and agencies are also expected to follow
the accounting guidance issued by the Derivatives Implementation Group.
Definition of a Derivative
Statement No. 133 defines a ‘‘derivative instrument’’ as a
financial instrument or other contract with all three of the
following characteristics:
(1) It has one or more underlyings (i.e., specified interest rate, security price, commodity price, foreign
exchange rate, index of prices or rates, or other
variable) and one or more notional amounts (i.e.,
number of currency units, shares, bushels, pounds,
or other units specified in the contract) or payment
provisions or both. These terms determine the
amount of the settlement or settlements, and in some
cases, whether or not a settlement is required;
(2) It requires no initial net investment or an initial net
investment that is smaller than would be required for
other types of contracts that would be expected to
have similar response to changes in market factors;
and
(3) Its terms require or permit net settlement, it can be
readily settled net by a means outside the contract,
or it provides for delivery of an asset that puts the
recipient in a position not substantially different from
net settlement.
Certain contracts that may meet the definition of a
derivative are specifically excluded from the scope of
Statement No. 133, including:
• ‘‘regular-way’’ securities trades, which are trades that
are completed within the time period generally established by regulations and conventions in the marketplace or by the exchange on which the trade is
executed;
GL-16

• normal purchases and sales of an item other than a
financial instrument or derivative instrument (e.g., a
commodity) that will be delivered in quantities
expected to be used or sold by the reporting entity over
a reasonable period in the normal course of business;
• traditional life insurance and property and casualty
contracts; and
• certain financial guarantee contracts.
However, a loan commitment may meet Statement
No. 133’s definition of a derivative instrument. For
example, loan commitments to originate or acquire mortgage loans that will be resold as part of an institution’s
mortgage banking operations are derivative instruments.
Types of Derivatives
The most common types of freestanding derivatives
are forwards, futures, swaps, options, caps, floors, and
collars.
Forward contracts are agreements that obligate two parties to purchase (long) and sell (short) a specific financial
instrument, foreign currency, or commodity at a specified
price with delivery and settlement at a specified future
date.
Futures contracts are standardized forward contracts that
are traded on organized exchanges. Exchanges in the
U.S. are registered with and regulated by the Commodity
Futures Trading Commission. The deliverable financial
instruments underlying interest-rate future contracts are
specified investment-grade financial instruments, such as
U.S. Treasury securities or mortgage-backed securities.
Foreign currency futures contracts involve specified
deliverable amounts of a particular foreign currency. The
deliverable products under commodity futures contracts
are specified amounts and grades of commodities such as
gold bullion. Equity futures contracts are deliverables
that have a portion of their return linked to the price of a
particular equity or to an index of equity prices, such as
the Standard and Poor’s 500.
Other forward contracts are traded over the counter and
their terms are not standardized. Such contracts can only
be terminated, other than by receipt of the underlying
asset, by agreement of both buyer and seller. A forward
rate agreement is a forward contract that specifies a
reference interest rate and an agreed on interest rate (one
to be paid and one to be received), an assumed principal
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Glossary

amount (the notional amount), and a specific maturity
and settlement date.
Swap contracts are forward-based contracts in which two
parties agree to swap streams of payments over a specified period. The payments are based on an agreed upon
notional principal amount. An interest rate swap generally involves no exchange of principal at inception or
maturity. Rather, the notional amount is used to calculate
the payment streams to be exchanged. However, foreign
exchange swaps often involve the exchange of principal.
Option contracts (standby contracts) are traded on
exchanges and over the counter. Option contracts grant
the right to, but do not obligate, the purchaser (holder) to
buy (call) or sell (put) a specific or standard commodity,
financial, or equity instrument at a specified price during
a specified period or at a specified date. A purchased
option is a contract in which the buyer has paid compensation (such as a fee or premium) to acquire the right
to sell or purchase an instrument at a stated price on
a specified future date. A written option obligates the
option seller to purchase or sell the instrument at the
option of the buyer of the contract. Option contracts may
relate to purchases or sales of securities, money market
instruments, futures contracts, other financial instruments, or commodities.
Interest rate caps are option contracts in which the cap
seller, in return for a premium, agrees to limit the cap
holder’s risk associated with an increase in interest rates.
If rates go above a specified interest-rate level (the strike
price or cap rate), the cap holder is entitled to receive
cash payments equal to the excess of the market rate over
the strike price multiplied by the notional principal
amount. For example, an issuer of floating-rate debt may
purchase a cap to protect against rising interest rates,
while retaining the ability to benefit from a decline in
rates.
Interest rate floors are option contracts in which the floor
seller, in return for a premium, agrees to limit the risk
associated with a decline in interest rates based on a
notional amount. If rates fall below an agreed rate, the
floor holder will receive cash payments from the floor
writer equal to the difference between the market rate
and an agreed rate, multiplied by the notional principal
amount.
Interest rate collars are option contracts that combine a
cap and a floor (one held and one written). Interest rate
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

collars enable a user with a floating rate contract to lock
into a predetermined interest-rate range often at a lower
cost than a cap or a floor.
Embedded Derivatives
Contracts that do not in their entirety meet the definition
of a derivative instrument, such as bonds, insurance
policies, and leases, may contain ‘‘embedded’’ derivative instruments. Embedded derivatives are implicit or
explicit terms within a contract that affect some or all of
the cash flows or the value of other exchanges required
by the contract in a manner similar to a derivative
instrument. The effect of embedding a derivative instrument in another type of contract (‘‘the host contract’’)
is that some or all of the cash flows or other exchanges
that otherwise would be required by the host contract,
whether unconditional or contingent upon the occurrence
of a specified event, will be modified based on one or
more of the underlyings. An embedded derivative instrument shall be separated from the host contract and
accounted for as a derivative instrument if and only if all
three of the following conditions are met:
(1) The economic characteristics and risks of the embedded derivative instrument are not clearly and closely
related to the economic characteristics and risks of
the host contract,
(2) The contract (‘‘the hybrid instrument’’) that embodies the embedded derivative and the host contract is
not remeasured at fair value under otherwise applicable generally accepted accounting principles with
changes in fair value reported in earnings as they
occur, and
(3) A separate instrument with the same terms as the
embedded derivative instrument would be considered a derivative.
An embedded derivative instrument in which the underlying is an interest rate or interest rate index that alters
net interest payments that otherwise would be paid or
received on an interest-bearing host contract is considered to be clearly and closely related to the host contract
unless either of the following conditions exist:
(1) The hybrid instrument can contractually be settled
in such a way that the investor (holder) would not
recover substantially all of its initial recorded investment, or
(2) The embedded derivative could at least double the
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Glossary

investor’s initial rate of return on the host contract
and could also result in a rate of return that is at least
twice what otherwise would be the market return for
a contract that has the same terms as the host contract and that involves a debtor with a similar credit
quality.
Examples of hybrid instruments (not held for trading
purposes) with embedded derivatives which meet the
three conditions listed above and must be accounted for
separately include debt instruments (including deposit
liabilities) whose return or yield is indexed to: changes
in an equity securities index (e.g., the Standard & Poor’s
500); changes in the price of a specific equity security;
or changes in the price of gold, crude oil, or some other
commodity. For purposes of this report, when an embedded derivative must be accounted for separately from
the host contract under Statement No. 133, the carrying
value of the host contract and the fair value of the
embedded derivative may be combined and presented
together in Schedule RAL in the asset or liability category appropriate to the host contract.
Interest-only and principal-only strips are not subject
to the requirements of Statement No. 133 provided they
(1) initially resulted from separating the rights to receive
contractual cash flows of a financial instrument that, in
and of itself, did not contain an embedded derivative that
otherwise would have been accounted for separately and
(2) do not incorporate any terms not present in that
original financial instrument. However, questions have
been raised about how this provision of Statement
No. 133 should be applied in light of other accounting
guidance in FASB Statment No. 140, ‘‘Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.’’ As a result, the FASB Board
has decided that, pending the issuance of further guidance, institutions should continue to account for interestonly and principal-only strips and other beneficial interests in securitizations in accordance with Statement
No. 140. (For further information, see Derivatives Implementation Group Issue No. D1, ‘‘Application of Statement No. 133 to Beneficial Interests in Securitized Financial Assets.’’)

fair value is the amount at which an asset (liability) could
be bought (incurred) or sold (settled) in a current transaction between willing parties, that is, other than in a
forced or liquidation sale. Quoted market prices in active
markets are the best evidence of fair value and should be
used as the basis for the measurement, if available. If a
quoted market price is available, the fair value is the
product of the number of trading units times that market
price. If a quoted market price is not available, the
estimate of fair value should be based on the best information available in the circumstances. The estimate of
fair value should consider prices for similar assets or
similar liabilities and the results of valuation techniques
to the extent available in the circumstances.
Examples of valuation techniques include the present
value of expected future cash flows using discount rates
commensurate with the risk involved, option-pricing
models, matrix pricing, option-adjusted spread analysis,
and fundamental analysis. Valuation techniques for measuring assets and liabilities should be consistent with
the objective of measuring fair value. Those techniques
should incorporate assumptions that market participants
would use in their estimates of values, future revenues,
and future expenses, including assumptions about interest rates, default, prepayment, and volatility.

Recognition of Derivatives and Measurement
of Derivatives and Hedged Items

If expected future cash flows are used to estimate fair
value, those expected future cash flows should be the
best estimate based on reasonable and supportable projections. All available evidence should be considered in
developing estimates of expected future cash flows. The
weight given to the evidence should be commensurate
with the extent to which the evidence can be objectively
verified. If a range is estimated for either the amount
or the timing of possible cash flows, the likelihood of
possible outcomes should be considered in determining
the best estimate of future cash flows.
The accounting for changes in the fair value (that is,
gains and losses) of a derivative depends on whether it
has been designated and qualifies as part of a hedging
relationship and, if so, on the reason for holding it. Either
all or a proportion of a derivative may be designated as a
hedging instrument. The proportion must be expressed as
a percentage of the entire derivative. Gains and losses on
derivative instruments are accounted for as follows:

A branch or agency should recognize all of its derivative
instruments on Schedule RAL as either assets or liabilities at fair value. As defined in FASB Statement No. 133,

(1) No hedging designation—The gain or loss on a
derivative instrument not designated as a hedging
instrument, including all derivatives held for trading

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Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Glossary

purposes, is recognized currently in earnings (as
reflected in net due from/due to accounts).
(2) Fair value hedge—For a derivative designated as
hedging the exposure to changes in the fair value of
a recognized asset or liability or a firm commitment,
which is referred to as a fair value hedge, the gain or
loss on the derivative as well as the offsetting loss or
gain on the hedged item attributable to the risk being
hedged should be recognized currently in earnings
(as reflected in net due from/due to accounts).
(3) Cash flow hedge—For a derivative designated as
hedging the exposure to variable cash flows of an
existing recognized asset or liability or a forecasted
transaction, which is referred to as a cash flow hedge,
the effective portion of the gain or loss on the derivative should initially be reported outside of earnings
as a component of other comprehensive income and
subsequently reclassified into earnings in the same
period or periods during which the hedged transaction affects earnings. The remaining gain or loss on
the derivative instrument, if any, (i.e., the ineffective
portion of the gain or loss and any component of the
gain or loss excluded from the assessment of hedge
effectiveness) should be recognized currently in
earnings. For purposes of this report, this means that
the entire gain or loss on the derivative should be
reflected in net due from/due to accounts.
(4) Foreign currency hedge—For a derivative designated as hedging the foreign currency exposure of a
net investment in a foreign operation, the gain or loss
is reported outside of earnings in other comprehensive income as reflected in net due from/due to
accounts. For a derivative designated as a hedge of
the foreign currency exposure of an unrecognized
firm commitment or an available-for-sale security,
the accounting for a fair value hedge should be
applied. Similarly, for a derivative designated as a
hedge of the foreign currency exposure of a foreigncurrency denominated forecasted transaction, the
accounting for a cash flow hedge should be applied.
To qualify for hedge accounting, the risk being hedged
must represent an exposure to an institution’s earnings.
In general, if the hedged item is a financial asset or
liability, the designated risk being hedged can be (1) all
risks, i.e., the risk of changes in the overall fair value of
the hedged item or the risk of overall changes in the
hedged cash flows; (2) the risk of changes in the fair
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

value or cash flows of the hedged item attributable to
changes in the benchmark interest rate,2 (3) the risk of
changes in the fair value or cash flows of the hedged item
attributable to changes in foreign exchange rates; or
(4) the risk of changes in the fair value or cash flows of
the hedged item attributable to changes in the obligor’s
creditworthiness. For held-to-maturity securities, only
credit risk, foreign exchange risk, or both may be hedged.
Designated hedging instruments and hedged items qualify for fair value or cash flow hedge accounting if all of
the criteria specified in Statement No. 133 are met. These
criteria include:
(1) At inception of the hedge, there is formal documentation of the hedging relationship and the institution’s risk management objective and strategy for
undertaking the hedge, including identification of the
hedging instrument, the hedged item or transaction,
the nature of the risk being hedged, and how the
hedging instrument’s effectiveness will be assessed.
There must be a reasonable basis for how the institution plans to assess the hedging instrument’s
effectiveness.
(2) Both at inception of the hedge and on an ongoing
basis, the hedging relationship is expected to be
highly effective in achieving offsetting changes in
fair value or offsetting cash flows attributable to the
hedged risk during the period that the hedge is designated or the term of the hedge. An assessment of
effectiveness is required whenever financial statements or earnings are reported, and at least every
three months. All assessments of effectiveness shall
be consistent with the risk management strategy
documented for that particular hedging relationship.
In a fair value hedge, an asset or liability is eligible for
designation as a hedged item if the hedged item is
specifically identified as either all or a specific portion of
a recognized asset or liability or of an unrecognized firm
commitment, the hedged item is a single asset or liability
(or a specific portion thereof) or is a portfolio of similar
assets or a portfolio of similar liabilities (or a specific
portion thereof), and certain other criteria specified in
2. The benchmark interest rate is a widely recognized and quoted rate in
an active financial market that is broadly indicative of the overall level of
interest rates attributable to high-credit-quality obligors in that market. In
theory, this should be a risk-free rate. In the U.S., interest rates on U.S.
Treasury securities and the LIBOR swap rate are considered benchmark
interest rates.

