Investment Edge Corporations

Contents for
FR2886B Instructions

GENERAL INSTRUCTIONS FOR PREPARATION OF THE CONSOLIDATED REPORT
OF CONDITION AND INCOME FOR EDGE AND AGREEMENT CORPORATIONS
Reporting Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Submission Date and Reporting Frequency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures and Attestation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency in which Report is Prepared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Clarity, Completeness, and Amounts Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

GEN-1
GEN-1
GEN-2
GEN-2
GEN-2
GEN-2
GEN-2

DETAILED INSTRUCTIONS FOR INDIVIDUAL BALANCE SHEET ITEMS
Banking vs. Nonbanking Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULES
Schedule RI—Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule RI-A—Changes in Equity Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule RI-B—Changes in Allowance for Loan and Lease Losses . . . . . . . . . . . . . . . . . . . . . . .
Schedule RC—Balance Sheet
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Memorandum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule RC-A—Cash and Balances Due from Depository Institutions . . . . . . . . . . . . . . . . . . . .
Schedule RC-B—Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule RC-C—Loans and Lease Financing Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule RC-E—Deposit Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule RC-K—Quarterly Averages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule RC-L—Derivatives and Off-Balance-Sheet Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule RC-M—Claims on and Liabilities to Related Organizations . . . . . . . . . . . . . . . . . . . . .
Instructions for Preparation of Reporting Form FR 2886b
Contents September 2004

GEN-3

RI-1
RI-A-1
RI-B-1
RC-1
RC-3
RC-5
RC-6
A-1
B-1
C-1
RC-E-1
RC-K-1
RC-L-1
RC-M-1
Contents-1

Contents

Schedule RC-N—Past Due and Nonaccrual Loans, Leases and Other Assets . . . . . . . . . . . . . . .
Schedule RC-R—Regulatory Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule RC-V—Branch Schedule of Selected Items Non-Consolidated . . . . . . . . . . . . . . . . . . .

RC-N-1
RC-R-1
RC-V-1

DEFINITIONS
Acceptances Executed by the Reporting Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Participations in Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acceptances Owned by the Reporting Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Addressees (Domicile) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial Banks in the U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal Funds Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Immediately Available Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
One-day Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Continuing Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mutual Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Offsetting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reciprocal Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Related Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Syndications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Participations other than Syndications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treatment of Pass-through Reserve Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

DEF-1
DEF-2
DEF-2
DEF-2
DEF-3
DEF-3
DEF-3
DEF-3
DEF-3
DEF-3
DEF-3
DEF-3
DEF-3
DEF-4
DEF-4
DEF-4
DEF-4
DEF-4
DEF-4
DEF-4
DEF-4

Contents-2

Instructions for Preparation of Reporting Form FR 2886b
Contents September 2004

Instructions for Preparation
of the Consolidated Reports
of Condition and Income for
Edge and Agreement Corporations
FR 2886b
General Instructions
The FR 2886b report must be filed quarterly by each
Edge and agreement corporation organized under Section 25 or 25(a) of the Federal Reserve Act. All information should reflect the consolidation of all branches, and
underlying subsidiary companies.

Reporting Basis
As noted above, the report should cover the consolidated
operations of the reporting corporation, including:
(1) the reporting corporation’s head office;
(2) any branch offices of the reporting corporation;
(3) any International Banking Facility (IBF) established
by the reporting corporation at the head office and at
any branch offices;
(4) all majority-owned foreign banks held directly by
the reporting corporation pursuant to Section 25(a)
of the Federal Reserve Act;
(5) all majority-owned subsidiaries of the reporting corporation that are significant, EXCEPT subsidiary
Edge or agreement corporations;
(6) all nonsignificant majority-owned subsidiaries that
the bank has elected to consolidate on a consistent
basis.
Where this report collects information on a branch office
separately, such information should include balances of
an IBF of only that branch office. Assets and liabilities
may be reported on a net basis in this report whenever
the reporting organization has a ‘‘right of setoff.’’ See the
entry for Offsetting in the Definitions section for further
information. Also see the FFIEC 031 General Instructions for further information on consolidation, accrual
basis reporting, and generally accepted accounting
principles.
Instructions for Preparation of Reporting Form FR 2886b
General Instructions September 2004

Inactive corporations should report only if the corporation has engaged in some business activity at one time.
Corporations, such as a name saver organizations, that
have never engaged in any business activity should not
report.

Submission Date and Reporting Frequency
The term ‘‘submission date’’ is defined as the date by
which an Edge corporation’s completed original report
must be received by the district Federal Reserve Bank.
An official copy (non-facsimile) of the FR 2886b consisting of the balance sheet, memorandum item, and all
schedules for domestic and foreign offices of banking
and nonbanking Edges should reach the Federal Reserve
Bank of the District in which the reporting office is
domiciled, no later than 30 calendar days after the close
of business of the last calendar day of the quarter (subject to the timely filing provisions set forth in the following paragraph).
The filing of an Edge corporation’s completed original
report will be considered timely, regardless of when the
reports are received by the district 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 corporation
whose completed original 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 reports,
on or before the submission deadline, to the location to
which the report would otherwise be mailed is an acceptable alternative to mailing such reports. Corporations
GEN-1

General Instructions

that are unable to obtain the required directors’ signatures on their completed original reports in sufficient
time to file these reports so that they are received by the
submission deadline may contact the district Reserve
Bank to which they mail their original reports to arrange
for the timely submission of their report data and the
subsequent filing of their signed reports.

form and shall not be reported. Hence, assets with credit
balances must be reported in liability items and liabilities with debit balances must be reported in asset items,
as appropriate, and in accordance with these instructions.
Negative amounts that are permitted should be enclosed
in parentheses. The items for which negative entries may
be made, if appropriate, are:

15-day extension. A respondent may take an additional
15 calendar days to submit its completed report. Such
banks are urged to use the additional time only if absolutely necessary and to make every effort to report as
soon as possible, preferably within the 30-day submission period.

(1) Schedule RC, Item 23, ‘‘Retained earnings,’’

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 this signature. Signatures need
not be notarized. All copies shall bear the same signatures as on the original, but these signatures may be
facsimiles or photocopies.

(2) Schedule RC, Item 24, ‘‘Accumulated other comprehensive income,’’
(3) Schedule RC, Item 25, ‘‘Other equity capital components,’’
(4) Schedule RC, Item 26, ‘‘Total equity capital,’’ and
(5) Schedule RC-R, Item 4, ‘‘Total qualifying capital
(i.e., Tier 1 and Tier 2 capital) allowable under the
risk-based capital guidelines.’’
On Schedule RI, Income and Expenses, and on Schedule RI-A, Changes in Equity Capital, negative entries
may appear as appropriate. Income items with a debit
balance and expense items with a credit balance must be
reported in parentheses.

Additional Forms
Currency in Which Report is Prepared
All items in the report should be expressed in United
States dollars. Assets or liabilities payable in foreign
currencies should be converted into dollars at the
exchange rate prevailing on the report date.

Clarity, Completeness and Amounts
Reported
Reports should be clearly and distinctly typewritten, and
care should be exercised that each copy is clearly legible
and conforms with the printed lines on the form. Computer printouts are also acceptable, provided that they
are identical in format and detail to the reporting form,
including all items and column captions. All dollar
amounts should be rounded to the nearest thousands
with the total asset figure based on unrounded numbers,
then rounded. Item captions in the report should in no
way be amended, nor should additional items be added.
An amount or the word ‘‘none’’ should be entered for
every item on the report. Except for the items listed
below, negative entries are not appropriate on the report
GEN-2

Copies of the FR 2886b form can be obtained from the
Federal Reserve Bank in the Federal Reserve District in
which the reporting institution is located, or may be
found on the Federal Reserve Board’s public website
(www.federalreserve.gov).

Confidentiality
The Federal Reserve System regards as confidential
the following portions of this report: for respondents
engaged in banking, Schedules RC-M and RC-V; for
respondents not engaged in banking, Schedule RC-M. If
it should be determined subsequently that any confidential information collected on this form must be released,
respondents will be notified.

Detailed Instructions
Some items on the balance sheet are also reported on
supporting schedules. Detailed instructions for those
items are found in those schedules. The content of items
on the balance sheet should be identical to the content of
Instructions for Preparation of Reporting Form FR 2886b
General Instructions September 2004

General Instructions

the same items on the supporting schedules even though
submission of the schedules may not be required. See the
General Instructions to determine whether the supporting
schedules are required.
This report and accompanying instructions have been
designed to generally conform with the form and instructions to the Consolidated Reports of Condition and
Income (FFIEC 031) that U.S. banks prepare quarterly
and submit to their U.S. regulatory agencies. Unless
expressly stated otherwise, the definitions and procedures used to determine individual items in this report
should conform with those used to prepare the
FFIEC 031 report. In some instances, where an FR 2886b
item is identical to an item reported on the FFIEC 031,
only a reference to the corresponding item(s) in the
FFIEC 031 instructions is contained in brackets. Both the
reporting office totals and the IBF-only columns must be
completed if the office has IBF balances.

Instructions for Preparation of Reporting Form FR 2886b
General Instructions September 2004

Banking vs. Nonbanking Designation
All respondents must designate whether their corporation
is a banking or nonbanking type in the box on the front
page of the report form. A corporation is considered to
be ‘‘engaged in banking’’ if it is ordinarily engaged in
the business of accepting deposits in the U.S. from nonrelated organizations, whether directly or through its
branch offices.
Reporting Requirements by Type
Banking

Nonbanking

Schedules RI,
RI-A, RI-B

Schedules RI,
RI-A, RI-B

Schedule RC:
Balance Sheet

Schedule RC:
Balance Sheet

Memorandum to
Balance Sheet

Memorandum to
Balance Sheet

Schedules RC-A,
through RC-V

Schedules RC-L,
RC-M, RC-N

GEN-3

LINE ITEM INSTRUCTIONS FOR

Income and Expenses
Schedule RI

General Instructions
This schedule must be completed by all Edge corporations and all agreement corporations.
The schedule is structured to highlight net interest and
noninterest income and to separate revenues and expenses of transactions with related organizations from
those of nonrelated organizations for the calendar yearto-date. The sections of the schedule that deal with
nonrelated organizations should reflect the full contribution of the reporting corporation to the revenues and
expenses of the corporation’s parent U.S. bank (if applicable). See the definition of the term ‘‘related organizations’’ in the Definitions section.

Line Item Instructions
Line Item 1

Interest income:

Line Item 1(a) Interest and fee income from
nonrelated organizations:
Line Item 1(a)(1) Interest and fees on loans and
lease financing receivables.
Enter the total income from interest and fees on all assets
of the types and classes described in the instructions for
Schedule RC-C and included in Schedule RC, Item 4,
less rebates made on loans paid prior to maturity and less
amortization of any premium paid when the asset was
acquired. Profits or losses resulting from the sale of such
assets at a price different from the cost of acquisition
should be added to or deducted from this figure, as
appropriate. Include gross revenue from loan commitment fees, and all yield-related fees on loans held by the
reporting organization. Also include premiums received
or discounts paid on foreign exchange contracts related
to financial swap transactions involving loans. Such
gains or losses are known at the inception of the contract
Instructions for Preparation of Reporting Form FR 2886b
Schedule RI September 2004

and should be amortized over the life of the contract.
Exclude fees that are not yield-related, such as syndication fees applicable to loans which are not assets of the
corporation. These fees should be reported in
Item 5(a)(5), ‘‘Other commissions, fees, etc.’’
When yield-related fees are collected in connection with
a loan syndication or participation and passed through to
another lender, only the reporting corporation’s proportional share of such fees should be reported in this item.
Do not include reimbursement for out-of-pocket expenditures made by the corporation for the account of its
customers. If the corporation’s expense accounts were
charged with the amount of such expenditures, the reimbursements should be credited to the same expense
accounts.
Line Item 1(a)(2) Interest on balances due from
depository institutions.
Report the amount of interest income received or accrued
year-to-date on the types and classes of assets shown in
Schedule RC, Item 1, ‘‘Cash and balances due from
depository institutions,’’ and detailed in Schedule RC-A.
Include premiums received or discounts paid on foreign
exchange contracts related to financial swap transactions
involving interest-bearing balances due from depository
institutions. Such gains or losses are known at the inception of the contract and should be amortized over the life
of the contract.
Line Item 1(a)(3) Interest income from federal
funds sold and securities purchased under
agreements to resell.
Include in this item gross revenue from federal funds
sold, securities purchased under agreements to resell, and
purchases of participation in pools of securities that are
reported in Schedule RC, Item 3, ‘‘Federal funds sold
and securities purchased under agreements to resell.’’
RI-1

Schedule RI

Income from loans purchased under resale agreements
should be reported in Item 1(a)(1) above.
Line Item 1(a)(4) Interest on bonds, notes, and
debentures and dividends on stock.
Report all interest income arising from debt securities, including bills, certificates of indebtedness, notes,
or bonds issued by any private or governmental
organization of the type of assets included in Schedule
RC, Item 2, ‘‘Securities.’’ Report all dividend income
received from holdings of corporate stock in nonrelated
companies. Exclude dividends received on equity securities carried in trading accounts.
Line Item 1(a)(5) Interest income and dividends
from assets held in trading accounts.
Report all interest income arising from debt securities,
including bills, certificates or indebtedness, notes, or
bonds issued by any private or governmental organization of the type of assets of Schedule RC, Item 5 on the
balance sheet. Include accretion of discounts on assets
held in trading accounts that have been issued on a
discount basis, such as U.S. Treasury bills and commercial paper. Include dividends received on equity securities carried in trading accounts.
Line Item 1(b) Interest income from claims on
related organizations.
Report all interest income related to claims on related
organizations of the type included in Schedule RC,
Item 10, including dividends received on investments in
such companies. Exclude any noninterest income and
income from undistributed earnings of related organizations, which should be reported in Item 5(b) below.
Line Item 1(c)

Total interest income.

Enter the sum of Items 1(a)(1) through 1(b).
Line Item 2

Interest expense:

Line Item 2(a) Interest expense pertaining to
nonrelated organizations:
Enter the interest paid or accrued on the types and
classes of liabilities included in Schedule RC, Item 12(a),
‘‘Total non-interest-bearing deposits.’’ Include premiums
paid or discounts received on foreign exchange contracts
RI-2

related to financial swap transactions that involve deposits. Such gains or losses are known at the inception of the
contract and should be amortized over the life of the
contract. Also report the interest paid on the types and
classes of borrowings included in Schedule RC, Item 15,
‘‘Other borrowed money.’’ Include interest and discounts
on bills payable and rediscounts, and interest paid on any
subordinated notes and debentures.
Line Item 2(b) Interest expense pertaining to
related organizations.
Report all interest expenses paid or due to related organizations. See the definition of related organizations in the
Definitions section.
Line Item 2(c)

Total interest expense.

Enter the sum of Items 2(a) and 2(b).
Line Item 3

Net interest income.

Subtract Item 2(c), ‘‘Total interest expense’’ from
Item 1(c), ‘‘Total interest income.’’ If the amount is
negative, enclose it in parentheses.
Line Item 4

Provisions:

Line Item 4(a)

Provision for loan and lease losses.

Report the amount needed to make the allowance for
loan and lease losses, as reported on Schedule RI-B,
Item 3, Column A, adequate to absorb expected loan and
lease losses, based upon management’s evaluation of the
corporation’s current loan and lease portfolio. Enclose
negative amounts in parentheses. The amount reported
here may differ from the bad debt expense deduction
taken for federal income tax purposes.
Line Item 4(b)
risk.

