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

Federal Financial Institutions Examination Council

Instructions for Preparation of

Report of Assets and Liabilities
of U.S. Branches and Agencies
of Foreign Banks
Reporting Form FFIEC 002
Reissued September 2008

Contents for
FFIEC 002 Instructions

GENERAL INSTRUCTIONS
Who Must Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Where and When to Submit the Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Submission Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Scope of the Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures and Attestation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Release of Individual Branch and Agency Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amended Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Organization of Instruction Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preparation of Information to be Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounting Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Applicability of Generally Accepted Accounting Principles
to Regulatory Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Completion of the Report Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidation of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Negative Entries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign Currency Translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rounding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Verification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FFIEC 002
Contents September 2008

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LINE ITEM INSTRUCTIONS
Schedule RAL—Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule A—Cash and Balances Due from Depository Institutions . . . . . . . . . . . . . . . . . . . . . . .
Schedule C—Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part I. Loans and Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part II. Loans to Small Businesses and Small Farms . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule E—Deposit Liabilities and Credit Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule K—Quarterly Averages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule L—Derivatives and Off-Balance Sheet Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule M—Due From/Due To Related Institutions in the U.S. and in Foreign Countries .
Schedule N—Past Due, Nonaccrual, and Restructured Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule O—Other Data for Deposit Insurance Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule P—Other Borrowed Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule Q—Financial Assests and Liabilities Measured at Fair Value . . . . . . . . . . . . . . . . . . . .
Schedule S—Securitization and Asset Sale Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule T—Fiduciary and Related Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Contents

RAL- 1
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C- 1
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K- 1
L- 1
M- 1
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FFIEC 002
September 2008

Contents

GLOSSARY
Accounting Errors, Corrections of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounting Principles, Changes in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accretion of Discount on Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrual of Loss Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for Loan Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of Premiums on Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bankers Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks, U.S. and Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brokered Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Broker’s Security Draft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity or Bill-of-Lading Draft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Custody Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depository Institutions in the U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Domicile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Edge and Agreement Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Extinguishments of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fails . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal Funds Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federally-Sponsored Lending Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign Currency Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign Governments and Official Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hypothecated Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internal-Use Computer Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International Banking Facility (IBF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans Secured by Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market Value of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nonaccrual of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Offsetting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FFIEC 002
Contents September 2008

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Overdraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pass-through Reserve Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Placements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premiums and Discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reciprocal Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Related Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchase/Resale Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities Borrowing/Lending Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Servicing Asset and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shell Branches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Suspense Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Syndications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade Date and Settlement Date Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transactions with Related Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfers of Financial Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Territories and Possessions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation Allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
When-Issued Securities Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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APPENDIX
List of the Address and Telephone Number for Each Federal Reserve Bank . . . . . . . . . . . . . . .

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FFIEC 002
September 2008

INSTRUCTIONS FOR PREPARATION OF

Report of Assets and Liabilities
of U.S. Branches and Agencies
of Foreign Banks
FFIEC 002

General Instructions

cally should contact the appropriate district Federal
Reserve Bank for instructions.

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

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

September 2008

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

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

Scope of the Report
The report asks for data on the entire operation of the
branch or agency including its International Banking
Facility (‘‘IBF’’) if it has one, and also asks for separate
data on the IBF only.
In general, each U.S. branch or agency of a given foreign
bank is required to file a separate report. No consolidation of statements for multiple branches and agencies of a
given foreign bank is permitted, except that a foreign
bank may submit to the appropriate Federal Reserve
Bank a request to consolidate reports for two or more
offices, provided that (1) the offices are located in the
same city or metropolitan area and are in the same state
and Federal Reserve district, and (2) the consolidated
report does not combine agencies with branches or
insured branches with uninsured branches.
For purposes of this report, assets administered by the
reporting branch or agency’s trust department are not to
be consolidated into the reporting branch or agency’s
assets. However, information concerning the branch or
agency’s trust activities must be reported in Schedule T,
‘‘Fiduciary and Related Services,’’ beginning December 31, 2001. Assets held in or administered by the
branch or agency’s trust department are excluded from
all of the other schedules of this report except when trust
funds are deposited by the trust department of the
reporting institution. When such trust funds are deposited
in the reporting institution, they are to be reported as
deposit liabilities in Schedule E in the deposit category
appropriate to the beneficiary. Interest paid on such
deposits are to be reported as part of the reporting
institution’s unremitted profits reported on Schedule M.
GEN-2

However, there are two exceptions: (1) uninvested trust
funds (cash) held in the branch or agency’s trust department, which are not included in Schedule RAL, ‘‘Assets
and Liabilities,’’ of the reporting institution, must be
reported in Schedule O, ‘‘Other Data for Deposit Insurance Assessments;’’ and (2) the fees earned by the trust
department for its fiduciary activities and the operating
expenses of the trust department should be included
as part of the reporting institution’s unremitted profits
reported on Schedule M.
Custody Accounts: All custody and safekeeping activities (i.e., the holding of securities, jewelry, coin collections, and other valuables in custody or in safekeeping for
customers) are not to be reflected in Schedule RAL,
‘‘Assets and Liabilities,’’ unless cash funds held by the
branch or agency in safekeeping for customers are commingled with the general assets of the reporting institution. In such cases, the commingled funds would be
reported in Schedule E as deposit liabilities of the branch
or agency.
Similarly, securities held in custody or in safekeeping for
customers shall only be included in Schedule T of this
report. However, funds held by the reporting institution
in safekeeping for customers, except those held in the
reporting institution’s own trust department, are included
(and must be reported in Schedule E, Deposit Liabilities
and Credit Balances).

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

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

FFIEC 002
September 2008

General Instructions

Foreign Countries,’’ which is considered to be confidential by the federal supervisory authorities. The reports are
made available in their entirety to the relevant state
supervisory authorities.

General Instructions, the line item instructions, and the
Glossary (all of which are extensively cross-referenced)
must be used jointly.

Data reported in Schedule N, ‘‘Past Due, Nonaccrual, and
Restructured Loans,’’ will not be publicly disclosed on an
individual branch or agency basis for periods prior to
June 30, 2001.

Preparation of Information to be Reported

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

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

September 2008

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

Accounting Basis
Applicability of Generally Accepted Accounting Principles to Regulatory Reporting Requirements: For recognition and measurement purposes, the regulatory
reporting requirements applicable to the Report of Assets
and Liabilities of U.S. Branches and Agencies of Foreign
Banks shall conform to generally accepted accounting
principles (GAAP). When reporting events and transactions not covered in principle by the instructions for the
Report of Assets and Liabilities of U.S. Branches and
Agencies of Foreign Banks or authoritative GAAP standards, branches and agencies are encouraged to discuss
the event or transaction with their primary federal supervisory authority or with the Federal Reserve Bank to
which their reports are submitted.
Regardless of whether a branch or agency discusses a
reporting issue with its supervisory authority or the
GEN-3

General Instructions

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

Completion of the Report Form
The reports are to be submitted on the report forms
provided each quarter. Prior to or immediately following
the end of each quarter, each reporting institution will be
furnished with copies of the reporting form. Since, from
time to time, there may be minor changes in the report
form, forms from previous quarters should not be used.
Accounts and transactions shall be reported in the appropriate items on the reporting form as specified in the
instructions. No caption on the report form shall be
changed in any way.
GEN-4

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

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September 2008

General Instructions

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

FFIEC 002
General Instructions

September 2008

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

GEN-5

INSTRUCTIONS FOR THE PREPARATION OF THE

Assets and Liabilities
Schedule RAL

General Instructions

Items 1(b) and 1(c)

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

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

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

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

ASSETS
Item 1

Claims on nonrelated parties.

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

September 2008

Securities.

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

Schedule RAL

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

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

U.S. Treasury securities.

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

U.S. Government agency obligations.

Report the appropriate value of all U.S. Government
agency obligations (excluding mortgage-backed securities) not held in trading accounts.
For purposes of this item, a U.S. government agency is
defined as an instrumentality of the U.S. government
whose debt obligations are fully and explicitly guaranteed as to the timely payment of principal and interest by
the full faith and credit of the U.S. government.
Include, among others, debt securities (but not mortgagebacked securities) of the following U.S. government
agencies:
(1) Export–Import Bank (Ex-Im Bank)
(2) Federal Housing Administration (FHA)
(3) Government National Mortgage Association
(GNMA or Ginnie Mae)
Schedule RAL

FFIEC 002
September 2008

Schedule RAL

(4) Maritime Administration
(5) Small Business Administration (SBA)
Include such obligations as:
(1) Small Business Administration (SBA) ‘‘Guaranteed
Loan Pool Certificates,’’ which represent an undivided interest in a pool of SBA-guaranteed portion of
loans for which the SBA has further guaranteed the
timely payment of scheduled principal and interest
payments.
(2) Participation certificates issued by the Export–Import
Bank and the General Services Administration.
For purposes of this item government sponsored agencies
are defined as agencies originally established or chartered
by the U.S. government to serve public purposes specified by the U.S. Congress but whose debt obligations are
not explicitly guaranteed by the full faith and credit of the
U.S. government.
Include, among others, debt securities (but not mortgagebacked securities) of the following governmentsponsored agencies:
(1) Federal Agricultural Mortgage Corporation
(Farmer Mac)

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

(5) Federal Land Banks (FLBs)

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

(6) Federal National Mortgage Association (FNMA or
Fannie Mae)

Item 1(c)(2)

(2) Federal Farm Credit Banks
(3) Federal Home Loan Banks (FHLBs)
(4) Federal Home Loan Mortgage Corporation
(FHLMC or Freddie Mac)

(7) Financing Corporation (FICO)
(8) Resolution Funding Corporation (REFCORP)
(9) Student Loan Marketing Association (SLMA or
Sallie Mae)
(10) Tennessee Valley Authority (TVA)
(11) U.S. Postal Service
Exclude from U.S. government agency obligations:
(1) Loans to the Export–Import Bank and to federallysponsored lending agencies (report in Schedule C,
item 8, ‘‘All other loans’’). Refer to the Glossary
FFIEC 002
Schedule RAL

September 2008

Mortgage-backed securities.

Mortgage-backed securities include mortgage passthrough securities, collateralized mortgage obligations
(CMOs), real estate mortgage investment conduits
(REMICs), CMO and REMIC residuals, and stripped
mortgage-backed securities (such as interest-only strips
(IOs), principal-only strips (POs), and similar instruments).
In general, a mortgage pass-through security represents
an undivided interest in a pool that provides the holder
with a pro rata share of all principal and interest payments on the residential mortgages in the pool, and
includes certificates of participation in pools of residential mortgages.
SCHEDULE RAL-3

Schedule RAL

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

depository institutions, insurance companies, and state
and local housing authorities in the U.S.).
Item 1(c)(3)

Other asset-backed securities.

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

All other.

Report the appropriate value of all bonds, notes, debentures, commercial paper, and equity securities with
readily determinable fair values not held for trading that
cannot properly be reported in items 1(b) and 1(c)(1)
through 1(c)(3) above, including:
(1) securities issued by states and political subdivisions
in the U.S. (including industrial development bonds
that the branch or agency reports as securities for
other financial reporting purposes, as described more
fully in Schedule C, part I, item 8),
(2) obligations of business corporations,
(3) detached U.S. Government security coupons and
ex-coupon U.S. Government securities held as a
result of either their purchase or the branch or
agency’s stripping of such securities and Treasury
receipts such as CATS, TIGRs, COUGARs, LIONs,
and ETRs,
(4) corporate stock with readily determinable fair values,
Schedule RAL

FFIEC 002
September 2008

Schedule RAL

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

September 2008

Item 1(d)(1)

Federal funds sold

Federal funds sold are immediately available funds lent
under agreements or contracts that mature in one business day or roll over under a continuing contract, excluding such funds lent in the form of securities purchased
under agreements to resell (which should be reported in
Schedule RAL, item 1(d)(2)) and overnight lending for
commercial and industrial purposes (which generally
should be reported in Schedule RAL, item 1(e). Transactions that are to be reported as federal funds sold may be
secured or unsecured or may involve an agreement to
resell loans or other instruments that are not securities.
Immediately available funds are funds that the purchasing institution can either use or dispose of on the same
business day that the transaction giving rise to the receipt
or disposal of the funds is executed. A continuing
contract, regardless of the terminology used, is an agreement that remains in effect for more than one business
day, but has no specified maturity and does not require
advance notice of the lender or the borrower to terminate.
Report federal funds sold on a gross basis; i.e., do not net
them against federal funds purchased, except to the
extent permitted under FASB Interpretation No. 39.
Also exclude from fed funds sold:
(1) Sales of so-called ‘‘term federal funds’’ (as defined in
the Glossary entry for ‘‘federal funds transactions’’)
(report in Schedule RAL item 1.e.).
(2) Security resale agreements that have an original
maturity of one business day or roll over under a
continuing contract, if the agreement requires the
bank to resell the identical security purchased or a
security that meets the definition of substantially the
same in the case of a dollar roll (report in Schedule
RAL, item 1(d)(2), ‘‘Securities purchased under
agreements to resell’’).
(3) Deposit balances from a Federal Home Loan Bank
(report as balances due from depository institutions
in RAL, item 1(a).
(4) Lending transactions in foreign offices involving
immediately available funds with an original maturity of one business day or under a continuing
contract that are not security resale agreements
(report in RAL, item 1.e).
For further information, see the Glossary entry for ‘‘federal funds transactions.’’
SCHEDULE RAL-5

Schedule RAL

Item 1.d.(1)a. Federal Funds sold with commercial
banks in the U.S.
In column A, report federal funds sold (as defined above)
to all non-related commercial banks domiciled in the U.S.
For purposes of this schedule, commercial banks include:
(1) national banks;

NOTE: In the IBF column, report federal funds sold to:

(2) state-chartered commercial banks;
(3) trust companies that perform a commercial banking
business;

Item 1.d.(1)c.

(4) industrial banks;
(5) private or unincorporated banks;
(6) International Banking Facilities (IBFs) of U.S. banking institutions;
(7) Edge and Agreement corporations; and
(8) U.S. branches and agencies of foreign banks (including their IBFs).
For purposes of this schedule, the term ‘‘U.S. Branches
and agencies of foreign banks’’ covers:
(1) the U.S. branches and agencies of other foreign
banks;
(2) the U.S. branches and agencies of foreign official
banking institutions, including central banks, nationalized banks, and other banking institutions owned
by foreign governments; and
(3) investment companies that are chartered under Article
XII of the New York State banking law and that are
majority-owned by one or more nonrelated foreign
banks.
NOTE: IBFs are to report in column B, federal funds sold
to:
(1) IBFs of all nonrelated commercial banks in the U.S.,
including IBFs of U.S. branches and agencies of
foreign banks; and
(2) non-related U.S. and foreign commercial banks domiciled in Puerto Rico and in the U.S. territories and
possessions, including branches and agencies of other
foreign banks located in Puerto Rico and in the U.S.
territories and possessions.
.
Item 1.d.(1)b. Federal Funds sold with nonbank
brokers and dealers in securities.
In column A, report federal funds sold (as defined above)
to nonbank brokers and dealers in securities.
SCHEDULE RAL-6

(1) persons or other nonbank entities domiciled in the
U.S. and;
(2) persons domiciled in foreign countries.
Federal Funds sold with others.

In column A, report federal funds sold (as defined above)
to nonrelated institutions not covered in item 1.d.(1)a or
1.d.(1)b, such as other depository institutions, state and
local governments, agencies of the U.S. Government,
banks in foreign countries (including branches and subsidiaries of U.S. banks), and any other nonrelated institution or organization located in the U.S. or abroad.
NOTE: In the IBF column, report federal funds sold to:
(1) IBFs of all nonrelated depository institutions in the
U.S., including IBFs of U.S. branches and agencies of
foreign banks;
(2) nonrelated U.S. and foreign depository institutions
domiciled in Puerto Rico and in the U.S. territories
and possessions, including branches and agencies of
other foreign banks located in Puerto Rico and the
U.S. territories and possessions; and
(3) IBFs of all nonrelated depository institutions other
than commercial banks.
Item 1(d)(2) Securities purchased under
agreements to resell.
Securities purchased under agreements to resell include:
(1) Securities resale agreements, regardless of maturity,
if the agreement requires the bank to resell the
identical security purchased or a security that meets
the definition of substantially the same in the case of
a dollar roll.
(2) Purchases of participations in pools of securities,
regardless of maturity.
Report securities purchased under agreements to resell on
a gross basis, i.e., do not net them against securities sold
under agreements to repurchase, except to the extent
permitted under FASB Interpretation No. 41.
Exclude from items 1(d)(2)a and 1(d)(2)b the following:
Schedule RAL

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Schedule RAL

(1) Resale agreements involving assets other than securities (report in Schedule RAL, item 1(d)(1), ‘‘Federal funds sold,’’ or item 1(e), ‘‘Loans, net of
unearned income’’ as appropriate, depending on the
maturity and office location of the transaction).
(2) Due bills representing purchases of securities or
other assets by the branch or agencies that have not
been delivered and similar instruments, whether collateralized or uncollateralized (report in Schedule
RAL, item 1(e)). See the Glossary entry for ‘‘due
bills.’’
(3) So-called yield maintenance dollar repurchase agreements (see the Glossary entry for ‘‘repurchase/resale
agreements’’).
For further information, see the Glossary entry for
repurchase/resale agreements.
Item 1.d.(2)a. Securities purchased under
agreements to resell with commercial banks in the
U.S.
In column A, report securities purchased under agreements to resell (as defined above) with all non-related
commercial banks domiciled in the U.S. For purposes of
this schedule, commercial banks include:
(1) national banks;

(2) the U.S. branches and agencies of foreign official
banking institutions including central banks, nationalized banks, and other banking institutions owned
by foreign governments; and
(3) investment companies that are chartered under Article
XII of the New York State banking law and that are
majority-owned by one or more nonrelated foreign
banks.
NOTE: IBFs are to report in column B, securities purchased under agreements to resell with:
(1) IBFs of all nonrelated commercial banks in the U.S.,
including IBFs of U.S. branches and agencies of
foreign banks; and
(2) non-related U.S. and foreign commercial banks domiciled in Puerto Rico and in the U.S. territories and
possessions, including branches and agencies of other
foreign banks located in Puerto Rico and in the U.S.
territories and possessions.
Item 1.d.(2)b. Securities purchased under
agreements to resell with nonbank brokers and
dealers in securities.
In column A, report securities purchased under agreements to resell (as defined above) with nonbank brokers
and dealers in securities.

