Consolidated Reports of Condition and Income (Call Report)

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Draft Instructions

for New and Revised Call Report Items
for March 31, 2009

DRAFT
Draft Instructions

for New and Revised Call Report Items
for March 31, 2009

Contents
Schedule RI - Income Statement
Items 12,13, and 14
Schedule RI-A - Changes in Bank Equity Capital
Items 1,4, and 12
Schedule RC - Balance Sheet

Items 22, 26.c, 27.a, 27.b, 28, 29
Memorandum item 2

2
3

Schedule RC-C, Part I - Loans and Leases

Memorandum items 12 through 12.d

3

Schedule RC-R - Regulatory Capital

Items 1 and 6
Schedule RC- T - Fiduciary and Related Services
General Instructions

4

5

Glossary
Accounting Changes: Corrections of Accounting Errors
Loan Secured by Real Estate

5
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Draft Instructions

for New and Revised Call Report Items
for March 31, 2009
NOTE: The agencies have proposed that, effective March 31,2009, the following Call Report items will
be completed only by banks with $1 billion or more in total assets:

. Schedule RI, Memorandum item 2, "Income from the sale and servicing of mutual funds and annuities
(in domestic offices)."
. Schedule RC-B, Memorandum items 5.a through 5.f, "Asset-backed securities," on the FFIEC 031
report. (Banks with less than $1 billion in total assets are currently exempt from completing these
Memorandum items on the FFIEC 041 report.)
. Schedule RC-L, item 2.a, "Amount of financial standby letters of credit conveyed to others."
. Schedule RC-L, item 3.a, "Amount of performance standby letters of credit conveyed to others."

Schedule RI - Income Statement
NOTE: The instructions to item 7.d, "Other noninterest expense," will be revised to remove "Minority
interests in the net income or loss of the reporting bank's consolidated subsidiaries" from the list of types
of other noninterest expense.

Item No. Caption and Instructions
12 Net income (loss) attributable to bank and noncontrollng (minority) interests. Report
the sum of Schedule RI, items 10 and 11. If this amount is a net loss, enclose it in

parentheses.

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

14 Net income (loss) attributable to bank. Report Schedule RI, item 12, less item 13. If this
amount is a net loss, enclose it in parentheses.

Schedule RI-A - Changes in Bank Equity Capital
Item No. Caption and Instructions
1 Total bank equity capital most recently reported for the December 31, 20xx, reports of

Condition and Income. Report the bank's total equity capital balance as reported in the
Reports of Condition and Income for the previous calendar year-end after the effect of all
corrections and adjustments to total bank equity capital that were made in any amended
report(s) for the previous calendar year-end.
For banks opened since January 1 of the current calendar year, report a zero or the word
"none" in this item. Report the bank's opening (original) total equity capital in Schedule RI-A,
item 5, "Sale, conversion, acquisition, or retirement of capital stock, net."

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Schedule RI-A - Changes in Bank Equity Capital (cont.

Item No. Caption and Instructions
4 Net income (loss) attributable to bank. Report the net income (loss) attributable to the
bank for the calendar year-to-date as reported in Schedule RI, item 14, "Net income (loss)
attributable to bank."

**************
12 Total bank equity capital end of current period. Report the sum of items 3 through 11.
This item must equal Schedule RC, item 27.a, "Total bank equity capital."

Schedule RC - Balance Sheet

Item No. Caption and Instructions

22 Not applicable.

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EQUITY CAPITAL

26.c Other equity capital components. Report the carrying value of any treasury stock and of
any unearned Employee Stock Ownership Plan (ESOP) shares, which under generally
accepted accounting principles are reported in a contra-equity account on the balance sheet.
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 Glossary entry
for "treasury stock," AICPA Statement of Position 93-6, Employers' Accounting for Employee
Stock Ownership Plans, and APB Opinion No. 25.
27.a Total bank equity capitaL. Report the sum of items 23 through 26.c. This item must equal

Report of Income Schedule RI-A, item 12, "Total bank equity capital end of current period."

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

28 Total equity capitaL. Report the sum of items 27.a and 27.b.
29 Total

liabilties and equity capitaL. Report the sum of items 21 and 28. This item must

equal Schedule RC, item 12, ''Total assets."

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Schedule RC - Balance Sheet (cont.)

Memoranda

Item No. Caption and Instructions
2 Bank's fiscal year-end date. (To be reported only with the March Report of Condition.)

Report the bank's fiscal year-end date (month and day) for financial reporting purposes. For
example, a bank whose fiscal year ends on June 30 would report 0630 in this Memorandum
item.

Schedule RC-C, Part i - Loans and Leases
Memoranda

Item No. Caption and Instructions
12 Loans (not subject to the requirements of AICPA Statement of Position 03-3) and
leases held for investment that were acquired in business combinations with
acquisition dates in the current calendar year. Report in the appropriate subitem and

column the specified information on loans and leases held for investment purposes that were
acquired in a business combination, as prescribed under FASB Statement No. 141 (Revised),
Business Combinations (FAS 141(R)), with an acquisition date in the current calendar year.
The acquisition date is the date on which the bank obtains controi1 of the acquiree. If the
reporting bank was acquired in a transaction during the calendar year pursuant to
FAS 141(R) and push down accounting was applied, report the specified information on the
bank's loans and leases reported as held for investment after the application of push down
accounting. Exclude purchased impaired loans held for investment that are accounted for in
accordance with AICPA Statement of Position 03-3 (report information on such loans in
Schedule RC-C, Memorandum item 7). (For further information, see the Glossary entry for
"purchased impaired loans and debt securities.")