Provision for allocated transfer

If the reporting corporation (banking only) has any credit
exposure classified as Value Impaired which requires
it to establish and maintain an allocated transfer risk
reserve as specified in Section 905(a) of the International
Lending Supervision Act of 1983, in Subpart D of Federal Reserve Regulation K, and in any guidelines, letters,
or instructions issued by the Federal Reserve, report in
this item the amount of the provision for allocated transfer risk. If the reporter has no Value Impaired exposure
Instructions for Preparation of Reporting Form FR 2886b
Schedule RI September 2004

Schedule RI

which requires it to establish and maintain an allocated
transfer risk reserve, report a zero or the word ‘‘none’’.
Also report this on Schedule RI-B, Item 3, Column B.
Line Item 5

Noninterest income:

Line Item 5(a) Noninterest income from
nonrelated organizations:
Line Item 5(a)(1) Equity in undistributed earnings
of nonrelated organizations.
Report all income from holdings of corporate stock of
the type reported in Schedule RC-B, Item 3, ‘‘Equity
interest in nonrelated organizations.’’
Line Item 5(a)(2) Net gain (loss) on foreign
exchange transactions.
Report the net gain or loss from all foreign exchange
transactions, including the maturing or covering of outstanding forward contracts within the reporting period,
regardless of whether these transactions are conducted
in the trading department or in another department of the
corporation. Also include any net gain or loss resulting
from translating foreign currency denominated investments that arise from the application of FASB Statement
No. 52. Include incidental fee income from such transactions. Exclude gains and losses on swap transactions
(report as adjustments to the income or expense of the
related asset or liability) and any gains or losses that
must be excluded in accordance with FASB Statement
No. 52. If this net amount is a debit balance, enclose it in
parentheses.
Line Item 5(a)(3)

Income from fiduciary activities.

Include gross income from services rendered by this
reporting organization in any fiduciary capacity.
Line Item 5(a)(4) Gains(losses) and fees from
trading assets and liabilities.
Report the net gain or loss from the sale of assets
reportable in Schedule RC, Item 5, ‘‘Trading Assets’’,
and from liabilities reportable in Schedule RC, Item 14,
‘‘Trading Liabilities.’’ Include:
(1) revaluation adjustments to the carrying value of
assets reportable in Schedule RC, Item 5, ‘‘Trading
Assets, and Schedule RC, Item 14, ‘‘Trading
Instructions for Preparation of Reporting Form FR 2886b
Schedule RI September 2004

Liabilities’’, resulting from the periodic marking to
market of such assets and liabilities
(2) revaluation adjustments from the periodic marking
to market of interest rate, foreign exchange, equity
derivative, and commodity and other contracts held
for trading purposes
(3) incidental income and expenses related to the purchase and sale of assets reportable in Schedule RC,
Item 5, and Schedule RC, Item 14.
Line Item 5(a)(5)

Other commissions, fees, etc.

Enter the total of all commissions and fees received from
clients of the reporting corporation for services routinely
or ordinarily performed under the laws of or accepted
practices in the country in which the reporter is domiciled. Such services would include the collection of
checks, notes, and bills of exchange; the receipt of collections for public utilities and other firms; the sale of bank
drafts; the acceptance of bills of exchange; the purchase
and sale of securities, acceptances, and other negotiable
paper and the negotiation of loans for the account of
customers; the lending of securities owned by the reporting corporation; the servicing of evidences of debt owned
by others; the provision of data processing services; and
the issuance and handling of letters of credit. Do not
include reimbursed expenditures made by the reporting
corporation on behalf of clients or rentals received from
land or premises leased or subleased to others by the
reporter. Such rentals should be included in Item 5(a)(6)
or netted against the amount shown in Item 7(a)(2).
Do not include reimbursement for out-of-pocket expenditures made by this reporting corporation for the account
of its customers. If the corporation’s expense accounts
were charged with the amount of such expenditures, the
reimbursements should be credited to the same account.
Line Item 5(a)(6)

Other.

Include in this item all other noninterest income from
nonrelated organizations that cannot properly be included
elsewhere under Item 5(a), including gains and losses
and net income from securities carried in connection
with trading activities, gross rentals received from real
estate other than this reporting organization’s own premises, regular operating credits such as recoveries on
forgeries and on checks paid over stop-payment orders,
and similar recurring operating transactions. Reporting
RI-3

Schedule RI

organizations should consistently report net gains
(losses) from the sale or other disposal of assets other
than securities and trading assets (e.g., loans, premises,
other real estate owned, etc.) either in this item or in
Item 7(a)(3), ‘‘Other noninterest expense.’’ Exclude dividends received from nonrelated organizations and interest income on securities held in trading accounts, and
report them in Item 1(a)(5), ‘‘Interest Income and Dividends from Assets Held in Trading Accounts.’’
Line Item 5(b)
organizations.

Noninterest income from related

Report all noninterest income from related organizations.
Exclude dividends received from investments in related
organizations, and report in Item 1(b). Include the reporting organization’s share of any undistributed earnings
of affiliated companies. If the organization’s share of
all undistributed earnings of related organizations (in
total) is a net loss or if other income accounts reflect
debit balances, include them as noninterest expenses in
Item 7(b).

Interest on bonds, notes, and debentures and dividends on stock. ).
(2) Charge-offs and write-downs of investment securities prior to sale, maturity, or redemption because of
a decline in value, judged to be other than temporary,
and subsequent recoveries of amounts charged-off or
written-down (report in Item 7(a)(3), ‘‘Other noninterest expense,’’ and Item 5(a)(6), ‘‘Other noninterest
income,’’ respectively).
(3) Net unrealized losses on marketable equity securities and subsequent recoveries of such net unrealized losses (report in Schedule RI-A, Item 6, ‘‘Other
Adjustments’’).
(4) Net gains (losses) from the sale of detached
securities coupons and the sale of ex-coupon
securities (report in Item 7(a)(3), ‘‘Other noninterest
expense,’’ or Item 5(a)(6), ‘‘Other noninterest
income,’’ as appropriate).
Line Item 7

Line Item 5(c)

Noninterest expense:

Total noninterest income.

Enter the sum of Items 5(a)(1) through 5(b). If the result
is negative, enclose it in parentheses.

Line Item 7(a)
organizations:

Line Item 6 Realized gains (losses) on securities
not held in trading accounts.

Line Item 7(a)(1)

Report the net gain or loss realized during the reporting
period from the sale, exchange, redemption, or retirement of all securities (except U.S. Treasury bills), excluding securities held in trading accounts. The gain or loss is
the difference between the sales price (excluding interest
at the coupon rate accrued since the last interest payment
date, if any) and the book value. Also include: (a) net
unrealized losses (and subsequent recoveries of such net
unrealized losses to the extent provided for through a
valuation allowance) during the calendar year to date on
debt securities held for sale. (b) write-downs charged to
expense and provisions for credit losses prior to sale,
redemption, or maturity on all securities not held in
trading accounts, including debt securities held for sale.
If the amount is negative, enclose it in parentheses.
Report the amount gross of tax effect.
Exclude the following:
(1) Gains and losses on the sale of U.S. Treasury bills
not held in trading accounts (report in Item 1(a)(4),
RI-4

Pertaining to nonrelated

Salaries and employee benefits.

Include all compensations for personal services of all
officers and employees, including dining room and cafeteria employees, and building department officers and
employees and the cost of temporaries and contract
guards. Include bonuses and extra compensation, unemployment and pension taxes, and contributions to the
reporting organization’s retirement or pension funds or
profit sharing plan.
Exclude amounts paid to legal, management, and investment counsel for professional services, if such counsel
are not salaried officers of the corporation; amounts so
paid should be included in Item 7(a)(3), ‘‘Other noninterest expense.’’
Include all supplementary benefits, paid or accrued during the report period on behalf of all officers and employees, such as life insurance premiums (net of dividends
received) when the reporter is not the beneficiary, and
hospitalization insurance; unemployment taxes, the net
cost to the reporting corporation for employee dining
Instructions for Preparation of Reporting Form FR 2886b
Schedule RI March 2006

Schedule RI

rooms, restaurants and cafeterias; the cost of medical or
health services; and other so-called fringe benefits for
officers and employees.
Exclude expenses related to the testing, training, and
education of officers and employees; the cost of office
temporaries and contracted guards; the cost of the reporter’s newspapers and magazines; premiums on life insurance policies when the reporting corporation is the beneficiary; athletic activities when the purpose may be
construed to be for internal or public relations, with
incidental employee benefits. These amounts should be
included in Item 7(a)(3), ‘‘Other noninterest expense.’’
Line Item 7(a)(2) Expenses of premises and fixed
assets (net of rental income). (Exclude salaries and
employee benefits and mortgage interest).
Report the net expense of office premises occupancy, i.e.,
the difference between gross occupancy expense and
rental income. Include normal and recurring depreciation
or amortization charges applicable to the current period,
whether they represent direct reductions in the carrying
value of the assets, including capital lease assets, or
additions to accumulated depreciation or amortization
accounts; ordinary repairs to the reporter’s premises
(including leasehold improvements), equipment, furniture and fixtures; all current expenses, not included
above, connected with the use of the corporation’s premises, such as the cost of heat, electricity, water, outside
janitor supplies, fire insurance, and similar expenses; all
operating lease rents paid on the corporation’s premises
and parking lot and interest on mortgages, liens or other
encumbrances on the reporter’s premises owned, including the portion of capital lease payments representing
interest expense, but not such expenses incurred on ‘‘real
estate’’ other than the corporation’s premises; and all
property and other taxes, paid or accrued, relating to the
reporter’s premises and leasehold improvements, including deficiency payments, net of all rebates, refunds, or
credits and adjusted for all over or under accruals. Also
include any portion of capital lease payments representing executory costs such as insurance, maintenance, and
taxes.
Include in this item the normal and recurring depreciation charges on the furniture and fixtures used in the
operations of the reporting corporation applicable to the

Instructions for Preparation of Reporting Form FR 2886b
Schedule RI March 2006

calendar or fiscal year for which the schedule is prepared, whether representing direct reductions in the carrying value of the assets or additions to depreciation
reserves; rental costs of machinery and equipment,
including servicing costs; the cost of furniture and equipment not placed on the books as assets (i.e., charged
directly to expenses); and all taxes paid on furniture,
fixtures, and equipment.
Rental income should include all rentals charged for use
of the reporting corporation’s building not incident to the
use of the premises by this reporter. Although this item
ordinarily includes only rental from regular tenants of the
building, it may also include income received from shortterm rentals of other facilities except safe deposit boxes.

Line Item 7(a)(3)

Other noninterest expense.

Enter the total of all other noninterest expenses relating to nonrelated organizations that cannot properly be
included in the figures at line 7(a)(1) or 7(a)(2). This will
include: fees paid to directors and committee members
for attendance at meetings, including travel and expenses
allowance; premiums on fidelity insurance; operating
expenses (except salaries) connected with holding of real
estate other than office premises, including interest paid
on liens and normal or recurring depreciation charges
on such ‘‘other real estate;’’ office supplies purchased;
retainer fees; expenses related to the use of automobiles
for the reporter’s business; losses on counterfeit money,
forged checks, net cash shortages, payment of checks
over stop- payment orders, and similar losses of recurring nature. Include all taxes not reported against other
items, net losses on the sale of loans (other than acceptances and commercial paper) or participation, and any
securities charged off prior to sale or redemption, if no
securities reserve exists. Include as all other noninterest
expense net losses from the sale or other disposal of all
assets reported as loans and leases in Schedule C. When
determining whether the corporation has had net losses,
include all gains and losses recognized on sales or other
disposal of loans and leases and net unrealized losses
(and subsequent recoveries of such net unrealized losses)
on loans and leases held for sale during the calendar
year to date. Reporting organizations should consistently
report net losses (gains) from the sale or other disposal of
assets other than securities and trading assets (e.g., loans,
premises, other real estate owned, etc.) either in this item
or in Item 5(a)(6), ‘‘Other noninterest income.’’ Itemize
RI-5

Schedule RI

any category or type of expense representing an amount
greater than 25 percent of Item 7(c).

Line Item 11
effect.

Line Item 7(b) Noninterest expense pertaining to
related organizations.

Report all extraordinary items less the estimated tax
provision applicable to the item. Include the following
items:

Include all expenses of related organizations that cannot
properly be reported in Item 2(b), ‘‘Interest expense
pertaining to related organizations.’’ Report amounts
that have net credit balances as noninterest income
in Item 5(b), ‘‘Noninterest Income from Related
Organizations.’’
Line Item 7(c)

Total noninterest expense.

Enter the sum of Items 7(a)(1) through 7(b).
Line Item 8 Income (loss) before income taxes and
extraordinary items.
Report the total of Item 3, ‘‘Net interest income,’’
Item 5(c), ‘‘Total noninterest income,’’ and Item 6,
‘‘Realized gains (losses) on Securities not held in trading
accounts,’’ less Item 4(a), ‘‘Provision for loan and lease
losses,’’ Item 4(b), ‘‘Provision for allocated transfer
risk,’’ and Item 7(c), ‘‘Total noninterest expense.’’ If the
result is negative, enclose it in parentheses.
Line Item 9

Applicable income taxes (on Item 8).

Report the total estimated federal, state, local and foreign
income tax expense applicable to Item 8, ‘‘Income (loss)
before income taxes and extraordinary items.’’ Include
both the current and deferred portions of these income
taxes. If the amount is a tax benefit rather than a tax
expense, enclose it in parentheses.
Exclude the estimated income taxes applicable to foreign
currency translation adjustments included in Schedule H,
Item 1(e). Include tax benefits from operating loss carrybacks realized during the reporting period.

(1) Realized tax benefits of operating loss carryforwards
(other than realized loss carryforward benefits of
purchased subsidiaries which should be treated as an
adjustment of the purchase price);
(2) Material net gains or losses from disposal of significant assets within two years after a pooling of interests business combination;
(3) Material aggregate gains or losses from extinguishment of debt unrelated to sinking fund requirements (see FASB Statement No. 4 for detailed
information);
(4) Material aggregate gains or restructuring of troubled
debt payables (see FASB Statement No. 15 for information as to how a debtor organization should
account for a troubled debt restructuring); and
(5) The material effects of any other events or transactions, which are both (a) unusual in nature, and
(b) infrequent in their occurrence.
To be unusual in nature, the underlying event or transaction should be abnormal and significantly different
from the ordinary and typical activities of the reporting
corporation. An event or transaction not reasonably
expected to recur in the foreseeable future is considered
to occur infrequently. Gains or losses from the sale or
other disposal of corporation premises and real estate
other than corporation premises should not be reported
as extraordinary items, as well as branch offices; report
these gains or losses in Items 5(a)(6) or 7(a)(3), respectively. If the amount is negative, enclose it in
parentheses.
Line Item 12

Line Item 10
items.

Income (loss) before extraordinary

Enter the amount shown in Item 8, plus or minus the
amount shown in Item 9. If the amount is a loss, enclose
it in parentheses.

RI-6

Extraordinary items, net of tax

Net income (loss).

This item represents the total of Item 10, ‘‘Income before
extraordinary items,’’ plus or minus Item 11, ‘‘Extraordinary items, net of tax effect.’’ If the amount is negative,
enclose it in parentheses. Also report this on Schedule RI-A, Item 2.

Instructions for Preparation of Reporting Form FR 2886b
Schedule RI March 2006

LINE ITEM INSTRUCTIONS FOR

Changes in Equity Capital
Schedule RI-A

General Instructions

Line Item 5

This schedule must be completed by all Edge corporations and all agreement corporations.

Report the other comprehensive income for the calendar
year-to-date. If the amount to be reported represents a
reduction to equity capital, enclose it in parentheses.

Line Item Instructions

Other comprehensive income includes:

Total Equity capital:

(1) The change during the calendar year-to-date in net
unrealized holding gains (losses) on available-forsale securities.

Line Item 1 Balance most recently reported for
end of previous calendar year.

(2) The change during the calendar year-to-date in accumulated net gains (losses) on cash flow hedges.

Enter the ending balance most recently reported as of the
previous year-end for total equity capital. The amount
must reflect the effect of all corrections and adjustment
to total equity capital that were made in any amended
report(s) for the previous calendar year-end.

(3) The increase or decrease during the calendar yearto-date in cumulative foreign currency translation
adjustments and qualifying foreign currency transaction gains and losses, net of applicable income taxes,
if any. Refer to the FFIEC 031 Glossary entry for
‘‘foreign currency transactions and translation’’ for
further information on accounting for foreign currency translation.