(2) state-chartered commercial banks;

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

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

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

(4) industrial banks;
(5) private or unincorporated banks;
(6) International Banking Facilities (IBFs) of U.S. banking institutions;

(2) persons domiciled in foreign countries.
Item 1.d.(2)c. Securities purchased under
agreements to resell with others.

For purposes of this schedule, the term ‘‘U.S. Branches
and agencies of foreign banks’’ covers:

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

(1) the U.S. branches and agencies of other foreign
banks;

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

(7) Edge and Agreement corporations; and
(8) U.S. branches and agencies of foreign banks (including their IBFs).

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September 2008

SCHEDULE RAL-7

Schedule RAL

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

that are held for sale. Available-for-sale securities should
be reported in Schedule RAL, item 1(b) or 1(c), and in
Schedule RAL, Memorandum items 3 and 4. Loans and
leases that are held for sale should be reported in
Schedule RAL, item 1(e), and in Schedule C.
Item 1(f)(1) Trading assets: U.S. Treasury and
Agency securities
Report the fair value of all U.S. Treasury securities and
U.S. Government agency and corporation obligations
held for trading by the reporting branch or agency.

Loans, net of unearned income.

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

Item 1(f)(2)

Item 1(f)

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

Trading assets.

Branches and agencies that (a) regularly underwrite or
deal in securities; interest rate, foreign exchange rate,
commodity, equity, and credit derivative contracts; other
financial instruments; and other assets for resale; (b)
acquire or take positions in such items principally for the
purpose of selling in the near term or otherwise with the
intent to resell in order to profit from short-term price
movements; or (c) acquire or take postitions in such
items as an accommodation to customers or for other
trading purposes shall report in items 1(f)(1) and 1(f)(2)
the value of such assets or positions on the report date.
Assets and other financial instruments held for trading
shall be consistently valued at fair value. See the Glossary entry for ‘‘trading account’’ for further information.
Trading assets also include the amount of revaluation
gains (i.e., assets) from the ‘‘marking to market’’ of
derivative contracts held for trading purposes. Revaluation gains and losses (i.e., assets and liabilities) from the
‘‘marking to market’’ of the reporting branch or agency’s
derivative contracts with the same counterparty that meet
the criteria for a valid right of setoff contained in FASB
Interpretation No. 39 (e.g., these contracts subject to a
qualifying master netting agreement) may be reported on
a net basis using this item and Schedule RAL, item 4(e),
‘‘Trading liabilities,’’ as appropriate. For further information, see the Glossary entry for ‘‘offsetting.’’
Do not include in this item the carrying value of any
securities that are available for sale or any loans or leases
SCHEDULE RAL-8

Trading assets: other trading assets

Report the fair value of all other assets held for trading by
the reporting branch or agency. Other trading assets
include but are not limited to:

(2) other bonds, notes, and debentures;
(3) certificates of deposit;
(4) commercial paper;
(5) bankers acceptances; and
(6) loans.
Item 1(g)

Not applicable.

Item 1(h) Other assets (including other claims on
nonrelated parties).
Report the total of all other claims on related nondepository and nonrelated parties, and other assets, which
cannot properly be reported in Asset items 1(a) through
1(g) of this schedule.
Include:
(1) Income earned or accrued but not collected on
loans, securities, and other interest-bearing assets.
(2) Prepaid expenses (i.e., those applicable as a charge
against operations in future periods).
(3) Accrued interest on securities purchased.
(4) Cash items not conforming to the definition of
‘‘Cash items in process of collection’’ found in the
instructions to Schedule A, item 1.
Schedule RAL

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(5) Credit or debit card sales slips in process of collection until the reporting branch or agency has been
notified that it has been given credit (thereafter
report in Schedule A, item 3 or 4, as appropriate).
(6) Derivative instruments with nonrelated parties that
have a positive fair value that are held for purposes
other than trading.
(7) Purchased computer software, net of accumulated
amortization, and unamortized costs of computer
software to be sold, leased, or otherwise marketed
capitalized in accordance with the provisions of
FASB Statement No. 86.
(8) Bullion not held for trading (e.g., gold or silver).
(9) Original art objects, including paintings, antique
objects, and similar valuable decorative articles
(report at cost, unless there has been a decline in
value, judged to be other than temporary, in which
case the object should be written down to its fair
value).
(10) Cash surrender value of life insurance policies for
which the branch or agency is the beneficiary.
(11) The book value, less accumulated depreciation or
amortization, of all premises, equipment, furniture
and fixtures. Any method of depreciation conforming to acceptable accounting principles may be
used. Do not deduct mortgages or other liens on
such property (report in Liability item 4(f)).
Include:
(a) Premises that are actually owned by the reporting institution and that are entirely or partly
occupied (or are to be occupied, if under construction) by the reporting institution.
(b) Leasehold improvements, vaults, and fixed
machinery and equipment.
(c) Remodeling costs to existing premises, real
estate acquired and intended to be used for
future expansion, and parking lots, whether
adjoining or not adjoining the reporting institution’s premises, that are owned by the reporting
institution and that are used by its customers or
employees.
(d) All furniture, fixtures and movable equipment.
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September 2008

(e) The amounts assigned to leases acquired in
purchase and assumption transactions.
(f) The amount of stocks and bonds that indirectly
represent premises, equipment, furniture or
fixtures.
(g) The amount of capital lease property (with the
reporting institution as lessee)—premises, furniture, fixtures, and equipment. See the discussion of ‘‘accounting with branch or agency as
lessee’’ contained in the ‘‘lease accounting’’
section of the Glossary.
(12) Automobiles, boats, equipment, appliances, real
estate and similar property repossessed or otherwise acquired for debts previously contracted, even
if the branch or agency has not yet received title to
the property.
(13) All real estate owned other than premises and
foreclosed real estate, net of accumulated depreciation and other reserves and allowances, if any.
Foreclosed real estate includes real estate acquired
in any manner for debts previously contracted and
real estate collateral underlying a loan when the
branch or agency has obtained physical possession
of the collateral, regardless of whether formal
foreclosure proceedings have been instituted against
the borrower.
NOTE: Foreclosed real estate received in full or
partial satisfaction of a loan should be recorded at
the fair value less cost to sell of the property at the
time of foreclosure. This amount becomes the
‘‘cost’’ of the foreclosed real estate. When foreclosed real estate is received in full satisfaction of a
loan, the amount, if any, by which the recorded
amount of the loan exceeds the fair value less cost
to sell of the property is a loss which must be
recognized at the time of foreclosure. The amount
of any senior debt (principal and interest) (to a
nonrelated party) to which foreclosed real estate is
subject at the time of foreclosure must be reported
as a liability in Schedule RAL, item 4(f), ‘‘Other
liabilities (to nonrelated parties).’’
(14) Customers’ liability for deferred payment letters of
credit.
(15) The right to receive payment from the short sales
of securities. (See also the instructions to Schedule RAL, item 4(f).)
SCHEDULE RAL-9

Schedule RAL

(16) Historical cost of equity securities that do not have
readily determinable fair values. These securities
are outside the scope of FASB Statement No. 115,
‘‘Accounting for Certain Investments in Debt and
Equity Securities.’’
(17) All other assets not specifically mentioned herein
nor in Asset items 1(a) through 1(g), such as items
temporarily held in suspense accounts. See the
entry for ‘‘suspense accounts’’ in the Glossary.
(18) The liability to the reporting institution of its
customers on drafts and bills of exchange that have
been accepted by the reporting institution, or its
agents, and that are outstanding (that is, not held by
the reporting branch or agency) on the date of the
report. Amounts reportable in Liability item 4.f.,
‘‘Other liabilities to nonrelated parties’’ cannot be
netted against this item or vice versa. Similarly,
participations in acceptances—regardless of form
or terminology—cannot be netted from this item.
For further information, see the Glossary entry for
‘‘bankers acceptances.’’
Exclude the following from this item:
(1) All assets due from or claims upon related depository
institutions which are to be reflected in ‘‘Net due
from’’ (item 2) or ‘‘Net due to’’ (item 5) depending
upon the overall due from/to position of the reporting
branch or agency vis-a`-vis its related depository
institutions.
(2) Holdings of bills representing purchases of securities
or other assets that have not yet been delivered. Such
holdings are to be reported in Loans, item 1(e).
(3) Deferred tax assets. (See the Glossary entry for ‘‘U.S.
income taxes’’).
Item 1(i)

Total claims on nonrelated parties.

Report in this item the sum of items 1(a) through 1(h).
Item 2 Net due from related depository
institutions.
All balances and positions due from and due to the head
office and related depository institutions should be
reported as a single net amount. If that single net amount
is a net due from, it should be entered in this item; if the
single net amount is a net due to, it should be entered in
Liability item 5. (Thus, there should be a positive amount
reported in either item 2 or item 5, but not in both items,
SCHEDULE RAL-10

and neither item should show negative amounts.) The
positions reported in item 2 or 5 should reflect all
balances due from and due to the head office and related
depository institutions wherever located including unremitted profits, any statutory or regulatory capital requirement, and any reserve accounts.
Item 2(a) For the reporting branch or agency
including its IBF.
Report the net balances due from the head office and
other related depository institutions of the reporting
branch or agency, including its IBF. This balance is
calculated by subtracting item 1(i), column A, ‘‘Total
claims on nonrelated parties,’’ from item 4(g), column A,
‘‘Total liabilities to nonrelated parties,’’ if item 4(g) is
greater than item 1(i); otherwise, enter zero in this item.
Item 2(b)
agency.

For the IBF of the reporting branch or

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

Total assets.

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

LIABILITIES
Item 4(a)

Total deposits and credit balances.

Report in column A the sum of the amounts reported
in Schedule E, item 7, columns A, C, and D. Report in
Schedule RAL

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Schedule RAL

column B the amount reported in Schedule E, item 7,
column D. Detailed definitions of deposit items are to be
found in the instructions for Schedule E.
Item 4(b)(1)

Federal funds purchased.

Federal funds purchased are immediately available funds
borrowed under agreements or contrats that mature in
one business day or roll over under a continuing contract,
excluding such funds borrowed in the form of securities
sold under agreements to repurchase (which should be
reported in Schedule RAL, item 4(b)(2)) and Federal
Home Loan Advances (which should be reported in
Schedule RAL item 4.c.). Transactions that are to be
reported as federal funds purchased ma be secured or
unsecured or may involved an agreement to repurchase
loans or other instruments that are not securities.
Immediately available funds are funds that the purchasing institution can either use or dispose of on the same
business day that the transaction giving rise to the receipt
or disposal of the funds is executed. A continuing
contract, regardless of the terminology used, is an agreement that remains in effect for more than one business
day, but has no specified maturity and does not require
advance notice of the lender or the borrower to terminate.
Report federal funds purchased on a gross basis; i.e., do
not net them against federal funds sold, except to the
extent permitted under FASB Interpretation No. 39.

(4) Borrowing transactions in foreign offices involving
immediately available funds with an original maturity of one business day or under a continuing
contract that are not security repurchase agreements
(report in Schedule RAL item 4.c.).
For further information, see the Glossary entry for ‘‘federal funds transactions.’’
Item 4.b.(1)a. Federal Funds purchased with
commercial banks in the U.S.
In column A, report federal funds purchased (as defined
above) from all non-related commercial banks domiciled
in the U.S. For purposes of this schedule, commercial
banks include:
(1) national banks;
(2) state-chartered commercial banks;
(3) trust companies that perform a commercial banking
business;
(4) industrial banks;
(5) private or unincorporated banks;
(6) International Banking Facilities (IBFs) of U.S. banking institutions;
(7) Edge and Agreement corporations; and

Exclude from items 4(b)(1)a and 4(b)(1)b:’’

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

(1) Purchases of so-called ‘‘term federal funds’’ (as
defined in the Glossary entry for ‘‘federal funds
transactions’’) (report in Schedule RAL item 4.c.).

For purposes of this schedule, the term ‘‘U.S. Branches
and agencies of foreign banks’’ covers:

(2) Security repurchase agreements that have an original
matrity of one business day or roll over under a
continuing contract, if the agreement requires the
bank to repurchase the identical secruity sold or a
security that meet the definition of substantially the
same in the case of a dollar roll (report in Schedule
RAL, item 4(b)(2), ‘‘Securities sold under agreements to repurchase’’).
(3) Borrowings from a Federal Home Loan Bank or a
Federal Reserve Bank (report those in those in the
form of securities repurchase agreements in Schedule, RAL, item 4(b)(2), and all other borrowings in
Schedule RAL, item 4.c.
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September 2008

(1) the U.S. branches and agencies of other foreign
banks;
(2) the U.S. branches and agencies of foreign official
banking institutions, including central banks, nationalized banks, and other banking institutions owned
by foreign governments; and
(3) investment companies that are chartered under Article
XII of the New York State banking law and that are
majority-owned by one or more nonrelated foreign
banks.
NOTE: IBFs are to report in column B, federal funds
purchased from:
SCHEDULE RAL-11

Schedule RAL

(1) IBFs of all nonrelated commercial banks in the U.S.,
including IBFs of U.S. branches and agencies of
foreign banks; and
(2) non-related U.S. and foreign commercial banks domiciled in Puerto Rico and in the U.S. territories and
possessions, including branches and agencies of other
foreign banks located in Puerto Rico and in the U.S.
territories and possessions.
Item 4.b.(1)b.
others.

Federal Funds purchased with

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

Securities sold under agreements to

Securities sold under agreements to repurchase include:
(1) Securities repurchase agreements, regardless of maturity, if the agreement requires the bank to repurchase
the identical security sold or a security that meets the
definition of substantially the same in the case of a
dollar roll.
(2) Sales of participations in pools of securities, regardless of maturity.
SCHEDULE RAL-12

Report securities sold under agreements to repurchase on
a gross basis, i.e., do not net them against securities
purchased under agreements to resell, except to the
extent permitted under FASB Interpretation No. 41.
Exclude from items 4(b)(2)a and 4(b)(2)b the following:
(1) Repurchase agreements involving assets other than
securities (report in Schedule RAL, item 4(b)(1),
‘‘Federal funds purchased,’’ or Schedule RAL, item
4.c., ‘‘Other borrowed money,’’ as appropriate,
depending on the maturity and office location of the
transaction).
(2) Borrowings from a Federal Home Loan Bank or a
Federal Reserve Bank other than in the form of
security repurchase agreements (report in Schedule
RAL, item 4.c. ).
(3) Obligations under due bills that resulted when the
bank sld securities or other assets and received
payment, but has not yet delivered the assets, and
similar obligations, whether collateralized or uncollateralized (report in Schedule RAL, item 4.c.). See
the Glossary entry for ‘‘due bills.’’
(4) Yield maintenance dollar repurchase agreements (see
the Glossary entry for ‘‘repurchase/resale agreements’’).
For further information, see the Glossary entry for
‘‘repurchase/resale agreements.’’
Item 4.b.(2)a. Securities sold under agreements to
repurchase with commercial banks in the U.S.
In column A, report securities sold under agreements to
repurchase (as defined above) with all non-related commercial banks domiciled in the U.S. For purposes of this
schedule, commercial banks include:
(1) national banks;
(2) state-chartered commercial banks;
(3) trust companies that perform a commercial banking
business;
(4) industrial banks;
(5) private or unincorporated banks;
(6) International Banking Facilities (IBFs) of U.S. banking institutions;
(7) Edge and Agreement corporations; and
Schedule RAL

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Schedule RAL

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

and possessions, including branches and agencies of
other foreign banks located in Puerto Rico and the
U.S. territories and possessions;
(3) IBFs of all nonrelated depository institutions other
than commercial banks;
(4) persons or other nonbank entities domiciled in Puerto
Rico or in the U.S. territories and possessions; and
(5) persons domiciled in foreign countries.
Item 4(c)

Other borrowed money.

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

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

Not applicable.

NOTE: IBFs are to report in column B, securities sold
under agreements to repurchase with:

Item 4(e)

Trading liabilities.