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Glossary

Statement No. 133 are met. If similar assets or similar
liabilities are aggregated and hedged as a portfolio, the
individual assets or individual liabilities must share the
risk exposure for which they are designated as being
hedged. The change in fair value attributable to the
hedged risk for each individual item in a hedged portfolio must be expected to respond in a generally proportionate manner to the overall change in fair value of the
aggregate portfolio attributable to the hedged risk.
In a cash flow hedge, the individual cash flows related to
a recognized asset or liability and the cash flows related
to a forecasted transaction are both referred to as a
forecasted transaction. Thus, a forecasted transaction
is eligible for designation as a hedged transaction if the
forecasted transaction is specifically identified as a single
transaction or a group of individual transactions, the
occurrence of the forecasted transaction is probable, and
certain other criteria specified in Statement No. 133 are
met. If the hedged transaction is a group of individual
transactions, those individual transactions must share the
same risk exposure for which they are designated as
being hedged.
An institution should discontinue prospectively its use of
fair value or cash flow hedge accounting for an existing
hedge if any of the qualifying criteria for hedge accounting is no longer met; the derivative expires or is sold,
terminated, or exercised; or the institution removes the
designation of the hedge.
For a fair value hedge, in general, if a periodic assessment of hedge effectiveness indicates noncompliance
with the highly effective criterion that must be met in
order to qualify for hedge accounting, an institution
should not recognize adjustment of the carrying amount
of the hedged item for the change in the item’s fair value
attributable to the hedged risk after the last date on
which compliance with the effectiveness criterion was
established.
With certain limited exceptions, a nonderivative instrument, such as a U.S. Treasury security, may not be designated as a hedging instrument.
Reporting Derivative Contracts
When an institution enters into a derivative contract, it
should classify the derivative as either held for trading
or held for purposes other than trading (end-user derivaGL-20

tives) based on the reasons for entering into the contract.
All derivatives must be reported at fair value on Schedule RAL.
Netting of derivative assets and liabilities is prohibited on Schedule RAL except as permitted under
FASB Interpretation No. 39. See the Glossary entry for
‘‘offsetting.’’
Derivatives with Counterparties other than Related
Depository Institutions—Trading derivatives with positive values should be reported as trading assets in Schedule RAL, item 1(f). Trading derivatives with negative
fair values should be reported as trading liabilities in
Schedule RAL, item 4(e).
Derivatives held for purposes other than trading that
have positive fair values should be included in Schedule RAL, item 1(h), ‘‘Other’’ assets. Derivatives held for
purposes other than trading that have negative fair values
should be included in Schedule RAL, item 4(f), ‘‘Other’’
liabilities.
Changes in the fair value (that is, gains and losses) of
trading derivatives and net gains (losses) on derivatives
held for purposes other than trading that are not designated as hedging instruments should be recognized as
part of the unremitted profit/loss reported on Schedule M, Due from/Due to Related Institutions in the U.S.
and in Foreign Countries, Part I, item 2(a), ‘‘Gross due
to/due from head office of parent bank.’’
Branches and agencies must report the notional amounts
of their derivative contracts by risk exposure in Schedule L, first by type of contract in Schedule L, item 9,
and then by purpose of contract (i.e., trading, other than
trading) in Schedule L, items 10 and 11. Branches and
agencies must report the gross fair values of their derivatives, both positive and negative, by risk exposure and
purpose of contract in Schedule L, item 12.
Derivatives with Related Depository Institutions—The
fair value of all derivatives with related depository institutions, whether held for trading of for other purposes,
should be included on Schedule RAL in item 2, ‘‘Net
due from related depository institutions,’’ or item 5, ‘‘Net
due to related depository institutions,’’ as appropriate.
Changes in the fair value (that is, gains and losses)
of these derivative contracts should also be included in
these net due from/due to accounts.
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Glossary

Branches and agencies must report the notional amounts
of their derivative contracts with related depository institutions by risk exposure in Schedule M, Part V, first by
type of contract in Schedule M, Part V, item 9, and then
by purpose of contract (i.e., trading, other than trading),
in Schedule M, Part V, items 10 and 11. Branches and
agencies must report the gross fair values of their derivatives, both positive and negative, by risk exposure and
purpose of contract in Schedule M, Part V, item 12.
Discounts: See ‘‘premiums and discounts.’’
Domicile: Domicile is used to determine the foreign
(non-U.S. addressee) or domestic (U.S. addressee) status
of a customer of the reporting branch or agency, for
purposes of this report. Domicile is determined by the
principal residence address of an individual or the principal business address of a corporation, partnership, or sole
proprietorship. If other addresses are used for correspondence or other purposes, only the principal address,
insofar as it is known to the reporting institution, should
be used in determining whether a customer should be
regarded as a U.S. or non-U.S. addressee.
For purposes of defining customers of the reporting
branch or agency, U.S. addressees include residents of
the 50 states of the United States, the District of Columbia, Puerto Rico, and U.S. territories and possessions.
Non-U.S. addressees includes residents of any foreign
country. The term non-U.S. addressee generally includes
foreign-based subsidiaries of other U.S. banks.
For customer identification purposes, the IBFs of other
U.S. depository institutions are U.S. addressees
Due Bills: A due bill is an obligation that results when a
branch or agency sells an asset and receives payment,
but does not deliver the security or other asset. A due bill
can also result from a promise to deliver an asset in
exchange for value received. In both cases, the receipt of
the payment creates an obligation regardless of whether
the due bill is issued in written form.
Outstanding due bill obligations shall be reported as
borrowings in Schedule RAL, item 4(c), ‘‘Other borrowed money,’’ by the issuing branch or agency. Conversely, when the reporting branch or agency is the
holder of a due bill, the outstanding due bill obligation of
the seller shall be reported as a loan to that party.
Instructions for Preparation of Reporting Form FFIEC 002
March 2004

Edge and Agreement Corporation: An Edge corporation is a federally-chartered corporation organized under
Section 25(a) of the Federal Reserve Act and subject
to Federal Reserve Regulation K. Edge corporations are
allowed to engage only in international banking or other
financial transactions related to international business.
An Agreement corporation is a state-chartered corporation that has agreed to operate as if it were organized
under Section 25 of the Federal Reserve Act and has
agreed to be subject to Federal Reserve Regulation K.
Agreement corporations are restricted, in general, to
international banking operations. Banks must apply to
the Federal Reserve for permission to acquire stock in an
Agreement corporation.
Extinguishments of Liabilities: The accounting and
reporting standards for extinguishments of liabilities are
set forth in FASB Statement No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Under Statement No. 140, a
branch or agency should remove a previously recognized
liability from its balance sheet if and only if the liability
has been extinguished. A liability has been extinguished
if either of the following conditions is met:
(1) The branch or agency pays the creditor and is
relieved of its obligation for the liability. Paying the
creditor includes delivering cash, other financial
assets, goods, or services or the branch’s or agency’s
reacquiring its outstanding debt.
(2) The branch or agency is legally released from being
the primary obligor under the liability, either judicially or by the creditor.
Fails: When a branch or agency has sold an asset and, on
settlement date, does not deliver the security or other
asset and does not receive payment, a sales fail exists.
When a branch or agency has purchased a security or
other asset and, on settlement date, does not receive the
asset and does not pay for it, a purchase fail exists. Fails
do not affect the way securities are reported in this
report.
Federal Funds Transactions For purposes of this report, federal funds transactions involve the reporting
branch or agency’s lending (federal funds sold) or borrowing (federal funds purchased) immediately available
funds under agreements or contracts that have an original
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Glossary

maturity of one business day or roll over under a continuing contract. However, funds lent or borrowed in the
form of securities resale or repurchase agreements, due
bills, borrowings from the Discount and Credit Department of a Federal Reserve Bank, deposits with and
advances from a Federal Home Loan Bank, and overnight loans for commercial and industrial purposes are
excluded from federal funds. Transactions that are to be
reported as federal funds transactions may be secured or
unsecured or may involve an agreement to resell loans or
other instruments that are not securities.
Immediately available funds are funds that the purchasing institution can either use or dispose of on the same
business day that the transaction giving rise to the receipt
or disposal of the funds is executed.
The borrowing and lending of immediately available
funds has an original maturity of one business day if the
funds borrowed on one business day are to be repaid or
the transaction reversed on the next business day, that is,
if immediately available funds borrowed today are to be
repaid tomorrow (in tomorrow’s immediately available
funds). Such transactions include those made on a Friday
to mature or be reversed the following Monday and those
made on the last business day prior to a holiday (for
either or both of the parties to the transaction) to mature
or be reversed on the first business day following the
holiday.
A continuing contract is a contract or agreement that
remains in effect for more than one business day, but has
no specified maturity and does not require advance notice of either party to terminate. Such contracts may also
be known as rollovers or as open-ended agreements.
Federal funds may take the form of the following two
types of transactions provided that the transactions meet
the above criteria (i.e., immediately available funds with
an original maturity of one business day or under a
continuing contract):
(1) Unsecured loans (federal funds sold) or borrowings
(federal funds purchased). (In some market usage,
the term ‘ ed 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
GL-22

under continuing contracts) and are in immediately
available funds.
Any borrowing or lending of immediately available
funds 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 federallysponsored 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.
Foreign Banks: See ‘‘banks, U.S. and foreign.’’
Foreign Currency Transactions: Foreign currency
transactions are transactions occurring in the ordinary
course of business (e.g., purchases, sales, borrowings,
lendings, forward exchange contracts) denominated in
currencies other than the branch or agency’s functional
currency (as described below).
A functional currency is the currency of the primary
economic environment in which an office operates. For
the U.S. branches or agencies of foreign banks, the
functional currency will be the U.S. dollar.
Foreign Governments and Official Institutions: Foreign governments and official institutions are central,
state, provincial, and local governments in foreign countries and their ministries, departments, and agencies.
These include treasuries, ministries of finance, central
banks, development banks, exchange control offices, stabilization funds, diplomatic establishments, fiscal agents,
and nationalized banks and other banking institutions
that are owned by central governments and that have as
an important part of their function activities similar to
those of a treasury, central bank, exchange control office,
or stabilization fund. For purposes of this report, other
government-owned enterprises are not included.
Instructions for Preparation of Reporting Form FFIEC 002
March 2004

Glossary

Also included as foreign official institutions are international, regional, and treaty organizations, such as the
International Monetary Fund, the International Bank for
Reconstruction and Development (World Bank), the
Bank for International Settlements, the Inter-American
Development Bank, and the United Nations.
Forward Contracts: See ‘‘derivative contracts.’’
Futures Contracts: See ‘‘derivative contracts.’’
Hypothecated Deposit: A hypothecated deposit is the
aggregation of periodic payments on an installment
contract received by a reporting institution in a state in
which, under law, such payments are not immediately
used to reduce the unpaid balance of the installment note,
but are accumulated until the sum of the payments equals
the entire amount of principal and interest on the contract, at which time the loan is considered paid in full.
For purposes of this report, hypothecated deposits are to
be netted against the related loans.

development are the conceptual formulation of alternatives, the evaluation of the alternatives, the determination of the existence of needed technology, and the final
selection of alternatives. The application development
stage involves the design of the chosen path (including
software configuration and software interfaces), coding,
installation of software to hardware, and testing (including the parallel processing phase). Generally, training
and application maintenance occur during the postimplementation/operation stage. Upgrades of and
enhancements to existing internal-use software, i.e.,
modifications to software that result in additional functionality, also go through the three aforementioned stages
of development.
Computer software costs that are incurred in the preliminary project stage should be expensed as incurred (i.e.,
should not be capitalized).

Internal-Use Computer Software: Guidance on the
accounting and reporting for the costs of internal-use
computer software is set forth in AICPA Statement of
Position 98-1, Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use. A
summary of this accounting guidance follows. For further information, see AICPA Statement of Position 98-1.