Column Instructions
Column A, Fair value of acquired loans and leases at acquisition date: Report in this
column the fair value of acquired loans and leases held for investment at the acquisition date
(see the Glossary entry for "fair value").

Column B, Gross contractual amounts receivable at acquisition date: Report in this
column the gross contractual amounts receivable, i.e., the total undiscounted amount of all
uncollected contractual principal and contractual interest payments on the receivable, both
past due, if any, and scheduled to be paid in the future, on the acquired loans and leases

held for investment at the acquisition date.
Column C, Best estimate at acquisition date of contractual cash flows not expected to
be collected: Report in this column the bank's best estimate at the acquisition date of the
portion of the contractual cash flows receivable on acquired loans and leases held for
investment that the bank does not expect to collect.

1 Control has the meaning of controllng financial interest in paragraph 2 of Accounting Research Bulletin No. 51,
Consolidated Financial Statements, as amended.

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Schedule RC-C, Part i - Loans and Leases (cont.)

Memoranda

Item No. Caption and Instructions
12.a Loans secured by real estate. Report in the appropriate column the specified amounts for
acquired loans secured by real estate (as defined for Schedule RC-C, part I, item 1) held for
investment that were acquired in a business combination occurring in the current calendar

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

12.b Commercial and industrial

for commercial and industrial

year.

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

year.
12.d All other loans and all leases. Report in the appropriate column the specified amounts
for all other loans and all

leases (as defined for Schedule RC-C, part I, items 2,3,7,8,9,

and 10) held for investment that were acquired in a business combination occurring in the

current calendar year.

Schedule RC-R - Regulatory Capital
Item No. Caption and Instructions
1 Total bank equity capitaL. Report the amount of the bank's total equity capital as reported

in Schedule RC, item 27.a.

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6 Qualifying noncontrollng (minority) interests in consolidated subsidiaries. Report the

portion of noncontrolling interests (also called minority interests) in consolidated subsidiaries
included in Schedule RC, item 27.b, that is eligible for inclusion in Tier 1 capital based on the
capital guidelines of the bank's primary federal supervisory authority. Generally, banks may
include noncontrolling interests in equity capital accounts (both common and noncumulative
perpetual preferred stocks) of consolidated subsidiaries unless such accounts would not
otherwise qualify for inclusion in Tier 1 capitaL. For example, a bank may not include
noncontrolling interests representing cumulative preferred stock in consolidated subsidiaries
since such preferred stock if issued directly by the bank would not be eligible for inclusion in
Tier 1 capitaL.

Exclude any noncontrolling interests in consolidated asset-backed commercial paper
conduits if the consolidated program assets are excluded from risk-weighted assets.

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Schedule RC-T - Fiduciary and Related Services
General Instructions
This schedule should be completed on a fully consolidated basis, i.e., including any trust company
subsidiary (or subsidiaries) of the reporting institution. For report dates through December 31,2008,
the information reported in Schedule RC-T, items 12 through 18, 19.a (on the FFIEC 031), and 20
through 23, on fiduciary and related services income and in all of Memorandum item 4 on fiduciary
settlements, surcharges, and other losses will not be made available to the public on an individual
institution basis. Beginning with the March 31,2009, report date, all of the information reported in
Schedule RC-T for each bank will be publicly available.

NOTE: Comparable changes would be made to the instructions for reporting Fiduciary and Related
Services Income and "Fiduciary settlements, surcharges, and other losses" in Schedule RC-T.

Glossary
Accounting Changes:
Corrections of accounting errors - A bank may become aware of an error in a Report of Condition or
Report of Income after it has been submitted to the appropriate federal bank regulatory agency through
either its own or its regulator's discovery of the error. An error in the recognition, measurement, or
presentation of an event or transaction included in a report for a prior period may result from:
. a mathematical mistake;
. a mistake in applying accounting principles; or
. the oversight or misuse of facts that existed when the Reports of Condition and Income for prior

periods were prepared.
According to SEC Staff Accounting Bulletin NO.1 08, Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB 108), the
effects of prior year errors or misstatements ("carryover effects") should be considered when
quantifying misstatements identified in current year financial statements. SAB 108 describes two
methods for accumulating and quantifying misstatements. These methods are referred to as the
"rollover" and "iron curtain" approaches:

. The rollover approach "quantifies a misstatement based on the amount of the error originating in
the current year income statement" only and ignores the "carryover effects" of any related prior
year misstatements. The primary weakness of the rollover approach is that it fails to consider the
effects of correcting the portion of the current year balance sheet misstatement that originated in
prior years.
. The iron curtain approach "quantifies a misstatement based on the effects of correcting the

misstatement existing in the balance sheet at the end of the current year, irrespective of the
misstatement's year(s) of origination." The primary weakness of the iron curtain approach is that it
does not consider the correction of prior year misstatements in the current year financial
statements to be errors because the prior year misstatements were considered immaterial in the

year(s) of origination. Thus, there could be a material misstatement in the current year income
statement because the correction of the accumulated immaterial amounts from prior years is not
evaluated as an error.
Because of the weaknesses in these two approaches, SAB 108 states that the impact of correcting all
misstatements on current year financial statements should be accomplished by quantifying an error
under both the rollover and iron curtain approaches and by evaluating the error measured under each

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Glossary (cont.)