(1) IBFs of all nonrelated commercial banks in the U.S.,
including IBFs of U.S. branches and agencies of
foreign banks; and
(2) non-related U.S. and foreign commercial banks domiciled in Puerto Rico and in the U.S. territories and
possessions, including branches and agencies of other
foreign banks located in Puerto Rico and in the U.S.
territories and possessions.
Item 4.b.(2)b. Securities sold under agreements to
repurchase with others.
In column A, report securities sold under agreements to
repurchase (as defined above) with nonrelated institutions not covered in item 4.b.(2)a., such as other depository institutions, state and local governments, agencies of
the U.S. Government, banks in foreign countries (including branches and subsidiaries of U.S. banks), and any
other nonrelated institution or organization located in the
U.S. or abroad.
NOTE: In the IBF column, report securities sold under
agreements to repurchase with:
(1) IBFs of all nonrelated depository institutions in the
U.S., including IBFs of U.S. branches and agencies of
foreign banks;
(2) nonrelated U.S. and foreign depository institutions
domiciled in Puerto Rico and in the U.S. territories
FFIEC 002
Schedule RAL

September 2008

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

Other liabilities (to nonrelated parties).

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

Schedule RAL

(2) Amounts in transit to other institutions. Report the
amount of drafts, or other authorizations to charge
the reporting institution’s account at another institution, until the date when the other institution would
ordinarily debit the reporting institution’s account.
(3) Liability for deferred payment letters of credit.
(4) The amount of mortgages, liens, or other encumbrances on premises and fixed assets and on other
real estate owned for which the reporting institution
is liable.
(5) The reporting institution’s liability on capitalized
leased property. (See ‘‘lease accounting’’ in the
Glossary.)
(6) Deferred gains from sale–leaseback transactions.
(7) Accounts payable.
(8) Unamortized loan fees, other than those that represent an adjustment of the interest yield, if material.
(9) Derivative contracts with nonrelated parties that have
a negative fair value that are held for purposes other
than trading. For further information, see the Glossary entry for ‘‘derivative contracts.’’
(10) The amount of drafts and bills of exchange accepted
by the reporting branch or agency, or by its agents,
that are outstanding and that are not owned by the
reporting branch or agency on the date of the
report. Amounts reportable in item 1.h., ‘‘Other
assets including other claims on nonrelated parties’’
cannot be netted against this item and vice versa.
Similarly, participations in acceptances—regardless
of form or terminology—cannot be netted from this
item. For further information, see the Glossary
entry for ‘‘bankers acceptances.’’
Exclude the following accounts, which should be reported
as ‘‘deposit liabilities’’ in the appropriate Item of Schedule E.
(1) Proceeds from the sale of savings bonds.
(2) Withheld taxes, social security taxes, sales taxes, and
similar items.
(3) Mortgage and other escrow funds, such as funds
received for payment of taxes, insurance, etc., sometimes described as mortgagors’ deposits, mortgage
credit balances, or suspense or escrow accounts.
SCHEDULE RAL-14

(4) Undisbursed loan funds (proceeds of loans for which
borrowers are liable and pay interest thereon, including funds deposited by the borrowers in such
accounts).
(5) Funds held as dealer reserves. See the Glossary entry
for ‘‘dealer reserve account’’ for the definition of this
term.
Also exclude the following from this item:
(1) All liabilities due to related depository institutions
which are to be reflected in net due from (item 2) or
net due to (item 5) depending upon the overall due
from/due to position of the reporting branch or
agency vis-a`-vis its related depository institutions.
(2) Due bills or similar instruments representing securities sold by the reporting institution but not yet
delivered to customers. (Report in Schedule P—
‘‘Other borrowed money.’’)
(3) Liabilities incurred by short sales of securities that
are not in the form of due bills or similar instruments.
Report in Schedule RAL, item 4(e), ‘‘Trading liabilities.’’ The right to receive payment on the sale of the
securities is to be reported in Schedule RAL, item 1(h).
(4) Deferred tax liabilities. (See the Glossary entry for
‘‘U.S. income taxes’’).
NOTE: For the branch or agency’s IBF, report in column B all IBF liabilities to related nondepository and
nonrelated depository institutions that are not reported in
items 4(a), 4(b), and 4(c) above.
Item 4(g)

Total liabilities to nonrelated parties.

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

Net due to related depository institutions.

All balances and positions due from and due to the
head office and related depository institutions should be
reported as a single net amount. If that single net amount
is a net due to, it should be entered in this item; if the
single net amount is a net due from, it should be entered
in Asset item 2. (Thus, there should be a positive amount
reported in either item 2 or 5, but not in both items, and
neither item should show negative amounts.) The positions reported in item 2 or 5 should reflect all balances
due from and due to the head office and related depository institutions wherever located including unremitted
Schedule RAL

FFIEC 002
September 2008

Schedule RAL

profits, any statutory or regulatory capital requirement,
and any reserve accounts.
Item 5(a) For the reporting branch or agency
including its IBF.
Report the net balances due to the head office and other
related depository institutions of the reporting branch or
agency, including its IBF. This balance is calculated
by subtracting item 4(g), column A, ‘‘Total liabilities to
nonrelated parties,’’ from item 1(i), column A, ‘‘Total
claims on nonrelated parties,’’ if item 1(i) is greater than
item 4(g); otherwise, enter zero in this item.
Item 5(b)
agency.

For the IBF of the reporting branch or

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

Total liabilities.

Report the sum of items 4(g) and 5(a) for item 6, column A. For column B, item 6, report the sum of
items 4(g) and 5(b). These items must equal item 3,
‘‘Total assets,’’ column A or B, as appropriate.
NOTE: Because of the structure of this schedule and the
separate identification in item 2(b) and 5(b) of the net due
from or due to position of the reporting branch or agency’s IBF (if any) vis-a`-vis its establishing entity, head
office, and other related depository institutions, total
liabilities of the IBF only, as reported in column B,
item 6, may not be a component of total liabilities of the
reporting branch or agency, including its IBF, as reported
in column A, item 6. However, the total of IBF claims on
unrelated parties as reported in item 4(g), column B, is a
component of item 4(g), column A.

Memoranda
General Instructions for Memorandum Items 1, 2,
3, and 4
Memorandum items 1 through 4 are for additional information on the reporting branch or agency’s securities not
held for trading, i.e., those securities reported in Schedule
RAL, items 1(b) and 1(c). Two items are for held-toFFIEC 002
Schedule RAL

September 2008

maturity securities and two items are for available-forsale securities. Report the current fair (market) value and
amortized cost of held-to-maturity securities in Memorandum items 1 and 2, respectively. Report the current
fair (market) value and amortized cost of availablefor-sale debt securities in Memorandum items 3 and 4,
respectively. For equity securities with readily determinable fair values, fair (market) value is reported in Memorandum item 3 and historical cost (not amortized cost) is
reported in Memorandum item 4. See the Glossary entry
for ‘‘market value of securities’’ for a discussion of
acceptable valuation methods.
The sum of Memorandum items 2 and 3 must equal the
sum of items 1(b)(1), 1(b)(2), 1(c)(1), 1(c)(2), 1(c)(3),
and 1(c)(4) of Schedule RAL.
Exclude from Memorandum items 1 through 4 all securities held for trading. Securities held for trading are to be
reported in Schedule RAL, item 1(f), ‘‘Trading assets.’’
Also exclude equity securities that do not have readily
determinable fair values. These equity securities are to be
reported in Schedule RAL, item 1(h), ‘‘Other assets
(including other claims or nonrelated parties).’’
Amortized cost must include amortization of premium
and accretion of discount on securities purchased at other
than par or face value (including U.S. Treasury bills).
Memoranda Item Instructions
Item M1

Fair value of held-to-maturity securities.

Report the fair (market) value of held-to-maturity
securities.
Item M2 Amortized cost of held-to-maturity
securities.
Report the amortized cost of held-to-maturity securities.
Item M3

Fair value of available-for-sale securities.

Report the fair (market) value of available-for-sale debt
securities and for those equity securities with readily
determinable fair values.
Item M4 Amortized cost of available-for-sale
securities.
Report the amortized cost of available-for-sale debt
securities and the historical cost of equity securities with
readily determinable fair values.
SCHEDULE RAL-15

Schedule RAL

Item M5
Item M5.a

Loans held for trading.
Loans secured by real estate.

In column A, report in the appropriate subitem the total
fair value of loans secured by real estate (as defined for
Schedule C, part I, item 1) held for trading. In column B,
IBFs are to report in the appropriate subitem the total fair
value of loans secured by real estate (as defined for
Schedule C, part I, item 1) held for trading.
Item M5.a.(1) Construction, land development,
and other land loans.
Report the total fair value of construction, land development, and other land loans (as defined for Schedule C,
part I, item 1.a) held for trading.
Item M5.a.(2)

Secured by farmland.

Report the total fair value of loans secured by farmland
(as defined for Schedule C, part I, item 1.b) held for
trading.
Item M5.a.(3)
properties.

Secured by 1-4 family residential

Report in the appropriate subitem the total fair value of
all open-end and closed-end loans secured by real estate
(as defined for Schedule C, part I, item 1.c) held for
trading.
Item M5.a.(3)(a) Revolving, open-end loans
secured by 1-4 family residential properties and
extended under lines of credit.
Report the total fair value of revolving, open-end loans
secured by 1-4 family residential properties and extended
under lines of credit (as defined for Schedule C, part I,
item 1.c.(1)) held for trading.
Item M5.a.(3)(b) Closed-end loans secured by 1-4
family residential properties.
Report the total fair value of all closed-end loans secured
by real estate (as defined for Schedule C, part I, item
1.c.(2)) held for trading.
Item M5.a.(4) Secured by multifamily (5 or more)
residential properties.
Report the total fair value of loans secured by multifamily (5 or more) residential properties (as defined for
Schedule C, part I, item 1.d) held for trading.
SCHEDULE RAL-16

Item M5.a.(5)
properties.

Secured by nonfarm nonresidential

Report the total fair value of loans secured by nonfarm
nonresidential properties (as defined for Schedule C, part
I, item 1.e) held for trading.
Item M5.b.

Commercial and industrial loans.

Report the total fair value of commercial and industrial
loans (as defined for Schedule C, part I, item 4) held for
trading.
Item M5.c

Other loans.

Report the total fair value of all other loans held for
trading that cannot properly be reported in one of the
preceding subitems of this item 5. Such loans include
“Loans to depository institutions and acceptances of
other banks,” “Loans to financial institutions,” “Loans
for purchasing or carrying securities,” “Loans to foreign
governments and official institutions,” and “All other
loans” (as defined for Schedule C, part I, items 2, 3, 6, 7,
and 8).
Item M6 Unpaid principal balance of loans held
for trading.
Item M6.a

Loans secured by real estate.

In column A, report in the appropriate subitem the unpaid
principle balance of loans measured at fair value that are
secured by real estate reported in memorandum item 5. In
column B, IBFs are to report in the appropriate subitem
the unpaid principle balance of loans measured at fair
value that are secured by real estate reported in memorandum item 5.
Item M6.a.(1) Construction, land development,
and other land loans.
Report the unpaid principle balance of construction, land
development, and other land loans reported in memorandum item 5.a.(1).
Item M6.a.(2)

Secured by farmland.

Report the unpaid principle balance of loans secured by
farmland reported in memorandum item 5.a.(2).
Schedule RAL

FFIEC 002
September 2008

Schedule RAL

Item M6.a.(3)
properties.

Secured by 1-4 family residential

Report the unpaid principle balance in the appropriate
subitem of all open-end and closed-end loans secured by
real estate reported in memorandum item 5.a.(3).
Item M6.a.(3)(a) Revolving, open-end loans
secured by 1-4 family residential properties and
extended under lines of credit.
Report the unpaid principle balance of revolving, openend loans secured by 1-4 family residential properties
and extended under lines of credit reported in memorandum item 5.a.(3)(a).
Item M6.a.(3)(b) Closed-end loans secured by 1-4
family residential properties.
Report the unpaid principle balance of all closed-end
loans secured by real estate reported in memorandum
item 5.a.(3)(b).
Item M6.a.(4) Secured by multifamily (5 or more)
residential properties.
Report the unpaid principle balance of loans secured by
multifamily (5 or more) residential properties reported in
memorandum item 5.a.(4).
Item M6.a.(5)
properties.

Secured by nonfarm nonresidential

Report the unpaid principle balance of loans secured by
nonfarm nonresidential properties reported in memorandum item 5.a.(5).
Item M6.b

Commercial and industrial loans.

Report the unpaid principle balance of loans of commercial and industrial loans reported in memorandum item
5.b.
Item M6.c

Other loans.

Report the unpaid principle balance of all other loans
held for trading that cannot properly be reported in one of
the preceding subitems of this item 6. Such loans include
“Loans to depository institutions and acceptances of
other banks,” “Loans to financial institutions,” “Loans
for purchasing or carrying securities,” “Loans to foreign
governments and official institutions,” and “All other
loans” (as defined for Schedule C, part I, items 2, 3, 6, 7,
and 8) reported in memorandum item 5.c.
FFIEC 002
Schedule RAL

September 2008

Items M7 and M8

Structured notes.

Report in Memorandum items 7 and 8 all structured notes
included in the held-to-maturity and available-for-sale
accounts and reported in Schedule RAL, Memorandum
items 1 through 4 above. In general, structured notes are
debt securities whose cash flow characteristics (coupon
rate, redemption amount, or stated maturity) depend upon
one or more indices and/or that have embedded forwards
or options or are otherwise commonly known as ‘‘structured notes.’’ Include as structured notes any assetbacked securities (other than mortgage-backed securities)
which possess the aforementioned characteristics. Exclude
from structured notes all ‘‘inflation indexed’’ securities
issued by the U.S. Treasury.
Structured notes include, but are not limited to, the
following common structures:
(1) Floating rate debt securities whose payment of
interest is based upon a single index of a Constant
Maturity Treasury (CMT) rate or a Cost of Funds
Index (COFI).
(2) Step-up Bonds. Step-up securities initially pay the
investor an above-market yield for a short noncall
period and then, if not called, ‘‘step up’’ to a higher
coupon rate (which will be below current market
rates). The investor initially receives a higher yield
because of having implicitly sold one or more call
options. A step-up bond may continue to contain call
options even after the bond has stepped up to the
higher coupon rate. A multistep bond has a series of
fixed and successively higher coupons over its life.
At each call date, if the bond is not called, the coupon
rate increases.
(3) Index Amortizing Notes (IANs). IANs repay principal
according to a predetermined amortization schedule
that is linked to the level of a specific index (usually
the London Interbank Offered Rate—LIBOR—or a
specified prepayment rate). As market interest rates
increase (or prepayment rates decrease), the maturity
of an IAN extends, similar to that of a collateralized
mortgage obligation.
(4) Dual Index Notes. These bonds have coupon rates
that are determined by the difference between two
market indices, typically the CMT rate and LIBOR.
These bonds often have a fixed coupon rate for a
brief period, followed by a longer period of variable
rates, e.g., 8 percent fixed for two years, then the
SCHEDULE RAL-17

Schedule RAL

10-year CMT rate plus 300 basis points minus threemonth LIBOR.

Examples of such callable securities that should not be
reported as structured notes include:

(5) De-leveraged Bonds. These bonds pay investors
according to a formula that is based upon a fraction
of the increase or decrease in a specified index, such
as the CMT rate or the prime rate. For example, the
coupon might be the 10-year CMT rate multiplied
by 0.5, plus 150 basis points. The de-leveraging
multiplier (0.5) causes the coupon to lag overall
movements in market yields. A leveraged bond
would involve a multiplier greater than 1.

(1) Callable municipal and corporate bonds which have
single (or multiple) explicit call dates and then can be
called on any interest payment date after the
last explicit call date (i.e., they are continuously
callable).

(6) Range Bonds. Range bonds (or accrual bonds) pay
the investor an above-market coupon rate as long as
the reference rate is between levels established at
issue. For each day that the reference rate is outside
this range, the bonds earn no interest. For example, if
LIBOR is the reference rate, a bond might pay
LIBOR plus 75 basis points for each day that LIBOR
is between 3.5 and 5.0 percent. When LIBOR is less
than 3.5 percent or more than 5 percent, the bond
would accrue no interest.
(7) Inverse Floaters. These bonds have coupons that
increase as rates decline and decrease as rates rise.
The coupon is based upon a formula, such as 12 percent minus three-month LIBOR.
Exclude from structured notes floating rate debt securities
denominated in U.S. dollars whose payment of interest is
based upon a single index of a Treasury bill rate, the
prime rate, or LIBOR and which do not contain adjusting caps, adjusting floors, leverage, or variable
principal redemption. Furthermore, debt securities that
do not possess the aforementioned characteristics of a
structured note need not be reported as structured notes
solely because they are callable as of a specified date at a
specified price. In addition, debt securities that in the past
possessed the characteristics of a structured note, but
which have ‘‘fallen through’’ their structures (e.g., all of
the issuer’s call options have expired and there are no
more adjustments to the interest rate on the security),
need not be reported as structured notes.
Generally, municipal and corporate securities that have
periodic call options should not be reported as structured
notes. Although many of these securities have features
similar to those found in some structured notes (e.g.,
step-ups, which generally remain callable after a step-up
date), they are not commonly known as structured notes.
SCHEDULE RAL-18

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

Fair value of structured notes.