Internal and external costs incurred to develop internaluse software during the application development stage
should be capitalized. Capitalization of these costs
should begin once (a) the preliminary project stage is
completed and (b) management, with the relevant authority, implicitly or explicitly authorizes and commits to
funding a computer software project and it is probable
that the project will be completed and the software will
be used to perform the function intended. Capitalization
should cease no later than when a computer software
project is substantially complete and ready for its
intended use, i.e., after all substantial testing is completed. Capitalized internal-use computer software costs
generally should be amortized on a straight-line basis
over the estimated useful life of the software.

Internal-use computer software is software that meets
both of the following characteristics:

Only the following application development stage costs
should be capitalized:

Deposits which simply serve as collateral for loans are
not considered hypothecated deposits for purposes of this
report.

(1) The software is acquired, internally developed, or
modified solely to meet the institution’s internal
needs; and
(2) During the software’s development or modification,
no substantive plan exists or is being developed to
market the software externally.
Statement of Position 98-1 identifies three stages of
development for internal-use software: the preliminary
project stage, the application development stage, and the
post-implementation/operation stage. The processes that
occur during the preliminary project stage of software
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

(1) External direct costs of materials and services consumed in developing or obtaining internal-use
software;
(2) Payroll and payroll-related costs for employees who
are directly associated with and who devote time to
the internal-use computer software project (to the
extent of the time spent directly on the project); and
(3) Interest costs incurred when developing internal-use
software.
Costs to develop or obtain software that allows for
access or conversion of old data by new systems also
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Glossary

should be capitalized. Otherwise, data conversion costs
should be expensed as incurred (i.e., should not be capitalized). General and administrative costs and overhead
costs should not be capitalized as internal-use software
costs.
During the post-implementation/operation stage, internal
and external training costs and maintenance costs should
be expensed as incurred (i.e., should not be capitalized).
Impairment of capitalized internal-use computer software costs should be recognized and measured in accordance with FASB Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of.
The costs of internally developed computer software to
be sold, leased, or otherwise marketed as a separate
product or process should be reported in accordance with
FASB Statement No. 86, Accounting for the Costs of
Computer Software to Be Sold, Leased, or Otherwise
Marketed. If, after the development of internal-use software is completed, an institution decides to market the
software, proceeds received from the license of the software, net of direct incremental marketing costs, should
be applied against the carrying amount of the software.
International Banking Facility (IBF): General
definition—An International Banking Facility (IBF) is a
set of asset and liability accounts, segregated on the
books and records of the establishing entity, which reflect
international transactions. An IBF is established in accordance with the terms of Federal Reserve Regulation D
and after appropriate notification to the Federal Reserve.
The establishing entity may be a U.S. depository institution, a U.S. office of an Edge or Agreement corporation,
or a U.S. branch or agency of a foreign bank pursuant to
Federal Reserve Regulations D and Q. An IBF is permitted to hold only certain assets and liabilities. In general,
IBF accounts are limited, as specified in the paragraphs
below, to non-U.S. residents of foreign countries, residents of Puerto Rico and U.S. territories and possessions,
other IBFs, and U.S. and non-U.S. offices of the establishing entity.

(2) other IBFs; and
(3) U.S. and non-U.S. offices of the establishing entity.
Credit may be extended to non-U.S. nonbank residents
only if the funds are used in their operations outside the
United States. IBFs may extend credit in the form of a
loan, deposit, placement, advance, security, or other similar asset.
Permissible IBF liabilities include (as specified in Federal Reserve Regulations D and Q) liabilities to non-U.S.
nonbank residents only if such liabilities have a minimum maturity or notice period of at least two business
days. IBF liabilities also may include overnight liabilities
to:
(1) non-U.S. offices of other depository institutions and
of Edge or Agreement corporations;
(2) non-U.S. offices of foreign banks;
(3) foreign governments and official institutions;
(4) other IBFs; and
(5) the establishing entity.
IBF liabilities may be issued in the form of deposits,
borrowings, placements, and other similar instruments.
However, IBFs are prohibited from issuing negotiable
certificates of deposit, bankers acceptances, or other
negotiable or bearer instruments.
Treatment of transactions with IBFs of other depository
institutions—Transactions between the reporting branch
or agency and IBFs outside the scope of the reporting
branch or agency’s report are to be reported as transactions with depository institutions in the U.S., as appropriate. (Note, however, that only the reporting branch or
agency’s IBF is permitted to have transactions with other
IBFs.)
Lease Accounting: A lease is an agreement that transfers the right to use land, buildings, or equipment for a
specified period of time. This financing device is essentially an extension of credit evidenced by an obligation
between a lessee and a lessor.

Permissible IBF assets include extensions of credit to the
following:

Standards for lease accounting are set forth in FASB
Statement No. 13, Accounting for Leases, as amended
and interpreted.

(1) non-U.S. residents (including foreign branches of
other U.S. banks);

Accounting with branch or agency as lessee—Any lease
entered into by a lessee branch or agency that meets

GL-24

Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Glossary

certain criteria (defined in the following paragraph) shall
be accounted for as a property acquisition financed with
a debt obligation. The property shall be amortized
according to the reporter’s normal depreciation policy.
In this report, the property is to be reported in Schedule RAL, item 1(h), and the liability for capitalized
leases in Schedule RAL, item 4(c).
If any one of the following criteria is met, a lease must
be accounted for as a capital lease:
(1) ownership of the property is transferred to the lessee
at the end of the lease term, or
(2) the lease contains a bargain purchase option, or
(3) the lease term represents at least 75 percent of the
estimated economic life of the leased property, or
(4) the present value of the minimum lease payments at
the beginning of the lease term is 90 percent or more
of the fair value of the leased property to the lessor at
the inception of the lease less any related investment
tax credit retained by and expected to be realized by
the lessor.
If none of the above criteria is met, the lease should be
accounted for as an operating lease. Rental payments
should be charged to expense over the term of the
operating lease as they become payable.
NOTE: If a lease involves land only, the lease must be
capitalized if either of the first two criteria above is met.
Where a lease that involves land and building meets
either of these two criteria, the land and building must be
separately capitalized by the lessee. The accounting for a
lease involving land and building that meets neither of
the first two criteria should conform to the standards
prescribed by FASB Statement No. 13.
Accounting for sales with leasebacks—Sale-leaseback
transactions involve the sale of property by the owner
and a lease of the property back to the seller. If a branch
or agency sells premises or fixed assets and leases back
the property, the lease shall be treated as a capital lease if
it meets any one of the four criteria above for capitalization. Otherwise, the lease shall be accounted for as an
operating lease.
As a general rule, the branch or agency shall defer any
gain resulting from the sale. The unamortized deferred
gain is to be reported in Schedule RAL, item 4(f),
‘‘Other liabilities to nonrelated parties.’’ For further
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

information, see FASB Statement No. 28, Accounting for
Sales with Leasebacks.
Accounting with branch or agency as lessor—Unless a
long-term creditor is also involved in the transaction, a
lease entered into by a lessor branch or agency that meets
one of the four criteria above for a capital lease plus two
additional criteria (as defined below) shall be treated as a
direct financing lease. The unearned income (minimum
lease payments plus estimated residual value plus initial
direct costs less the cost of the leased property) shall be
amortized to income over the lease term in a manner
which produces a constant rate of return on the net
investment.
The following two additional criteria must be met for a
lease to be classified as a direct financing lease:
(1) Collectability of the minimum lease payments is
reasonably predictable.
(2) No important uncertainties surround the amount of
unreimbursable costs yet to be incurred by the lessor
under the lease.
When a lessor branch or agency enters into a lease that
has all the characteristics of a direct financing lease but
where a long-term creditor provides nonrecourse financing to the lessor, the transaction shall be accounted for as
a leveraged lease. The lessor’s net investment in a leveraged lease shall be recorded in a manner similar to that
for a direct financing lease but net of the principal and
interest on the nonrecourse debt.
If a lease is neither a direct financing lease nor a leveraged lease, the lessor branch or agency shall account
for it as an operating lease. The leased property shall
be reported in Schedule RAL, item 1(h), ‘‘Other assets
including claims on nonrelated parties,’’ and depreciated
in accordance with the branch or agency’s normal policy.
Letter of Credit: A letter of credit is a document issued
by a bank, including a branch or agency, on behalf of its
customer (the account party) authorizing a third party
(the beneficiary), or in special cases the account party, to
draw drafts on the bank or branch or agency up to a
stipulated amount and with specified terms and conditions. The letter of credit is a conditional commitment
(except when prepaid by the account party) on the part
of the bank or branch or agency to provide payment
on drafts drawn in accordance with the terms of the
document.
GL-25

Glossary

As a matter of sound practice, letters of credit should:
(1) be conspicuously labeled as a letter of credit;
(2) contain a specified expiration date or be for a definite
term;
(3) be limited in amount;
(4) call upon the issuing branch or agency to pay only
upon the presentation of a draft or other documents
as specified in the letter of credit and not require the
issuing branch or agency to make determinations of
fact or law at issue between the account party and
the beneficiary; and
(5) be issued only subject to an agreement between the
account party and the issuing branch or agency
which establishes the unqualified obligation of the
account party to reimburse the issuing branch or
agency for all payments made under the letter of
credit.
There are four basic types of letters of credit:
(1) commercial letters of credit,
(2) letters of credit sold for cash,
(3) travelers’ letters of credit, and
(4) standby letters of credit,
each of which is discussed separately below.
A commercial letter of credit is issued specifically to
facilitate trade or commerce. Under the terms of a commercial letter of credit, as a general rule, drafts will be
drawn when the underlying transaction is consummated
as intended.
A letter of credit sold for cash is a letter of credit for
which the branch or agency has received funds from the
account party at the time of issuance. This type of letter
of credit is not to be reported as an outstanding letter of
credit but as a demand deposit. These letters are considered to have been sold for cash even though the branch
or agency may have advanced funds to the account party
for the purchase of such letters of credit on a secured or
unsecured basis.
A travelers’ letter of credit is issued to facilitate travel.
This letter of credit is addressed by the branch or agency
to its correspondents authorizing the correspondents to
honor drafts drawn by the person named in the letter of
GL-26

credit in accordance with specified terms. These letters
are generally sold for cash.
A standby letter of credit is a letter of credit or similar
arrangement that:
(1) represents an obligation on the part of the issuing
branch or agency to a designated third party (the
beneficiary) contingent upon the failure of the issuing branch or agency’s customer (the account party)
to perform under the terms of the underlying contract
with the beneficiary, or
(2) obligates the branch or agency to guarantee or stand
as surety for the benefit of a third party to the extent
permitted by law or regulation.
The underlying contract may entail either financial or
nonfinancial undertakings of the account party with the
beneficiary. The underlying contract may involve such
things as the customer’s payment of commercial paper,
delivery of merchandise, completion of a construction
contract, release of maritime liens, or repayment of the
account party’s obligations to the beneficiary. Under the
terms of a standby letter, as a general rule, drafts will be
drawn only when the underlying event fails to occur as
intended.
Loan: For purposes of this report, a loan is generally an
extension of credit resulting from direct negotiations
between a lender and a borrower. The reporting branch
or agency may originate a loan by directly negotiating
with a borrower or it may purchase a loan or a portion of
a loan originated by another lender that directly negotiated with a borrower. The reporting branch or agency
may also sell a loan or a portion of a loan, regardless of
the method by which it acquired the loan.
Loans may take the form of promissory notes, acknowledgments of advance, due bills, invoices, overdrafts,
acceptances, and similar written or oral obligations.
Among the extensions of credit reportable as loans in
Schedule C, which covers both loans held for sale and
loans that the reporting branch or agency has the intent
and ability to hold for the foreseeable future or until
maturity or payoff, are:
(1) acceptances of other banks purchased in the open
market, not held for trading;
(2) acceptances executed by or for the account of the
reporting branch or agency and subsequently
acquired by it through purchase or discount;
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Glossary