Line Item 2

Net income (loss).

Enter the amount reported on Schedule RI, Item 12, ‘‘Net
income (loss).’’
Line Item 3 Sale, conversion, acquisition, or
retirement of capital stock, net.
Enter the net effect on total equity capital of any changes
in the capital account resulting from the sale of preferred
or common stock, exercise of stock options, conversion
of convertible debt or preferred stock into common stock,
redemption of preferred stock, retirement of capital stock
and any other capital stock transactions not relating to
business combinations and stock dividends.
Line Item 4

Other comprehensive income.

(4) The change during the calendar year-to-date in any
minimum pension liability adjustment recognized in
accordance with FASB Statement No. 87, Employers’ Accounting for Pensions.
Line Item 6

Other adjustments.

Itemize all other adjustments to equity capital. Report
any changes in the capital accounts resulting from capital
stock transactions not reflected on other items of this
schedule. This item should include the net changes incident to mergers and absorptions, or the conversion of
previously separate corporations into branches.

Less: Cash dividends declared.

Enter the amount of all cash dividends declared during
the reporting period, including dividends on preferred
stock, if any. Dividends declared but not yet paid should
be included in Schedule RC, Item 18, ‘‘Other liabilities.’’
Instructions for Preparation of Reporting Form FR 2886b
Schedule RI-A September 2004

Line Item 7

Balance at the end of period.

Enter the total of Items 1 through 6. This total amount
must equal the amount reported in Schedule RC, Item 26,
‘‘Total equity capital.’’
RI-A-1

LINE ITEM INSTRUCTIONS FOR

Changes in Allowance for Loan and Lease
Losses
Schedule RI-B

General Instructions
This schedule must be completed by all Edge corporations and all agreement corporations.

Line Item Instructions
Allowance for loan and lease losses: This part has
two columns.
Report in column A the reconcilement of the allowance
for loan and lease losses, Schedule RC, Item 4(b). Those
banking corporations which have Value Impaired exposures that require it to establish and maintain an allocated transfer risk reserve, as specified in Section 905(a)
of the International Lending Supervision Act of 1983, in
Subpart D of Federal Reserve Regulation K, and in any
guidelines, letters, or instructions issued by the Federal
Reserve, must report the reconcilement of this reserve in
column B. Corporations which have no Value Impaired
exposures that require them to establish and maintain an
allocated transfer risk reserve shall report zeros or the
word ‘‘none’’ in column B.
All changes in the allowance accounts are to be reported
on a year-to-date basis. When the reporting corporation
maintains an allowance for possible loan losses or an
allocated transfer risk reserve, all related transactions are
to be reported and reconciled, beginning with the balance
reported at the end of the previous year, to the balances
shown in Schedule RC, Items 4(b) or 4(c) as of the end
of the current period. The corresponding provision expenses reported herein should correspond to the amounts
reported in Item 4 of Schedule RI. Transactions pertaining to reserves carried in capital accounts, such as
reserves for contingencies which represent a segregation
of undivided profits, are not to be reported here. Corporations which do not maintain an allowance for loan and
lease losses should report gross recoveries and gross
Instructions for Preparation of Reporting Form FR 2886b
Schedule RI-B September 2004

charge-offs on loans and leases and the amount of provision for such losses reported in Item 4 of Schedule RI
against the appropriate items below. The amount of
difference between gross charge-offs and gross recoveries reported herein should reconcile to the amount of
provision for loan and lease losses reported in Schedule RI, Item 4. The beginning and ending balances
reported in Schedule RI-B by these corporations should
be zero.
Line Item 1 Balance most recently reported for
end of previous calendar year.
Include the ending balances most recently reported for
the prior year-end in the two allowance accounts. The
amount must reflect the effect of all corrections and
adjustment to the allowance for loan and lease losses that
were made in any amended report(s) for the previous
calendar year-end.
Line Item 2

Recoveries.

Include recoveries of amounts previously charged off
against the two allowance accounts.
Line Item 3

Provisions.

This item corresponds with provisions, Items 4(a) and
4(b) of Schedule RI. If either amount is negative, enclose
it in parentheses.
Line Item 4

Adjustments, net.

Report the net cumulative effect of all corrections and
adjustments made in any amended report(s) to the
amount originally reported as the ending balance of the
allowances in this report for the previous year-end
period. Such adjustments would include changes to the
reserves caused by mergers or acquisitions and any
transfers between the two reserves authorized by Subpart D of Federal Reserve Regulation K and any related
RI-B-1

Schedule RI-B

guidelines, letters, or instructions issued by the Federal Reserve.
Line Item 5

Less: charge-offs.

Enter in the appropriate column the amount of gross
charge-offs on loans and leases and for transfer risk
purposes during the period.

RI-B-2

Line Item 6

Balance at end of current period.

Enter the totals for each column of Item 2(a) plus or
minus Items 2(b) through 2(e). The amount shown in
column A should agree with the balance reported in
Schedule RC, Item 4(b).

Instructions for Preparation of Reporting Form FR 2886b
Schedule RI-B September 2004

LINE ITEM INSTRUCTIONS FOR THE

Balance Sheet for
Edge and Agreement Corporations
Schedule RC

Assets
Detailed definitions of certain asset items will be found
in the instructions pertaining to the schedules referred to
under those items. Items 1 through 9 should exclude any
transactions with related organizations. Such transactions
should be reported gross and reported in either Item 10
or 20.

(1) All transactions involving the disposal of immediately available funds for one business day or undercontinuing contract (defined below) regardless of the
nature of the transaction or the collateral involved;
(2) Other security resale agreements that mature in more
than one business day, other than securities purchased under resale (reverse purchase) agreements to
maturity; and

Line Item 1 Cash and balances due from
depository institutions.

(3) Purchases of participation in pools of securities that
mature in more than one business day.

Report the amount of currency and coin, cash items in
process of collection and balances with depository institutions and central banks, (Schedule RC-A, Item 5).
Refer to the instructions for Schedule RC-A for further
guidance.

Exclude the following:

Line Item 2 Securities (as reported in
Schedule RC-B, sum of item 4, columns A and D).
Report the total carrying value of the reporting organization’s holdings of debt and equity securities, excluding
those that are held for trading purposes. Debt securities
that are classified as held-to-maturity should be reported
at amortized cost. Debt securities and equity securities
that are classified as available-for-sale should be reported
at fair value. IBFs should report the total carrying value
of the reporting organization’s holdings of obligations of
states and political subdivisions, obligations of business
corporations, international organizations, and all other
securities evidencing debt. Refer to the instructions for
Schedule RC-B for further guidance.
Line Item 3 Federal funds sold and securities
purchased under agreements to resell.
Domestic offices and IBFs should include the following
in this item:
Instructions for Preparation of Reporting Form FR 2886b
Balance Sheet September 2004

(1) Due bills purchased and similar instruments, whether
collateralized or uncollateralized (to be treated as a
loan and reported in the appropriate item of Schedule RC-C);
(2) 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 the security resale
agreements specified above (to be reported in
Item 4(a));
(3) Securities purchased under agreements to resell by
foreign branches of the reporting corporation and
‘‘Federal funds sold’’ by the corporation’s foreign
branches to banks in the U.S. (to be reported in
Schedule RC-C); and
(4) So-called yield maintenance dollar repurchase
agreements.
See entry for Federal Funds Transactions in the Definitions section for definitions of various terms that are used
in the above instructions for Asset Item 3.
Line Item 4
net.

Loans and lease financing receivables,

Report in this item all loans, including real estate loans,
RC-1

Schedule RC—Balance Sheet

commercial and industrial loans, loans to individuals,
and loans to foreign governments and official institutions.
Refer to the instructions for Schedule RC-C for further
guidance.
Line Item 4(a)
income.

Loans and leases, net of unearned

This item should be reported net of any applicable allocated transfer risk reserve.
Report the amount from Schedule RC-C, Item 7.
Line Item 4(b)

Allowance for loan and lease losses.

Report the amount of allowance for possible losses on
loans and leases, (Schedule RI-B, Item 6, Column A).
This amount is determined as of the end of each reporting period when the management of an accrual basis
corporation evaluates the collectibility of the portfolio
of loans and lease financing receivables to bring the
‘‘Allowance for loan and lease losses’’ (‘‘allowance’’),
by means of a charge or credit to the ‘‘Provision for loan
and lease losses’’ (‘‘provision’’), to a level adequate to
absorb anticipated losses. Any recoveries during the
reporting period should be credited to the allowance,
and any charge-offs should be charged to the allowance.
Under no circumstances can loan and lease losses be
charged directly to ‘‘Undivided profits and capital
reserves.’’
The ‘‘Allowance for loan and lease losses’’ must never
have a debit balance. If losses charged off exceed the
amount of the allowance, a provision sufficient to restore
the allowance to an adequate level must be charged to
expense on the income statement immediately. A corporation shall not increase the allowance account by
transferring an amount from undivided profits or any
segregation thereof to the ‘‘Allowance for loan and lease
losses.’’
The amount of the loss to be recognized on a loan or
lease includes the difference between the current fair
value of the assets (or fair value less cost to sell for long
lived assets) received in a foreclosure or similar settlement and the carrying value of the loan or lease on the
balance sheet. Such a loss shall be charged to the allowance at the time of foreclosure or repossession.
After foreclosure, the asset must be carried at the lower
of (1) fair value of the asset minus the estimated costs to
RC-2

sell the asset, or (2) the cost of the asset (as defined in
the preceding paragraph). Any additional losses in value
and any gain or loss from the sale or disposition of the
asset is not to be reported as a loan or lease loss or
recovery and shall not be debited or credited to the
‘‘Allowance for loan and lease losses.’’ Such additional
declines in value and the gain or loss from the sale
or disposition shall be reported net on Schedule RI as
Item 5(a)(6) ‘‘Other’’ or Item 7(a)(3), ‘‘Other noninterest
expense,’’ as appropriate.
A corporation that does not have an allowance (i.e., that
reports on a cash basis and that has not voluntarily
established an allowance) must account for loan and
lease losses on an actual net charge-off basis. The management of such a corporation must evaluate the collectibility of the loan portfolio as of the end of each quarter
and charge off all known losses at that time.
To the extent that the bad debt deduction for tax purposes
in any year is greater than or less than the ‘‘Provision for
loan and lease losses’’ for that year, the difference is
referred to as a timing difference. The tax effect of such
a timing difference shall be accounted for and reported
as a deferred income tax credit or debit component of
Item 9, ‘‘Applicable income taxes,’’ in Schedule RI and
also flows through to the net deferred income tax account
which is reported in ‘‘Other liabilities,’’ Item 18, if a
credit balance, or in ‘‘Other assets,’’ Item 8, if a debit
balance. Any difference between the balance of the
‘‘Allowance for loan and lease losses,’’ Item 4(b) and the
balance of the reserve for bad debts for tax purposes can
be eliminated only through subsequent differences
between the tax bad debt deduction and the ‘‘Provision
for loan and lease losses,’’ Item 4(a) in Schedule RI (i.e.,
a reversal of the timing difference). For example, an
income statement provision that exceeds the bad debt
deduction (to be taken for tax purposes for the same
year) by the excess of the balance of the tax bad debt
reserve over the balance of the allowance as of the
beginning of the year, will give rise to an income tax
effect that eliminates the deferred income taxes associated with the aggregate timing differences from previous
years.
Line Item 4(c)

Not applicable.

Line Item 4(d) Loans and leases, net of unearned
income and allowance.
Subtract 4(b) from 4(a).
Instructions for Preparation of Reporting Form FR 2886b
Balance Sheet September 2004

Schedule RC—Balance Sheet

Line Item 5

Trading assets.

Report the value of all assets held in the organization’s
trading accounts. Report all assets and other financial
instruments held in the organization’s trading accounts
consistently at fair value (or, if appropriate, at the lower
of cost or market). Such assets are generally held for
only a short period of time. Short sales of securities or
other assets and futures or other types of forward transactions involving assets held in a trading account are not
to be reflected in the trading account nor netted against
trading account positions. Report these short positions
in Item 14, ‘‘Trading Liabilities.’’ Trading assets also
include the amount of revaluation gains (that is, assets)
from the ‘‘marking to market’’ of interest rate, foreign
exchange rate, and other off-balance-sheet commodity
and equity contracts held for trading purposes. Refer
to the FFIEC 031 instructions and glossary for further
information.
Line Item 6 Premises and fixed assets (including
capitalized leases).
Report the book value, less accumulated depreciation or
amortization, of all premises, equipment, furniture, and
fixtures purchased directly or acquired by means of a
capital lease. Refer to the FFIEC 031 instructions for
further information.

are outstanding. (See the Definitions section for a
detailed discussion of the treatment of acceptances.) Also
include other real estate owned, which is not reported in
Item 6 above.
Line Item 9

Claims on nonrelated organizations.

This item is the sum of asset Items 1 through 8 above.
Line Item 10 Gross claims on related
organizations.
Include all credit extensions and balances with related
organizations, (Schedule RC-M, Item 3, Column A). See
the definition of related organizations in the Definitions
section. Do not net claims on related organizations with
liabilities to related organizations.
For column B, IBF only, include gross claims on the
establishing Edge corporation.
Line Item 11

Total Assets.

This item is the sum of Items 9 and 10.

Liabilities
Items 12 through 18 should exclude any liabilities to
related organizations. Such amounts should be reported
in Item 20, ‘‘Gross liabilities to related organizations.’’

Line Item 7

Not applicable.

Line Item 12

Line Item 8

Other assets.

Include as deposits (1) those liabilities readily identifiable by name and definition as deposits, (2) all liabilities
identical to those described under Schedule RC-E, but
having different names in foreign countries, (3) liabilities
that owing to law, custom, or banking practice in foreign
countries have characteristics analogous to those defined
in Schedule RC-E, and (4) every other liability treated as
a deposit by law, custom or banking practice in the
country in which the liability is booked. Any nondeposit
borrowing should be reported as a borrowing in Liabilities, Item 15, ‘‘Other borrowed money’’ or other liabilities item, as appropriate.

Report the total carrying value of assets that cannot be
properly reported in any of the preceding items. Some of
the assets included in this item are the positive fair value
of derivative contracts held for purposes other than trading, customers’ liability on deferred payment letters of
credit, equity securities that do not have readily determinable fair values (report the historical cost), furniture
and equipment rented to others under operating leases
(net of depreciation), accounts receivable, income earned
or accrued but not collected, prepaid expenses, original
art objects, margin accounts, gold, balances with closed,
inactive or liquidating institutions, and deferred tax debit
balance.
Report the amount of customers’ liabilities to the reporting office on drafts and bills of exchange that have been
accepted by this office, or by others for its account, and
Instructions for Preparation of Reporting Form FR 2886b
Balance Sheet March 2006

Deposits.

If it is unclear whether a liability is a deposit or borrowing, report the liability as a deposit.
Line Item 12(a)

Total noninterest-bearing deposits.

Report the total of all noninterest-bearing deposits
RC-3

Schedule RC—Balance Sheet

included in Schedule RC-E. Noninterest-bearing deposits
consist of deposit accounts on which the issuing depository institution pays no compensation to the holder for
the use of the funds. 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 zero
percent stated interest rate that are issued at face value.
Line Item 12(b)

Total interest-bearing deposits.

Report the total of all interest-bearing deposits included
in Schedule RC-E. Interest-bearing deposits 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.
Line Item 13 Federal funds purchased and
securities sold under agreements to repurchase.
Domestic offices and IBFs should include the following
in this item:
(1) All transactions involving the receipt of immediately
available funds for one business day only, or under
continuing contract regardless of the nature of the
transaction or the collateral involved;
(2) All securities sold under agreements to repurchase,
and similar transactions, that mature in more than
one business day (other than securities sold under
repurchase agreements to maturity); and
(3) All liabilities representing sales of participation in
pools of securities that mature in more than one
business day.
Exclude the following:
(1) Due bills issued and similar instruments, whether
collateralized or uncollateralized (to be treated
asa borrowing and reported in Item 15, ‘‘Other borrowed money;’’)
(2) Purchase of so-called ‘‘term federal funds’’ (i.e.,
purchases of immediately available funds with a
maturity of more than one business day) other than
RC-4

security repurchase agreements specified above (to
be reported in Item 15, ‘‘Other borrowed money;’’)
(3) Securities sold under agreements to repurchase by
foreign branches of the reporting corporation and
‘‘Federal funds purchased’’ from banks in the U.S. by
foreign branches of the corporation (to be reported in
Item 15, ‘‘Other borrowed money;’’) and
(4) So-called yield maintenance dollar repurchase
agreement.
See entry for Federal Funds Transactions in the Definitions section for definitions of various terms that are used
in the above instructions for Liability Item 13.
Line Item 14

Trading liabilities.