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

Amortized cost of structured notes.

Report the amortized cost of all structured notes included
in the held-to-maturity and available-for-sale accounts.
The amortized cost of these securities will have been
reported in Schedule RAL, Memorandum items 2 and 4
above.
Item M9 Assets under the reporting branch or
agency’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
Schedule RAL

FFIEC 002
September 2008

Schedule RAL

which the reporting branch or agency or a subsidiary
of the branch or agency acts as investment adviser. If
neither the branch or agency nor any subsidiary of the
branch or agency acts as investment adviser for a mutual
fund or annuity, the branch or agency should report a zero
or the word ‘‘none’’ in this item.
Mutual fund is the common name for an open-end
investment company whose shares are sold to the investing public. An annuity is an investment product, typically
underwritten by an insurance company, that pays either a
fixed or variable payment stream over a specified period
of time. Both proprietary and private label mutual funds
and annuities are established in order to be marketed
primarily to a branch or agency’s customers. A proprietary product is a product for which the reporting branch
or agency, or an affiliate of the reporting branch or
agency, acts as investment adviser and may perform
additional support services. In a private label product,
an unaffiliated entity acts as the investment adviser. The
identity of the investment adviser is normally disclosed
in the prospectus for a mutual fund or annuity. Mutual
funds and annuities that are not proprietary or private
label products are considered third party products.
For example, third party mutual funds and annuities
include products that are widely marketed by numerous
parties to the investing public and have investment
advisers that are not affiliated with the reporting branch
or agency.
Item M10 Revaluation gains on interest rate,
foreign exchange rate, and other commodity and
equity contracts held for trading purposes.
Report the amount of revaluation gains (i.e., assets)
from the ‘‘marking to market’’ of derivative contracts
held for trading purposes. Revaluation gains and losses
(i.e., assets and liabilities) from the ‘‘marking to market’’
of the reporting branch or agency’s derivative contracts
executed with the same counterparty that meet the criteria for a valid right of setoff contained in FASB Interpretation No. 39 (e.g., those contracts subject to a qualifying
master netting arrangement) may be reported on a net
basis using this Memorandum item and Memorandum
item 11 below, as appropriate.
Item M11 Revaluation losses on interest rate,
foreign exchange rate, and other commodity and
equity contracts held for trading purposes.
Report the amount of revaluation losses (i.e., liabilities)
from the ‘‘marking to market’’ of derivative contracts
FFIEC 002
Schedule RAL

September 2008

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

Not applicable.

Item M13

Pledged U.S. Government securities.

Report the amortized cost of all held-to-maturity securities and the fair value of all available-for-sale securities
included in Schedule RAL, item 1(b), above that are
pledged to secure deposits, repurchase transactions, or
other borrowings (regardless of the balance of the deposits or other liabilities against which the securities are
pledged), as performance bonds under futures or forward
contracts, or for any other purpose.
Item M14 If other assets including other claims on
nonrelated parties (item 1(h)) exceed 5 percent of
total assets (item 3), itemize and describe amounts
that exceed 25 percent of item 1(h).
The description of each of these amounts should not
exceed 50 characters in length (including spacing between
words).
Item M15 If other liabilities to nonrelated parties
(item 4(f)) exceed 5 percent of total liabilities
(item 6), itemize and describe amounts that exceed
25 percent of item 4(f).
The description of each of these amounts should not
exceed 50 characters in length (including spacing between
words).
Item M16 Number of full-time equivalent
employees of the branch or agency at end of
current period.
Report the number of full-time equivalent employees of
the branch or agency as of the report date (round to the
nearest whole number). For purposes of this item, a
branch or agency should include as employees individuals who, in form, are employed by an affiliate but who,
in substance, do substantially all of their work for the
reporting branch or agency. To convert the number of
SCHEDULE RAL-19

Schedule RAL

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

STATUTORY OR REGULATORY
REQUIREMENT

Item S1

Asset maintenance requirement.

Report the total amount of assets in the respondent’s
portfolio that is eligible to satisfy asset maintenance
requirements imposed by regulatory authorities other
than the FDIC. A state-chartered branch or agency must
report the amount required by state law or regulation.
(Where such requirements exist, the maintenance of
eligible assets is often stated in terms of 108 or 110 percent of a specific liability total.) FDIC-insured branches
should report assets maintained to satisfy the FDIC asset
maintenance requirement in item S3(b) below.
Item S2 Asset pledge requirement/Capital
equivalency deposit.
Report the total amount of assets pledged (principal
amount or market value, whichever is lower) or capital
equivalency deposit by the respondent to safeguard certain liabilities in accordance with federal or state requirements. A federally-licensed branch or agency must report
in this item the amount of assets pledged as specified by
Comptroller of the Currency regulation 12 C.F.R. 28.6. A
state-chartered branch or agency must report the amount
of assets pledged, security deposits or similar segregation
of assets as specified by the requirements of state law or
regulation.
Do not report here the amount of assets pledged solely
for deposit insurance purposes as required by the Federal
Deposit Insurance Corporation under Section 347.210 of
the FDIC’s Rules and Regulations or by similar regulation imposed by any state. Do not report here reserve
balances or special deposits maintained at the Federal
Reserve Bank under Regulation D.
Item S3

FDIC asset maintenance requirement.

Items S3(a) and S3(b) are to be completed by FDICinsured branches only.

As appropriate for the reporting institution.

Item S3(a) Average liabilities for the preceding
calendar quarter.

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

Report the average book value of the liabilities of the
branch for the calendar quarter preceding the quarterending on the report date, calculated in accordance with
Section 347.211 of the FDIC’s Rules and Regulations.
The average book value for a quarter is exclusive of
liabilities due to the parent bank’s head office, other
branches, agencies, offices, or wholly owned subsidiaries
and shall be, at the branch or agency’s option, either an

SCHEDULE RAL-20

Schedule RAL

FFIEC 002
September 2008

Schedule RAL

average of the balances as of the close of business for
each day for the quarter or an average of the balances as
of the close of business on each Wednesday during the
quarter. For days on which the branch is closed, the
amount outstanding from the previous business day is to
be used.

theFDIC asset maintenance requirement. The exclusions
from eligibility are specified in Section 347.211(b) of the
FDIC’s Rules and Regulations.

Item S3(b) Eligible assets as of the report date.
Report the total amount of assets in the respondent’s
portfolio as of the report date that is eligible to satisfy

FFIEC 002
Schedule RAL

September 2008

SCHEDULE RAL-21

INSTRUCTIONS FOR THE PREPARATION OF

Cash and Balances Due From
Depository Institutions
Schedule A

General Instructions
Amounts reported in this Schedule should exclude all
claims on the reporting institution’s head office and other
related depository institutions as defined under ‘‘related
institutions’’ in the Glossary.
The amounts reported in column A are for the reporting
branch or agency including its IBF, and those reported in
column B are for the reporting branch or agency’s IBF
only. If the reporting branch or agency has no IBF, no
amounts are to be reported in column B. The shaded
items in the IBF column reflect the fact that certain types
of assets are not permissible for IBFs (refer to the
Glossary entry for ‘‘International Banking Facility (IBF)’’
for a further discussion). Unless otherwise specified, the
item instructions pertain to both the reporting branch or
agency, including its IBF, and the IBF only. At times the
instructions may discuss assets that are permissible for
the branch or agency but not for the IBF. Report in the
IBF column only those permissible IBF assets.
For purposes of this report, deposit accounts ‘‘due from’’
other depository institutions that are overdrawn are to be
reported as borrowings in Schedule P, ‘‘Other borrowed
money,’’ except overdrawn ‘‘due from’’ accounts arising
in connection with checks or drafts drawn by the reporting branch or agency and drawn on, or payable at or
through, another depository institution either on a zerobalance account or on an account that is not routinely
maintained with sufficient balances to cover checks or
drafts drawn in the normal course of business during the
period until the amount of the checks or drafts is remitted
to the other depository institution (in which case, report
the funds received or held in connection with such checks
or drafts as deposits in Schedule E until the funds are
remitted). For further information, refer to the Glossary
entry for ‘‘overdraft.’’
Exclude from this schedule:
FFIEC 002
Schedule A

September 2008

(1) Deposit accounts ‘‘due to’’ other depository institutions that are overdrawn (report in Schedule C,
item 2, ‘‘Loans to depository institutions and acceptances of other banks,’’ as appropriate).
(2) Loans to depository institutions (report in Schedule C, item 2, as appropriate).
(3) Unavailable balances due from closed or liquidating
banks or other depository institutions (report in
Schedule RAL, item 1(h), ‘‘Other assets including
other claims on nonrelated parties’’).
(4) All balances maintained by the trust department of
the reporting institution in a fiduciary capacity with
other institutions.
(5) Claims on depository institutions that the reporting
institution holds for trading purposes (report in
Schedule RAL, item 1(f), ‘‘Trading assets.’’)

Item Instructions
NOTE: All the items exclude claims on the reporting
branch or agency’s head office and other related depository institutions.
Item 1 Cash items in process of collection and
unposted debits.
For purposes of this report, cash items in process of
collection include the following:
(1) Checks or drafts in process of collection that are
drawn on another depository institution (or on a
Federal Reserve Bank), and that are payable in cash
immediately upon presentation in the United States
and its territories and possessions. This includes
those checks or drafts drawn on other institutionsthat
have already been forwarded for collection but for
which the reporting institution has not yet been given
credit (‘‘cash letters’’), and checks or drafts on hand
SCHEDULE A-1

Schedule A

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

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

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

Report all currency and coin (both U.S. and foreign)
owned and held in the reporting institution’s vaults;
currency and coin in transit to a Federal Reserve Bank, a
foreign central bank, or any other depository institution
(other than related banking institutions) for which the
reporting institution has not yet received credit; and
currency and coin in transit from a Federal Reserve Bank,
a foreign central bank or from any other depository
institution (other than related depository institutions) for
Schedule A

FFIEC 002
September 2008

Schedule A

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

September 2008

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

Schedule A

deposit with them for which the IBF has already received
credit.

For purposes of this item, foreign central banks cover:

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

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

Report in this item all balances due from U.S. branches
and agencies of nonrelated foreign banks (including their
IBFs) in columns A and B, as appropriate. For purposes
of this schedule, the term ‘‘U.S. branches and agencies of
foreign banks’’ covers:
(1) the U.S. branches and agencies of other foreign
banks;
(2) the U.S. branches and agencies of foreign official
banking institutions, including central banks, nationalized banks, and other banking institutions owned
by foreign governments; and
(3) investment companies that are chartered under Article
XII of the New York State banking law and that are
majority-owned by one or more foreign banks.
Item 3(b) Other depository institutions in the U.S.
(including their IBFs).
For the reporting branch or agency, including its IBF,
report in column A all balances due from nonrelated
depository institutions in the U.S. (including their IBFs),
other than U.S. branches and agencies of foreign banks.
For the reporting institution’s IBF, report separately in
column B all balances due from any of the nonrelated
depository institutions in the U.S.
Item 4 Balances due from banks in foreign
countries and foreign central banks.
For the reporting branch or agency including its IBF,
report a breakdown between balances due from foreign
branches of nonrelated U.S. banks (item 4(a)), balances
due from nonrelated banks in the home country and the
home country central bank (item 4(b)), and balances due
from all other nonrelated banks in foreign countries and
foreign central banks (item 4(c)).
Banks in foreign countries include:
(1) foreign-domiciled branches of U.S. banks; and

(1) central banks in foreign countries;

(3) nationalized banks and banking institutions owned
by central governments that have, as an important
part of their functions, activities similar to those of a
central bank; and
(4) the Bank for International Settlements (BIS).
Balances due from banks in foreign countries and foreign
central banks cover all interest-bearing and noninterestbearing balances excluding any balances that the reporting branch or agency holds for trading. Balances, as
reported in this item, should reflect funds on deposit at
nonrelated banks in foreign countries and at foreign
central banks for which the reporting institution has
already received credit. Balances with foreign central
banks should include all balances with such entities,
including reserve, operating, and investment balances.
Reciprocal balances with banks in foreign countries and
foreign central banks may be reported on a net basis
when a right of setoff exists. See the Glossary entry for
‘‘offsetting’’ for the conditions that must be met for a
right of setoff to exist.
Exclude from items 4(a), 4(b), and 4(c):
(1) balances with U.S. branches and agencies of other
foreign banks (report in item 3(a) above);
(2) loans to foreign central banks (report in Schedule C,
item 6);
(3) loans to banks in foreign countries (report in Schedule C, item 2(c));
(4) cash items in process of collection and unposted
debits (report in item 1 above); and
(5) any balances held for trading (report in Schedule RAL, item 1(f), ‘‘Trading assets.’’)
Item 4(a) Foreign branches of U.S. banks.
Report in the appropriate column all balances due from
foreign-domiciled branches of nonrelated U.S. banks.

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

Item 4(b) Banks in home country and home
country central bank.

See the Glossary entry for ‘‘banks, U.S. and foreign’’ for
a description of banks in foreign countries.

Report all balances due from foreign-domiciled branches
of nonrelated banks headquartered in the reporting branch

SCHEDULE A-4

Schedule A

FFIEC 002
September 2008

Schedule A

or agency’s home country and from the reporting branch
or agency’s home country central bank.
Item 4(c) All other banks in foreign countries and
foreign central banks.
Report all balances due from foreign-domiciled branches
of nonrelated banks headquartered in foreign countries
other than the reporting branch or agency’s home country and from central banks in foreign countries other than
the reporting branch or agency’s home country.
Item 5

Balances due from Federal Reserve Banks.

Report balances due from Federal Reserve Banks as
shown by the reporting institution’s books. This amount

FFIEC 002
Schedule A

September 2008

includes reserves and other balances. Include the amount
of reserve balances actually passed through to a Federal
Reserve Bank by the reporting institution on behalf of its
respondent depository institutions.

Item 6

Total.

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

SCHEDULE A-5

INSTRUCTIONS FOR THE PREPARATION OF

Loans
Schedule C

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

September 2008

loans reflected in items 1–8 above,’’ of this schedule. Net
unamortized direct loan origination costs should be added
to the related loan balances in each item of this schedule.
Loans held for sale should be reported at the lower of
cost or fair market.
Exclude all loans and leases held for trading purposes
(report in Schedule RAL, item 1(f), ‘‘Trading assets’’).
Also exclude all intrabranch or intraagency transactions
and all transactions with related depository institutions.
However, include transactions with related nondepository institutions. See the Glossary entries for ‘‘related
institutions’’ and ‘‘transactions with related institutions’’
for additional discussion.
All loans are classified according to security, borrower, or
purpose. Loans covering two or more classifications are
sometimes difficult to classify. In such instances, classify
the entire loan according to the major criterion.
Report in this schedule all loans that the reporting
institution has sold under repurchase agreements that
mature in more than one business day. Also report in this
schedule all loans and leases on the books of the reporting institution even if on the report date they are past due
and collection is doubtful. Exclude any loans or leases
the reporting branch or agency has sold or charged off.
Also exclude assets received in full or partial satisfaction
of a loan or lease (unless the asset received is itself
reportable as a loan or lease) and any loans for which the
branch or agency has obtained physical possession of the
underlying collateral, regardless of whether formal foreclosure or repossession proceedings have been instituted
against the borrower.
Refer to the Glossary entry for ‘‘transfers of financial
assets’’ for a detailed discussion of this topic.
Exclude, for purposes of this schedule, the following:
(1) all loans of immediately available funds that mature
in one business day or roll over under a continuing
SCHEDULE C-1

Schedule C

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

Item Instructions for Part I
Item 1

Loans secured by real estate.