(3) customers’ liability to the reporting branch or agency
on drafts paid under letters of credit for which the
branch or agency has not been reimbursed;
(4) ‘‘advances’’ and commodity or bill-of-lading drafts
payable upon arrival of goods against which drawn,
for which the reporting branch or agency has given
deposit credit to customers;
(5) paper pledged by the branch or agency whether for
collateral to secure bills payable (e.g., margin collateral to secure bills rediscounted) or for any other
purpose;
(6) sales of so-called ‘‘term federal funds’’ (i.e., sales of
immediately available funds with a maturity of more
than one business day), other than those involving
security resale agreements;
(7) factored accounts receivable;
(8) loans arising out of the purchase of assets (other than
securities) under resale agreements with a maturity
of more than one business day if the agreement
requires the branch or agency to resell the identical
asset purchased; and
(9) participations (acquired or held) in a single loan or in
a pool of loans or receivables (see discussion in the
Glossary entry for ‘‘transfers of financial assets’’).
See also ‘‘loans secured by real estate,’’ ‘‘overdraft,’’ and
‘‘transfers of financial assets.’’
Loan Fees: The accounting standards for nonrefundable
fees and costs associated with lending, committing to
lend, and purchasing a loan or group of loans are set
forth in FASB Statement No. 91, ‘‘Accounting for Nonrefundable Fees and Costs Associated with Originating
or Acquiring Loans and Initial Direct Costs of Leases,’’ a
summary of which follows. The statement applies to all
types of loans as well as to debt securities (but not to
loans or debt securities carried at market value if the
changes in market value are included in earnings) and to
all types of lenders. For further information, see FASB
Statement No. 91. A branch or agency may acquire a
loan by originating the loan (lending) or by acquiring a
loan from a party other than the borrower (purchasing).
Lending, committing to lend, refinancing or restructuring
loans, arranging standby letters of credit, syndicating
loans, and leasing activities are all considered ‘‘lending
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

activities.’’ Nonrefundable loan fees paid by the borrower to the lender may have many different names, such
as origination fees, points, placement fees, commitment
fees, application fees, management fees, restructuring
fees, and syndication fees, but in this Glossary entry,
they are referred to as loan origination fees, commitment
fees, or syndication fees. FASB Statement No. 91 applies
to both a lender and a purchaser, and should be applied to
individual loan contracts. Aggregation of similar loans
for purposes of recognizing net fees or costs and purchase premiums or discounts is permitted under certain
circumstances specified in FASB Statement No. 91 or if
the result does not differ materially from the amount that
would have been recognized on an individual loan-byloan basis.
In general, the statement specifies that:
(1) Loan origination fees should be deferred and recognized over the life of the related loan as an adjustment of yield (interest income). Once a branch or
agency adopts FASB Statement No. 91, recognizing
a portion of loan fees as revenue to offset all or part
of origination costs in the reporting period in which
a loan is originated is no longer acceptable.
(2) Certain direct loan origination costs specified in the
Statement should be deferred and recognized over
the life of the related loan as a reduction of the loan’s
yield. Loan origination fees and related direct loan
origination costs for a given loan should be offset
and only the net amount deferred and amortized.
(3) Direct loan origination costs should be offset against
related commitment fees and the net amounts
deferred except for: (a) commitment fees (net of
costs) where the likelihood of exercise of the commitment is remote, which generally should be recognized as service fee income on a straight line basis
over the loan commitment period, and (b) retrospectively determined fees, which are recognized as service fee income on the date as of which the amount
of the fee is determined. All other commitment fees
(net of costs) shall be deferred over the entire commitment period and recognized as an adjustment
of yield over the related loan’s life or, if the commitment expires unexercised, recognized in income
upon expiration of the commitment.
(4) Loan syndication fees should be recognized by the
branch or agency managing a loan syndication (the
GL-27

Glossary

syndicator) when the syndication is complete unless
a portion of the syndication loan is retained. If the
yield on the portion of the loan retained by the
syndicator is less than the average yield to the other
syndication participants after considering the fees
passed through by the syndicator, the syndicator
should defer a portion of the syndication fee to produce a yield on the portion of the loan retained that is
not less than the average yield on the loans held by
the other syndication participants.
(5) Loan fees, certain direct loan origination costs, and
purchase premiums and discounts on loans shall be
recognized as an adjustment of yield generally by the
interest method based on the contractual term of the
loan. However, if the branch or agency holds a large
number of similar loans for which prepayments are
probable and the timing and amount of prepayments
can be reasonably estimated, the branch or agency
may consider estimates of future principal prepayments in the calculation of the constant effective
yield necessary to apply the interest method. Once
a branch or agency adopts FASB Statement No. 91,
the practice of recognizing fees over the estimated average life of a group of loans is no longer
acceptable.
(6) A refinanced or restructured loan, other than a
troubled debt restructuring, should be accounted for
as a new loan if the terms of the new loan are at least
as favorable to the lender as the terms for comparable loans to other customers with similar collection
risks who are not refinancing or restructuring a loan.
Any unamortized net fees or costs and any prepayment penalties from the original loan should be
recognized in interest income when the new loan is
granted. If the refinancing or restructuring does not
meet these conditions or if only minor modifications
are made to the original loan contract, the unamortized net fees or costs from the original loan and any
prepayment penalties should be carried forward as
a part of the net investment in the new loan. The
investment in the new loan should consist of the
remaining net investment in the original loan, any
additional amounts loaned, any fees received, and
direct loan origination costs associated with the
transaction. In a troubled debt restructuring involving a modification of terms, fees received should be
applied as a reduction of the recorded investment in
the loan, and all related costs, including direct loan
GL-28

origination costs, should be charged to expense as
incurred.
(7) Deferred net fees or costs shall not be amortized
during periods in which interest income on a loan is
not being recognized because of concerns about realization of loan principal or interest.
Direct loan origination costs of a completed loan are
defined to include only (a) incremental direct costs of
loan origination incurred in transactions with independent third parties for that particular loan and (b) certain
costs directly related to specified activities performed by
the lender for that particular loan. Incremental direct
costs are costs to originate a loan that (a) result directly
from and are essential to the lending transaction and
(b) would not have been incurred by the lender had that
lending transaction not occurred. The specified activities
performed by the lender are evaluating the prospective
borrower’s financial condition; evaluating and recording guarantees, collateral, and other security arrangements; negotiating loan terms; preparing and processing
loan documents; and closing the transaction. The costs
directly related to those activities include only that portion of the employees’ total compensation and payrollrelated 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. Adminstrative costs, rent, depreciation, and all other occupancy
and equipment costs are considered indirect costs and
should be charged to expense as incurred.
Net unamortized loan fees represent an adjustment of the
loan yield, and shall be reported in the same manner as
unearned income on loans, i.e., deducted from the related
loan balances (to the extent possible) or deducted from
total loans in ‘‘Any unearned income on loans reflected
in items 1–8 above’’ in Schedule C. Net unamortized
direct loan origination costs shall be added to the related
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Glossary

loan balances in Schedule C. Amounts of loan origination, commitment and other fees and costs recognized
as an adjustment of yield should be included in interest
income which is recognized as part of unremitted profit
and loss. 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 included in noninterest income which
is recognized as part of unremitted profit and loss.

reliable market price data are available may be valued at
cost adjusted for amortization of premium or accretion of
discount unless credit problems of the obligor or upward
movements in the level of interest rates warrant a lower
estimate of current value. Securities that are not marketable such as equity securities in closely held businesses
should be valued at book or par value, as appropriate.
Money Market Deposit Account (MMDA): See
‘‘deposits.’’
NOW Account: See ‘‘deposits.’’

Loans Secured by Real Estate: For purposes of this
report, loans secured by real estate are loans predicated
upon a security interest in real property. A loan predicated upon a security interest in real property is a loan
secured wholly or substantially by a lien on real property
for which the lien is 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 on real property. All loans
satisfying the criteria above are to be reported as loans
secured by real estate (Schedule C, item 1), regardless of
whether secured by first or junior liens, regardless of the
department within the branch or agency that made the
loans, regardless of how the loans are categorized in the
branch or agency’s records, and regardless of the purpose of the financing. Only in transactions where a lien
on real property has been taken as collateral solely
through an abundance of caution and where the terms as
a consequence have not been made more favorable than
they would have been in the absence of the lien, would
the loans not be considered to be secured by real estate
and not be classifiable as loans secured by real estate in
this report.
Market Value of Securities: The market value of securities should be determined, to the extent possible, by
timely reference to the best available source of current
market quotations or other data on relative current values. For example, securities traded on national, regional,
or foreign exchanges or in organized over-the-counter
markets should be valued at the most recently available
quotation in the most active market. Rated securities for
which no organized market exists should be valued on
the basis of yield curve estimate. Quotations from brokers or others making markets in securities that are
neither widely nor actively traded are acceptable if
prudently used. Unrated debt securities for which no
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Nonaccrual Status: Branches or agencies shall not
accrue interest or discount on (1) any asset which is
maintained on a cash basis because of deterioration in
the financial condition of the borrower, (2) any asset for
which payment in full of interest or principal is not
expected, or (3) any asset upon which principal or interest has been in default for a period of 90 days or more
unless it is both well secured and in the process of
collection. A nonaccrual asset may be restored to an
accrual status when none of its principal and interest is
due and unpaid or when it otherwise becomes well
secured and in the process of collection.
For purposes of applying the third test for the nonaccrual
of interest 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
above.
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. A debt is ‘‘in the process of collection’’ if collection of the debt is proceeding in due course
either through legal action, including judgment enforcement procedures, or, 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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Glossary

Consumer loans and loans secured by 1-to-4 family
residential properties on which principal and interest is
due and unpaid for 90 days or more are not required to be
placed in nonaccrual status. Nevertheless, such loans
should be subject to other alternative methods of evaluation to assure that the branch or agency’s income is not
materially overstated.
Any state statute, regulation, or rule that imposes more
stringent standards for nonaccrual of interest takes precedence over this instruction.
The reversal of previously accrued but uncollected interest applicable to any asset placed in nonaccrual status
and the treatment of subsequent payments as either principal or interest should be handled in accordance with
generally accepted accounting principles. Acceptable
accounting treatment includes a reversal of all previously
accrued but uncollected interest applicable to assets
placed in a nonaccrual status against appropriate income
and balance sheet accounts.
For example, one acceptable method of accounting for
such uncollected interest on a loan placed in nonaccrual
status is (1) to reverse all of the unpaid interest by
crediting the income earned, not collected, (2) to reverse
the uncollected interest that has been accrued during the
calendar year-to-date by debiting the appropriate interest
and fee income account on the income statement, and
(3) to reverse any uncollected interest that had been
accrued during previous calendar years by debiting the
‘‘allowance for loan and lease losses.’’
Offsetting: Offsetting is the reporting of assets and
liabilities on a net basis in Schedule RAL. Branches and
agencies are permitted to offset assets and liabilities
recognized in the Report of Assets and Liabilities of U.S.
Branches and Agencies of Foreign Banks when a ‘‘right
of setoff’’ exists. Under FASB Interpretation No. 39,
Offsetting of Amounts Related to Certain Contracts, a
right of setoff exists when all of the following conditions
are met:
(1) Each of two parties owes the other determinable
amounts. Thus, only bilateral netting is permitted.
(2) The reporting party has the right to set off the amount
owed with the amount owed by the other party.
(3) The reporting party intends to set off. This condition
does not have to be met for fair value amounts
recognized for conditional or exchange contracts that
GL-30

have been executed with the same counterparty
under a master netting arrangement.
(4) The right of setoff is enforceable at law. Legal constraints should be considered to determine whether
the right of setoff is enforceable. Accordingly, the
right of setoff should be upheld in bankruptcy (or
receivership). Offsetting is appropriate only if the
available evidence, both positive and negative,
indicates that there is reasonable assurance that the
right of setoff would be upheld in bankruptcy (or
receivership).
According to Interpretation No. 39, for forward,
interest rate swap, currency swap, option, and other
conditional and exchange contracts, a master netting
arrangement exists if the reporting branch or agency
has multiple contracts, whether for the same type
of conditional or exchange contract or for different
types of contracts, with a single counterparty that are
subject to a contractual agreement that provides for
the net settlement of all contracts through a single
payment in a single currency in the event of default
or termination of any one contract.
Offsetting the assets and liabilities recognized for
conditional or exchange contracts outstanding with
a single counterparty results in the net position
between the two counterparties being reported as an
asset or a liability in the Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign
Banks. The reporting entity’s choice to offset or not
to offset assets and liabilities recognized for conditional or exchange contracts must be applied
consistently.
Offsetting of assets and liabilities is also permitted
by other accounting pronouncements identified in
Interpretation No. 39. These pronouncements apply
to such items as leveraged leases, pension plan and
other postretirement benefit plan assets and liabilities, and deferred tax assets and liabilities. In
addition, FASB Interpretation No. 41, Offsetting of
Amounts Related to Certain Repurchase and Reverse
Repurchase Agreements, describes the circumstances
in which amounts recognized as payables under
repurchase agreements may be offset against
amounts recognized as receivables under reverse
repurchase agreements and reported as a net amount
in the balance sheet. The reporting entity’s choice to
offset or not to offset payables and receivables under
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Glossary