Report the amount of liabilities from the reporting
organization’s trading activities. Include liabilities resulting from sales of assets that the reporting bank does not
own (see FFIEC 031 Glossary entry for ‘‘short position’’) and revaluation losses from the ‘‘marking to market’’ (or the ‘‘lower of cost or market’’) of interest rate,
foreign exchange rate, and other off-balance sheet commodity and equity contracts into which the reporting
bank has entered for trading, dealer, customer accommodation, and similar purposes. Refer to the FFIEC 031
instructions for further information.
Line Item 15 Other borrowed money (including
mortgage indebtedness and obligation under capital
leases).
Report the total amount borrowed by the reporting corporation on its promissory notes, on notes and bills rediscounted, on loans or other assets sold with recourse or
with the reporting corporation’s endorsement or guarantee, on due bills issued, on assets sold that the corporation did not own, or on any other obligation for the
purpose of borrowing money. Also include any mortgages, liens, or capitalized lease property. Include securities sold under repurchase agreements by foreign
branches of the corporation, unless legally defined as
deposits in the country where the liability is booked.
Line Item 16

Not applicable.

Line Item 17

Subordinated notes and debentures.

Report the amount of outstanding subordinated notes and
debentures (including mandatory convertible debt).
Instructions for Preparation of Reporting Form FR 2886b
Balance Sheet March 2006

Schedule RC—Balance Sheet

Line Item 18

Other liabilities.

Enter the total of any liability to nonrelated organizations
that cannot be properly reported in Items 12 through 17
above. Included here are such items as the negative fair
value of derivative contracts held for purposes other than
trading, amount of accrued and unpaid expenses, net
deferred income taxes, dividends declared but not yet
payable, liability for deferred payment letters of credit,
deferred gains on financial contracts, unamortized loan
fees (except those that are yield-related), and others not
properly reported above. Report the amount of unmatured drafts and bills of exchange accepted by the corporation or by other institutions for its account that are
outstanding. Acceptances acquired by the reporter
through purchase or discount and held as of the report
date should be excluded and reported as loans in Assets,
Item 4, ‘‘Loans and lease financing receivables, net;’’
and included in Schedule RC-C. Liabilities for letters of
credit issued for money or its equivalent should be
reported as deposits. Participation of acceptances does
not reduce the accepting Edge’s obligation to honor the
full amount of the acceptance. (See the Definitions section for a detailed discussion of the treatment of acceptances.)
Line Item 19 Liabilities to nonrelated
organizations.
This item is the sum of liability Items 12 through 18
above.
Line Item 20 Gross liabilities to related
organizations.
Report the amounts of all liabilities to related organizations, (Schedule RC-M, Item 3, Column B). See the
definition of related organizations in the Definitions section. Do not net liabilities to related organizations against
claims on related organizations. For column B, IBF only,
include gross liabilities on the establishing Edge corporation.

Equity Capital
Equity capital represents the sum of capital stock, surplus, undivided profits, and various reserve accounts.
Corporations with branches should report all equity capital items, including any undivided profits or translations
adjustments of branches, in the report filed by the head
office. Any claims of the head office on its branches,
Instructions for Preparation of Reporting Form FR 2886b
Balance Sheet March 2006

including any unremitted earnings of the branches,
should be included in Schedule RC-M.
Line Item 21

Stock.

Report the total par value of the capital stock, both
common and preferred, or its equivalent, issued by the
corporation and outstanding.
Line Item 22

Surplus.

Enter the net amount formally transferred to or paid into
the surplus account or its equivalent plus any amount
received for preferred or common stock in excess of its
par value on or before the date of the report.
Line Item 23

Retained earnings.

Report the total amount of the corporation’s retained
earnings (undivided profits) after transfers of net income,
dividend distributions, transfers to surplus, and any other
appropriate reductions. Also include any reserves for
contingencies and other capital reserves, such as reserves
for undeclared dividends or dividends payable in capital
stock, reserves for retirement of preferred capital notes
or dividend profits, and any reserve for contingencies.
This last item represents amounts set aside for possible
unforeseen or indeterminate liabilities not otherwise
reflected on the corporation’s books and not covered by
insurance—including, for example, amounts reserved for
possible losses resulting from lawsuits, possible default
on obligations on which the reporting organization is
contingently liable, or other potential claims against the
corporation. A reserve for contingencies should not
include any element of known loss or losses, the amount
of which can be estimated with reasonable accuracy.
Line Item 24
income.

Accumulated other comprehensive

Report the accumulated balance of other comprehensive
income in accordance with FASB Statement No. 130,
Reporting Comprehensive Income. ‘‘Other comprehensive income’’ refers to revenues, expenses, gains, and
losses that under generally accepted accounting principles are included in comprehensive income but
excluded from net income. Include in this item net unrealized holding gains (losses) on available-for-sale securities, accumulated net gains (losses) on cash flow hedges,
RC-5

Schedule RC—Balance Sheet

cumulative foreign currency translation adjustments,
minimum pension liability adjustment (see FFIEC 031
Schedule RC, Item 26(b)).
Line Item 25

Other equity capital components.

Report the carrying value of any treasury stock and of
any unearned Employee Stock Ownership Plan (ESOP)
shares, which under generally accepted accounting principles are reported in a contra-equity account on the
balance sheet. Also include any unearned or deferred
compensation expense that must be shown as a separate
reduction of equity capital pursuant to Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees. For further information, see the
FFIEC 031 Glossary entry for ‘‘treasury stock,’’ AICPA
Statement of Position 93-6, Employers’ Accounting for
Employee Stock Ownership Plans, and APB Opinion
No. 25.
Line Item 26

Memorandum to Balance Sheet:
Line Item M1 Assets under the reporting Edge
and agreement corporation’s management in
proprietary mutual funds and annuities.
Report the amount of assets (stated in U.S. dollars) held
by mutual funds and annuities as of the report date for
which the reporting Edge and agreement corporation or a
subsidiary of the corporation acts as investment adviser.
A general description of a proprietary product is included
in the instructions to FFIEC 031 Schedule RC-M, item 6.
Proprietary mutual funds and annuities are typically created by large banking organizations and offered to customers of the banking organization’s subisidiaries. If
neither the Edge and agreement corporation nor any
subisidiary of the corporation acts as investment adviser
for a mutual fund or annuity, report a zero or the word
‘‘none’’ in this item.

Total equity capital.

Enter the sum of Items 21 through 25.
Line Item 27

Total liabilities and equity capital.

Enter the sum of Items 19, 20, and 26.

RC-6

Instructions for Preparation of Reporting Form FR 2886b
Balance Sheet September 2004

LINE ITEM INSTRUCTIONS FOR

Cash and Balances Due
From Depository Institutions
Schedule RC-A

General Instructions
This schedule must be completed only by banking Edge
corporations and banking agreement corporations.
This schedule has two columns for information on cash
and balances due from depository institutions. The first
column provides consolidated information on the reporting office and its IBF. The second column provides
information for only the IBF. For purposes of this report,
deposit accounts ‘‘due from’’ other depository institutions that are overdrawn should be reported as borrowings and included in Schedule RC, Item 15, ‘‘Other
borrowed money.’’ Exclude claims on related organizations and assets held in trading accounts.

Line Item Instructions
Line Item 1 Cash items in process of collection,
unposted debits, and currency and coin.
Report cash, cash items in the process of collection, and
unposted debits as defined below, including such balances booked in the IBF of the reporting office.
Cash is the total of all currency and coin owned and
held by the reporting organization and local currency and
coin in transit to or from the central bank or its equivalent in the country in which the reporting organization is
domiciled.

reporting office which is clearing or collecting the
check or draft is located. This includes checks or
drafts that have been deposited with the reporting
bank’s correspondent and for which the reporting
bank has already been given credit, but for which the
amount credited is not subject to immediate withdrawal (‘‘ledger credit’’ items);
(2) Checks or warrants drawn on the government (federal government equivalent) of the country in which
the reporting office is domiciled and which are in the
process of collection;
(3) Such other items in process of collection, payable
immediately upon presentation, as are customarily
cleared or collected as cash items;
(4) Checks drawn on another depository institution and
which have been forwarded for collection to other
offices or branches of the reporter;
(5) Amounts credited to deposit accounts in connection
with automatic payment arrangements where such
credits are made one business day prior to the payment date to ensure the availability of funds on the
payment date;
(6) Commodity or bill-of-lading drafts payable immediately upon presentation in the country in which the
reporting office that is handling the drafts is located.

(1) Checks in the process of collection, drawn on banking institutions 1 and payable immediately upon presentation, including checks already forwarded for
collection and checks on hand which will be presented for payment or forwarded for collection on
the following business day in the country where the

Unposted debits are defined as cash items in the reporting corporation’s possession drawn on itself that are
chargeable, but have not yet been charged, against deposit liabilities on the general ledger at the close of
business on a given day. Unposted debits do not include
items that have been reflected in deposit accounts on the
General Ledger or a balance sheet even though they may
not have been debited to individual deposit accounts.

1. Institutions which, by law or accepted practice in the country in
which domiciled, accept deposits as a significant part of their business.

Where allowed by statute or written agreement, items
payable at or through the reporting corporation may, at

Cash items in the process of collection include:

Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-A September 2004

RC-A-1

Schedule RC-A

the discretion of the reporter, be immediately charged
against the deposits of the drawer. Such items may be
regarded as drawn on the reporting organization 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 the following from cash items in the process of
collection:
(1) Cash items for which the reporting corporation has
already received credit provided that the funds on
deposit are subject to immediate withdrawal (include
in Items 2, 3, or 4 below);
(2) Items handled as noncash collections not payable
immediately on presentation (to be reported in
Schedule RC, Item 8, ‘‘Other assets’’);
(3) Commodity or bill-of-lading drafts payable upon
arrival of goods against which the draft was drawn,
whether or not deposit credit has been given to a
customer. (If deposit credit has been given, such
drafts should be reported as loans in the appropriate
item of Schedule RC-C; if the drafts were received
on a collection basis, they should be excluded entirely from the reporting corporation’s statement until the funds have actually been collected.)
Line Item 2 Balances due from depository
institutions in the U.S.
Report demand, savings, and time balances with offices
of depository institutions domiciled in the U.S., including
balances due from commercial banks in the U.S., U.S.
branches and agencies of foreign banks, New York State
Article XII investment companies, savings and loan
associations and mutual stock savings banks, and other

RC-A-2

Edge and agreement corporations for which the reporting corporation has received credit. See the Definitions
section for a discussion of the reporting of reciprocal
balances. Also, see the Definitions section for a discussion of pass-through balances relating to maintenance
of required reserves on deposits. Exclude balances for
which the corporation has not yet received credit and
balances representing checks or drafts for which immediate credit has been given but which are not subject to
immediate withdrawal (reported in Item 1, ‘‘Cash items
in process of collection’’).
Line Item 3 Balances due from banks in foreign
countries and foreign central banks.
Report all balances due from banking offices located
outside the United States, including foreign branches of
U.S. banks and foreign central banks. Do not include
balances due from U.S. branches and agencies of foreign
banks. Also, see the Definitions section for a discussion
of the reporting of reciprocal balances. Exclude any
balances held in the reporting office’s trading account.
Line Item 4
Banks.

Balances due from Federal Reserve

Report the total balances with Federal Reserve Banks,
including reserves and other balances. Include the
amount of reserve balances actually passed through to a
Federal Reserve Bank on behalf of its respondent depository institutions.
Line Item 5

Total.

Enter the total of Items 1 through 4 above. This total
should equal the sum of Schedule RC, Items 1(a) and
1(b).

Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-A September 2004

LINE ITEM INSTRUCTIONS FOR

Securities
Schedule RC-B

General Instuctions
This schedule must be completed only by banking Edge
corporations and banking agreement corporations.
The Financial Accounting Standards Board issued Statement No. 115, ‘‘Accounting for Certain Investments in
Debt and Equity Securities,’’ in May 1993. For reporting
purposes, all Edge corporations should have adopted this
accounting standard as of January 1, 1994, or the beginning of their first fiscal year thereafter, if later. Statement
No. 115 requires depository institutions to divide their
securities holdings among three categories: held-tomaturity, available-for-sale, and trading. The accounting
standard provides a different accounting treatment for
each category. Under Statement No. 115, only those debt
securities for which an institution has the positive intent
and ability to hold to maturity may be included in the
held-to- maturity account, and the institution would continue to account for these debt securities at amortized
cost.
Trading securities are those debt and equity securities
that an institution buys and holds principally for the
purpose of selling in the near term. Trading securities
will continue to be reported at fair value (i.e., generally
market value) with unrealized changes in value (appreciation and depreciation) reported directly in the income
statement as a part of the organization’s earnings.
Securities in the available-for-sale category are defined
as those securities for which the organization does not
have the positive intent and ability to hold to maturity,
yet does not intend to trade actively as part of its trading
account. Available-for-sale securities must be reported at
fair value. Any unrealized appreciation or depreciation in
the value of debt and equity securities available for sale
is to be reported directly as a separate component of
equity capital. Thus, unrealized changes in these securities’ value will have no effect on the reported earnings of
the institution.
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-B September 2004

This schedule has four columns for information on securities: two columns for held-to-maturity securities and
two columns for available-for-sale securities. Report the
amortized cost and the current fair value of held-tomaturity securities in columns A and B, respectively.
Report the amortized cost and current fair value of
available-for-sale securities in columns C and D, respectively. Report information on equity securities in the
columns for available-for-sale securities only (columns C
and D). For equity securities with readily determinable
fair values, report historical cost (not amortized cost) in
column C and fair value in column D. The unrealized
appreciation or depreciation in the corporation’s
available-for-sale debt and equity securities as of the
report date, net of tax effect, should be reported in
Schedule RC, Item 24, ‘‘Accumulated other comprehensive income.’’
Exclude all securities held in trading accounts, and report
them in Schedule RC, Item 5, ‘‘Trading Assets.’’ Also
exclude all equity securities that do not have readily
determinable fair values, and report them in Schedule
RC, Item 8, ‘‘Other Assets.’’
When completing reports for U.S. offices, include securities that have been sold under repurchase agreements
since, for purposes of this report, these securities are
treated as collateral for financial transactions and not
as sales. The transactions arising from security RPs
should be reported as liabilities in Schedule RC, Item 13.
Similarly, do not include securities that have been purchased under resale agreements, which are to be reported
as assets in Schedule RC, Item 3.
Include all securities included in a pool in which participation is sold. The proceeds from the participation sales
should be reflected in Schedule RC, Item 13, ‘‘Federal
funds purchased and securities sold under agreements
to repurchase.’’ Corporations that buy participations in
RC-B-1

Schedule RC-B

pooled securities should report the purchase in Schedule
RC, Item 3, ‘‘Federal funds sold and securities purchased
under agreements to resell.’’ Include all securities
pledged, lent, or sold ‘‘short,’’ and securities purchased
but not yet delivered, but do not include securities borrowed or due bills acquired. Do not report any futures
contracts to buy or sell securities until the actual transfer
of securities occurs. Securities should be reflected using
trade date accounting.

Line Item Instructions
Line Item 1 Securities of all governments and
official institutions.
Include the value of U.S. government obligations, direct
and guaranteed, and the value of the direct obligations of
any entity other than the U.S. government, either foreign
or U.S., that has the power to levy taxes or is otherwise
considered to be a public borrower or ‘‘official institution.’’ (See FFIEC 031 Glossary entry for ‘‘Foreign
Governments and Official Institutions.’’)
Line Item 2

Other debt securities.