In column A, report in the appropriate subitem all loans
secured by real estate. In column B, IBFs are to report all
loans secured by real estate. Include all loans (other than
those to states and political subdivisions in the U.S.),
regardless of purpose and regardless of whether originated by the bank or purchased from others, that are
secured by real estate as evidenced by mortgages, deeds
of trust, land contracts, or other instruments, whether first
or junior liens (e.g., equity loans, second mortgages) on
real estate. See the Glossary entry for ‘‘loans secured by
real estate’’ for the definition of this term.
Include as loans secured by real estate:
(1) Loans secured by residential properties that are guaranteed by the Farmers Home Administration (FmHA)
and extended, collected, and serviced by a party other
than the FmHA.
SCHEDULE C-2

(2) Loans secured by properties and guaranteed by governmental entities in foreign countries.
(3) Participations in pools of Federal Housing Administration (FHA) Title I home improvement loans that
are secured by liens (generally, junior liens) on
residential properties.
Exclude from loans secured by real estate:
(1) Loans to real estate companies, real estate investment
trusts, mortgage lenders, and foreign nongovernmental entities that specialize in mortgage
loan originations and that service mortgages for other
lending institutions when the real estate mortgages or
similar liens on real estate are not sold to the branch
or agency but are merely pledged as collateral (report
in Schedule C, part I, item 2, Loans to depository
institutions and acceptances of other banks,’’ or as all
other loans in Schedule C, part I, item 8).
(2) Bonds issued by the Federal National Mortgage
Association or by the Federal Home Loan Mortgage
Corporation that are collateralized by residential
mortgages.
(3) Pooled residential mortgages for which participation
certificates have been issued or guaranteed by the
Government National Mortgage Association, the
Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation. However, if
the reporting branch or agency is the seller-servicer
of the residential mortgages backing such securities
and, as a result of a change in circumstances, it must
rebook any of these mortgages because one or more
of the conditions for sale accounting in FASB Statement No. 140 are no longer met, the rebooked
mortgages should be included in Schedule C, part I,
as loans secured by real estate.
Item 1.a Construction, land development, and
other land loans.
Report loans secured by real estate made to finance land
development (i.e., the process of improving land —
laying sewers, water pipes, etc.) preparatory to erecting
new structures or the on-site construction of industrial,
commercial, residential, or farm buildings. For this item,
‘‘construction’’ includes not only construction of new
structures, but also additions or alterations to existing
structures and the demolition of existing structures to
make way for new structures.
Schedule C

FFIEC 002
September 2008

Schedule C

Also include in this item:
(1) Loans secured by vacant land, except land known to
be used or usable for agricultural purposes, such as
crop and livestock production (which should be
reported in Schedule C, part I, item 1.b, below, as
loans secured by farmland).
(2) Loans secured by real estate the proceeds of which
are to be used to acquire and improve developed and
undeveloped property.
(3) Loans made under Title I or Title X of the National
Housing Act that conform to the definition of construction stated above and that are secured by real
estate.
Exclude loans to finance construction and land development that are not secured by real estate (report in other
items of Schedule C, part I, as appropriate).
Item 1.b

(3) Individual condominium dwelling units and loans
secured by an interest in individual cooperative housing units, even if in a building with five or more
dwelling units.
(4) Housekeeping dwellings with commercial units combined where use is primarily residential and where
only 1-to-4 family dwelling units are involved.
Exclude loans for 1-to-4 family residential property
construction and land development purposes (report in
Schedule C, part I, item 1.a). Also exclude loans secured
by vacant lots in established single-family residential
sections or in areas set aside primarily for 1-to-4 family
homes (report in Schedule C, part I, item 1.a).

Secured by farmland.

Report loans secured by farmland and improvements
thereon, as evidenced by mortgages or other liens. Farmland includes all land known to be used or usable for
agricultural purposes, such as crop and livestock production. Farmland includes grazing or pasture land, whether
tillable or not and whether wooded or not. Include loans
secured by farmland that are guaranteed by the Farmers
Home Administration (FmHA) or by the Small Business
Administration (SBA) and that are extended, serviced,
and collected by any party other than FmHA or SBA.
Exclude loans for farm property construction and land
development purposes (report in Schedule C, part I, item
1.a).
Item 1.c Secured by 1-4 family residential
properties.
Report in the appropriate subitem open-end and closedend loans secured by real estate as evidenced by mortgages (FHA, FmHA, VA, or conventional) or other liens
on:
(1) Nonfarm property containing 1-to-4 dwelling units
(including vacation homes) or more than four dwelling units if each is separated from other units by
dividing walls that extend from ground to roof (e.g.,
row houses, townhouses, or the like).
(2) Mobile homes where (a) state laws define the purchase or holding of a mobile home as the purchase or
FFIEC 002
Schedule C

holding of real property and where (b) the loan to
purchase the mobile home is secured by that mobile
home as evidenced by a mortgage or other instrument
on real property.

September 2008

Item 1.c.(1) Revolving, open-end loans secured by
1-4 family residential properties and extended
under lines of credit.
Report the amount outstanding under revolving, openend lines of credit secured by 1-to-4 family residential
properties. These lines of credit, commonly known as
home equity lines, are typically secured by a junior lien
and are usually accessible by check or credit card.
Item 1.c.(2) Closed-end loans secured by 1-4
family residential properties.
Report the amount of all closed-end loans secured by
1-to-4 family residential properties (i.e., closed-end first
mortgages and junior liens).
Item 1.d Secured by multifamily (5 or more)
residential properties.
Report all other nonfarm residential loans secured by real
estate as evidenced by mortgages (FHA and conventional) or other liens that are not reportable in Schedule
C, part I, item 1.c.
Specifically, include loans on:
(1) Nonfarm properties with 5 or more dwelling units in
structures (including apartment buildings and apartment hotels) used primarily to accommodate households on a more or less permanent basis.
SCHEDULE C-3

Schedule C

(2) 5 or more unit housekeeping dwellings with commercial units combined where use is primarily residential.

real property. Report loans to depository institutions
where the collateral is the real estate itself, as evidenced by mortgages or similar liens, in item 1.

(3) Cooperative-type apartment buildings containing 5
or more dwelling units. Exclude loans for multifamily residential property construction and land development purposes (report in Schedule C, part I, item
1.a). Also exclude loans secured by nonfarm nonresidential properties (report in Schedule C, part I, item
1.e).

(3) Purchases of mortgages and other loans under agreements to resell that do not involve the lending of
immediately available funds or that mature in more
than one business day, if acquired from depository
institutions.

Item 1.e Secured by nonfarm nonresidential
properties.
Report loans secured by real estate as evidenced by
mortgages or other liens on business and industrial
properties, hotels, motels, churches, hospitals, educational and charitable institutions, dormitories, clubs,
lodges, association buildings, ‘‘homes’’ for aged persons
and orphans, golf courses, recreational facilities, and
similar properties.
Exclude loans for nonfarm nonresidential property construction and land development purposes (report in
Schedule C, part I, item 1.a).
Item 2 Loans to depository institutions and
acceptances of other banks.
For the reporting branch or agency, report in the appropriate subitems all loans (other than those secured by
real estate), including overdrafts to banks, other depository institutions, and other associations, companies, and
financial intermediaries whose primary business is to
accept deposits and to extend credit for business or for
personal expenditure purposes and the branch or agency’s holdings of all bankers acceptances accepted by
other banks that are not held for trading. Acceptances
accepted by other banks may be purchased in the open
market or discounted by the reporting branch or agency.
For further information, see the Glossary entry for ‘‘bankers acceptances.’’

(4) Certain participations in pools of loans (other than
residential mortgages), if issued by depository institutions. (See the Glossary entry for ‘‘transfer of
financial assets’’ for further information.)
(5) The reporting institution’s own acceptances discounted and held in its portfolio when the account
party is another depository institution.
(6) Loans of immediately available funds to depository
institutions that mature in more than one business
day, other than security resale agreements (term
federal funds sold).
Exclude from loans to depository institutions and acceptances of other banks:
(1) All transactions reportable in Schedule RAL,
item 1(d), ‘‘Federal funds sold and securities purchased under agreements to resell.’’
(2) Loans secured by real estate, even if extended to
depository institutions (report in item 1).
(3) Loans to holding companies of depository institutions (report as all other loans in item 3 or item 8, as
appropriate).
(4) Loans to real estate investment trusts and to mortgage companies that specialize in mortgage loan
originations and warehousing or in mortgage loan
servicing (report as all other loans in item 3).
(5) Loans to finance companies and insurance companies (report as all other loans in item 3).

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

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

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

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

(2) Loans to depository institutions for which the collateral is a mortgage instrument and not the underlying

(8) Loans to lenders other than brokers, dealers, and
banks whose principal business is to extend credit

SCHEDULE C-4

Schedule C

FFIEC 002
September 2008

Schedule C

for the purpose of purchasing or carrying securities (as described in Federal Reserve Regulation U)
and loans to ‘‘plan lenders’’ (as defined in Federal
Reserve Regulation G) (report as loans for purchasing or carrying securities in item 7).
(9) Loans to federally-sponsored lending agencies
(report as all other loans in item 8). Refer to the
Glossary entry for ‘‘federally-sponsored lending
agency’’ for the definition of this term.
(10) Loans to any related depository institutions (report
in Schedule M).

Exclude from items 2(a)(1) and 2(a)(2) loans to other
depository institutions such as mutual savings banks,
savings and loan associations, and credit unions (report
in item 2(b) below).
Item 2(a)(1) To U.S. branches and agencies of
other foreign banks.
For the reporting branch or agency, report in column A
all loans to and acceptances of U.S. branches and agencies of other (nonrelated) foreign banks located in the
50 states of the U.S., the District of Columbia, Puerto
Rico, and U.S. territories and possessions.

(11) Loans secured by production payments (e.g., shares
in future oil or mining production) (to be reported
in item 4, ‘‘Commercial and industrial loans’’).

For purposes of this schedule, the term ‘‘U.S. branches
and agencies of foreign banks’’ covers:

(12) Acceptances accepted by the reporting branch or
agency, discounted, and held in its portfolio, when
the account party is not another depository institution. Such acceptances are reported in other items
of Schedule C according to the account party.

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

Item 2(a) To commercial banks in the U.S.
(including IBFs).
Report this item broken down between loans to and
acceptances of U.S. branches and agencies of other
foreign banks (item 2(a)(1)) and loans to and acceptances
of other commercial banks in the U.S. (item 2(a)(2)).
Commercial banks in the U.S. covers:
(1) U.S. branches and agencies of other foreign banks;
and
(2) all other commercial banks in the U.S., i.e., U.S.
branches of U.S. banks and all nonrelated international banking facilities (IBFs).
Refer to the Glossary entry for ‘‘banks, U.S. and foreign’’
and ‘‘international banking facility (IBF)’’ for further
discussion of these terms.
Loans to and acceptances of commercial banks in the
U.S. include all loans and all other instruments evidencing loans to operating commercial banks and their
branches in the U.S., including their IBFs. Loans to and
acceptances of U.S.-chartered banks that are owned by
foreign banks or by foreign official banking institutions
should be included in item 2(a)(2), ‘‘Loans to other
commercial banks in the U.S.’’
FFIEC 002
Schedule C

September 2008

(1) the U.S. branches and agencies of foreign banks;

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

To other commercial banks in the

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

To other depository institutions in the

Report only in column A those loans of the reporting
branch or agency to the following depository institutions,
other than commercial banks, domiciled in the U.S.:
SCHEDULE C-5

Schedule C

(1) credit unions;
(2) mutual or stock savings banks;
(3) savings or building and loan associations;
(4) cooperative banks;
(5) industrial banks; and
(6) other similar depository institutions.
Exclude from loans to other depository institutions in the
U.S.:
(1) All transactions reportable in Schedule RAL,
item 1(d), ‘‘Federal funds sold and securities purchased under agreements to resell.’’
(2) Loans to and acceptances of commercial banks
(including IBFs) in the U.S. (report in item 2(a)
above).
(3) Loans to brokers and dealers in securities and loans
to investment trusts of the mutual fund or the closedend types that hold stock for investment purposes
(to be reported in item 7, ‘‘Loans for purchasing or
carrying securities’’).
NOTE: In the IBF column, report loans extended to IBFs
of nonrelated depository institutions, mentioned above,
that are domiciled in the U.S., and to the nonrelated
depository institutions mentioned above domiciled in
Puerto Rico and the U.S. territories and possessions.
Item 2(c)

To banks in foreign countries.

Report this item broken down between loans to and
acceptances of foreign branches of U.S. banks
(item 2(c)(1)) and loans to and acceptances of other
banks in foreign countries (item 2(c)(2)).
Banks in foreign countries cover:
(1) foreign-domiciled branches of U.S. banks; and
(2) foreign-domiciled non-U.S. banks, including foreign
commercial banks, savings banks, discount houses,
and other similar foreign institutions.
See the Glossary entry for ‘‘banks, U.S. and foreign’’ for
further discussion of these terms.
Loans to banks in foreign countries include all loans
(including overdrafts) and all other instruments that
represent loans to operating banks and their branches
domiciled outside the 50 states of the United States, the
SCHEDULE C-6

District of Columbia, Puerto Rico, and U.S. territories
and possessions.
Exclude from items 2(c)(1) and 2(c)(2):
(1) Loans to U.S. branches and agencies of foreign banks
(report in item 2(a) above).
(2) Dollar exchange acceptances accepted by foreign
governments and official institutions (report in item 6).
(3) Loans to foreign governments and official institutions, including foreign central banks (report in
item 6). See the Glossary entry for ‘‘foreign governments and official institutions’’ for the definition of
this term.
(4) Loans to related banks in foreign countries (report in
Schedule M).
Item 2(c)(1)

To foreign branches of U.S. banks.

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

To other banks in foreign countries.

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

Loans to other financial institutions.

Report in this item loans to nonbank financial institutions, associations, companies, and financial intermediaries whose primary business is to extend credit for business purposes or for financing personal expenditures.
Include those loans for which the collateral is the mortgage instrument, not the real estate property. Those loans
where the collateral is the real estate itself, as evidenced
by mortgages or similar liens, are to be reported in
item 1.
For the reporting branch or agency, including its IBF, and
for the IBF only (where applicable), include extensions of credit, as defined, to the following financial
institutions:
(1) Investment banks.
Schedule C

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September 2008

Schedule C

(2) Real estate investment trust (REITs) and mortgage
companies that specialize in mortgage loan originations and warehousing and that service mortgages for
other lending institutions. Include unsecured loans,
loans secured by mortgage instruments, and loans
secured by any other collateral except real estate.
(Loans secured by real estate are to be reported in
item 1 above.)
(3) Finance companies and foreign mortgage finance
companies. Include both direct loans and marketable
instruments of finance companies purchased either
directly from the issuing companies or from commercial paper dealers. Include such loans to the following institutions:
(a) factors and other financial intermediaries,
(b) short-term business credit institutions that extend
credit to finance inventories or to carry accounts
receivable, and
(c) institutions whose functions are predominantly to
finance personal expenditures.
(4) Bank holding companies.
(5) Insurance companies.
(6) Other domestic and foreign financial intermediaries
(excluding those institutions included in item 2
above) whose functions are predominantly extensions of credit for business purposes, such as investment companies that hold stock of operating companies for management or development purposes.
Exclude, for purposes of the reporting branch or agency,
including its IBF:
(1) All transactions that are included in Schedule RAL,
item 1(d), ‘‘Federal funds sold and securities purchased under agreements to resell.’’
(2) Loans to brokers and dealers in securities and loans
to investment trusts of the mutual fund or the closedend types that hold stock for investment purposes.
These should be reported against item 7, ‘‘Loans for
purchasing or carrying securities.’’
(3) Loans to financial corporations whose sole function
is to borrow money and relend it to its affiliated
companies or a corporate joint venture in which an
affiliated company is a joint venturer.
Item 4 Commercial and industrial loans.
For the reporting branch or agency, report in the appropriate subitem loans for commercial and industrial purFFIEC 002
Schedule C

September 2008

poses to sole proprietorships, partnerships, corporations,
and other business enterprises, whether secured (other
than by real estate) or unsecured, single-payment or
installment. These loans may take the form of direct or
purchased loans. Include the reporting institution’s own
acceptances that it holds in its portfolio when the account
party is a commercial or industrial enterprise. Also
include loans to individuals for commercial, industrial,
and professional purposes but not for investment or
personal expenditure purposes.
Include loans of the types listed below. These descriptions may overlap and are not all inclusive.
(1) Loans for commercial, industrial, and professional
purposes to:
(a) mining, oil- and gas-producing, and quarrying
companies;
(b) manufacturing companies of all kinds, including those which process agricultural
commodities;
(c) construction companies;
(d) transportation and communications companies
and public utilities;
(e) wholesale and retail trade enterprises and other
dealers in commodities;
(f) cooperative associations including farmers’
cooperatives;
(g) service enterprises such as hotels, motels, laundries, automotive service stations, and nursing
homes and hospitals operated for profit;
(h) insurance agents; and
(i) practitioners of law, medicine, and public
accounting.
(2) Loans for the purpose of financing capital expenditures and current operations.
(3) Loans to business enterprises guaranteed by the
Small Business Administration.
(4) Loans to farmers for commercial and industrial
purposes (when farmers operate a business enterprise as well as a farm).
(5) Loans supported by letters of commitment from the
Agency for International Development.
SCHEDULE C-7

Schedule C

(6) Loans made to finance construction that are not
secured by real estate.

(7) Holdings of acceptances accepted by other banks
(report in item 2).

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

(8) Holdings of own acceptances when the account
party is another bank (report in item 2) or a foreign
government or official institution (report in item 6).

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

(9) Equipment trust certificates (report in Schedule RAL, item 1(c)(4)).

(9) Dealer flooring or floor-plan loans.
(10) Loans collateralized by production payments (e.g.,
oil or mining production payments). Treat as a loan
to the original seller of the production payment
rather than to the holder of the production payment.
For example, report in this item, as a loan to an
oil company, a loan made to a nonprofit organization collateralized by an oil production payment; do
not include in item 8 as a loan to the nonprofit
organization.
(11) Loans and participations in loans secured by conditional sales contracts made to finance the purchase
of commercial transportation equipment.
(12) Commercial and industrial loans guaranteed by
foreign governmental institutions.
Exclude from commercial and industrial loans:
(1) Loans secured by real estate, even if for commercial
and industrial purposes (report in item 1).
(2) Loans to depository institutions (report in item 2).
(3) Loans to nondepository financial institutions such
as real estate investment trusts, mortgage companies, and insurance companies (report as loans to
other financial institutions in item 3).
(4) Loans for the purpose of purchasing or carrying
securities (report in item 7).
(5) Loans for the purpose of financing agricultural
production, whether made to farmers or to nonagricultural businesses (report in item 8).
(6) Loans to nonprofit organizations, such as hospitals
or educational institutions (report as all other loans
in item 8), except those for which oil or mining
production payments serve as collateral which are
to be reported in this item.
SCHEDULE C-8

(10) Any commercial and industrial loans held for trading purposes (report on Schedule RAL, item 1(f),
‘‘Trading assets’’).
Item 4(a)

To U.S. addressees (domicile).