Interpretation No. 41 must be applied consistently.
See also ‘‘reciprocal balances.’’
One-Day Transaction: See ‘‘federal funds transactions.’’
Option: See ‘‘derivative contracts.’’
Other Depository Institutions in the U.S.: See ‘‘depository institutions in the U.S.’’
Overdraft: An overdraft can be either planned or
unplanned. An unplanned overdraft occurs when a
depository institution honors a check or draft drawn
against a deposit account when insufficient funds are on
deposit and there is no advance contractual agreement to
honor the check or draft. When a contractual agreement
has been made in advance to allow such credit extensions, overdrafts are referred to as planned or prearranged. Any overdraft, whether planned or unplanned,
is an extension of credit and is to be treated and reported
as a ‘‘loan’’ rather than being treated as a negative
deposit balance.
Planned overdrafts are to be classified in Schedule C by
type of loan according to the nature of the overdrawn
depositor. For example, a planned overdraft by a commercial customer is to be classified as a ‘‘commercial
and industrial loan.’’
Unplanned overdrafts in depositors’ accounts are to be
classified in Schedule C as ‘‘All other loans,’’ unless the
depositor is a depository institution, in which case it
would be reported in Schedule C as ‘‘Loans to depository
institutions and acceptances of other banks.’’ In addition,
an unplanned overdraft in the deposit account of a foreign government or official institution would not be
reported in ‘‘All other loans,’’ but would be reported in
‘‘Loans to foreign governments and official institutions.’’
The reporting branch or agency’s overdrafts on deposit
accounts it holds with other banks (i.e., its ‘‘due from’’
accounts) are to be reported as borrowings in Schedule RAL, item 4(c).
For purposes of treatment of overdrafts, separate transaction accounts of a single depositor that are established
under a bona fide cash management arrangement are
regarded as a single account rather than multiple or
separate accounts. In such a situation, an overdraft in one
of the accounts of a single customer is netted against
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

the related transaction accounts of the customer and an
extension of credit is regarded as arising only if, and to
the extent, the combined accounts of the customer are
overdrawn.
Participations: See ‘‘transfers of financial assets.’’
Participations
acceptances.’’

in

Acceptances:

See

‘‘bankers

Pass-through Reserve Balances: Under the Monetary
Control Act of 1980, and as reflected in Federal Reserve
Regulation D, depository institutions that are members
of the Federal Reserve System must maintain their
required reserves (in excess of vault cash) directly with
a Federal Reserve Bank. However, nonmember depository institutions may maintain their required reserves
(in excess of vault cash) in one of two ways: either
(1) directly with a Federal Reserve Bank or (2) indirectly
in an account with another institution (referred to here
as a ‘‘correspondent’’), which, in turn, is required to
pass the reserves through to a Federal Reserve Bank.
This second type of account is called a ‘‘pass-through
account,’’ and a depository institution passing its reserves
to the Federal Reserve through a correspondent is
referred to here as a ‘‘respondent.’’
This pass-through reserve relationship is legally and for
supervisory purposes considered to constitute an asset/
debt relationship between the respondent and the correspondent, and an asset/debt relationship between the
correspondent and the Federal Reserve. The required
reporting of the ‘‘pass-through reserve balances’’ reflects
this structure of asset/debt relationship.
In the balance sheet of the respondent branch or agency,
the pass-through reserve balances are to be treated as a
claim on the correspondent (not as a claim on the Federal
Reserve) and, as such, are to be reflected in the balance
sheet of this report, Schedule RAL, item 1(a), (‘‘Cash
and balances due from depository institutions’’). (The
footings for the respondent are not affected by this
required classification of the claim.) For the respondent
branch or agency, the pass-through reserve balances
would also be reflected in Schedule A, item 3, ‘‘Balances
due from depository institutions in the U.S.’’
In the balance sheet of the correspondent branch or
agency, the pass-through reserve balances are to be
treated as balances due to respondents and, to the extent
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Glossary

that the balances have actually been passed through to
the Federal Reserve, as balances due from the Federal
Reserve. The balances due to respondents are to be
reflected in Schedule RAL, item 4(a), ‘‘Total deposits
and credit balances,’’ and in Schedule E, Deposit Liabilities and Credit Balances, item 7. The balances due from
the Federal Reserve are to be reflected in Schedule RAL,
item 1(a), and in Schedule A, item 5. (Under this required
treatment, the footings for the correspondent are higher,
by the amount of reserves actually passed through to the
Federal Reserve, than they would be under treatment as
an agent relationship.)
For branches or agencies that are correspondents for
related institutions, the pass-through reserve balances are
to be treated as due to U.S. domiciled offices of related
depository institutions and, to the extent that the balances
have actually been passed through to the Federal
Reserve, as balances due from the Federal Reserve. The
balances due to respondents are to be reflected in Schedule M, Due from/Due to Related Institutions in the U.S.
and Foreign Countries, item 1, ‘‘U.S. domiciled offices of
related depository institutions (including their IBFs).’’
The balances due from the Federal Reserve are to be
reflected in Schedule RAL, item 1(a), and in Schedule A,
item 5.
Since the respondent will not know from its own books
the amount that the correspondent has actually passed
through to the Federal Reserve for the respondent’s
account, the respondent must obtain a statement of this
amount from its correspondent.
Placements: The reporting institution may on occasion
transfer (place) funds to a bank or other institution.
Reporting of such placements in this report depends on
the characteristics of the underlying instrument to the
transaction. As a result, the transaction might be reported
in ‘‘Cash and balances due from depository institutions’’
(if the transaction is a deposit); ‘‘Federal funds sold and
securities purchased under agreements to resell’’ (if the
transaction meets the federal funds criteria of one day, or
continuing contracts, maturity in immediately available
funds); or ‘‘Loans, net of unearned income’’ (if the
transaction is a loan). To determine the reporting treatment of these transactions, the reporting institution must
review the contract or wire confirmation to determine the
type of transaction.
Pools of Securities, Participations in: See ‘‘repurchase/
resale agreements.’’
GL-32

Preauthorized Transfer Account: See ‘‘deposits’’
Premiums and Discounts: A premium arises when a
bank (including a branch or agency) purchases a security,
loan, or other asset at a price in excess of its par or face
value, typically because the current level of interest rates
for such assets is less than its contract or stated rate of
interest. The difference between the purchase price and
par or face value represents the premium which all banks
are required to amortize.
A discount arises when a bank (including a branch or
agency) purchases a security, loan, or other asset at a
price below its par or face value, typically because the
current level of interest rates for such assets is greater
than its contract or stated rate of interest. A discount is
also present on instruments which do not have a stated
rate of interest such as U.S. Treasury bills and commercial paper. The difference between par or face value and
the purchase price represents the discount which all
banks are required to accrete.
Premiums and discounts are accounted for as adjustments to the yield on an asset over the life of the asset. A
premium must be amortized and a discount must be
accreted from date of purchase to maturity, not to call or
put date. The preferable method for amortizing premiums and accreting discounts involves the use of the
interest method for accruing income on the asset. The
objective of the interest method is to produce a constant
yield or rate of return on the carrying value of the asset
(par or face value plus unamortized premium or less
unaccreted discount) at the beginning of each amortization period over the asset’s remaining life. The difference
between the periodic interest income that is accrued on
the asset and interest at the stated rate is the periodic
amortization or accretion. However, a straight-line
method of amortization or accretion is acceptable if the
results are not materially different from the interest
method.
A premium or discount may also arise when the reporting branch or agency, acting either as a lender or a
borrower, is involved in an exchange of a note for assets
other than cash and the interest rate is either below the
market rate or not stated, or the face amount of the note
is materially different from the fair value of the noncash
assets exchanged. The noncash assets and the related
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

Glossary

note shall be recorded at either the fair value of the
noncash assets or the market value of the note, whichever is more clearly determinable.
Put Option: See ‘‘derivative contracts.’’

(6) Any other majority-owned subsidiaries (depository
or nondepository) of (1), (2), (3), and (4).
Please note that related nondepository institutions are
treated (reported) as third parties on this report.
The following definitions concern ‘‘related institutions:’’

Real Estate, Loans Secured By: See ‘‘loans secured by
real estate.’’
Reciprocal Balances: Reciprocal balances arise when
two depository institutions maintain deposit accounts
with each other; that is, when a reporting branch or
agency has both a due to and a due from balance with
another depository institution.
For purposes of Schedule RAL, reciprocal balances
between the reporting branch or agency and other depository institutions (including U.S. branches and agencies of
other foreign banks) may be reported on a net basis when
a right of setoff exists. See the Glossary entry for ‘‘offsetting’’ for the conditions that must be met for a right of
setoff to exist.
Related Institutions: For purposes of this report,
‘‘related institutions’’ of a reporting U.S. branch or
agency of a foreign bank include the following depository institutions and their majority-owned subsidiaries,
whether they are located in the U.S., in Puerto Rico or
U.S. territories and possessions, or elsewhere outside of
the U.S.:
(1) Head office of the foreign bank and its other
branches and agencies, hereafter referred to as the
foreign bank parent.
(2) Holding company of the foreign bank parent, hereafter referred to as the parent bank holding company.
(3) Other depository institutions (including their
branches and agencies and IBFs) majority-owned
by (1) or (2) above, or by their majority-owned
subsidiaries.
(4) Edge and Agreement corporations (including their
branches, agencies, IBFs, and majority-owned subsidiaries) majority-owned by (1), (2), or (3) above,
or (6) below.
(5) New York State (Article XII) investment companies
(including branches of such companies) majorityowned by (1), (2), (3), or (4), above.
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

(1) Foreign bank parent: any company (a) that has a
branch or agency required to submit this report;
(b) that is organized under the laws of a foreign
country, a territory or possession of the United
States, Puerto Rico, Guam, American Samoa, or the
Virgin Islands; and (c) that engages in the business
of banking.
(2) Parent bank holding company: any company that
owns more than 50 percent of the outstanding voting
common stock of the foreign bank parent as defined
in (1) above.
(3) Nondepository subsidiary a majority-owned subsidiary that does not engage in the business of banking.
(4) New York State (Article XII) investment company:
any company that is subject to Article XII of the
New York State banking law.
Repurchase/Resale Agreements: A repurchase agreement is a transaction involving the ‘‘sale’’ of financial
assets by one party to another, subject to an agreement by
the ‘‘seller’’ to repurchase the assets at a specified date or
in specified circumstances. A resale agreement (also
known as a reverse repurchase agreement) is a transaction involving the ‘‘purchase’’ of financial assets by
one party from another, subject to an agreement by
the‘‘purchaser’’ to resell the assets at a specified date or
in specified circumstances.
As stated in the AICPA’s Audit and Accounting Guide
for Banks and Savings Institutions, dollar repurchase
agreements (also called dollar rolls) are agreements to
sell and repurchase similar but not identical securities.
The dollar roll market consists primarily of agreements
that involve mortgage-backed securities (MBS). Dollar
rolls differ from regular repurchase agreements in that
the securities sold and repurchased, which are usually of
the same issuer, are represented by different certificates,
are collateralized by different but similar mortgage pools
(for example, single-family residential mortgages), and
generally have different principal amounts.
General rule—Consistent with FASB Statement No. 140,
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Glossary

Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities, repurchase
and resale agreements involving financial assets (e.g.,
securities and loans), including dollar repurchase agreements, are either reported as (a) secured borrowings and
loans or (b) sales and forward repurchase commitments
based on whether the transferring (‘‘selling’’) institution
maintains control over the transferred assets. (See the
Glossary entry for ‘‘transfers of financial assets’’ for
further discussion of control criteria).
If a repurchase agreement both entitles and obligates the
‘‘selling’’ institution to repurchase or redeem the transferred assets from the transferee (‘‘purchaser’’), the ‘‘selling’’ institution should report the transaction as a secured
borrowing if and only if the following conditions have
been met:
(1) The assets to be repurchased or redeemed are the
same or ‘‘substantially the same’’ as those transferred, as defined by FASB Statement No. 140.
(2) The ‘‘selling’’ institution has the ability to repurchase or redeem the transferred assets on substantially the agreed terms, even in the event of default
by the transferee (‘‘purchaser’’). This ability is presumed to exist if the ‘‘selling’’ institution has
obtained cash or other collateral sufficient to fund
substantially all of the cost of purchasing replacement assets from others.
(3) The agreement is to repurchase or redeem the transferred assets before maturity, at a fixed or determinable price.
(4) The agreement is entered into concurrently with the
transfer.
Participations in pools of securities are to be reported
in the same manner as security repurchase/resale
transactions.
Repurchase agreements reported as secured
borrowings—If a repurchase agreement qualifies as a
secured borrowing, the ‘‘selling’’ institution should
report the transaction as indicated below based on
whether the agreement involves a security or some other
financial asset.
(1) Securities ‘‘sold’’ under agreements to repurchase
are reported in Schedule RAL, item 4(b)2, ‘‘Securities sold under agreements to repurchase. ’’
GL-34