Report the value of all other debt securities, including
state and local government securities. Also include all

RC-B-2

holdings of commercial paper other than for trading
purposes.
Line Item 3 Equity interest in nonrelated
organizations.
Include the total value of all equity investments other
than those in related organizations. Report equity investments that represent 20 percent to 50 percent of the
voting shares of an organization using the equity method
of accounting. Report equity investments representing
less than 20 percent of the voting shares of an organization in accordance with Statement 115 at fair value.
Include securities that have been sold under repurchase
agreements since, for purposes of this report, these securities are treated as collateral for financial transactions
and not as sales. Report the transactions arising from
security RPs in Schedule RC, Item 15, ‘‘Other borrowed
money,’’ on the balance sheet. Similarly, exclude securities that have been purchased under resale agreements,
and report them in Schedule RC, Item 4, ‘‘Loans and
lease financing receivables.’’
Line Item 4
through 3.

Total. Enter the sum of items 1

The total of column A plus the total of column D must
equal Schedule RC, Item 2, Consolidated Total.

Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-B September 2004

LINE ITEM INSTRUCTIONS FOR

Loans and Lease Financing Receivables
Schedule RC-C

General Instructions
This schedule must be completed only by banking Edge
corporations and banking agreement corporations.
This schedule has two columns for information on loans
and leases. The first column should include all such
balances of the reporting office, including the IBF, while
the second column includes balances of only the IBF.
Report in this schedule the aggregate book value of all
loans and leases before deduction of any allowances
for losses. The allowance for losses is to be deducted
under Schedule RC, Item 4(b). The total of ‘‘loans and
leases,’’ Item 7 of this schedule, is to be reported net of
unearned income and allocated transfer risk reserve. To
the extent possible, the preferred treatment is to report
each specific loan category net of unearned income.
However, if the amounts entered in Items 1 through 5
include any unearned income, report in Item 6 of this
schedule the total of such unearned income included in
the reported loan categories.
Loans and leases are extensions of credit resulting either
from direct negotiation between lender and borrower
or from the purchase of such assets from other lenders.
Loans include extensions of credit in the form of promissory notes, acknowledgements of advance, due bills, and
similar obligations (written or oral), as well as marketable instruments such as bankers acceptances. Report
holdings of commercial paper other than for trading
purposes in Schedule RC-B, Item 2. Report holding of
commercial paper for trading purposes in Schedule RC,
Item 5. Also report all loans and leases held for trading
purposes in Schedule RC, Item 5.
For purposes of this report, both ‘‘unplanned’’ and
‘‘planned’’ overdrafts are to be classified as loans in this
schedule. ‘‘Unplanned’’ overdrafts refer to advances of
credit that result when the reporting organization honors
checks drawn against deposit accounts with inadequate
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-C September 2004

balances, but has not contractually agreed in advance to
do so. Such overdrafts should be classified in Item 5,
‘‘All other loans including lease financing’’ except when
the reporting corporation’s customer is a domestic commercial bank or foreign bank. In that case, unplanned
overdrafts are to be classified in Item 1, ‘‘Loans to
commercial banks in the U.S.’’ or in Item 2, ‘‘Loans to
banks in foreign countries,’’ as appropriate. ‘‘Planned’’
overdrafts, which are overdrafts to deposit accounts contractually agreed to in advance, should be classified
according to the organization’s customer in the appropriate items of Schedule RC-C. Refer to the section on the
sale or purchase of assets included in the Definitions
section for a discussion of these two topics.
All assets classified in Schedule RC-C should remain on
the books of the reporting corporation until sold or
actually written off, even if on the report date they are
past due and collection is doubtful. Among the items
included in this schedule are the following:
(1) Acceptances of banks or other banking corporations;
(2) Acceptances executed by or for the account of the
reporting corporation and subsequently acquired by
it through purchase or discount;
(3) Customers’ liabilities to the reporting corporations
on drafts paid under letters of credit for which the
corporation 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 corporation has given deposit
credit to customers;
(5) Paper pledged whether for collateral to secure bills
payable, such as marginal 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
RC-C-1

Schedule RC-C

than one day), other than those involving security
resale agreements; and
(7) ‘‘Federal funds’’sold by foreign branches of the
reporting corporation to banks in the United States
and securities purchased by these branches under
agreements to resell.
Also include loans ‘‘sold’’ by the reporting office for
which the office retains some risk or obligation. See
Definitions section for a discussion of the treatment of
asset sales.
Exclude, for purposes of this schedule, the following
loans:
(1) All loans in immediately available funds of one day
(or continuing contract) maturity (i.e., federal funds
sold), held in domestic offices of the reporting corporation (to be reported in Schedule RC, Item 3);
(2) Contracts of sale or other loans indirectly representing other real estate (to be reported in Schedule RC,
Item 6 or 8 rather than in Schedule RC-C); and
(3) Undisbursed loan funds, sometimes referred to as
incomplete loans, unless the borrowers are liable and
pay interest thereon. However, 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. (Do not include
loan commitments that have not yet been taken
down, even if fees have been paid.)

Line Item Instructions
Line Item 1 Loans to and acceptances of
commercial banks.
Report loans and other instruments evidencing loans to
operating domestic commercial banks and their branches
domiciled in the United States, Puerto Rico, and U.S.
dependencies and insular possessions and trust territories. Also include loans to domestic offices of nonrelated
Edge and agreement corporations, to U.S. branches and
agencies of foreign banks, and to investment companies
that are chartered under Article XII of the New York
Banking Law and are majority-owned by one or more
foreign banks.
Include in this item all overdrafts to demand deposit
accounts of domestic commercial banks. This item
RC-C-2

includes both unplanned and planned overdrafts. Passthrough balances relating to the maintenance of required
reserves are also considered as loans in certain cases. See
Definitions section on the treatment of pass-through
balances.
Also include holdings of all bankers acceptances accepted by U.S. banks and not held in trading accounts,
whether they were purchased in the open market or were
discounted by the reporting office. Exclude acceptances
accepted by the reporter, discounted, and held in its
portfolio. Such acceptances should be reported elsewhere in the schedule according to the account party.
Exclude loans to other domestic depository institutions
such as mutual savings banks, savings and loan associations, and credit unions, finance companies, acceptance
companies, insurance companies, and credit agencies
that are owned wholly or in part by the Federal Government. Extensions of credit to these organizations should
be reported in Item 5, ‘‘All other loans including lease
financing receivables.’’
Loans to inactive, liquidating or closed banks should
be excluded from Schedule RC-C and included in Schedule RC, Item 8, ‘‘Other assets.’’

Line Item 2

Loans to banks in foreign countries.

Report loans and other instruments that represent loans
(including dollar exchange acceptances) to operating
banks, including branches of U.S. banks, that are domiciled outside the United States, Puerto Rico and U.S.
dependencies and insular possessions (including trust
territories). Exclude such credit extensions to U.S.
branches and agencies of foreign banks, which should
be reported in Item 1, ‘‘Loans to commercial banks in
the U.S.,’’ above. Banks in foreign countries include
foreign commercial banks, savings banks, discount
houses, nationalized banks not functioning as central
banks, development banks, or banks of issue and other
similar foreign institutions that accept short-term deposits, and foreign domiciled banking subsidiaries of U.S.
banks. Include loans to ‘‘shell’’ branches of U.S. banks
such as those in the Bahamas or Cayman Islands.
All overdrafts to demand deposit accounts of banks in
foreign countries are to be reported in this item, including both unplanned and planned overdrafts.
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-C September 2004

Schedule RC-C

Line Item 3 Loans to foreign governments and
official institutions (including foreign central banks).
Report all loans (including planned overdrafts) to central, state, provincial, and local governments in foreign
countries and to their ministries, departments, and agencies. Among these are treasuries, ministries of finance,
central banks, development banks, exchange control
offices, stabilization funds, diplomatic establishments,
fiscal agents, and nationalized banking 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, stabilization funds, etc.
Also include all loans (including planned overdrafts) to
international and regional institutions, such as the International Bank for Reconstruction and Development, the
Bank for International Settlements, the Inter-American
Development Bank, and the United Nations.
Include bankers acceptances accepted by the reporting
office and held in its portfolio when the account party is a
foreign government or official institution, including such
acceptances for the purpose of financing dollar exchange.
Exclude acceptances held in trading accounts.
Line Item 4

Commercial and industrial loans.

Report loans for commercial and industrial purposes to
sole proprietorships, partnerships, corporations, and other
business enterprises, whether secured or unsecured,
single-payment or installment. These loans may take the
form of direct or purchased loans. Include the reporting
corporation’s own acceptances discounted and held 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.
This item should include the same types of transactions
that are included in this loan category on the parent
U.S. bank’s consolidated report of condition. Examples
of such loans are:
(1) Loans for commercial and industrial purposes to the
following industries:
(a) mining, oil and gas-producing, and quarrying
industries;
(b) manufacturing industries of all kinds, including
those which process agricultural commodities;
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-C September 2004

(c) construction industries;
(d) wholesale and retail trade enterprises and other
dealers in commodities; and
(e) service industries such as hotels, laundries, and
automotive service stations.
(2) Loans for the purpose of financing capital expenditures as well as to finance current operations.
(3) Loans collateralized by production payments (e.g.,
oil or mining production payments) as a loan to the
original seller of the production payment rather than
to the holder of the production payment.
(4) Commercial and industrial loans guaranteed by foreign governmental institutions.

Line Item 4(a)

Loans to U.S. addressees (domicile).

Report all commercial and industrial loans to U.S.
addressees. For a discussion of ‘‘addressees,’’ see the
Definitions section.

Line Item 4(b)
(domicile).

Loans to non-U.S. addressees

Report all commercial and industrial loans to non-U.S.
addressees. For a discussion of ‘‘addressees,’’ see the
Definitions section.

Line Item 5 All other loans, including lease
financing receivables.
Report all loans and discounts which cannot properly
be reported against one of the preceding items of Schedule RC-C, all unplanned overdrafts in deposit accounts
(except overdrafts on demand deposits of banks), and
all lease financing receivables. Included in this item
are: loans to nonprofit organizations or individuals; real
estate loans; loans for the purpose of purchasing or
carrying securities; loans to inactive, liquidating or
closed banks; loans to mutual savings banks, savings
and loan associations, credit unions, finance companies,
insurance companies, acceptance companies, investment
banks, bank holding companies, federal credit agencies
and other financial intermediaries, whether domestic or
foreign; agricultural production loans; and automobile
loans.
RC-C-3

Schedule RC-C

Line Item 6 Less: unearned income on loans and
leases included above.
To the extent possible, the preferred treatment is to report
the specific loan categories net of unearned income. A
reporting corporation should enter in this item unearned
income only to the extent that it is included under the
various loan items (1 through 5) of this schedule. If a

RC-C-4

reporter reports each line net of unearned income, it
should make no entry in this line.
Line Item 7
income.

Loans and leases, net of unearned

Enter the difference between the sum of Items 1 through
5 less Item 6 above. Item 7 must agree with Schedule
RC, Item 4(a).

Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-C September 2004

LINE ITEM INSTRUCTIONS FOR

Deposits
Schedule RC-E

General Instructions
This schedule must be completed only by banking Edge
corporations and banking agreement corporations.
The format of the deposit schedule is different from that
used for most other schedules of the report. This schedule does not include IBF deposits. The term ‘‘deposits’’
is defined in the Federal Deposit Insurance Act and in
Federal Reserve Regulation D. The most relevant sections are shown below. Please refer to the instructions
associated with Schedule RC-E and the glossary entry
for ‘‘Deposits’’ in the FFIEC 031 for further detail.

Part I.

FDI Act definition of deposits:

(1) The unpaid balance of money or its equivalent
received or held by a bank 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 a letter of credit or a
traveler’s check on which the bank 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) Money received or held by a bank, or the credit
given for money or its equivalent received or held by
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-E September 2004

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 a debtor
to meet maturing obligations, funds deposited as
advance payment on subscriptions to United States
Government 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;
(3) 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
(4) 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 bank or savings association which is payable only at an office of such
bank or savings association located outside of the
RC-E-1

Schedule-RC-E

States of the United States, the District
of Columbia, Puerto Rico, Guam, American
Samoa, the Trust Territory of the Pacific Islands,
the Virgin Islands and the Northern Mariana
Islands; 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.

Part II. Transaction–nontransaction
deposit distinction:
The Monetary Control Act of 1980 and the current
Federal Reserve Regulation D, ‘‘Reserve Requirements
of Depository Institutions,’’ establish, for purposes of
Federal Reserve requirements on deposit liabilities, a
category of deposits designated as ‘‘transaction
accounts.’’ All deposits that are not transaction accounts
are ‘‘nontransaction accounts.’’
(1) Transaction accounts: With the exceptions noted
below, a ‘‘transaction account,’’ as defined in Regulation D and in these instructions, is a deposit or
account from which the depositor or account holder
is permitted to make transfers, or withdrawals by
negotiable or transferable instruments, payment
orders of withdrawal, telephone transfers, or other
similar devices for the purpose of making payments
or transfers to third persons or others or from which
the depositor may make third party payments at an
automated teller machine (ATM), a remote service
unit (RSU), or another electronic device, including
by debit card.
Excluded from transaction accounts are savings
deposits (both money market deposit accounts
(MMDAs) and other savings deposits) as defined
below in the nontransaction account category, even
though such deposits permit some third-party transfers. However, an account that otherwise meets the
definition of a savings deposit but that authorizes or
permits the depositor to exceed the transfer limitations specified for that account shall be reported as a
transaction account. (Please refer to the definition of
savings deposits for further detail.)
RC-E-2

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 of any funds in the account and (ii) that
can be withdrawn or transferred to third parties
by issuance of a negotiable or transferable
instrument.
NOW accounts, as authorized by federal law, are
limited to accounts held by:
(i) Individuals or sole proprietorships;
(ii) Organizations that are operated primarily
for religious, philanthropic, charitable, educational, or other similar purposes and that
are not operated for profit. These include
organizations, partnerships, corporations, or
associations that are not organized for profit
and are described in section 501(c)(3)
through (13) and (19) and section 528 of the
Internal Revenue Code, such as church
organizations; professional associations;
trade associations; labor unions; fraternities, sororities and similar social organizations; and nonprofit recreational clubs; or
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-E September 2004

Schedule-RC-E

(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
reporting institution and the depositor, withdrawals may be made automatically through payment
to the depository institution itself or through
transfer of credit to a demand deposit or other
account in order to cover checks or drafts drawn
upon the institution or to maintain a specified
balance in, or to make periodic transfers to, such
other accounts.
Some institutions may have entered into agreements with their customers providing that in the
event the customer should overdraw a demand
deposit (checking) or NOW account, the institution will transfer from the 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
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-E September 2004

not exceeded. Please refer to the definition of
savings deposit for further detail.
(d) Telephone or preauthorized transfer accounts
consist of deposits or accounts, other than savings deposits, (1) in which the entire beneficial
interest is held by a party eligible to hold a NOW
account, (2) on which the reporting institution
has reserved the right to require at least seven
days’ written notice prior to withdrawal or transfer of any funds in the account, and (3) under the
terms of which, or by practice of the reporting
institution, the depositor is permitted or authorized to make more than six withdrawals per
month or statement cycle (or similar period) of at
least four weeks for purposes of transferring
funds to another account of the depositor at the
same institution (including a transaction account)
or for making payment to a third party by means
of preauthorized transfer, or telephonic (including data transmission) agreement, order or instruction. An account that permits or authorizes
more than six such withdrawals in a ‘‘month’’
(i.e., a calendar month or any period approximating a month that is at least four weeks long, such
as a statement cycle) is a transaction account
whether or not more than six such withdrawals
actually are made in the ‘‘month.’’
A ‘‘preauthorized transfer’’ includes any arrangement by the reporting institution to pay a
third party from the account of a depositor
(1) upon written or oral instruction (including an
order received through an automated clearing
house (ACH)), or (2) at a predetermined time or
on a fixed schedule.
Telephone and preauthorized transfer accounts
also include:
(i) 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.
RC-E-3