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

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

For the reporting branch or agency, including its IBF,
report all commercial and industrial loans to non-U.S.
addressees. For a detailed discussion of U.S. and nonU.S. addressees, see the Glossary entry for ‘‘domicile.’’
For the branch or agency only, include all commercial
and industrial loans to U.S. addresses that have since
moved or relocated outside the 50 states of the United
States, the District of Columbia, Puerto Rico, and the
U.S. territories and possessions.
NOTE: Report in the IBF column all commercial and
industrial loans made to businesses located in foreign
countries.
Item 5

Not applicable.

Item 6 Loans to foreign governments and official
institutions (including foreign central banks).
Report all loans (other than those secured by real estate),
including planned and unplanned overdrafts, to governments in foreign countries, to their official institutions,
and to international and regional institutions. Include
bankers acceptances accepted by the reporting bank and
held in its portfolio when the account party is a foreign
government or official institution, including such acceptances for the purpose of financing dollar exchange. See
Schedule C

FFIEC 002
September 2008

Schedule C

the Glossary entry for ‘‘foreign governments and official
institutions’’ for the definition of this term.
Exclude from loans to foreign governments and official
institutions:
(1) Loans to nationalized banks and other banking institutions owned by foreign governments and not functioning as central banks, banks of issue, or development banks (report in the appropriate subitem of
item 2 above).

(f) Loans to lenders other than brokers, dealers, and
banks whose principal business is to extend
credit for the purpose of purchasing or carrying
securities.
Exclude from loans for purchasing or carrying securities:
(1) Loans to nonrelated banks in foreign countries that
act as brokers and dealers in securities (report in
item 2(c)).

(2) Loans to U.S. branches and agencies of foreign
official banking institutions (report as a loan to a
commercial bank in the U.S. in item 2(a)(1)).

(2) Loans to depository institutions (other than related
depository institutions reported in Schedule M) for the
purpose of purchasing or carrying securities (report
in subitems of item 2, as appropriate).

(3) Loans to foreign-government-owned nonbank corporations and enterprises (report in item 3, 4, or 8 as
appropriate).

(3) Transactions reportable in Schedule RAL, item 1(d),
‘‘Federal funds sold and securities purchased under
agreements to resell.’’
(4) Loans secured by real estate (report in item 1).

Item 7 Loans for purchasing or carrying securities
(secured and unsecured).
Report all loans extended by the reporting branch or
agency, or by the IBF only for the purpose of purchasing
or carrying securities.
Loans for purchasing or carrying securities include:
(1) All loans to brokers and dealers in securities (other
than those secured by real estate and those to depository institutions).
(2) All loans, whether secured (other than by real estate)
or unsecured, to any other borrower (except related
depository institutions, which are reported in Schedule M) for the purpose of purchasing or carrying
securities (debt or equity), such as:
(a) Loans made to provide funds to pay for the
purchase of securities at settlement date.
(b) Loans made to provide funds to repay indebtedness incurred in purchasing securities.
(c) Loans that represent the renewal of loans to
purchase or carry securities.
(d) Loans to investment companies and mutual funds,
but excluding loans to Small Business Investment
Companies (reported in item 8).
(e) Loans to ‘‘plan lenders’’ as defined in Section 221.4(a) of Federal Reserve Regulation U.
FFIEC 002
Schedule C

September 2008

Item 8

All other loans.

For the reporting branch or agency, including its IBF, and
for the IBF only, report in the appropriate column all
loans and discounts (other than loans for purchasing or
carrying securities) that cannot properly be reported in
one of the preceding items in this schedule, such as:
(1) Unplanned overdrafts to deposit accounts (except
overdrafts of depository institutions and foreign governments and official institutions, which are to be
reported in items 2 and 6 above, respectively, or
Schedule M if of related depository institutions).
(2) Loans (other than those secured by real estate) to
nonprofit organizations (e.g., churches, hospitals,
educational and charitable institutions, clubs, and
similar associations) except those collateralized by
production payments where the proceeds ultimately
go to a commercial or industrial organization (report
in item 4).
(3) Loans to individuals for investment or personal
expenditure purposes (as distinct from commercial,
industrial, or professional purposes), other than those
secured by real estate.
(4) Loans to finance agricultural production, whether
made to farmers or to nonagricultural businesses, and
other loans to farmers except those secured by real
estate (report in item 1).
SCHEDULE C-9

Schedule C

(5) Loans and advances made to the reporting institution’s own trust department.
(6) Loans to Small Business Investment Companies.
(7) Obligations (other than securities and leases) of
states and political subdivisions in the U.S. Report
here obligations of states and political subdivisions in the United States (including planned
andunplanned overdrafts and obligations secured by
real estate), other than those obligations reported
(a) as securities issued by such entities in Schedule
RAL, item 1(c)(4), and (b) as lease financing receivables of states and political subdivisions in the U.S. in
Schedule C, part I, item 9. Exclude all such obligations held for trading purposes.
States and political subdivisions in the U.S. include:
(a) the fifty states of the United States and the
District of Columbia and their counties, municipalities, school districts, irrigation districts, and
drainage and sewer districts; and
(b) the governments of Puerto Rico and of the U.S.
territories and possessions and their political
subdivisions.
Treatment of industrial development bonds (IDBs).
Industrial development bonds (IDBs), sometimes
referred to as ‘‘industrial revenue bonds,’’ are typically issued by local industrial development authorities to benefit private commercial and industrial
development. For purposes of this report, all IDBs
should be reported as securities issued by states and
political subdivisions in the U.S. in Schedule RAL,
item 1(c)(4), or as loans in this item, consistent with
the asset category in which the branch or agency
reports IDBs for other financial reporting purposes.
Regardless of whether they are reported as securities
in Schedule RAL, item 1(c)(4), or as loans in this
item, all IDBs that meet the definition of a ‘‘security’’ in FASB Statement No. 115 must be measured
in accordance with Statement No. 115.
Treatment of other obligations of states and political subdivisions in the U.S. In addition to those
IDBs that are reported in this item in accordance with
the preceding paragraph, include as obligations (other
than securities and leases) of states and political
subdivisions in the U.S., all other obligations except
those that meet any of the following criteria:
SCHEDULE C-10

(a) Industrial development bonds (IDBs) that are
reported as securities in accordance with the
reporting treatment described above (report as
securities in Schedule RAL, item 1(c)(4)).
(b) Notes, bonds, and debentures (including tax warrants and tax-anticipation notes) that are rated
bya nationally-recognized rating service (report
as securities in Schedule RAL, item 1(c)(4)).
(c) Mortgage-backed securities issued by state and
local housing authorities (report as securities in
Schedule RAL, item 1(c)(2)).
(d) Obligations of state and local governments that
are guaranteed by the U.S. government (report as
securities in Schedule RAL, item 1(c)(4)).
(e) Nonrated obligations of states and political subdivisions in the U.S. that the reporting institution
considers securities for other financial reporting
purposes (report as securities in Schedule RAL,
item 1(c)(4)).
(f) Lease financing receivables of states and political subdivisions in the U.S. (report as leases in
item 9 below).
(g) Obligations of states and political subdivisions in
the U.S. held in trading accounts (report in
Schedule RAL, item 1(f)).
(8) Loans to federally-sponsored lending agencies. Refer
to the Glossary entry for ‘‘federally-sponsored lending agency’’ for the definition of this term.
Exclude from all other loans extensions of credit initially
made in the form of planned or ‘‘advance agreement’’
overdrafts other than those made to borrowers of the
types whose obligations are specifically reportable in this
item (report in other items, as appropriate). For example,
report advances to banks in foreign countries in the form
of ‘‘advance agreement’’ overdrafts as loans to banks in
foreign countries in item 2(c). Report both planned and
unplanned overdrafts on ‘‘due to’’ deposit accounts of
depository institutions in item 2.
Item 9 Lease financing receivables (net of
unearned income).
For the reporting branch or agency, including its IBF, and
for the IBF only, report in the appropriate column all
lease financing receivables of U.S. addressees (item 9(a))
and all lease financing receivables of non-U.S. addressees
Schedule C

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September 2008

Schedule C

(item 9(b)). Include all outstanding receivable balances
relating to direct financing and leveraged leases on
property acquired by the branch or agency for leasing
purposes. These balances should include the estimated
residual value of leased property and must be net ofunearned income. For further discussion of leases where
the branch or agency is the lessor, refer to the Glossary
entry for ‘‘lease accounting.’’
Include all lease financing receivables of states and
political subdivisions in the U.S.
Item 9(a)

Of U.S. addressees (domicile).

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

Of non-U.S. addressees (domicile)

Report all outstanding receivable balances relating to
direct financing and leveraged leases on property acquired
by the branch or agency for leasing to non-U.S. addressees (see the Glossary entry for ‘‘domicile’’).
Item 10 LESS: Any unearned income on loans
reflected in items 1–8 above.
To the extent possible, report the specific loan categories
net of unearned income. A reporting institution (including its IBF) should enter here unearned income only to
the extent that it is included in (i.e., not deducted from)
the various loan items (items 1 through 8) of this
schedule. If a reporting institution reports each loan item
net of unearned income, enter a zero. (Unearned income
includes income received but not yet earned, such as
prepaid interest and the unamortized portion of loan
origination fees.)
Do not include unearned income on lease financing
receivables in this item (deduct from Schedule C, part I,
item 9).
Item 11 Total loans and leases, net of unearned
income.
Report the sum of items 1 through 9 less the amount
reported in item 10. The amounts in columns A and B
must equal Schedule RAL, item 1(e), columns A and B,
respectively.
FFIEC 002
Schedule C

September 2008

Memoranda
Item M1 and M2 Not applicable.
Item M3 Commercial and industrial loans with
remaining maturity of one year or less (excluding
those in nonaccrual status).
Report in the proper subitems below the amount outstanding on report date of commercial and industrial
loans (sum of items 4(a) and 4(b) of this schedule,
column A) which have a remaining maturity (from the
report date until the final contractual maturity date) of
one year or less. Demand loans, loans with no stated
repayment schedule and no stated maturity, and overdrafts should be considered as having at maturity of one
year or less and included here. All other commercial and
industrial loans with remaining maturity of more than
one year are reported in Memorandum item 4 below.
Exclude those loans and leases that are reported as
nonaccrual in Schedule N, column C.
Item M3(a) With predetermined interest rates.
Report in this item those commercial and industrial loans
with a remaining maturity of one year or less with fixed
or predetermined interest rates. A predetermined interest
rate is a rate that changes during the term of the loan on a
predetermined basis, with the exact rate of interest over
the life of the loan known with certainty to both the
borrower and the lender when the loan (or instrument) is
acquired.
Item M3(b) With floating interest rates.
Report in this item those commercial and industrial loans
with a remaining maturity of one year or less with
floating or adjustable interest rates. A floating or adjustable interest rate is a rate that varies, or can vary, in
relation to an index, to some other interest rate such as
the rate on certain U.S. Government securities or the
branch or agency’s ‘‘prime rate,’’ or to some other
variable criterion the exact value of which cannot be
known in advance. Therefore, the exact rate the loan (or
instrument) carries at any subsequent time cannot be
known at the time of origination. All demand loans
should be considered to have a floating interest rate, for
purposes of this report.
Item M4 Commercial and industrial loans with
remaining maturity of more than one year
(excluding those in nonaccrual status).
Report in the proper subitems below the amount outstanding on the report date of commercial and industrial
SCHEDULE C-11

Schedule C

loans (the sum of items 4(a) and 4(b) of this schedule,
column A) which have a remaining maturity (from the
report date until the final contractual maturity date) of
more than one year. Exclude demand loans, loans with no
stated repayment schedule and no stated maturity, and
overdrafts, which should be reported in Memorandum
item 3 above. Exclude those loans and leases that are
reported as nonaccrual in Schedule N, column C.
Item M4(a)

With predetermined interest rates.

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

With floating interest rates.

Report in this item those commercial and industrial loans
with a remaining maturity of more than one year with
floating interest rates. The definition of this type of rate is
found in Memorandum item 3(b) above.
Memorandum items 5 and 6 are to be completed by
branches and agencies that have elected to measure
loans included in Schedule C, part I, items 1
through 8, at fair value under a fair value option.
Item M5
Item M5.a

Loans measured at fair value.
Loans secured by real estate.

In column A, report in the appropriate subitem the total
fair value of loans secured by real estate (as defined for
Schedule C, part I, item 1). In column B, IBFs are to
report in the appropriate subitem the total fair value of
loans secured by real estate (as defined for Schedule C,
part I, item 1).
Item M5.a.(1) Construction, land development,
and other land loans.
Report the total fair value of construction, land development, and other land loans (as defined for Schedule C,
part I, item 1.a).
Item M5.a.(2)

Secured by farmland.

Report the total fair value of loans secured by farmland
(as defined for Schedule C, part I, item 1.b).
SCHEDULE C-12

Item M5.a.(3)
properties.

Secured by 1-4 family residential

Report in the appropriate subitem the total fair value of
all open-end and closed-end loans secured by real estate
(as defined for Schedule C, part I, item 1.c).
Item M5.a.(3)(a) Revolving, open-end loans
secured by 1-4 family residential properties and
extended under lines of credit.
Report the total fair value of revolving, open-end loans
secured by 1-4 family residential properties and extended
under lines of credit (as defined for Schedule C, part I,
item 1.c.(1)).
Item M5.a.(3)(b) Closed-end loans secured by 1-4
family residential properties.
Report the total fair value of all closed-end loans secured
by real estate (as defined for Schedule C, part I, item
1.c.(2)).
Item M5.a.(4) Secured by multifamily (5 or more)
residential properties.
Report the total fair value of loans secured by multifamily (5 or more) residential properties (as defined for
Schedule C, part I, item 1.d).
Item M5.a.(5)
properties.

Secured by nonfarm nonresidential

Report the total fair value of loans secured by nonfarm
nonresidential properties (as defined for Schedule C, part
I, item 1.e).
Item M5.b

Commercial and industrial loans.

Report the total fair value of commercial and industrial
loans (as defined for Schedule C, part I, item 4).
Item M5.c

Other loans.

Report the total fair value of all other loans that cannot
properly be reported in one of the preceding subitems of
this item 5. Such loans include “Loans to depository
institutions and acceptances of other banks,” “Loans to
financial institutions,” “Loans for purchasing or carrying
securities,” “Loans to foreign governments and official
institutions,” and “All other loans” (as defined for Schedule C, part I, items 2, 3, 6, 7, and 8).
Schedule C

FFIEC 002
September 2008

Schedule C

Item M6 Unpaid principle balance of loans
measured at fair value.

Item M6.a.(5) Secured by nonfarm nonresidential
properties.

Item M6.a

Report the unpaid principle balance of loans secured by
nonfarm nonresidential properties reported in memorandum item 5.a.(5).

Loans secured by real estate.

In column A, report in the appropriate subitem the unpaid
principle balance of loans measured at fair value that are
secured by real estate reported in memorandum item 5. In
column B, IBFs are to report in the appropriate subitem
the unpaid principle balance of loans measured at fair
value that are secured by real estate reported in memorandum item 5.
Item M6.a.(1) Construction, land development,
and other land loans.
Report the unpaid principle balance of construction, land
development, and other land loans reported in memorandum item 5.a.(1).
Item M6.a.(2)

Secured by farmland.

Report the unpaid principle balance of loans secured by
farmland reported in memorandum item 5.a.(2).
Item M6.a.(3)
properties.

Secured by 1-4 family residential

Report the unpaid principle balance in the appropriate
subitem of all open-end and closed-end loans secured by
real estate reported in memorandum item 5.a.(3).
Item M6.a.(3)(a) Revolving, open-end loans
secured by 1-4 family residential properties and
extended under lines of credit.
Report the unpaid principle balance of revolving, openend loans secured by 1-4 family residential properties
and extended under lines of credit reported in memorandum item 5.a.(3)(a).
Item M6.a.(3)(b) Closed-end loans secured by 1-4
family residential properties.
Report the unpaid principle balance of all closed-end
loans secured by real estate reported in memorandum
item 5.a.(3)(b).
Item M6.a.(4) Secured by multifamily (5 or more)
residential properties.
Report the unpaid principle balance of loans secured by
multifamily (5 or more) residential properties reported in
memorandum item 5.a.(4).
FFIEC 002
Schedule C

September 2008

Item M6.b Commercial and industrial loans.
Report the unpaid principle balance of loans of commercial and industrial loans reported in memorandum item
5.b.
Item M6.c Other loans.
Report the unpaid principle balance of all other loans that
cannot properly be reported in one of the preceding
subitems of this item 6. Such loans include “Loans to
depository institutions and acceptances of other banks,”
“Loans to financial institutions,” “Loans for purchasing
or carrying securities,” “Loans to foreign governments
and official institutions,” and “All other loans” (as defined
for Schedule C, part I, items 2, 3, 6, 7, and 8) reported in
memorandum item 5.c.