(2) Financial assets (other than securities) ‘‘sold’’ under
agreements to repurchase are reported as follows:
(a) If the repurchase agreement matures in one business day (or is under a continuing contract) and
is in immediately available funds, it should be
reported in Schedule RAL, item 4(b)1, ‘‘Federal
funds purchase.’’
(b) If the repurchase agreement matures in more
than one business day or is not in immediately
available funds, it should be reported in Schedule
RAL, item 4.c.’’
In addition, the ‘‘selling’’ institution may need to record
further entries depending on the terms of the agreement.
If the ‘‘purchaser’’ has the right to sell or repledge
noncash assets, the ‘‘selling’’ institution should recategorize the transferred financial assets as ‘‘assets receivable’’ and report them in Schedule RAL, item 1(h),
‘‘Other assets including claims on nonrelated parties.’’
Otherwise, the financial assets should continue to be
reported in the same asset category as before the transfer (e.g., securities should continue to be reported in
Schedule RAL, item 1(b), ‘‘U.S. Government Securities,’’ item 1(c), ‘‘Other bonds, notes, debentures, and
corporate stock,’’ or item 1(f), ‘‘Trading assets,’’ as
appropriate).
Resale agreements reported as secured borrowings—
Similarly, if a resale agreement qualifies as a secured
borrowing, the ‘‘purchasing’’ institution should report
the transaction as indicated below based on whether the
agreement involves a security or some other financial
asset.
(1) Securities ‘‘purchased’’ under agreements to resell
are reported in Schedule RAL, item 1(d)2, ‘‘ Securities purchased under agreements to resell.’’
(2) Financial assets (other than securities) ‘‘purchased’’
under agreements to resell are reported as follows:
(a) If the resale agreement matures in one business
day (or is under a continuing contract) and is
in immediately available funds, it should be
reported in Schedule RAL, item 1(d)1, ‘‘Federal
funds sold.’’
(b) If the resale agreement matures in more than one
business day or is not in immediately available
funds, it should be reported in Schedule RAL,
Instructions for Preparation of Reporting Form FFIEC 002
March 2004

Glossary

item 1(e), ‘‘Loans and leases, net of unearned
income.’’
In addition, the ‘‘purchasing’’ institution may need to
record further entries depending on the terms of the
agreement. If the ‘‘purchasing’’ institution has the right
to sell the noncash assets it has ‘‘purchased’’ and sells
these assets, it should recognize the proceeds from the
sale and report its obligation to return the assets in
Schedule RAL, item 4(f), ‘‘Other liabilities to nonrelated parties.’’ If the ‘‘selling institution defaults under
the terms of the repurchase agreement and is no longer
entitled to redeem the noncash assets, the ‘‘purchasing’’
institution should report these assets on Schedule RAL in
the appropriate asset category (e.g., securities should be
reported in Schedule RAL, item 1(b), ‘‘U.S. Government
Securities,’’ item 1(c), ‘‘Other bonds, notes, debentures,
and corporate stock,’’ or item 1(f), ‘‘Trading assets,’’ as
appropriate) and initially measure them at fair value.
However, if the ‘‘purchasing’’ institution has already
sold the assets it has ‘‘purchased,’’ it should derecognize
its obligation to return the assets. Otherwise, the ‘‘purchasing’’ institution should not report the transferred
financial assets (i.e., the financial assets ‘‘purchased’’
under the resale agreement) on Schedule RAL.
Repurchase/resale agreements reported as sales—If a
repurchase agreement does not qualify as a secured borrowing under FASB Statement No. 140, the selling institution should account for the transaction as a sale of
financial assets and a forward repurchase commitment.
The selling institution should remove the transferred
assets from Schedule RAL and record the proceeds from
the sale of the transferred assets (including the forward
repurchase commitment). Similarly, if a resale agreement
does not qualify as a borrowing under FASB Statement
No. 140, the purchasing institution should account for the
transaction as a purchase of financial assets and a forward resale commitment. The purchasing institution
should record the transferred assets on Schedule RAL,
initially measure them at fair value, and record the payment for the purchased assets (including the forward
resale commitment).
Reserve Balances, Pass-through: See ‘‘pass-through
reserve balances.’’
Securities Activities: Institutions should categorize each
security as trading, available-for-sale, or held-to-maturity
Instructions for Preparation of Reporting Form FFIEC 002
March 2004

consistent with FASB Statement No. 115, Accounting for
Certain Investments in Debt and Equity Securities, as
amended. Management should periodically reassess its
security categorization decisions to ensure that they
remain appropriate.
Securities that are intended to be held principally for the
purpose of selling them in the near term should be
classified as trading assets. Trading activity includes
active and frequent buying and selling of securities for
the purpose of generating profits on short-term fluctuations in price. Securities held for trading purposes must
be reported at fair value, with unrealized gains and losses
recognized in the institutions unremitted profit (loss) and
reported in Schedule RAL, item 2, ‘‘Net due from related
depository institutions,’’ or item 5, ‘‘Net due to related
depository institutions.’’
Held-to-maturity securities are debt securities that an
institution has the positive intent and ability to hold to
maturity. Held-to-maturity securities are generally
reported at amortized cost. Securities not categorized as
trading or held-to-maturity must be reported as availablefor-sale. An institution must report its available-for-sale
securities at fair value on Schedule RAL and report any
unrealized gains or losses from these securities as part
of its unremitted profit (loss), which is reported in Schedule RAL, item 2, ‘‘Net due from related depository
institutions,’’ or item 5, ‘‘Net due to related depository
institutions.’’
If a decline in fair value of a held-to-maturity or
available-for-sale security is judged to be other than
temporary, the cost basis of the individual security shall
be written down to fair value as a new cost basis. For
example, if it is probable that an institution will be
unable to collect all amounts due according to the contractual terms of a debt security not impaired at acquisition, an other-than-temporary impairment has occurred.
The proper categorization of securities is important to
ensure that trading gains and losses are promptly recognized in the institution’s earnings and trading activities
can be properly evaluated for safety and soundness purposes. This will not occur when securities intended to be
held for trading purposes are categorized as held-tomaturity or available-for-sale. The following practices
are considered trading activities:
(1) Gains Trading—Gains trading is characterized by
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Glossary

the purchase of a security and the subsequent sale of
the same security at a profit after a short holding
period, while securities acquired for this purpose that
cannot be sold at a profit are typically retained in
the available-for-sale or held-to-maturity portfolio.
Gains trading may be intended to defer recognition
of losses, as unrealized losses on available-for-sale
and held-to-maturity debt securities generally are not
reported in income until the security is sold.
(2) When-Issued Securities Trading—When-issued
securities trading is the buying and selling of securities in the period between the announcement of an
offering and the issuance and payment date of the
securities. A purchaser of a ‘‘when-issued’’ security
acquires the risks and rewards of owning a security
and may sell the when-issued security at a profit
before having to take delivery and pay for it. Because
such transactions are intended to generate profits
from short-term price movements, they should be
categorized as trading.
(3) Pair-offs—Pair-offs are security purchase transactions that are closed-out or sold at, or prior to,
settlement date. In a pair-off, an institution commits
to purchase a security. Then, prior to the predetermined settlement date, the institution will pair-off
the purchase with a sale of the same security. Pairoffs are settled net when one party to the transaction
remits the difference between the purchase and sale
price to the counterparty. Pair-offs may also involve
the same sequence of events using swaps, options on
swaps, forward commitments, options on forward
commitments, or other off-balance sheet derivative
contracts.
(4) Extended Settlements—In the U.S., regular-way
settlement for federal government and federal agency
securities (except mortgage-backed securities and
derivative contracts) is one business day after the
trade date. Regular-way settlement for corporate and
municipal securities is three business days after the
trade date. For mortgage-backed securities, it can be
up to 60 days or more after the trade date. The use of
extended settlements may be offered by securities
dealers in order to facilitate speculation on the part
of the purchaser, often in connection with pair-off
transactions. Securities acquired through the use of a
settlement period in excess of the regular-way settlement periods in order to facilitate speculation should
be reported as trading assets.
GL-36

(5) Repositioning Repurchase Agreements—A repositioning repurchase agreement is a funding technique
offered by a dealer in an attempt to enable an institution to avoid recognition of a loss. Specifically, an
institution that enters into a ‘‘when-issued’’ trade or
a ‘‘pair-off’’ (which may include an extended settlement) that cannot be closed out at a profit on the
payment or settlement date will be provided dealer
financing in an effort to fund its speculative position
until the security can be sold at a gain. The institution purchasing the security typically pays the dealer
a small margin that approximates the actual loss in
the security. The dealer then agrees to fund the
purchase of the security, typically by buying it back
from the purchaser under a resale agreement. Any
securities acquired through a dealer financing technique such as a repositioning repurchase agreement
that is used to fund the speculative purchase of
securities should be reported as trading assets.
(6) Short Sales—A short sale is the sale of a security
that is not owned. The purpose of a short sale generally is to speculate on a fall in the price of the
security. (For further information, see the Glossary
entry for ‘‘short position.’’)
One other practice, referred to as ‘‘adjusted trading,’’ is
not acceptable under any circumstances. Adjusted trading involves the sale of a security to a broker or dealer at
a price above the prevailing market value and the contemporaneous purchase and booking of a different security, frequently a lower-rated or lower quality issue or
one with a longer maturity, at a price above its market
value. Thus, the dealer is reimbursed for losses on the
purchase from the institution and ensured a profit. Such
transactions inappropriately defer the recognition of
losses on the security sold and establish an excessive
cost basis for the newly acquired security. Consequently,
such transactions are prohibited and may be in violation
of 18 U.S.C. Sections 1001—False Statements or Entries
and 1005—False Entries.
Securities Borrowing/Lending Transactions: Securities borrowing/lending transactions are typically initiated
by broker–dealers and other financial institutions that
need specific securities to cover a short sale or a customer’s failure to deliver securities sold. A transferee (‘‘borrower’’) of securities generally is required to provide
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Glossary

‘‘collateral’’ to the transferor (‘‘lender’’) of securities,
commonly cash but sometimes other securities or
standby letters of credit, with a value slightly higher than
that of the securities ‘‘borrowed.’’
Most securities borrowing/lending transactions do not
qualify as sales under FASB Statement No. 140 because
the agreement entitles and obligates the securities lender
to repurchase or redeem the transferred assets before
their maturity. (See the Glossary entry for ‘‘transfers of
financial assets’’ for further discussion of sale criteria.)
When such transactions do not qualify as sales, securities
lenders and borrowers should account for the transactions as secured borrowings in which cash (or securities
that the holder is permitted by contract or custom to sell
or repledge) received as ‘‘collateral’’ by the securities
lender is considered the amount borrowed and the securities ‘‘loaned’’ are considered pledged against the amount
borrowed, and the ‘‘loaned’’ securities are recategorized
on the securities lender’s balance sheet as ‘‘assets receivable’’ and reported in Schedule RAL, item 1(h), ‘‘Other
assets including other claims on nonrelated parties.’’
If the securities borrowing/lending transaction meets the
criteria for a sale under FASB Statement No. 140, the
lender of the securities should remove the securities from
Schedule RAL and record the proceeds from the sale of
the securities (including the forward repurchase commitment). The borrower of the securities should record the
securities on Schedule RAL at fair value and record the
payment for the purchased assets (including the forward
resale commitment).
Securities, Participations in Pools of: See ‘‘repurchase/
resale agreements.’’
Servicing Assets and Liabilities: The accounting and
reporting standards for servicing assets and liabilities are
set forth in FASB Statement No. 140, ‘‘Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities’’ and FASB Statement No. 65,
‘‘Accounting for Certain Mortgage Banking Activities,’’
as amended by Statement No. 140. A summary of the
relevant sections of these accounting standards follows.
For further information, see FASB Statements No. 140
and No. 65 and the Glossary entry for ‘‘transfers of
financial assets.’’
Servicing of mortgage loans, credit card receivables, or
other financial assets includes, but is not limited to,
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

collecting principal, interest, and escrow payments from
borrowers; paying taxes and insurance from escrowed
funds; monitoring delinquencies; executing foreclosure
if necessary; temporarily investing funds pending distribution; remitting fees to guarantors, trustees, and others
providing services; and accounting for and remitting
principal and interest payments to the holders of beneficial interests in the financial assets. Servicers typically
receive certain benefits from the servicing contract and
incur the costs of servicing the assets.
Servicing is inherent in all financial assets; it becomes a
distinct asset or liability only when contractually separated from the underlying financial assets by sale or
securitization of the assets with servicing retained or by a
separate purchase or assumption of the servicing. When
a branch or agency undertakes an obligation to service
financial assets, it must recognize a servicing asset or
liability for that servicing contract unless it securitizes
the assets, retains all of the resulting securities, and
classifies the securities as held-to-maturity debt securities. Servicing assets result from contracts to service
financial assets for which the benefits of servicing
(revenues from contractually specified servicing fees,
late charges, and other ancillary sources) are expected to
more than adequately compensate the servicer for performing the servicing. Servicing liabilities result from
contracts to service financial assets for which the benefits
of servicing are not expected to adequately compensate
the servicer for performing the servicing. Contractually
specified servicing fees are all amounts that, per contract,
are due to the servicer in exchange for servicing the
financial asset and would no longer be received by a
servicer if the beneficial owners of the serviced assets or
their trustees or agents were to exercise their actual or
potential authority under the contract to shift the servicing to another servicer. Adequate compensation is the
amount of benefits of servicing that would fairly compensate a substitute servicer should one be required including the profit that would be demanded by a substitute
servicer in the marketplace.
When a branch or agency sells or securitizes financial
assets and retains the servicing asset, the branch or
agency shall allocate the cost of the financial assets to the
servicing assets and the financial assets (without the
servicing) based on their relative fair values. If it is not
practicable to estimate the fair values of the servicing
assets and the financial assets (without the servicing),
the entire cost shall be allocated to the financial assets
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Glossary