Schedule-RC-E

(ii) The balance of deposits or accounts that
otherwise meet the definition of time deposits, but from which payments may be made
to third parties by means of a debit card, an
automated teller machine, remote service
unit or other electronic device, regardless of
the number of payments made.
However, an account is not a transaction account
merely by virtue of arrangements that permit
the following types of transfers or withdrawals,
regardless of the number:
(i) Transfers for the purpose of repaying loans
and associated expenses at the same depository institution (as originator or servicer).
(ii) Transfers of funds from this account to
another account of the same depositor at the
same depository institution when made by
mail, messenger, automated teller machine,
or in person.
(iii) Withdrawals for payment directly to the
depositor when made by mail, messenger,
automated teller machine, in person, or
by telephone (via check mailed to the
depositor).
(2) Nontransaction accounts: All deposits that are not
transaction accounts (as defined above) are nontransaction accounts. Nontransaction accounts include:
(a) savings deposits ((i) money market deposit
accounts (MMDAs) and (ii) other savings deposits)
and (b) time deposits ((i) time certificates of deposit
and (ii) time deposits, open account). Regulation D
no longer distinguishes between money market
deposit accounts (MMDAs) and other savings deposits. However, these two types of accounts are defined
below for purposes of these reports.
(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.
RC-E-4

The term savings deposit also means a deposit or
account, such as an account commonly known as
a passbook savings account, a statement savings
account, or a money market deposit account
(MMDA), that otherwise meets the requirements
of the preceding paragraph and from which,
under the terms of the deposit contract or by
practice of the depository institution, the depositor is permitted or authorized to make no more
than six transfers and withdrawals, or a combination of such transfers and withdrawals, per
calendar month or statement cycle (or similar
period) of at least four weeks, to another account
(including a transaction account) of the depositor
at the same institution or to a third party by
means of a preauthorized or automatic transfer,
or 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.
There are no regulatory restrictions on the following
types of transfers or withdrawals from a savings deposit
account, regardless of the number:
(1) Transfers for the purpose of repaying loans and
associated expenses at the same depository institution (as originator or servicer).
(2) Transfers of funds from this account to another
account of the same depositor at the same depository
institution when made by mail, messenger, automated teller machine, or in person.
(3) Withdrawals for payment directly to the depositor
when made by mail, messenger, automated teller
machine, in person, or by telephone (via check
mailed to the depositor).
Further, for a savings deposit account, no minimum
balance is required by regulation, there is no regulatory
limitation on the amount of interest that may be paid, and
no minimum maturity is required (although depository
institutions must reserve the right to require at least
seven days’ written notice prior to withdrawal as stipulated above for a savings deposit).
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-E September 2004

Schedule-RC-E

Any depository institution may place restrictions and
requirements on savings deposits in addition to those
stipulated above. In the case of such further restrictions,
the account would still be reported as a savings deposit.
On the other hand, an account that otherwise meets the
definition of a savings deposit but that authorizes or
permits the depositor to exceed the six-transfer/
withdrawal rule or three-draft rule shall be reported as a
transaction account, as follows:
(1) If the depositor is ineligible to hold a NOW account,
such an account is considered a demand deposit.
(2) If the depositor is eligible to hold a NOW account,
the account will be considered either a NOW
account, a telephone or preauthorized transfer
account, or an ATS account:
(a) If withdrawals or transfers by check, draft, or
similar instrument are permitted or authorized,
the account is considered a NOW account.
(b) If withdrawals or transfers by check, draft, or
similar instrument are not permitted or authorized. the account is considered either an ATS
account or a telephone or preauthorized transfer
account.
Regulation D no longer distinguishes between money
market deposit accounts (MMDAs) and other savings
deposits. However, these two types of accounts are
defined as follows for purposes of these reports, which
call for separate data on each.
(1) Money market deposit accounts are deposits or
accounts that meet the above definition of a savings
deposit and that permit up to (but no more than)
three of six allowable transfers to be made by check,
draft, debit card or similar order made by the depositor and payable to third parties.
(2) Other savings deposits are deposits or accounts that
meet the 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.
(b) Time deposits are deposits that the depositor
does not have a right, and is not permitted,
to make withdrawals from within six days
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-E September 2004

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:
(1) Time certificates of deposits (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 bank, that provides,
on its face, that the amount of such deposit is payable to the bearer, to any specified person, or to the
order of a specified person, as follows:
(a) on a certain date not less than seven days after
the date of deposit;
(b) at the expiration of a specified period not less
than seven days after the date of the deposit; or
(c) upon written notice to the bank which is to be
given not less than seven days before the date of
withdrawal.
(2) Time deposits, open account are deposits (other than
time certificates of deposit) for which there is in
force a written contract with the depositor that
neither the whole nor any part of such deposit may
be withdrawn prior to:
(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.
RC-E-5

Schedule-RC-E

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:
(a) 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.
(b) 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.

Part III. Interest-bearing/noninterestbearing deposit distinction:
(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.
(2) Noninterest-bearing deposit accounts consist of
deposit accounts on which the issuing depository
RC-E-6

institution pays no compensation to the holder for
the use of the funds.
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.

Line Item Instructions
Line Item 1 Individuals, partnerships and
corporations (including certified and official checks).
Report in the proper columns all deposits, as defined in
the general definition of deposits at the beginning of this
schedule, made by or for the account of individuals,
partnerships and corporations, and all certified and official checks.
Deposits of individuals include those related to the personal, household, or family activities of individuals, and
to the business activities of sole proprietorships. Also
included in this item are deposits of nongovernment
corporations, associations, or other organizations operated primarily for religious, philanthropic, charitable,
educational, fraternal, or other similar purposes and not
operated for a profit, and deposits of U.S. government
agencies and instrumentalities.
Deposits of partnerships, corporations, and other associations organized for profit including such organizations
engaged in commercial, industrial, financial, or other
activities in the United States or abroad. The following
institutions are examples of corporations and other profit
organizations to be included: building and loan associations; credit unions; mutual funds and all other financial
institutions (other than domestic and foreign commercial
banks); the Export Import Bank; federally-sponsored
lending agencies; foreign government-owned commercial and industrial enterprises; and quasi-government
organizations.
Certified and official checks include:
(1) Unpaid depositors checks that have been certified;
(2) Cashiers checks, money orders, or other officers’
checks issued for any purpose including those issued
in payment for services, dividends, or purchases that
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-E September 2004

Schedule-RC-E

are drawn on the reporting corporation by any of its
duly authorized officers and that are outstanding on
the report date;
(3) Funds received or held in connection with checks or
drafts drawn by the reporting corporation 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 corporation only when
it has been advised that the checks or drafts have
been presented);
(4) Funds received or held in connection with traveler’s
checks and money orders sold (but not drawn) by the
reporting corporation, until the proceeds of the sale
are remitted to another party, and funds received or
held in connection with other such checks used (but
not drawn) by the reporting corporation, until the
amount of the checks is remitted to another party;
(5) Checks drawn by the reporting corporation on, or
payable at or through, a Federal Reserve Bank or a
Federal Home Loan Bank;
(6) Outstanding travelers’ letters of credit and other
letters of credit (less any outstanding drafts accepted
there under) issued for money or its equivalent by
the reporting corporation or its agents; and
(7) Outstanding drafts and bills of exchange accepted by
the reporting corporation or its agents for money or
its equivalent. This includes drafts accepted against a
letter of credit issued for money or its equivalent.
Reporting corporations with foreign branches should
include all checks or drafts drawn by, or on behalf of, a
foreign branch on an account maintained by such a
branch with a domestic office of the reporter. This would
include ‘‘London checks,’’ ‘‘Eurodollar bills payable
checks,’’ and any other credit item that the domestic
office issues in connection with such transactions.
Line Item 1(a)

U.S. addressees (domicile).

Report all deposits of individuals, partnerships, and corporations having U.S. addresses. For a detailed discussion of ‘‘addressees,’’ see Definitions.
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-E March 2006

Line Item 1(b)

Non-U.S. addressees (domicile).

Report all deposits of individuals, partnerships and corporations having non-U.S. addresses. For a detailed discussion of ‘‘addressees,’’ see Definitions.

Line Item 2 Commercial banks and other
depository institutions in the U.S. (excluding their
IBFs).
Report in the proper columns deposits standing to the
credit of banking offices domiciled in the United States,
Puerto Rico, and in U.S. dependencies and insular possessions (including trust territories). Also report deposits
of U.S. branches and agencies of foreign banks and
deposits of U.S.-domiciled offices of New York Article XII investment companies that are majority-owned
by one or more foreign banks.
For purposes of this item, ‘‘banks’’ should include
national banks, state-chartered commercial banks, U.S.
branches or agencies owned by foreign banks or by
foreign banking institutions, trust companies performing
a commercial banking business, industrial banks, stock
savings banks, private banks (including regulatedcertified banks) performing a commercial banking business, and Edge and agreement corporations that are
domiciled in the United States, Puerto Rico, or U.S.
dependencies and possessions.
If the deposit account of a commercial bank or other
depository institution in the United States becomes overdrawn, the resulting net overdraft position (whether unplanned or contractually agreed to in advance) is to be
reported as a loan to domestic commercial banks in
Item 1 of Schedule RC-C. See the Definitions section for
a discussion of the reporting of reciprocal balances. Also,
see the instructions for a discussion of pass-through
balances where the reporting office is acting as a correspondent for a nonbank depository institution.
Line Item 3

Banks in foreign countries.

Report in the proper columns deposits standing to the
credit of banking offices domiciled in foreign countries
(i.e., outside the United States, Puerto Rico, and U.S.
dependencies and insular possessions). This includes
all deposits of foreign-domiciled commercial banks, savings banks, discount houses, and other similar foreigndomiciled institutions that accept short term deposits.
RC-E-7

Schedule-RC-E

Include deposits of foreign-domiciled banking subsidiaries of both U.S. banks and Edge and agreement corporations that are not related organizations. Also include
foreign-domiciled banking institutions that have U.S.
branches and agencies, but exclude the deposits of their
U.S. branches and agencies (to be reported in Item 2).
If the deposit account of a bank located in a foreign
country becomes overdrawn, the resulting overdraft,
whether unplanned or contractually agreed to in advance,
is to be reported as a loan to a foreign bank in Item 2 of
Schedule RC-C. See the Definitions section for a discussion of the reporting of reciprocal balances.
Exclude deposits of foreign official institutions (to be
reported in Item 4, (Deposits of) ‘‘Foreign governments
and official institutions’’).
Line Item 4 Foreign governments and official
institutions (including foreign central banks).
Report in the proper columns all deposits standing to
the credit of central, state, provincial, and local governments in foreign countries and to their ministries, departments, and agencies. Among these are treasuries, ministries of finance, central banks, development banks,
exchange control offices, stabilization funds, diplomatic

RC-E-8

and other representative establishments, fiscal agents,
and nationalized banking 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,
stabilization fund, etc. Also include deposits of international and regional institutions, such as the International
Bank for Reconstruction and Development, the Bank for
International Settlement, the Inter-American Development Bank, and the United Nations.
Line Item 5

Not applicable.

Line Item 6

Other.

Report all deposits that cannot be properly reported in
one of the preceding Items. Included are such deposits as
those of the United States, its agencies and corporations,
and States and political subdivisions thereof.
Line Item 7

Total deposits.

Enter the total of Items 1(a) through 6 above. The sum of
the columns A and B must equal the sum of Schedule
RC, Items 12(a) and 12(b) minus Item 12.

Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-E September 2004

LINE ITEM INSTRUCTIONS FOR

Quarterly Average
Schedule RC-K

General Instructions
This schedule must be completed only by banking Edge
corporations and banking agreement corporations.
Each banking office must compute a quarterly average
for each item below. The figures to be averaged are
either the amounts outstanding at the close of business
for each day of the calendar quarter, including the day
for which this report is prepared, or an average of the
balances at the close of business each Wednesday during
the calendar quarter. For those days that the reporting
institution is not open for business (including Saturday
and Sunday), use the amount outstanding from the preceding business day. The average balances relate to
Schedule RC items. And consequently, with the exception of average total assets (Item 1(g)) exclude all claims
on or liabilities to related organizations.

Line Item Instructions
Line Item 1 Interest-bearing balances due from
depository institutions.
The definition of this item corresponds to Schedule RC,
Item 1(b).

Line Item 3
income.

Loans and leases, net of unearned

The definition of this item corresponds to Schedule RC,
Item 4(a).
Line Item 4

Interest-bearing deposits.

The definition of this item corresponds to Schedule RC,
Item 12(b).
Line Item 5 Federal funds purchased and
securities sold under agreements to repurchase.
The definition of this item corresponds to Schedule RC,
Item 13.
Line Item 6 Other borrowed money (including
mortgage indebtedness and obligations under
capital leases).
The definition of this item corresponds to Schedule RC,
Item 15.
Line Item 7

Total assets.

The definition of this item corresponds to Schedule RC,
Item 11.

Line Item 2 Federal funds sold and securities
purchased under agreements to resell.
The definition of this item corresponds to Schedule RC,
Item 3.

Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-K September 2004

RC-K-1

LINE ITEM INSTRUCTIONS FOR

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

General Instructions
This schedule must be completed by all Edge corporations and all agreement corporations.
References to the corresponding items in the FFIEC 031
instructions are contained in brackets.

Line Item Instructions
Line Item 1 Unused commitments on loans and all
other lines of credit.
Include the amount outstanding of securitized extensions
of credit to individuals for household, family, and other
personal expenditures arising from bank credit cards and
related plans.
Line Item 2 Unused commitments on securities
underwriting.

corporation is contingently liable and which cannot be
properly reported in other items of this schedule.
Line Item 8 Commitments to purchase foreign
currencies and U.S. dollar exchange (spot, forward
and futures).
Report the gross amount (stated in U.S. dollars) of all
spot, forward and futures contracts that are outstanding
as of the report date committing the reporting bank to
purchase foreign (non-U.S.) currencies and U.S. dollar
exchanges. For purposes of completing this item, U.S.
dollar exchange refers to the amount of U.S. dollars
purchased in connection with the sale of another currency. Effectively, then, report in this item the U.S. dollar
equivalent of all currencies (whether U.S. or non-U.S.
and whether local or nonlocal) that were purchased in
exchange for another currency.

[Schedule RC-L, item 1.d.]
Line Item 3 Financial standby letters of credit and
foreign office guarantees.
[Schedule RC-L, item 2]
Line Item 4 Performance standby letters of credit
and foreign office guarantees.

Line Item 9 All other futures and forward
contracts (excluding contracts involving foreign
exchange).
[Schedule RC-L, items 12.a and 12.b, columns A, C, and
D]
Line Item 10

Option contracts:

[Schedule RC-L, item 3]
Line Item 5
credit.

Commercial and similar letters of

Line Item 10(a)

Written option contracts.

[Schedule RC-L, item 12.d.(1)]

[Schedule RC-L, item 4]
Line Item 6

Not applicable.

Line Item 7

All other off-balance sheet liabilities.

Line Item 10(b)

Purchased option contracts.

[Schedule RC-L, item 12.d.(2)]
Enter the total of all items for which the reporting
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-L March 2006

Line Item 11

Swaps (notional values):
RC-L-1

Schedule RC-L

Line Item 11(a)
swaps.

Notional value of interest rate

[Schedule RC-L, item 12.e, column B]

[Schedule RC-L, item 12.e, column A]

Line Item 11(c)

Line Item 11(b) Notional value of foreign
exchange swaps (e.g., cross currency swaps).

[Schedule RC-L, item 12.e, columns C and D]

RC-L-2

Notional value of other swaps.

Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-L March 2006

LINE ITEM INSTRUCTIONS FOR

Claims on and Liabilities to
Related Organizations
Schedule RC-M
Draft

General Instructions
This schedule must be completed by all Edge corporations and all agreement corporations.
Schedule RC-M covers all transactions (including equity
investments) with ‘‘related’’ organizations. Related
organizations are defined in the Definitions section.
Report in Column A the gross amounts due from, and
in Column B the gross amounts due to, related organizations specified in the items listed below. Include all
amounts due to and due from related organizations
(including accrued interest), regardless of the nature of
the instruments or of the accounts that such amounts
reflect.
‘‘Gross due from’’ may arise from the following:
(1) funds placed on deposit by the reporting institution
at related organizations, whether payable on demand
or at the expiration of a specified maturity;
(2) funds advanced to related organizations by the
reporting institutions, including accrued interest on
such funds;
(3) sales of assets (including sales of participation in
assets) to related organizations;

in the appropriate equity capital or reserve account item
on the report submitted by the head office.
‘‘Gross due to’’ may arise from the following:
(1) funds placed on deposit at the reporting institution
by related organizations, whether payable on demand
or at the expiration of a specified maturity;
(2) borrowings from related organizations by the reporting institution, including funds advanced by a third
party to a related organization on behalf of the
reporting institution;
(3) purchases of assets (including purchases of participation in assets) from related organizations;
(4) checks or drafts drawn by or on behalf of the reporting institution on accounts maintained at related
organizations; and
(5) other liabilities to related organizations, such as
those resulting from clearing activities, foreign
exchange transactions, federal funds transactions,
bankers acceptance transactions, and other activities.

(5) other claims on related organizations, such as those
resulting from clearing activities, foreign exchange
transactions, federal funds transactions, bankers
acceptance transactions, and other activities.

The schedule segregates institutions domiciled in the
United States from those domiciled outside the United
States (non-U.S.). For purposes of this schedule, institutions in the United States are restricted to those with
offices domiciled in the 50 states of the United States and
the District of Columbia. Offices domiciled either in a
foreign country, in Puerto Rico, or in a U.S. territory or
possession, are to be classified as domiciled outside the
United States (non-U.S.).

Reporting corporations with branch offices should also
include in this schedule any undivided profits and
reserves booked at branch offices. If the amounts are
negative, the head office should show them as liabilities
to the branch(es). These amounts should also be reflected

If the reporting office maintains required reserves with
the Federal Reserve through a related correspondent or
acts as a correspondent for any related organization, see
the Definitions section for the proper treatment of ‘‘passthrough’’ balances.

(4) checks or drafts drawn by, or on behalf of, related
organizations on accounts maintained at the reporting institution; and

Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-M September 2004

RC-M-1

Schedule RC-M

Line Item Instructions

Line Item 2(b)
organizations.

Line Item 1 Related organizations domiciled in the
United States (including related IBFs).

Report the amount outstanding due to/due from non-U.S.
offices of this reporting Edge corporation’s majorityowned non-U.S. nonbanking subsidiaries.

Line Item 1(a) U.S. offices of parent bank and
other U.S. related banks.

Line Item 3

Report the amount outstanding due to/due from all U.S.
offices of: (1) the reporting corporation’s parent bank,
and (2) other related U.S. banks, including related IBFs.
If the corporation is not owned by a U.S. or foreign bank,
enter ‘‘none.’’
Line Item 1(b)
organizations.

U.S. offices of other related

Report the amount outstanding due to/due from U.S.
offices of this reporting Edge corporation, including
transactions with any of its majority-owned U.S. nonbanking subsidiaries.
Line Item 2 Related organizations domiciled
outside the United States.

Non-U.S. offices of other related

Total.

Report in Columns A and B the sum of Items 1(a) and
1(b) and 2(a) and 2(b) above. The amount reported in
Column A must equal Schedule RC, Item 10, and the
amount reported in Column B must equal Schedule RC,
Item 20.
Line Item 4 Total loans participated to related
organizations.
Report the total amount of loans outstanding that have
been participated to related organizations (and not
included in Item 3 above) where the reporting corporation is the managing agent or is otherwise acting as
servicer of the transaction for participating related organizations. Related organizations are defined in the Definitions section.

Memorandum

Line Item 2(a) Non-U.S. offices of parent bank and
other related U.S. banks.

Line Item M1 Amount of equity investments in
related organizations.

Report the amount outstanding due to/due from all nonU.S. offices of: (1) the reporting corporation’s parent
bank, and (2) other related U.S. banks. If the corporation
is not owned by a U.S. or foreign bank, enter ‘‘none.’’

Enter the amount of equity investments in related organizations. The amounts should be derived using the equity
method of accounting, and should be included in the
appropriate line item(s) in Column A.

RC-M-2

Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-M September 2004

LINE ITEM INSTRUCTIONS FOR

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

General Instructions
This schedule must be completed by all Edge corporations and all agreement corporations.

(2) Open-end credit such as 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.

The reporting corporation should report all loans, lease
financing receivables and any other assets booked at the
head office and any consolidated offices that are past
due or are in nonaccrual status, regardless of whether
such credits are secured or unsecured and regardless
of whether they are guaranteed by others. 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 RC-C. Report the full
outstanding balances of loans or other assets that are past
due or in nonaccrual status, not simply the delinquent
payments. Include such assets as debt securities and
interest-bearing balances due from depository institutions. Exclude other real estate owned and other repossessed assets, such as automobiles, boats, equipment,
appliances, and similar personal property.

(3) Amortizing real estate loans are to be reported as
past due when the borrower is in arrears two or more
monthly payments. (Reporters may use 30 days as a
proxy for a month if they prefer.) Such 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.

Past Due

(6) Unplanned overdrafts are to be reported as past due
if the account remains continuously overdrawn for
30 days or more.

For the purposes of this report, grace periods allowed by
the corporation after a loan technically has become past
due but before the imposition of late charges are not to
be considered in determining past due status. Furthermore, loans, lease financing receivables and other assets
are to be reported as past due when either interest or
principal is unpaid in the following circumstances:
(1) Closed-end monthly installment loans and lease
financing receivables are to be reported as past due
when the borrower is in arrears two or more monthly
payments. (Thirty days may be used as a proxy for
a month.) 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.
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-N September 2004

(4) 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.
(5) 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.

For purposes of this report, a full payment in computing
past due status for consumer installment loans (both
closed-end and open-end) is defined to include a partial
payment equivalent to 90 percent or more of the contractual payment.
Note: The time period used for reporting past due status
as indicated above may not in all instances conform
to those used by federal bank regulators in bank
examinations.

Nonaccrual
For the purposes of this report, loans, lease financing
receivables and any other assets are to be reported as
RC-N-1

Schedule RC-N

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 nonaccrual asset may be restored to an
accrual status when none of its principal or interest is due
and unpaid or when it otherwise becomes well-secured
and is 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 should remain in nonaccrual status until it meets the
criteria for restoration to accrual status described above.
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 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 that
do not involve legal actions, provided they are reasonably expected to result in repayment of the debt or in its
restoration to a current status.
Restructured For the purposes of this report, restructured
loans and leases are those loans and leases whose terms
have been modified, because of a deterioration in the
financial position of the borrower, to provide for a reduction of either the interest or principal. Once an obligation
has been restructured because of such credit problems, it
continues to be considered restructured until paid in full
or until such time as the terms are substantially equivalent to terms on which loans with comparable risks are
being made. A loan extended or renewed at a stated
interest rate equal to the current interest rate for new debt
with a similar risk is not considered a restructured loan.
Also, a loan to a purchaser of ‘‘other real estate owned’’
by the reporting corporation for the purpose of facilitating the disposal of such real estate is not considered a
restructured loan.
RC-N-2

Item Instructions
Report in Items 1 and 2 the full outstanding balances (not
just delinquent payments) of loans, lease financing
receivables and any other assets that are past due and
upon which the corporation continues to accrue interest,
as follows:

Line Item 1
accruing.

Past due 30–89 days and still

Report any loans, lease financing receivables and any
other assets that are past due 30–89 days (as defined
above) and still accruing.

Line Item 2
accruing.

Past due 90 days or more and still

Report the loans, lease financing receivables and any
other assets as specified above on which payment is due
and unpaid for 90 days or more.
Exclude from Items 1 and 2 all loans, lease financing
receivables and any other assets that are on a nonaccrual
status.

Line Item 3

Nonaccrual.

Report the outstanding balances of loans, leases and
other assets that are in nonaccrual status. However,
restructured loans and leases with a zero percent effective interest rate are not to be reported on this line as
nonaccrual loans, leases and other assets.

Item 4

Total.

Enter the total of Items 1 through 3.
Memorandum Item 1, Restructured loans and leases
included in Item 4 above. Report the outstanding balances of restructured loans and leases (as defined above)
that under their modified terms are past due 30 days or
more or are in nonaccrual status as of the report date.
Such loans and leases will have been included in one or
more lines of this schedule. Exclude from this item all
restructured loans secured by 1 to 4 family residential
properties and all restructured loans to individuals for
household, family and other personal expenditures.
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-N September 2004

LINE ITEM INSTRUCTIONS FOR

Risk-Based Capital
Schedule RC-R

General Instructions
This schedule must be completed only by banking Edge
corporations and banking agreement corporations.
Effective January 1, 1993, banking Edge corporations
became subject to risk-based capital requirements under
Section 211.12(c) of Regulation K. Banking Edge corporations must maintain a minimum ratio to weighted
risk assets of at least 10 percent, of which at least
50 percent must consist of Tier 1 capital. This differs
from the 8 percent required minimum ratio for state
member banks. Furthermore, Edge corporations, in contrast to state member banks, have no limitation as to
the amount of subordinated debt that qualifies as Tier 2
capital. With the exception of the preceding two distinctions, Edge corporations must comply with all
other aspects of the Capital Adequacy Guidelines for
state member banks. Please refer to the instructions on
risk-based capital and associated optional risk-based
capital worksheet in the FFIEC 031 for further guidance.

Line Item Instructions
Line Item 1 Tier 1 capital allowable under the
risk-based capital guidelines;
Report the amount of Tier 1 capital less deductions, that
is allowable under the risk-based capital guidelines of
state member banks. Tier 1 capital should be measured in
accordance with the definition of total capital in the
risk-based capital guidelines.

(3) minority interests in equity capital accounts of consolidated subsidiaries, less goodwill, other disallowed intangible assets, disallowed deferred tax
assets, and any other amounts that are deducted in
determining Tier 1 capital in accordance with the
capital standards issued by the reporting bank’s primary federal supervisory authority.
NOTE: For risk-based capital purposes, common stockholders’ equity capital includes any net unrealized holding losses on available-for-sale equity securities with
readily determinable fair values, but excludes other net
unrealized holding gains (losses) on available-for-sale
securities.
Generally, Tier 1 capital for Edge corporations should
correspond to the above definition.

Line Item 2 Tier 2 capital allowable under the
risk-based capital guidelines;
Report the amount of Tier 2 capital, less deductions, that
is allowable under the risk-based capital guidelines. This
amount should be measured in accordance with the definition of total capital in the risk-based capital guidelines
(except for the treatment of subordinated debt as mentioned above).
Tier 2 capital for banks consists of:
(1) cumulative perpetual preferred stock and any related
surplus;

(1) common stockholders’ equity capital;

(2) long-term preferred stock (original maturity of
20 years or more) and any related surplus (discounted for capital purposes as it approaches
maturity);

(2) noncumulative perpetual preferred stock and any
related surplus; and

(3) auction rate and similar preferred stock (both cumulative and noncumulative);

Tier 1 (core) capital for banks consists of:

Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-R September 2004

RC-R-1

Schedule RC-R

(4) hybrid capital instruments (including mandatory convertible debt securities);
(5) term subordinated debt and intermediate-term preferred stock (original weighted average maturity of
five years or more) to the extent of 50 percent of
Tier 1 capital (and discounted for capital purposes as
they approach maturity); and
(6) the allowance for loan and lease losses (limited to
the lesser of the balance of the allowance account or
1.25 percent of risk-weighted assets).
In addition, Tier 2 capital is limited to 100 percent of
Tier 1 capital.
Line Item 3 Subordinated debt allowable as Tier 2
(i.e., weighted average maturity of at least 5 years
included in item 2 above).
Report the outstanding amount of subordinated debt and
other limited life instruments. These capital instruments
must have an original weighted average maturity of at
least five years and otherwise be eligible for inclusion in
Tier 2 capital as discussed in the risk-based capital
guidelines.

RC-R-2

Line Item 4 Total qualifying capital (i.e., Tier 1
and Tier 2 capital) allowable under the risk-based
capital guidelines.
Report the amount of total capital, that is, Tier 1 plus
Tier 2 capital less deductions, that is allowable under the
risk-based capital guidelines (sum of items 1 and 2
above).
Line Item 5 Total risk-weighted assets and credit
equivalent amounts of off-balance sheet items.
The total represents the aggregate of the total riskweighted assets and credit equivalent amounts of offbalance sheet items assigned to the 0, 20 and 50 and
100 percent risk categories. Please refer to instructions
on Schedule RC-R of FFIEC 031.
Line Item 6 Credit equivalent amounts of
off-balance sheet items included in item 5 above.
The total represents the aggregate of the credit equivalent amounts of off-balance sheet items assigned to the
0, 20 and 50 and 100 percent risk categories. Please refer
to instructions on Schedule RC-R of FFIEC 031.

Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-R September 2004

LINE ITEM INSTRUCTIONS FOR

Branch Schedule of Selected Items—
Non-Consolidated
Schedule RC-V

General Instructions

Line Item 3

This schedule must be completed only by banking Edge
corporations and banking agreement corporations that
have branch offices.

This item includes credit extensions and balances with
related organizations (see related organizations in Definitions section). Do not net claims on related organizations
with liabilities to related organizations.

For the purposes of this schedule, all banking Edge
corporations and all banking agreement corporations
that have branch offices must complete Schedule RC-V
for the head office and each branch on a non-consolidated
basis. Items reported in this schedule reflecting balances
of the head office separately should include balances of
the IBF of only the head office. Items reported in this
schedule reflecting balances of a branch office should
include balances of the IBF of only that branch office.
Banking Edge corporations and banking agreement
corporations with no branch offices should not complete
this schedule.

Line Item Instructions
Line Item 1 Cash and balances due from
depository institutions.
Report the amount of currency and coin, cash items in
process of collection and balances with depository institutions and central banks included in Schedule RC-A,
Item 5. Refer to the instructions for Schedule RC-A for
further guidance.
Line Item 2 Loans and lease financing receivables,
net of unearned income.
Report in this item all loans, including real estate loans,
commercial and industrial loans, loans to individuals,
and loans to foreign governments and official institutions. This is to be reported net of unearned income and
before adjustment for allowances for loan and lease
losses. Refer to the instructions for Schedule RC-C for
further guidance.
Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-V September 2004

Line Item 4

Gross claims on related organizations.

Total assets.

This item is the sum of all claims on non-related organizations and claims on related organizations. See Definitions section for discussion of items included in total
assets for the purposes of this report.
Line Item 5

Total deposits.

Include as deposits (1) those liabilities readily identifiable by name and definition as deposits, (2) all liabilities
identical to those described under Schedule RC-E but
having different names in foreign countries, (3) liabilities
that, owing to law, custom, or banking practice in foreign
countries, have characteristics analogous to those defined
in Schedule RC-E; and (4) every other liability treated as
a deposit by law, custom or banking practice in the
country in which the liability is booked. This item should
exclude any liabilities to related organizations.
Line Item 6 Gross liabilities to related
organizations.
This item includes all balances due to related organizations, wherever located (see related organizations in
Definitions section). Do not net liabilities to related
organizations with claims on related organizations in
completing this schedule.
Line Item 7
credit.

Commercial and similar letters of

Enter the total unused balances of all outstanding irrevocable commercial letters of credit, travelers’ letters of
RC-V-1

Schedule RC-V

credit, and all similar letters of credit that have been
issued or confirmed by the reporting corporation or the
agents except those issued for money or its equivalent
(report as demand deposits) or that have been accepted
by the reporting corporation, or ‘‘standby letter’’ (see
Item 8 below).
Item 8

Guarantees and standby letters of credit.