Accounting Changes (cont.
approach. When either approach results in a misstatement that is material, after considering all
relevant quantitative and qualitative factors, an adjustment to the financial statements would be
required. Guidance on the consideration of all relevant factors when assessing the materiality of
misstatements is provided in SEC Staff Accounting Bulletin No. 99, Materialiy (SAB 99) (codified as
Topic 1.M. in the Codification of Staff Accounting Bulletins).
For purposes of the Reports of Condition and Income, all banks should follow the sound accounting
practices described in SAB 108 and SAB 99. Accordingly, banks should quantify the impact of
correcting misstatements, including both the carryover and reversing effects of prior year
misstatements, on their current year reports by applying both the "rollover" and "iron curtain"
approaches and evaluating the impact of the error measured under each approach. When the
misstatement that exists after recording the adjustment in the current year Reports of Condition and
Income is material (considering all relevant quantitative and qualitative factors), the appropriate prior
year report(s) should be amended, even though such revision previously was and continues to be
immaterial to the prior year report(s). If the misstatement that exists after recording the adjustment in
the current year Reports of Condition and Income is not material, then amending the immaterial errors
in prior year reports would not be necessary.

When a bank's primary federal bank regulatory agency determines that the bank's Reports of Condition
and Income contain a material accounting error, the bank may be directed to file amended condition
and/or income report data for each prior period that was significantly affected by the error. Normally,
such refiings will not result in restatements of reports for periods exceeding five years. If amended
reports are not required, the bank should report the effect of such corrections on retained earnings at
the beginning of the year, net of applicable income taxes, in Schedule RI-A, item 2, "Restatements due
to corrections of material accounting errors and changes in accounting principles," and in
Schedule RI-E, item 4. The effect of such corrections on income and expenses since the beginning of
the year in which the error is discovered should be reflected in each affected income and expense
account on a year-to-date basis in the next quarterly Report of Income to be filed and not as a direct

adjustment to retained earnings.
In addition, a change from an accounting principle that is neither accepted nor sanctioned by bank

supervisors to one that is acceptable to supervisors is to be reported as a correction of an error. When
such a change is implemented, the cumulative effect that applies to prior periods, calculated in the
same manner as described above for other changes in accounting principles, should be reported in
Schedule RI-A, item 2, "Restatements due to corrections of material accounting errors and changes in
accounting principles," and in Schedule RI-E, item 4. In most cases of this kind undertaken voluntarily
by the reporting bank in order to adopt more acceptable accounting practices, such a change will not
result in a request for amended reports for prior periods unless substantial distortions in the bank's
previously reported results are in evidence.
In the Reports of Condition and Income in which the correction of an error is first reflected, the bank is
encouraged to include an explanation of the nature and reason for the correction in Schedule RI-E,
item 7, "Other explanations," or in the "Optional Narrative Statement Concerning the Amounts Reported
in the Reports of Condition and Income."

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Glossary (cont.

Loan Secured by Real Estate: For purposes of these reports, a loan secured by real estate is a loan
secured wholly or substantially by a lien or liens on real property for which the lien or liens are central

to the extension of the credit - that is, the borrower would not have been extended credit in the same
amount or on terms as favorable without the lien or liens on real property. To be considered wholly or
substantially secured by a lien or liens on real property, the estimated value of the real estate collateral
(after deducting any more senior liens) must be greater than 50 percent of the principal amount of the
loan at origination. A loan satisfying the criteria above, except a loan to a state or political subdivision
in the U.S., is to be reported as a loan secured by real estate in the Reports of Condition and Income,
(1) regardless of whether the loan is secured by a first or a junior lien; (2) regardless of the department
within the bank or bank subsidiary that made the loan; (3) regardless of how the loan is categorized in
the bank's records; (4) and regardless of the purpose of the financing. Only in a transaction where a
lien or liens on real property (with an estimated collateral value greater than 50 percent of the loan's
principal amount at origination) have been taken as collateral solely through an abundance of caution
and where the loan terms as a consequence have not been made more favorable than they would
have been in the absence of the lien or liens, would the loan not be considered a loan secured by real
estate for purposes of the Reports of Condition and Income. In addition, when a loan is partially
secured by a lien or liens on real property, but the estimated value of the real estate collateral (after
deducting any more senior liens) is 50 percent or less of the principal amount of the loan at origination,
the loan should not be categorized as a loan secured by real estate. Instead, the loan should be
reported in one of the other loan categories used in these reports based on the purpose of the loan.

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