(without the servicing) and no cost shall be allocated
to the servicing assets. If a branch or agency incurs a
servicing liability in a sale or securitization, the servicing
liability should initially be measured at fair value. If a
branch or agency securitizes assets, retains all of the
resulting securities, and classifies the securities as heldto-maturity debt securities, no separate servicing asset
or liability shall be recorded. If a branch or agency
purchases servicing assets or assumes servicing liabilities in a transaction other than a sale or securitization of
the financial assets being serviced, the asset or liability
shall be recorded at fair value. For purchased servicing
assets, the fair value is presumptively the price paid to
acquire the servicing.
All servicing assets and liabilities carried on the books
of reporting branches and agencies shall be amortized in
proportion to, and over the period of, estimated net
servicing income (servicing revenue in excess of servicing costs) or net servicing loss (servicing costs in excess
of servicing revenue). The book value of servicing assets
and liabilities should be reviewed at least quarterly. The
servicing assets shall be stratified into groups based on
one or more of the predominant risk characteristics of the
underlying financial assets for purposes of determining
fair value. If the book value of a stratum of a servicing
asset exceeds its fair value, the servicing asset is considered to be impaired and the book value shall be reduced
to fair value through a valuation allowance for that
stratum. If the fair value of a servicing liability increases
above the book value, the increased obligation shall be
recognized as a loss in current earnings. The fair value
of servicing assets (liabilities) is the amount at which the
assets (liabilities) could be bought (incurred) or sold
(settled) in a bona fide transaction between willing
parties.
Settlement Date Accounting: See ‘‘trade date and settlement date accounting.’’
Shell Branches: Shell branches are limited service
branches that do not conduct transactions with residents,
other than with other shell branches, in the country in
which they are located. Transactions at shell branches
are usually initiated and effected by their head office or
by other related branches outside the country in which
the shell branches are located, with records and supporting documents maintained at the initiating offices.
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Examples of such locations are the Bahamas and the
Cayman Islands.
Short Position: When a branch or agency sells an asset
that it does not own, it has established a short position. If
on the report date a branch or agency is in a short
position, it shall report its liability to purchase the asset
in Schedule RAL, item 4(e), ‘‘Trading liabilities.’’ In this
situation, the right to receive payment shall be reported
in Schedule RAL, item 1(h), ‘‘Other assets (including
other claims on nonrelated parties).’’ Short positions
shall be reported gross. Short trading positions shall be
revalued consistent with the method used by the reporting branch or agency for the valuation of its trading
account assets.
Standby Contract: See ‘‘derivative contracts.’’
Standby Letter of Credit: See ‘‘letter of credit.’’
Suspense Accounts: Suspense accounts are temporary
holding accounts in which items are carried until they
can be identified and their disposition to the proper
account can be made. Such accounts may also be known
as interoffice or clearing accounts. The balances of suspense accounts as of the report date should not automatically be reported as other assets or other liabilities
in Schedule RAL, item 1(h) or 4(f). Rather, the items
included in these accounts should be reviewed and material amounts should be reported in the appropriate
accounts of this report.
Syndications: A syndication is a participation, usually
involving shares in a single loan, in which several participants agree to enter into an extension of credit under a
bona fide binding agreement that provides that, regardless of any event, each participant shall fund and be at
risk only up to a specified percentage of the total extension of credit or up to a specified dollar amount. In a
syndication, the participants agree to the terms of the
participation prior to the execution of the final agreement
and the contract is executed by the obligor and by all the
participants, although there is usually a lead institution
organizing or managing the credit. Large commercial
and industrial loans, large loans to finance companies,
and large foreign loans may be handled through such
syndicated participations.
Each participant in the syndicate, including the lead
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June 2002

Glossary

participant, records its own share of the participated loan
and the total amount of the loan is not entered on the
books of one institution to be shared through transfers of
loans. This type of participation thus does not give rise in
its initial operation and distribution to the type of transfer
to which the general rule in the Glossary entry for ‘‘sales
of assets’’ is addressed. However, any subsequent transfers of shares, or parts of shares, in the syndicated loan
would be subject to that general rule for determining
whether the transfer is to be treated as a sale of assets or
as a borrowing.
Telephone Transfer Account: See ‘‘deposits.’’
Term Federal Funds: See ‘‘federal funds transactions.’’
Time Deposits: See ‘‘deposits.’’
Trade Date and Settlement Date Accounting: For purposes of this report, the preferred method for reporting
transactions in investment portfolio securities and trading account assets (including money market instruments)
other than futures, forwards, and options (see the Glossary entry for ‘‘derivative contracts’’) is on the basis of
trade date accounting. However, if the reported amounts
under settlement date accounting would not be materially
different from those under trade date accounting, settlement date accounting is acceptable. Whichever method a
branch or agency elects should be used consistently,
unless the branch or agency has elected settlement date
accounting and subsequently decides to change to the
preferred trade date method.

entries are made. Upon receipt of the assets on the
settlement date, the asset is reported in the proper asset
category and payment is disbursed. The selling branch or
agency, on the trade date, would make no entries. On
settlement date, the selling branch or agency would
reduce the appropriate asset category and reflect the
receipt of the payment. Any gain or loss resulting from
such transaction would be recognized on the settlement
date.
Trading Account: Branches and agencies that (a) regularly underwrite or deal in securities, interest rate contracts, foreign exchange rate contracts, other off-balance
sheet commodity and equity contracts, other financial
instruments, and other assets for resale, (b) acquire or
take positions in such items principally for the purpose
of selling in the near term or otherwise with the intent to
resell in order to profit from short-term price movements,
or (c) acquire or take positions in such items as an
accommodation to customers or for other trading purposes shall report such assets or positions as trading
assets or liabilities.
All trading assets should be segregated from the other
assets of a branch or agency and reported in Schedule RAL, item 1(f), ‘‘Trading assets.’’ The failure of a
branch or agency to establish a separate account for
assets that are used for trading purposes does not prevent
such assets from being designated as trading for purposes
of these reports. For further information, see the FFIEC
Supervisory Policy Statement on Securities Activities
and FASB Statement No. 115, Accounting for Certain
Investments in Debt and Equity Securities.

Under trade date accounting, assets purchased shall be
recorded in the appropriate asset category on the trade
date and the branch or agency’s obligation to pay for
those assets shall be reported in Schedule RAL,
item 4(f). Conversely, when an asset is sold, it shall be
removed on the trade date from the asset category in
which it was recorded, and the proceeds receivable
resulting from the sale shall be reported in Schedule RAL, item 1(h). Any gain or loss resulting from
such transaction shall also be recognized on the trade
date. On the settlement date, disbursement of the payment or receipt of the proceeds will eliminate the respective other liability or other asset entry resulting from the
transaction.

All trading account assets should be reported at their
fair value with unrealized gains and losses recognized
as part of unremitted profit/loss included in net due
from/due to accounts. When a security or other asset is
acquired, a branch or agency should determine whether
it intends to hold the asset for trading or for investment (e.g., for securities, available-for-sale or held-tomaturity). A branch or agency should not record a newly
acquired asset in a suspense account and later determine
whether it was acquired for trading or investment purposes. Regardless of how a branch or agency categorizes
a newly acquired asset, management should document its
decision.

Under settlement date accounting, assets purchased are
not recorded until settlement date. On the trade date, no

All trading liabilities should be segregated from other
transactions and reported in Schedule RAL, item 4(e),
‘‘Trading liabilities.’’ The trading liability account

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June 2002

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Glossary

includes the fair value of off-balance sheet derivative
contracts held for trading that are in loss positions and
short sales of securities and other assets. Trading account
liabilities should be reported at fair value with unrealized
gains and losses recognized in current income in a manner similar to trading account assets.
Given the nature of the trading account, transfers into or
from the trading category should be rare. Transfers
between a trading account and any other account of the
branch or agency must be recorded at fair value at the
time of the transfer. For a security transferred from the
trading category, the unrealized holding gain or loss at
the date of the transfer will already have been recognized
in earnings and should not be reversed. For a security
transferred into the trading category, the unrealized holding gain or loss at the date of the transfer should be
recognized in earnings.
For purposes of these reports, short sales of securities or
other assets are treated as trading transactions because
such sales are entered into with the intent to profit from
short-term price movements. Nonetheless, the obligation
incurred in a short sale should not be netted against
trading assets, but should be recorded as a liability in
Schedule RAL, item 4(e), ‘‘Trading liabilities.’’ (See the
Glossary entry for ‘‘short position.’’)
Transaction Account: See ‘‘deposits.’’
Transactions with Related Institutions: Transactions
with related depository institutions (as defined in the
Glossary entry for ‘‘related institutions’’) are treated
differently from transactions with unrelated depository institutions. Moreover, transactions with related
depository institutions are treated differently from transactions with related nondepository institutions (i.e.,
transactions with related nondepository institutions are
treated in the same manner as transactions with nonrelated depository or nondepository institutions) if
certain criteria, which are explained below, are met.
The following describes the treatment of each type of
transaction:
(1) Transactions with nonrelated institutions—
Transactions with nonrelated institutions are to be
reflected, as appropriate, in each item of Schedule
RAL and supporting schedules other than (a) the
items on net due from and due to related depository
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institutions (Schedule RAL, Asset item 2 and Liability item 5), and (b) Schedule M.
(2) Transactions with related depository institutions—
Transactions with related depository institutions (and
with those related nondepository institutions that are
consolidated in the Report of Condition of a related
U.S. bank) are to be reflected only in the item for net
due from and due to related depository institutions
(Schedule RAL, Asset item 2 and Liability item 5)
and in Schedule M.
(3) Transactions
with
related
nondepository
institutions—Transactions with related nondepository institutions (other than those that are consolidated in the Report of Condition of a related U.S.
bank) are to be reported similarly to the reporting of
transactions with nonrelated institutions, i.e., they
are to be reflected, as appropriate, in each item of
Schedule RAL and the supporting schedules, other
than (a) the items on net due from and due to related
depository institutions (Schedule RAL, Asset item 2
and Liability item 5) and (b) Schedule M.
Transactions with majority-owned depository subsidiaries of related nondepository institutions are to be
treated the same as transactions with related depository
institutions and are reflected in the net due from and net
due to related depository institutions items of Schedule RAL (and in Schedule M) as appropriate and notin the other items of Schedule RAL or in the other
schedules.
Transfers of Financial Assets: The accounting and
reporting standards for transfers of financial assets are set
forth in FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. These standards are based on consistent application of a financial components approach that
focuses on control. Under the financial components
approach, after the reporting branch or agency transfers
financial assets, it recognizes the financial and servicing
assets it controls and the liabilities it has incurred,
removes financial assets from the balance sheet when
control has been surrendered, and removes liabilities
from the balance sheet when extinguished. A summary of these accounting and reporting standards follows. For further information, see FASB Statement
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Glossary

No. 140, the FASB staff implementation guide to Statement No. 140, and the Glossary entry for ‘‘Extinguishments of Liabilities.’’
FASB Statement No. 140 is effective for transfers of
assets, including repurchase agreements, loan participations, dollar rolls, securities lending, and similar transactions, occurring after March 31, 2001. However, the
provisions of Statement No. 140 governing the accounting for collateral are effective for December 31, 2000,
year-end financial statements. Branches and agencies
should apply Statement No. 140 prospectively after its
effective dates, with earlier or retroactive application not
permitted, except for the provisions of this accounting
standard applicable to servicing contracts in existence
before January 1, 1997, and financial assets subject to
prepayment held on or acquired after January 1, 1997
(discussed below in this Glossary entry). FASB Statement No. 125 generally applies to transfers of financial
assets occurring after December 31, 1996, but before
April 1, 2001.
A financial asset is cash, evidence of an ownership
interest in another entity, or a contract that conveys to the
branch or agency a contractual right either to receive
cash or another financial instrument from another entity
or to exchange other financial instruments on potentially
favorable terms with another entity. Most of the assets on
a financial statement of a branch or agency are financial
assets, including balances due from depository institutions, securities, federal funds sold, securities purchased
under agreements to resell, loans and lease financing
receivables, and interest-only strips receivable.3 However, servicing assets are not financial assets. Financial
assets also include financial futures contracts, forward
contracts, interest rate swaps, interest rate caps, interest
rate floors, and certain option contracts.
Determining Whether a Transfer Should be Accounted
for as a Sale or a Secured Borrowing—A branch or
agency should account for a transfer of its financial
assets (or a transfer of all or a portion of one of its
financial assets) in which it surrenders control over those
financial assets as a sale to the extent that it receives
consideration other than beneficial interests in the transferred assets in exchange. According to FASB Statement
3. Both FASB Statement Nos. 125 and 140 define an interest-only strip
receivable as the contractual right to receive some or all of the interest due
on a bond, mortgage loan, collateralized mortgage obligation, or other
interest-bearing financial asset.
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