Report the amount of outstanding and unused guarantees
issued by the reporting corporation or its agents guaranteeing customers’ debts or otherwise agreeing for a customer’s benefit to make payments on the occurrence of
readily ascertainable events, regardless of the form of

RC-V-2

guarantee, including those issued in the form of letters
of credit (so-called ‘‘standby letters’’) or letters of indemnity. Any standby letters of credit should be reported
gross of any amounts participated to others. Participating
organizations other than the originating institutions
should report only their shares in the potential extension
of credit under the standby letter of credit. In the case of
a syndicated standby letter of credit where each holder
has a direct obligation to the beneficiary, each reporting
corporation should report only its share of the syndication. Exclude letters of credit that are covered by pledged
deposits.

Instructions for Preparation of Reporting Form FR 2886b
Schedule RC-V September 2004

Definitions for
FR 2886b Instructions

The following terms are employed frequently in these
instructions and are defined as follows:
Acceptances Executed by the Reporting Corporation
With the exceptions described below, the accepting
corporation (i.e., the corporation on whom the draft is
drawn) must report on its balance sheet the full amount
of the acceptance in both (1) the liability item, ‘‘Other
liabilities,’’ (Schedule RC, Item 18, reflecting the accepting corporation’s obligation to put the holder of the
acceptance in funds (to pay the holder the full amount of
the draft) at maturity, and (2) the asset item, ‘‘Other
assets’’ (Schedule RC, Item 8), reflecting the customers’
liability to put the accepting bank in funds at maturity.
Exceptions to the mandatory reporting by the accepting
corporation of the full amount of all outstanding drafts
accepted by the reporting corporation in both Item 18
and Item 8 on the balance sheet occur in the following
situations:
(1) One exception occurs in situations where the accepting corporation acquires—through initial discounting or subsequent purchase—and holds its own
acceptance (that is, a draft that it has itself accepted).
In this case, its own acceptances that are held by it
will not be reported in the liability and asset items
noted above (that is, Schedule RC, Items 8 and 18).
The corporation’s own acceptances held will be reported under ‘‘Loans and leases, net of unearned
income’’ (Schedule RC, Item 4(a), and the appropriate item in Schedule RC-C).
(2) Another exception occurs in situations where the
account party anticipates its liability to the reporting corporation on an acceptance outstanding by
making a payment to the corporation that reduces
the customers’ liability in advance of the maturity of
the acceptance. In this case, the reporting corporation will decrease ‘‘Other assets’’ (Schedule RC,
Instructions for Preparation of Reporting Form FR 2886b
Definitions March 2006

Item 8), by the amount of such prepayment; the
prepayment will not affect ‘‘Other liabilities’’
(Schedule RC, Item 18), which would continue to
reflect the full amount of the acceptance until the
maturity date specified in the instrument. If the
account party’s payment to the accepting corporation
before the maturity date is not for the purpose of
immediate reduction of its indebtedness to the reporting bank or if receipt of the payment does not
immediately reduce or extinguish that indebtedness,
such payment will not reduce ‘‘Other assets’’ (Schedule RC, Item 8), but should be reflected in the
corporation’s deposit liabilities in Schedule RC-E.
In all situations other than these two exceptions just
described, the accepting corporation must report the full
amount of its acceptances in its liability item 18, and in
its asset item 8. There are no other circumstances in
which the accepting corporation can report as a balance
sheet liability anything less than the full amount of the
obligation to put the holder of the acceptance in funds at
maturity. Moreover, there are no circumstances in which
the reporting corporation can net its acceptance assets
against its acceptance liabilities.
NOTE: The amount of a corporation’s acceptances that
are subject to limitations on eligible acceptances, as set
forth in Federal Reserve regulation 12 CFR 211.6(a),
may differ from the required reporting of acceptances on
the balance sheet, as described above. These differences
are mainly attributable to ineligible acceptances, to participation in the reporting corporation’s acceptances conveyed to others, and to participation acquired by the
reporter in other banks’ acceptances.
‘‘Participations’’ in Acceptances
The general requirement for the accepting corporation to
report on its balance sheet the full amount of the total
obligation to put the holder of the acceptance in funds
DEF-1

Definitions

applies also, in particular, to any situation in which the
accepting corporation enters into any kind of arrangement with others for the purpose of having the latter
share, or participate, in the obligation to put the holder of
the acceptance in funds at maturity. In any such sharing
arrangement or participation agreement—regardless of
its form or its contract provisions, regardless of the
terminology (e.g., ‘‘funded,’’ ‘‘risk,’’ ‘‘unconditional,’’ or
‘‘contingent’’) used to describe it and the relationships
under it, regardless of whether it is described as a participation in the customer’s liability or the accepting corporation’s obligation, and regardless of the system of debits
and credits used by the accepting corporation to reflect
the participation arrangement—the existence of the participation or other agreement does not reduce its obligation to honor the full amount of the acceptance at maturity nor change the requirement to report the full amount
of the acceptance in the liability and asset items referenced above.

Certain items in this report apply only to customers
in the United States or to customers in foreign countries. Other items distinguish between U.S. and foreign
‘‘addressees.’’ Where applicable, the U.S./non-U.S. distinction should reflect the reporting corporation’s contribution to similar balances shown on its parent
bank’s Consolidated (foreign and domestic) Report of
Condition.

The existence of such participations is not to be recorded
on the balance sheet of the accepting corporation that
conveys shares in its obligation to put the holder of the
acceptance in funds or on the balance sheets of the other
parties that acquire such participation. However, in such
cases of agreements to participate, both the accepting party conveying the participation to others and the
party acquiring the participation from the accepting
organization, must report the amounts of such participation in the appropriate memorandum item of the report
form.

Whether a customer is ‘‘U.S.’’ or ‘‘foreign’’ shall be
determined by the customer’s principal address (its domicile). ‘‘U.S.’’ addressees include residents of any of the
50 states of the United States, the District of Columbia,
Puerto Rico, and U.S. dependencies and insular possessions (including trust territories). ‘‘Foreign’’ and ‘‘nonU.S.’’ addressees include residents of all other geographic areas. The distinction between a U.S. customer
and a foreign (or non-U.S.) customer should be based
on the principal address or domicile of the direct obligor
or direct depositor regardless of the domicile of any
guarantor.

Acceptances Owned by the Reporting Corporation
The treatment of acceptances owned or held by the
reporting corporation (whether acquired by initial discount or subsequent purchase) depends upon whether the
acceptances held have been accepted by the reporting
corporation or by others.
The reporting corporation’s holdings of other banks’
acceptances are to be reported as loans to banks and
included in Item 1 or 2 on Schedule RC-C. On the other
hand, the corporation’s holdings of its own acceptances
are to be reported according to the account party of the
draft. Thus, for example, holdings of own acceptances
for which the account parties are commercial or industrial enterprises are to be reported in Schedule RC-C in
‘‘Commercial and industrial loans’’ (Schedule RC,
Item 4).
DEF-2

The difference in treatment between holdings of own
acceptances and holdings of other banks’ acceptances
stems from the fact that, for other banks’ acceptances,
the holding bank’s immediate claim is on the accepting
bank, regardless of the account party or of the purpose of
the loan. On the other hand, for its holdings of its own
acceptances, the bank’s immediate claim is on the
account party named in the accepted draft.
Addressees (Domicile)

In some cases, the ‘‘account address’’ used for correspondence, etc., is different from the customer’s principal
address or domicile. In such cases, the corporation should
look behind the account address to other information in
its files or should make reasonable efforts to ascertain the
customer’s principal address or domicile from sources
outside the corporation. Only if the customer’s domicile
is not readily ascertainable from the reporter’s own
files, or from other sources, may the account address be
used for determining whether a customer is ‘‘U.S.’’ or
‘‘foreign.’’
Annuity
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
Instructions for Preparation of Reporting Form FR 2886b
Definitions March 2006

Definitions

are established in order to be marketed primarily to a
corporation’s customers.
Commercial Banks in the U.S.
For purposes of this report, a commercial bank is any
legal entity chartered as a commercial bank and/or trust
company by the U.S. or a unit of government of the U.S.,
or a private or industrial bank engaged in banking, and
located in the U.S. (exclude any foreign branches
thereof). For this report, include (unless specified separately) (1) U.S. agencies and branches of foreign banks;
(2) Edge and agreement corporations that are organized
under provisions of Section 25 or 25(a) of the Federal
Reserve Act; and (3) investment companies engaged in
banking and chartered under Article XII by the State of
New York that are majority-owned by one or more
foreign banks or by foreign official institutions.
Federal Funds Transactions
Provided below are definitions of various terms that are
used in the instructions for Schedule RC, Item 3 and
Item 13.
Immediately Available Funds
Funds that the purchasing corporation can either use or
dispose of on the same business day that the transaction
giving rise to the receipt of the funds is executed (or, in
the case of lending resulting from previous commitments
to lend, when the transaction giving rise to the disposal
of funds is effective).
One-day Transactions
Transactions made on one business day to mature on the
next business day, including those made on Friday to
mature on Monday, and those made on the last business
day prior to a holiday (for either or both parties to the
transaction) that mature on the first business day after the
holiday.
Continuing Contracts
Agreements, regardless of the terminology used, that
remain in effect for more than one business day but that
have no specified maturity and do not require advance
notice of the lender or borrower to terminate. Such
contracts may also be known as ‘‘roll-overs’’ or as
‘‘open-ended agreements.’’
Instructions for Preparation of Reporting Form FR 2886b
Definitions March 2006

Foreign
According to Federal Reserve Regulation K, ‘‘foreign’’
or ‘‘foreign country’’ refers to one or more foreign
nations, and includes the overseas territories, dependencies, and insular possessions of those nations and of the
United States, and the Commonwealth of Puerto Rico.
Mutual Fund
The common name for an open-end investment company
whose shares are sold to the investing public.
Offsetting
Offsetting is the reporting of assets and liabilities on a
net basis in Schedule RC. Reporting corporations are permitted to offset assets and liabilities recognized in the
balance sheet 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 parities 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 contractsthat 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 a 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 corporation 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
DEF-3

Definitions

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
on the balance sheet. 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 Interpretation No. 41 must
be applied consistently. See also ‘‘reciprocal balances’’
below.
Participation
The issue of appropriate reporting treatment (i.e., as a
sale or as a borrowing) arises particularly in the case of
participation. No single statement can be made about the
required reporting treatment of ‘‘participation’’ in general, since the term ‘‘participation’’ is used in connection
with a number of quite different arrangements. For example, it may refer to shares in a single loan, shares in a
single financing, shares in a pool of similar loans, shares
in a pool of dissimilar loans, or shares in liabilities, or
risks, etc. Refer to the FFIEC 031 Glossary entry for
‘‘Transfers of Financial Assets’’ for further information.
Reciprocal Balances
Reciprocal balances arise when two depository institutions maintain deposit accounts with each other; that is,
DEF-4

when a reporting corporation has both a due to and a due
from balance with another depository institution.
For purposes of the balance sheet, reciprocal balances
between the reporting bank and other depository institutions may be reported on a net basis when a right of
setoff exists. See the definition of ‘‘offsetting’’ above for
the conditions that must be met for a right of setoff to
exist.
Related Organizations
For purposes of this report, include (1) any organization
that directly or indirectly holds the majority of the voting
shares of, or otherwise controls the reporting organization, and (2) any organization the majority of whose
shares are held, directly or indirectly, or any organization
that is otherwise controlled by, the reporter’s ultimate
parent organization. However, any organization consolidated in the reporting Edge corporation’s financial statements should not be included.
Sale of Assets
Refer to the FFIEC 031 Glossary entry for Transfers of
Financial Assets. In addition, refer to the FFIEC 031
Glossary entry for Sales of Assets for Risk-Based Capital
Purposes for guidance for determining whether sales of
loans, securities, receivables, and other assets are subject
to risk-based capital requirements and are reportable in
Schedule RC-R, Risk-Based Capital, and Schedule RC-L, Derivatives and Off-Balance-Sheet Items.
Subsidiaries
The treatment of subsidiaries is the same as provided in
the FFIEC 031 report and depends upon the degree of
ownership held by the reporting corporation.
A majority-owned subsidiary of the reporting corporation is a subsidiary in which the parent corporation
directly or indirectly owns more than 50 percent of the
outstanding voting stock.
A significant subsidiary of the reporting corporation is a
majority-owned subsidiary that meets any one or more of
the following tests:
(1) The corporation’s direct or indirect investment in
and advances to the subsidiary equals five percent
or more of the total equity capital of the parent
corporation.
Instructions for Preparation of Reporting Form FR 2886b
Definitions March 2006

Definitions

Note: for the purposes of this test, the amount of
direct and indirect investments and advances is either
(a) the amount carried on the books of the parent
corporation or (b) the parent’s proportionate share in
the total equity capital of the subsidiary, whichever
is greater.
(2) The parent corporation’s proportional share (based
on equity ownership) of the subsidiary’s gross operating income or revenue amounts to five percent or
more of the gross operation income or revenue of the
consolidated parent corporation.
(3) The subsidiary’s income or loss before income taxes
amounts to five percent or more of the parent corporation’s income or loss before income taxes.
(4) The subsidiary is, in turn, the parent of one or more
subsidiaries which, when consolidated with the subsidiary, constitute a significant subsidiary as defined
in one or more of the above tests.
The equity ownership in majority-owned subsidiaries
that are not consolidated by the reporting organization
(for example, subsidiaries that are Edge and agreement
corporations) are to be accounted for using the equity
method of accounting and are reported in Schedule RC,
Items 9 or 10, and in Schedule RC-M.
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 be liable 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
operation. Large commercial and industrial loans, large
loans to finance companies, and large foreign loans may
be handled through such syndicated participation. Each
participant in the syndicate, including the lead party,
records its own share of the participated loan and the
total amount of the loan is not entered on the books of
one party to be shared through transfers of loans. Refer
Instructions for Preparation of Reporting Form FR 2886b
Definitions March 2006

to the FFIEC 031 Glossary entry for ‘‘Transfers of Financial Assets’’ for further information.
Participation Other than Syndications
Such participation may involve shares in a single loan or
in a pool of loans or receivables. They may be prearranged, with a lead institution originating the transaction
and—simultaneously (as prearranged with other participants) or at a later date—selling shares to others. The
seller may acquire or accumulate assets for the express
purpose of issuing participation or it may participate out
loans or receivables it has acquired over time in the
regular course of its credit operations. In any case, the
assets subject to the participation are, in contrast to the
situation in the case of the syndicated participation,
usually recorded on the books of the originator prior to
the distribution of shares in them. Refer to the FFIEC 031
Glossary entry for ‘‘Transfers of Financial Assets’’ for
further information.
Treatment of Pass-through Reserve Balances
A nonmember depository institution may hold its federally required reserve balances (in excess of vault cash)
with a Federal Reserve Bank either directly or it may
hold them indirectly, by passing its reserve balances
through another depository institution. When an Edge
corporation passes its reserve balance to the Federal
Reserve through another institution, it is referred to as
a ‘‘respondent.’’ When it passes them to the Federal
Reserve for another nonmember depository institution,
it is referred to as a ‘‘correspondent.’’
As was explained in the Federal Financial Institutions
Examination Council’s letter to all insured commercial
banks in the United States in December 1980, this passthrough 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, 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 Schedule RC-A,
Item 2, ‘‘Balances due from depository institutions in the
U.S.’’
DEF-5

Definitions

In the balance sheet of the correspondent bank, the
pass-through reserve balances are to be treated as balances due to respondents and, to the extent that the
balances have actually been passed through to the Federal Reserve, as balances due from the Federal Reserve.
The balances due to respondents are to be reflected in

DEF-6

Schedule RC-E, Item 2, ‘‘Deposits of commercial banks
and other depository institutions in the U.S. (including
their IBFs).’’ Balances due from the Federal Reserve are
to be reflected in Schedule RC-A, Item 4, ‘‘Balances due
from Federal Reserve Banks.’’

Instructions for Preparation of Reporting Form FR 2886b
Definitions March 2006