Part II. Loans to Small Businesses
and Small Farms—General Instructions
Schedule C, part II, is to be completed only as of the
June 30 report date by branches whose deposits are
insured by the FDIC.
Schedule C, part II, requests information on the number
and amount currently outstanding of ‘‘loans to smallbusinesses’’ and ‘‘loans to small farms,’’ as defined below.
This information is being collected pursuant to Section
122 of the Federal Deposit Insurance Corporation
Improvement Act of 1991.
For purposes of this schedule, ‘‘loans to small businesses’’ consist of the following:
(1) Loans secured by nonfarm nonresidential properties
(excluding those held in the branch’s IBF) with
original amounts of $1 million or less that have been
reported in Schedule C, part I, item 1, column A,
‘‘Loans secured by real estate,’’ and
(2) Loans (excluding those held in the branch’s IBF)
with original amounts of $1 million or less that have
been reported in Schedule C, part I, item 4(a),
column A, ‘‘Commercial and industrial loans to U.S.
addressees.’’
SCHEDULE C-13

Schedule C

For purposes of this schedule, ‘‘loans to small farms’’
consist of the following:
(1) Loans secured by farmland (including farm residential and other improvements) (excluding those held in
the branch’s IBF) with original amounts of $500,000
or less that have been reported in Schedule C, part I, item 1, column A, ‘‘Loans secured by
real estate,’’ and
(2) Loans to finance agricultural production and other
loans to farmers (excluding those held in the branch’s
IBF) with original amounts of $500,000 or less that
have been reported in Schedule C, part I, item 8,
column A, ‘‘All other loans.’’
The following guidelines should be used to determine the
‘‘original amount’’ of a loan:
(1) For loans drawn down under lines of credit or loan
commitments, the ‘‘original amount’’ of the loan
isthe size of the line of credit or loan commitment
when the line of credit or loan commitment was most
recently approved, extended, or renewed prior to the
report date. However, if the amount currently outstanding as of the report date exceeds this size, the
‘‘original amount’’ is the amount currently outstanding on the report date.
(2) For loan participations and syndications, the ‘‘original amount’’ of the loan participation or syndication
is the entire amount of the credit originated by the
lead lender.
(3) For all other loans, the ‘‘original amount’’ is the total
amount of the loan at origination or the amount
currently outstanding as of the report date, whichever
is larger.
The ‘‘amount currently outstanding’’ for a loan is its
carrying value, i.e., the amount at which the loan is
reported in Schedule C, part I, items 1, 4(a), or 8, above.
Except as noted below for ‘‘corporate’’ or ‘‘business’’
credit card programs, when determining ‘‘original
amounts’’ and reporting the number and amount currently outstanding for a category of loans in this part II,
multiple loans to one borrower should be combined and
reported on an aggregate basis rather than as separate
individual loans to the extent that the loan systems in
which the branch’s business and/or farm loan data are
maintained can provide aggregate individual borrower
data without undue cost to the reporting institution.
SCHEDULE C-14

However, if the burden of such aggregation would be
excessive, the institution may report multiple loans to
one borrower as separate individual loans.
A branch that offers ‘‘corporate’’ or ‘‘business’’ credit
card programs under which credit cards are issued to one
or more of a company’s employees for business-related
use should treat each company’s program as a single
extension of credit to that company. The credit limits for
all of the individual credit cards issued to the company’s
employees should be totalled and this total should be
treated as the ‘‘original amount’’ of the ‘‘corporate’’ or
‘‘business’’ credit card program established for this company. The company’s program should be reported as one
loan and the amount currently outstanding would be the
sum of the credit card balances as of the June 30 report
date on each of the individual credit cards issued to the
company’s employees. However, when aggregated data
for each individual company in a ‘‘corporate’’ or ‘‘business’’ credit card program are not readily determinable
from the branch’s credit card records, the branch should
develop reasonable estimates of the number of ‘‘corporate’’ or ‘‘business’’ credit card programs in existence
as of the June 30 report date, the ‘‘original amounts’’ of
these programs, and the ‘‘amounts currently outstanding’’ for these programs and should then report information about these programs on the basis of its reasonable
estimates. In no case should the individual credit cards
issued to a company’s employees under a ‘‘corporate’’ or
‘‘business’’ credit card program be reported as separate
individual loans to small businesses.

Item Instructions for Part II
Loans to Small Businesses
Item 1(a) Indicate in the appropriate box at the
right whether all or substantially all of the branch’s
‘‘Commercial and industrial loans to U.S.
addressees’’ (excluding those held in its IBF)
reported in Schedule C, part I, item 4(a), column A,
consist of loans with original amounts of $100,000
or less.
If (a) the average size of the amount currently outstanding for your branch’s ‘‘Commercial and industrial loans
to U.S. addressees’’ (excluding those held in its IBF) as
reported in Schedule C, part I, above, is $100,000 or
less and (b) your lending officers’ knowledge of your
branch’s loans or other relevant information pertaining to
‘‘Commercial and industrial loans to U.S. addressees’’
Schedule C

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September 2008

Schedule C

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

September 2008

equal to Schedule C, part I, item 1, column A minus
column B.
Item 2(a)
less.

With original amounts of $100,000 or

Add up the total carrying value of all currently outstanding ‘‘Loans secured by nonfarm nonresidential properties’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of $100,000 or less and report this
total amount in column B. Do not add up the ‘‘original
amounts’’ of each of these loans and report the total
original amount in column B.
Count the number of individual ‘‘Loans secured by
nonfarm nonresidential properties’’ whose carrying values were included in the amount reported in column B for
this item (i.e., those ‘‘Loans secured by nonfarm nonresidential properties’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of $100,000 or less).
Report this number in column A.
Item 2(b) With original amounts of more than
$100,000 through $250,000.
Add up the total carrying value of all currently outstanding ‘‘Loans secured by nonfarm nonresidential properties’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of more than $100,000 through
$250,000 and report this total amount in column B. Do
not add up the ‘‘original amounts’’ of each of these loans
and report the total original amount in column B.
Count the number of individual ‘‘Loans secured by
nonfarm nonresidential properties’’ whose carrying values were included in the amount reported in column B for
this item (i.e., those ‘‘Loans secured by nonfarm nonresidential properties’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of more than $100,000
through $250,000). Report this number in column A.
Item 2(c) With original amounts of more than
$250,000 through $1,000,000.
Add up the total carrying value of all currently outstanding ‘‘Loans secured by nonfarm nonresidential properties’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of more than $250,000 through
$1,000,000 and report this total amount in column B. Do
not add up the ‘‘original amounts’’ of each of these loans
and report the total original amount in column B.
SCHEDULE C-15

Schedule C

Count the number of individual ‘‘Loans secured by
nonfarm nonresidential properties’’ (excluding those held
in the branch’s IBF) whose carrying values were included
in the amount reported in column B for this item (i.e.,
those ‘‘Loans secured by nonfarm nonresidential properties’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of more than $250,000 through
$1,000,000). Report this number in column A.
Item 3 Number and amount currently outstanding
of ‘‘Commercial and industrial loans to U.S.
addressees’’ (excluding those held in the branch’s
IBF) reported in Schedule C, part I, item 4(a),
column A.
See the General Instructions to this part II for the
guidelines for determining the ‘‘original amount’’ of a
loan. Multiple loans to one borrower should be combined
and reported on an aggregate basis rather than as separate
individual loans to the extent that the loan systems in
which the branch’s business and/or farm loan data are
maintained can provide aggregate individual borrower
data without undue cost to the reporting institution.
However, if the burden of such aggregation would be
excessive, the institution may report multiple loans to
one borrower as separate individual loans.
The sum of the amounts currently outstanding reported in
items 3(a) through 3(c), column B, must be less than or
equal to Schedule C, part I, item 4(a), column A minus
column B.
Item 3(a)
less.

With original amounts of $100,000 or

Add up the total carrying value of all currently outstanding ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of $100,000 or less and report this
total amount in column B. Do not add up the ‘‘original
amounts’’ of each of these loans and report the total
original amount in column B.
Count the number of individual ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in
the branch’s IBF) whose carrying values were included
in the amount reported in column B for this item (i.e.,
those ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of $100,000 or less). Report this
number in column A.
SCHEDULE C-16

Item 3(b) With original amounts of more than
$100,000 through $250,000.
Add up the total carrying value of all currently outstanding ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of more than $100,000 through
$250,000 and report this total amount in column B. Do
not add up the ‘‘original amounts’’ of each of these loans
and report the total original amount in column B.
Count the number of individual ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in
the branch’s IBF) whose carrying values were included
in the amount reported in column B for this item (i.e.,
those ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of more than $100,000 through
$250,000). Report this number in column A.
Item 3(c) With original amounts of more than
$250,000 through $1,000,000.
Add up the total carrying value of all currently outstanding ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of more than $250,000 through
$1,000,000 and report this total amount in column B. Do
not add up the ‘‘original amounts’’ of each of these loans
and report the total original amount in column B.
Count the number of individual ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in
the branch’s IBF) whose carrying values were included
in the amount reported in column B for this item (i.e.,
those ‘‘Commercial and industrial loans to U.S. addressees’’ (excluding those held in the branch’s IBF) with
‘‘original amounts’’ of more than $250,000 through
$1,000,000). Report this number in column A.
Item 4 Number and amount currently outstanding
of ‘‘Loans secured by farmland (including farm
residential and other improvements)’’ (excluding
those held in the branch’s IBF) reported in
Schedule C, part I, item 1, column A, ‘‘Loans
secured by real estate.’’
See the General Instructions to this part II for the
guidelines for determining the ‘‘original amount’’ of a
loan. Multiple loans to one borrower should be combined
and reported on an aggregate basis rather than as separate
individual loans to the extent that the loan systems in
Schedule C

FFIEC 002
September 2008

Schedule C

which the branch’s business and/or farm loan data are
maintained can provide aggregate individual borrower
data without undue cost to the reporting institution.
However, if the burden of such aggregation would be
excessive, the institution may report multiple loans to
one borrower as separate individual loans.
The sum of the amounts currently outstanding reported in
items 4(a) through 4(c), column B, must be less than or
equal to Schedule C, part I, item 1, column A minus
column B. In addition, the sum of the amounts currently
outstanding reported in items 2(a) through 2(c), column B, and items 4(a) through 4(c), column B, must
beless than or equal to Schedule C, part I, item 1, column
A minus column B.
Item 4(a)
less.

With original amounts of $100,000 or

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

September 2008

whose carrying values were included in the amount
reported in column B for this item (i.e., those ‘‘Loans
secured by farmland (including farm residential and other
improvements)’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of more than $100,000
through $250,000). Report this number in column A.
Item 4(c) With original amounts of more than
$250,000 through $500,000.
Add up the total carrying value of all currently outstanding ‘‘Loans secured by farmland (including farm residential and other improvements)’’ (excluding those held in
the branch’s IBF) with ‘‘original amounts’’ of more than
$250,000 through $500,000 and report this total amount
in column B. Do not add up the ‘‘original amounts’’ of
each of these loans and report the total original amount in
column B.
Count the number of individual ‘‘Loans secured by
farmland (including farm residential and other improvements)’’ (excluding those held in the branch’s IBF)
whose carrying values were included in the amount
reported in column B for this item (i.e., those ‘‘Loans
secured by farmland (including farm residential and other
improvements)’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of more than $250,000
through $500,000). Report this number in column A.
Item M5 Number and amount currently
outstanding of ‘‘Loans to finance agricultural
production and other loans to farmers’’ (excluding
those held in the branch’s IBF) reported in
Schedule C, part I, item 8, column A, ‘‘All other
loans.’’
See the General Instructions to this part II for the
guidelines for determining the ‘‘original amount’’ of a
loan. Multiple loans to one borrower should be combined
and reported on an aggregate basis rather than as separate
individual loans to the extent that the loan systems in
which the branch’s business and/or farm loan data are
maintained can provide aggregate individual borrower
data without undue cost to the reporting institution.
However, if the burden of such aggregation would be
excessive, the institution may report multiple loans to
one borrower as separate individual loans.
The sum of the amounts currently outstanding reported in
items 5(a) through 5(c), column B, must be less than or
SCHEDULE C-17

Schedule C

equal to Schedule C, part I, item 8, column A minus
column B.
Item M5(a)
less.

With original amounts of $100,000 or

Add up the total carrying value of all currently outstanding ‘‘Loans to finance agricultural production and other
loans to farmers’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of $100,000 or less and
report this total amount in column B. Do not add up the
‘‘original amounts’’ of each of these loans and report the
total original amount in column B.
Count the number of individual ‘‘Loans to finance agricultural production and other loans to farmers’’ (excluding those held in the branch’s IBF) whose carrying values
were included in the amount reported in column B for
this item (i.e., those ‘‘Loans to finance agricultural
production and other loans to farmers’’ (excluding those
held in the branch’s IBF) with ‘‘original amounts’’ of
$100,000 or less). Report this number in column A.
Item M5(b) With original amounts of more than
$100,000 through $250,000.
Add up the total carrying value of all currently outstanding ‘‘Loans to finance agricultural production and other
loans to farmers’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of more than $100,000
through $250,000 and report this total amount in column B. Do not add up the ‘‘original amounts’’ of each of
these loans and report the total original amount in column
B.
Count the number of individual ‘‘Loans to finance agricultural production and other loans to farmers’’ (excluding those held in the branch’s IBF) whose carrying values
were included in the amount reported in column B for
this item (i.e., those ‘‘Loans to finance agricultural
production and other loans to farmers’’ (excluding those
held in the branch’s IBF) with ‘‘original amounts’’ of
more than $100,000 through $250,000). Report this
number in column A.
Item M5(c) With original amounts of more than
$250,000 through $500,000.
Add up the total carrying value of all currently outstanding ‘‘Loans to finance agricultural production and other
loans to farmers’’ (excluding those held in the branch’s
IBF) with ‘‘original amounts’’ of more than $250,000
SCHEDULE C-18

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

Examples of Reporting in Schedule C,
Part II
(1) A branch has a ‘‘Loan secured by nonfarm nonresidential property’’ (not held in its IBF) which has a
carrying value on the June 30 report date of $70,000
and this amount is included in Schedule C, part I,
item 1, column A. The branch made this loan to the
borrower in the original amount of $75,000, so it
would be considered a ‘‘loan to a small business’’
and would be reported in Schedule C, part II.
Because the original amount of the loan is $100,000
or less, the branch would report the $70,000 amount
currently outstanding in part II, item 2(a), column B.
(2) The branch has a second ‘‘Loan secured by nonfarm nonresidential property’’ (not held in its IBF)
which has a carrying value on the June 30 report
date of $60,000 and this amount is included in
Schedule C, part I, item 1, column A. The branch
made this loan to the borrower in the original
amount of $125,000, so it would be considered a
‘‘loan to a small business’’ and would be reported
in Schedule C, part II. Because the original amount
of the loan falls within the more than $100,000
through $250,000 range, the branch would report
the $60,000 amount currently outstanding in part II,
item 2(b), column B.
(3) The branch has a ‘‘Commercial and industrial loan
to a U.S. addressee’’ (not held in its IBF) which has
a carrying value on the June 30 report date of
$200,000 and this amount is included in Schedule C, part I, item 4(a), column A. The branch made
Schedule C

FFIEC 002
September 2008

Schedule C

this loan to the borrower in the original amount of
$250,000, so it would be considered a ‘‘loan to a
small business’’ and would be reported in Schedule C, part II. Because the original amount of the
loan is exactly $250,000 which is the upper end of
the more than $100,000 through $250,000 range,
the branch would report the $200,000 amount
currently outstanding in part II, item 3(b), column
B.

Schedule C, part I, item 4(a), column A. This loan
represents a participation purchased by the branch
from another lender. The original amount of the
entire credit is $1,250,000 and the branch’s original
share of this credit was $250,000. Because the
original amount of the entire credit exceeds
$1,000,000, the loan would not be considered a
‘‘loan to a small business’’ and would not be
reported in Schedule C, part II.

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

(7) The branch has a ‘‘Loan secured by nonfarm nonresidential property’’ (not held in its IBF) and
a ‘‘Commercial and industrial loan to a U.S.
addressee’’ (not held in its IBF) to the same borrower. The first loan has a carrying value on the
June 30 report date of $375,000 and this amount is
included in Schedule C, part I, item 1, column A.
This ‘‘Loan secured by nonfarm nonresidential
property’’ was made in the original amount of
$400,000. The second loan has a carrying value on
the June 30 report date of $650,000 and this amount
is included in Schedule C, part I, item 4(a), column A. This ‘‘Commercial and industrial loan to a
U.S. addressee’’ was made in the original amount of
$750,000.