No. 140, a transferor (i.e., the entity that transfers all or a
portion of one or more financial assets) has surrendered
control over transferred assets, and therefore has sold the
assets, if and only if all three of the following conditions
are met:
(1) The transferred assets have been isolated from the
transferor, i.e., put presumptively beyond the reach
of the transferor and its creditors, even in bankruptcy
or other receivership.
(2) Each transferee (i.e., the entity that receives all or a
portion of one or more financial assets from the
transferor), or each holder of the beneficial interests
in a qualifying special purpose entity that is a transferee, has the right to pledge or exchange the assets it
received, and no condition both constrains the transferee from taking advantage of that right and provides more than a trivial benefit to the transferor.
(3) The transferor does not maintain effective control
over the transferred assets through (a) an agreement
that both entitles and obligates it to repurchase or
redeem the transferred assets before their maturity or
(b) the ability to unilaterally cause the holder to
return specific assets, other than through a cleanup
call option.
If a transfer of financial assets in exchange for cash or
other consideration (other than beneficial interests in the
transferred assets) does not satisfy the criteria for sale
treatment, the transfer should be accounted for as a
secured borrowing with pledge of collateral.
Accounting for a Transfer That Qualifies as a Sale—
Upon the completion of a transfer of financial assets that
satisfies all three of the conditions to be accounted for as
a sale, the purchaser(s) must recognize on the balance
sheet all assets obtained and any liabilities incurred and
initially measure them at fair value. The aggregate fair
value is presumed to be the price paid by the purchaser(s). As for the selling branch or agency, it must:
(1) Remove all assets sold from the balance sheet while
continuing to carry on its balance sheet any retained
interest in the transferred assets, including, if applicable, servicing assets, retained undivided interests,
and beneficial interests in assets transferred to a
qualifying special-purpose entity in a securitization.
The selling branch or agency must allocate the
amount at which the transferred assets were carried
on the balance sheet at the date of the transfer
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Glossary

between the assets sold and the retained interests, if
any, based on their relative fair values at that date.
(2) Recognize on the balance sheet all cash, derivative
financial instruments, and other assets obtained and
all servicing liabilities and other liabilities incurred
in consideration as proceeds of the sale. Derivatives
include put or call options held or written (e.g.,
guarantee or recourse obligations), forward commitments (e.g., commitments to deliver additional
receivables in some securitizations), and swaps (e.g.,
provisions that convert interest rates from fixed to
variable).
(3) Initially measure the assets obtained and liabilities
incurred in a sale at fair value. However, if it is not
practicable to estimate the fair value of an asset
obtained, the selling branch or agency must record
the asset at zero. If it is not practicable to estimate
the fair value of a liability incurred, the selling bank
must not recognize any gain on the sale. The liability
should be recorded on the branch’s or agency’s
financial statements at the greater of:
(a) The amount, if any, by which the fair values of
the assets obtained in the sale less the fair values
of the liabilities incurred in the sale exceeds the
sum of the carrying values of the assets transferred, or
(b) The amount of loss that is probable of occurring
in accordance with FASB Statement No. 5,
Accounting for Contingencies, as interpreted by
FASB Interpretation No. 14, Reasonable Estimation of the Amount of a Loss. Under that interpretation, when the reasonable estimate of the loss
is a range and some amount within the range
appears at the time to be a better estimate than
any other amount within the range, that amount
should be considered probable. When no amount
within the range is a better estimate than any
other amount, the minimum amount in the range
should be considered probable.
(4) Recognize in income any gain or loss on the sale
in income (as reflected in net due from/due to
accounts).
Branches and agencies should refer to FASB Statement
No. 140 for implementation guidance for accounting for
transfers of partial interests, transfers of certain lease
receivables, securities lending transactions, repurchase
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agreements including ‘‘dollar rolls,’’ ‘‘wash sales,’’ loan
syndications, loan participations (discussed below), risk
participations in bankers acceptances, factoring arrangements, and transfers of receivables with recourse. However, this accounting standard does not provide guidance
on the accounting for most assets and liabilities recorded
on the balance sheet following a transfer accounted for
as a sale. As a result, after their initial measurement or
carrying amount allocation, these assets and liabilities
should be accounted for in accordance with the existing
generally accepted accounting principles applicable to
them.
Loan Participations—Statement No. 140 applies to loan
participations occurring after March 31, 2001, including
transfers by the originating lender to a participating
institution that take place after that date under loan
participation agreements that originated before April 1,
2001. However, for transfers by an FDIC-insured institution, the isolation test in Statement No. 140 (described
above under ‘‘Determining Whether a Transfer Should
be Accounted for as a Sale or a Secured Borrowing’’)
applies to transfers occurring after December 31, 2001. If
a loan participation agreement gives a participating institution the right to pledge or exchange the participation,
the isolation test has been met, and the originating lender
does not maintain effective control over the participation,
then the conditions for the surrender of control have been
met and the originating lender should account for transfers to the participating institution as sales of financial
assets.
An originating lender’s right of first refusal on a bona
fide offer to the participating institution from a third
party, a requirement for a participating institution to
obtain the originating lender’s permission that shall not
be unreasonably withheld, or a prohibition on the participating institution’s sale of the participation to the
originating lender’s competitor (if other potential willing
buyers exist) is a limitation on the participating institution’s rights, but is presumed not to constrain a participant from exercising its right to pledge or exchange the
participation. However, if the participation agreement
constrains the participating institution from pledging or
exchanging its participation, the originating lender presumptively receives more than a trivial benefit, has not
relinquished control over the loan, and should account
for the transfer as a secured borrowing.
A loan participation agreement may give the originating
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Glossary

lender the contractual right to repurchase a loan participation at any time. In this situation, the right to
repurchase is effectively a call option on a specific loan
participation, i.e., a participation that is not readily
obtainable in the marketplace. Regardless of whether this
option is freestanding or attached, it either constrains the
participating institution from pledging or exchanging its
participation or results in the originating lender maintaining effective control over the participation. As a consequence, the contractual right to repurchase precludes sale
accounting and the transfer should be accounted for as a
secured borrowing.
In addition, under a loan participation agreement, the
originating lender may give the participating institution
the right to resell the participation, but reserves the right
to call the loan participation at any time from whomever
holds it and can enforce that right by discontinuing the
flow of interest to the holder of the participation at the
call date. In this situation, the originating lender has
maintained effective control over the participation and
the transfer should be accounted for as a secured borrowing, not as a sale.
If an originating FDIC-insured lender transfers a loan
participation to a participating institution with recourse
prior to January 1, 2002, the existence of the recourse
obligation in and of itself does not preclude sale accounting for the transfer under FASB Statement No. 140. If a
loan participation transferred with recourse prior to January 1, 2002, meets the three conditions identified above
in order for the transferor to have surrendered control
over the transferred assets, the transfer should be
accounted for as a sale for financial reporting purposes.
If an originating FDIC-insured lender transfers a loan
participation with recourse after December 31, 2001, the
participation generally will not be considered isolated
from the transferor, i.e., the originating lender, in the
event of an FDIC receivership. Section 360.6 of the
FDIC’s regulations limits the FDIC’s ability to reclaim
loan participations transferred ‘‘without recourse,’’ as
defined in the regulations, but does not limit the FDIC’s
ability to reclaim loan participations transferred with
recourse. Under Section 360.6, a participation that is
subject to an agreement that requires the originating
lender to repurchase the participation or to otherwise
compensate the participating institution due to a default
on the underlying loan is considered a participation
Instructions for Preparation of Reporting Form FFIEC 002
June 2002

‘‘with recourse.’’ As a result, a loan participation transferred ‘‘with recourse’’ after December 31, 2001, generally should be accounted for as a secured borrowing and
not as a sale for financial reporting purposes. This means
that the originating lender should not remove the participation from its loan assets on the balance sheet, but
should report the secured borrowing in Schedule RAL,
item 4(c), ‘‘Other borrowed money.’’
Financial Assets Subject to Prepayment—Financial
assets such as interest-only strips receivable and certain
loans, debt securities, other receivables, and retained
interests in securitizations can be contractually prepaid
or otherwise settled in such a way that the holder of the
financial asset would not recover substantially all of its
recorded investment. After their initial recording on the
balance sheet, financial assets of this type must be subsequently measured at fair value like available-for-sale
securities or trading securities.
Traveler’s Letter of Credit: See ‘‘letter of credit.’’
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, the U.S. Virgin Islands,
and the U.S. trust territories.
Valuation Allowance: In general, a valuation allowance
is an account established for a specific asset or asset
category or to recognize a specific liability, with the
intent of absorbing some element of estimated loss. Such
allowances are created by charges to expense accounts
reported as part of an institution’s net unremitted profits.
Allowances established for an asset or asset category are
netted from the asset reported on Schedule RAL.
U.S. branches and agencies are not required to maintain
allowances for loan losses on an office level. The outstanding balance of a loan or lease should only be written
down for regulatory reporting purposes when management has identified a specific loss amount. The amount
of loans and leases to be reported on Schedules RAL and
C is the outstanding balances less any specified loss
amounts.
When-Issued Securities Transactions: Transactions
involving securities described as ‘‘when-issued’’ or
‘‘when-as-and-if-issued’’ are, for purposes of this report,
GL-43

Glossary

to be treated as conditional transactions in a security
authorized for issuance but not yet actually issued. Purchases and sales of when-issued securities for which
settlement date has not occurred as of the report date are
not to be reflected on Schedule RAL until settlement
date. Branches and agencies should report as forward
contracts in Schedule L, item 9(b), and Schedule M,
Part V, item 9(b), commitments to purchase and sell
when-issued securities that are not excluded from the
requirements of FASB Statement No. 133 as a regularway security trade. Such contracts should be reported on
a gross basis, except that branches and agencies may net
purchases and sales of the identical security with the
same party. Branches and agencies should report commitments to sell when-issued securities that are excluded
from the requirements of Statement No. 133 as ‘‘All other
off-balance sheet contingent claims (assets)’’ in Schedule L, item 8, and Schedule M, Part V, item 8, and
commitments to purchase when-issued securities that are
excluded from the requirements of Statement No. 133 as
‘‘All other off-balance sheet contingent liabilities’’ in

GL-44

Schedule L, item 7, and Schedule M, Part V, item 7,
subject to the existing reporting thresholds for these two
items.
Trading in when-issued securities normally begins when
the U.S. Treasury or some other issuer of securities
announces a forthcoming issue. (In some cases, trading
may begin in anticipation of such an announcement and
should also be reported as described herein.) Such transactions are contingent upon the actual issuance of the
security. Since the exact price and terms of the security
are unknown before the auction date, trading prior to that
date is on a ‘‘yield’’ basis. On the auction date the exact
terms and price of the security become known and whenissued trading continues until settlement date, when the
securities are delivered and the issuer paid. On settlement date, the securities purchased by the branch or
agency shall be reported in the appropriate securities
category on Schedule RAL or as trading assets in Schedule RAL, item 1(f).

Instructions for Preparation of Reporting Form FFIEC 002
June 2002

APPENDIX

List of the Address
and Telephone Number
for Each Federal Reserve Bank

District

Address and Telephone Number

District

Address and Telephone Number

01 Boston

Statistical Section
Research Department
Federal Reserve Bank of Boston
600 Atlantic Avenue
Boston, Massachusetts 02106
(617) 973-3315

07 Chicago

Research Department
Statistics Division
Federal Reserve Bank of Chicago
P.O. Box 834
Chicago, Illinois 60690-0834
(312) 322-5774

02 New York

Regulatory Reports Division
Financial Reports Department
Federal Reserve Bank of New York
33 Liberty Street
New York, New York 10045
(212) 720-6393

08 St. Louis

Banking Supervision and Regulation
Division
Federal Reserve Bank of St. Louis
P.O. Box 442
St. Louis, Missouri 63166
(314) 444-8512

03 Philadelphia

Financial and Regulatory Reporting
Financial Statistics Department
Federal Reserve Bank of Philadelphia
10 Independence Mall
Philadelphia, Pennsylvania 19106-1574
(215) 574-6605

09 Minneapolis

Federal Reserve Bank of Minneapolis
Risk Management Division
Statistical and Structure Reporting
P.O. Box 291
Minneapolis, Minnesota 55480-0291
(612) 204-6445

04 Cleveland

Department of Data Services
Federal Reserve Bank of Cleveland
P.O. Box 6387
Cleveland, Ohio 44101
(216) 579-2074

10 Kansas City

Federal Reserve Bank of Kansas City
Statistical Services Department
925 Grand Blvd
Kansas City, Missouri 64198
(816) 881-2390

05 Richmond

Statistics Division
Research Department
Federal Reserve Bank of Richmond
P.O. Box 27622
Richmond, Virginia 23261
(804) 697-8000

11 Dallas

Federal Reserve Bank of Dallas
Banking Supervision Department
Regulatory Reports Division
P.O. Box 65906
Dallas, Texas 75265-5906
(214) 922-6051

06 Atlanta

Federal Reserve Bank of Atlanta
Attn: Statistical Reports Department
2301 DeFoor Hills Road
Atlanta, Georgia 30318
(404) 498-8826

12 San Francisco

International Reports Section
Statistics Department
Federal Reserve Bank of San Francisco
101 Market Street
San Francisco, California 94105
(415) 974-3133

Instructions for Preparation of Reporting Form FFIEC 002
September 2002

AP-1