(5) The branch has a third ‘‘Commercial and industrial
loan to a U.S. addressee’’ (not held in its IBF)
which has a carrying value on the June 30 report
date of $55,000 and this amount is included in
Schedule C, part I, item 4(a), column A. This loan
represents a participation purchased by the branch
from another lender. The original amount of the
entire credit is $750,000 and the branch’s original
share of this credit was $75,000. Based on the
entire amount of the credit that was originated by
the other lender, the loan would be considered a
‘‘loan to a small business’’ and would be reported
in Schedule C, part II. Because the original amount
of the entire credit is $750,000 which falls within
the more than $250,000 through $1,000,000 range,
the branch would report the $55,000 amount currently outstanding in part II, item 3(c), column B.
(6) The branch has another ‘‘Commercial and industrial loan to a U.S. addressee’’ (not held in its IBF)
and it has a carrying value on the June 30 report
date of $120,000. This amount is included in
FFIEC 002
Schedule C

September 2008

Case I: The branch’s loan system can provide
aggregate individual borrower data without undue
cost to the reporting institution. The loan system
indicates that this borrower’s two loans have a
combined original amount of $1,150,000 and therefore the loans would not be considered ‘‘loans to a
small business’’ and would not be reported in
Schedule C, part II.
Case II: The branch’s loan system cannot provide
aggregate individual borrower data without undue
cost to the reporting institution. Therefore, the
borrower’s two loans would be treated as separate
loans for purposes of Schedule C, part II. Based on
its $400,000 original amount, the ‘‘Loan secured by
nonfarm nonresidential property’’ would be considered a ‘‘loan to a small business’’ and would be
reported in Schedule C, part II. Because the original
amount of the loan falls within the more than
$250,000 through $1,000,000 range, the branch
would report the $375,000 amount currently outstanding in part II, item 2(c), column B, and count
this loan as one loan for purposes of part II,
item 2(c), column A. Since the ‘‘Commercial and
SCHEDULE C-19

Schedule C

industrial loan to a U.S. addressee’’ is being handled
separately and its original amount is $750,000, it
would also be considered a ‘‘loan to a small business’’ and would be reported in Schedule C, part II.
Because the original amount of this loan falls within
the more than $250,000 through $1,000,000 range,
the branch would report the $650,000 amount currently outstanding in part II, item 3(c), column B,
and count this loan as one loan for purposes of
part II, item 3(c), column A.
(8) The branch has a ‘‘Loan secured by farmland
(including farm residential and other improvements)’’ (not held in its IBF) which has a carrying
value on the June 30 report date of $225,000. The
branch made this loan to the borrower in the
original amount of $260,000 and the loan is secured
by a first lien on the borrower’s farmland. The
branch has a second ‘‘Loan secured by farmland’’
(not held in its IBF) to this same borrower and it is
secured by a second lien on the borrower’s property. This second lien loan has a carrying value of
$50,000 and the original amount of the loan is the
same as its carrying value. The carrying values of
both loans (the $225,000 first lien loan and the
$50,000 second lien loan) are included in Schedule
C, part I, item 1, column A.
Case I: The branch’s loan system can provide
aggregate individual borrower data without undue
cost to the reporting institution. The loan system
indicates that this borrower’s two loans have a
combined original amount of $310,000 and therefore the two loans together would be considered
a single ‘‘loan to a small farm’’ and would be
reported in Schedule C, part II. Because the original
amount of the two combined loans falls within the
more than $250,000 through $500,000 range, the
branch would report the $275,000 combined total of
the amounts currently outstanding for the two loans
in part II, item 4(c), column B, and count these two
loans to the same borrower as one loan for purposes
of part II, item 4(c), column A.
Case II: The branch’s loan system cannot provide
aggregate individual borrower data without undue
cost to the reporting institution. Therefore, the
borrower’s two loans would be treated as separate
loans for purposes of Schedule C, part II. Based on
its $260,000 original amount, the first lien loan
SCHEDULE C-20

would be considered a ‘‘loan to a small farm’’ and
would be reported in Schedule C, part II. Because
the original amount of the loan falls within the more
than $250,000 through $500,000 range, the branch
would report the $225,000 amount currently outstanding in part II, item 4(c), column B, and count
this loan as one loan for purposes of part II,
item 4(c), column A. Since the second lien loan is
being handled separately and its original amount is
$50,000, it would also be considered a ‘‘loan to a
small farm’’ and would be reported in Schedule C,
part II. Because the original amount of this loan is
less than $100,000, the branch would report the
$50,000 amount currently outstanding in part II,
item 4(a), column B, and count this loan as one loan
for purposes of part II, item 4(a), column A.
(9) The branch has one final ‘‘Loan secured by farmland’’ (not held in its IBF) which has a carrying
value on the June 30 report date of $5,000 and this
amount is included in Schedule C, part I, item 1,
column A. The branch made this loan to the
borrower in the original amount of $300,000, so it
would be considered a ‘‘loan to a small farm’’ and
would be reported in Schedule C, part II. Because
the original amount of the loan falls within the
more than $250,000 through $500,000 range, the
branch would report the $5,000 amount currently
outstanding in part II, item 4(c), column B.
(10) The branch has granted a $150,000 line of credit to
a farmer that is not secured by real estate. The
farmer has received advances twice under this line
of credit and, rather than having signed a single
note for the entire $150,000 amount of the line of
credit, has signed separate notes for each advance.
One note is in the original amount of $30,000 and
the other is in the original amount of $50,000. The
carrying values of the two notes (which are not held
in the branch’s IBF) on the June 30 report date are
the same as their original amounts and these
amounts are included in Schedule C, part I, item 8,
column A. For loans drawn down under lines of
credit, the original amount of the loan is the size
of the line of credit when it was most recently
approved, extended, or renewed prior to the report
date. In this case, the line of credit was most
recently approved for $150,000.
Case I: The branch’s loan system can provide
Schedule C

FFIEC 002
September 2008

Schedule C

aggregate individual borrower data for multiple
advances under lines of credit without undue cost to
the reporting institution. Thus, even though a separate note was signed each time the farmer borrowed
under the line of credit, the loan system combines
all information about the farmer’s separate borrowings under the line of credit. Therefore, the loan
system indicates that the farmer has a line of credit
for $150,000 and that the amount currently outstanding under the line of credit for the combined
carrying values of the two borrowings under the
line of credit is $80,000. Because the line of credit
was most recently approved for $150,000, this
$150,000 original amount for the line of credit
would be considered a ‘‘loan to a small farm’’ that
would be reported in Schedule C, part II. Therefore,
the original amount of the line of credit falls within
the more than $100,000 through $250,000 range
and the branch would report the $80,000 combined
total of the amounts currently outstanding for the
two notes in part II, item 5(b), column B, and count
these two notes to the farmer under the line of credit
as one loan for purposes of part II, item 5(b),
column A.
Case II: The branch’s loan system cannot provide
aggregate individual borrower data for lines of
credit without undue cost to the reporting institu-

FFIEC 002
Schedule C

September 2008

tion. Therefore, the farmer’s two notes under the
line of credit would be treated as separate loans
for purposes of Schedule C, part II. The original
amount of the line of credit is $150,000 and each of
the two notes would be considered a ‘‘loan to a
small farm’’ that would be reported in Schedule C,
part II. Because each of the two notes indicates that
it is part of a $150,000 line of credit and the
$150,000 original amount of the line of credit falls
within the more than $100,000 through $250,000
range, the branch would report both the $30,000
and $50,000 amounts currently outstanding in part II,
item 5(b), column B, and count these as two loans
for purposes of part II, item 5(b), column A.
(11) The branch has one other ‘‘Loan to finance agricultural production and other loans to a farmer’’ (not
held in its IBF) which has a carrying value on the
June 30 report date of $75,000 and this amount is
included in Schedule C, part I, item 8, column A.
The branch made this loan to the borrower in the
original amount of $100,000, so it would be considered a ‘‘loan to a small farm’’ and would be
reported in Schedule C, part II. Because the original
amount of the loan is exactly $100,000 which is the
upper end of the $100,000 or less range, the branch
would report the $75,000 amount currently outstanding in part II, item 5(a), column B.

SCHEDULE C-21

INSTRUCTIONS FOR THE PREPARATION OF

Deposit Liabilities and
Credit Balances
Schedule E

General Instructions
A complete discussion of deposits is included in the
Glossary entry entitled ‘‘deposits.’’ That discussion
addresses the following topics and types of deposits in
detail:
(1) Federal Deposit Insurance Act definition of deposits;
(2) transaction accounts;

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

(3) demand deposits;
(4) NOW accounts;
(5) ATS accounts;
(6) telephone or preauthorized transfer accounts;
(7) nontransaction accounts;
(8) savings accounts;
(9) time deposits;
(10) time certificates of deposit;
(11) time deposits, open account;
(12) interest-bearing deposit accounts; and
(13) noninterest-bearing deposit accounts.
Additional discussions pertaining to deposits will also be
found under separate Glossary entries for:
(1) brokered deposits;
(2) credit balances;
(3) letter of credit (for letters of credit sold for cash and
travelers’ letters of credit);
(4) overdraft;
(5) pass-through reserve balances; and
(6) reciprocal balances.
This schedule covers the deposit liabilities and credit
FFIEC 002
Schedule E

September 2008

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

Schedule E

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

viced for others that have not yet been remitted to
the owners of the loans.
(4) Funds received from customers and held for the
eventual application to the reduction of outstanding
acceptances or where the receipt thereof does not
immediately reduce or extinguish the indebtedness.
(5) Credit balances, as defined in the Glossary, are those
liabilities held by U.S. agencies of foreign banks that
are defined as such by state law or federal regulation.
For purposes of this report, they are included as part
of transaction accounts.
(6) Funds received or held in connection with checks or
drafts drawn by the reporting branch or agency and
drawn on, or payable at or through, another depository institution either on a zero-balance account or on
an account that is not routinely maintained with
sufficient balances to cover checks drawn in the
normal course of business (including accounts where
funds are remitted by the reporting branch or agency
only when it has been advised that the checks or
drafts have been presented).
(7) Funds received or held in connection with traveler’s
checks and money orders sold (but not drawn) by the
reporting branch or agency, until the proceeds of the
sale are remitted to another party, and funds received
or held in connection with such other checks used
(but not drawn) by the reporting branch or agency,
until the amount of the checks is remitted to another
party.
(8) Checks drawn by the reporting branch or agency
on, or payable at or through, a Federal Reserve
Bank or a Federal Home Loan Bank.
(9) Refundable loan commitment fees received or held
by the reporting branch or agency prior to loan
closing.
In addition, the gross amount of debit items (‘‘throwouts,’’ ‘‘bookkeepers’ cutbacks,’’ or ‘‘rejects’’) that cannot be posted to the individual deposit accounts without
creating overdrafts or for some other reason (e.g., stop
payment, missing endorsement, post or stale date,
or account closed), but which have been charged to the
control accounts of the various deposit categories on
the general ledger, should be credited to (added back to)
the appropriate deposit control totals and reported in
Scedule RAL, item 1(h) ‘‘Other assets.’’
Schedule E

FFIEC 002
September 2008

Schedule E

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

Summary of Transaction Account
Classifications
(See the Glossary entry for ‘‘deposits’’ for detailed
definitions and further information.)
Always regarded as transaction accounts:
(1) Demand deposits.
(2) NOW accounts.
(3) ATS accounts.
(4) Accounts (other than savings deposits) from which
payments may be made to third parties by means of
an automated teller machine (ATM), a remote service
unit (RSU), or another electronic device, including
by debit card.

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

(5) Accounts (other than savings deposits) that permit third party payments through use of checks,
drafts, negotiable instruments, or other similar
instruments.

(4) Accounts that permit transfers to other accounts of
the depositor at the same institution through ATMs or
RSUs.

Deposits or accounts that are regarded as transaction
accounts if the following specified conditions exist:

Column Instructions

(1) Accounts that otherwise meet the definition of savings deposits but that authorize or permit the depositor to exceed the transfer and withdrawal rules for a
savings deposit.
(2) Any deposit or account that otherwise meets the
definition of a time deposit but that allows withdrawals within the first six days after the date of deposit
and that does not require an early withdrawal penalty
of at least seven days’ simple interest on amounts
withdrawn within those first six days, unless the
deposit or account meets the definition of a savings
deposit. Any such deposit or account that meets the
FFIEC 002
Schedule E

September 2008

Deposits as summarized above are divided into two
general categories, ‘‘Transaction Accounts’’ (columns A
and B) and ‘‘Nontransaction Accounts’’ (column C).
Deposits of the branch or agency’s IBF are excluded
from columns A, B, and C, and are reported separately in
column D.
Column A, Total Transaction Accounts and Credit
Balances (excluding IBF): Report in column A the total
of all transaction accounts and credit balances (excluding
IBF) as summarized above and fully defined in the
Glossary entries for ‘‘deposits’’ and ‘‘credit balances.’’
With the exceptions noted in the item instructions and
Glossary entries, the term ‘‘transaction account’’ is
SCHEDULE E-3

Schedule E

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

in Schedule M. Amounts in this column should exclude
federal funds purchased and securities sold under agreements to repurchase (which are reported in Schedule
RAL, item 4(b), as appropriate).

Item Instructions
In items 1 through 5 of Schedule E, institutions report
separate breakdowns of their transaction and nontransaction accounts by category of depositor. When reporting
brokered deposits in these items, the funds should be
categorized based on the beneficial owners of the funds
that the broker has placed in the institution. The business
structure of the deposit broker (i.e., whether the broker is,
for example, a bank, an individual, a partnership, or a
nonbank corporation) has no bearing on the categorization of the deposit. Thus, deposits placed in an institution
by a deposit broker that is a nonbank corporation should
not be reported in their entirety as deposits of ‘‘individuals, partnerships, and corporations’’ when in fact the
beneficial owners of the deposits are, for example, individuals, foreign governments, and other commercial
banks. Instead, the institution should report these deposits in items 1 through 5 of Schedule E according to the
appropriate beneficial owner categories as deposits of
‘‘Individuals, partnerships, and corporations,’’ ‘‘Foreign
governments and Official institutions,’’ and ‘‘Commercial banks in the U.S.’’ based on the proportionate amount
of funds from each category of depositor included in
the brokered deposits the institution has received. For
further information, see the Glossary entry for ‘‘brokered
deposits.’’
Item 1 Deposits of individuals, partnerships, and
corporations (include all certified and official
checks).
Report in the appropriate column all deposits and credit
balances of individuals, partnerships, and corporations,
wherever located, as well as all certified and official
checks.
Include in this item:
(1) Deposits related to the personal, household, or family
activities of both farm and nonfarm individuals and
to the business activities of sole proprietorships.
(2) Deposits of corporations and organizations (other
than depository institutions), regardless of whether or
not they are operated for profit, including but not
limited to:
Schedule E

FFIEC 002
September 2008

Schedule E

(a) mutual funds and other nondepository financial
institutions;
(b) foreign government-owned nonbank commercial
and industrial enterprises; and
(c) quasi-governmental organizations such as post
exchanges on military posts and deposits of a
company, battery, or similar organization (unless
the reporting branch or agency has been designated by the U.S. Treasury as a depository for
such funds and appropriate security for the deposits has been pledged, in which case, report in
item 5).
(3) Dealer reserve accounts. Exclude dealer differential
accounts, which are to be reported in Schedule RAL,
item 4(e).
(4) Deposits of U.S. Government agencies and instrumentalities such as the:
(a) Banks for Cooperatives,
(b) Export–Import Bank of the U.S.,
(c) Federal Deposit Insurance Corporation,
(d) Federal Financing Bank,
(e) Federal Home Loan Banks,
(f) Federal Home Loan Mortgage Corporation,
(g) Federal Intermediate Credit Banks,
(h) Federal Land Banks,
(i) Federal National Mortgage Association,
(j) National Credit Union Administration Central
Liquidity Facility,
(k) National Credit Union Share Insurance Fund,
(l) Office of Thrift Supervision, and
(m) (m) Student Loan Marketing Association.
(5) Deposits of trust funds standing to the credit of other
banks and all trust funds held or deposited in any
department (except the trust department) of the
reporting branch or agency, if the beneficiary is an
individual, partnership, or corporation.
(6) Credit balances on credit cards and related plans as a
result of customer overpayment.
FFIEC 002
Schedule E

September 2008

(7) Deposits of a federal or state court held for the
benefit of individuals, partnerships, or corporations,
such as bankruptcy funds and escrow funds.
(8) Certified and official checks, which include the
following:
(a) Unpaid depositors’ checks that have been
certified.
(b) Cashiers’ checks, money orders, or other officers’
checks issued for any purpose including those
issued in payment for services, dividends, or
purchases that are drawn on the reporting branch
or agency by any of its duly authorized officers
and that are outstanding on the report date.
(c) Funds received or held in connection with checks
or drafts drawn by the reporting branch or agency
and drawn on, or payable at or through, another
depository institution either on a zero-balance
account or on an account that is not routinely
maintained with sufficient balances to cover
checks drawn in the normal course of business
(including accounts where funds are remitted by
the reporting branch or agency only when it has
been advised that the checks or drafts have been
presented).
(d) Funds received or held in connection with traveler’s checks and money orders sold (but not
drawn) by the reporting branch or agency, until
the proceeds of the sale are remitted to another
party, and funds received or held in connection
with such other checks used (but not drawn) by
the reporting branch or agency, until the amount
of the checks is remitted to another party.
(e) Checks drawn by the reporting branch or agency
on, or payable at or through, a Federal Reserve
Bank or a Federal Home Loan Bank.
(f) Outstanding travelers’ checks, travelers’ letters
of credit, or other letters of credit (less any
outstanding drafts accepted thereunder) sold for
cash or its equivalent by the reporting branch or
agency or its agents.
(g) Outstanding drafts and bills of exchange accepted
by the reporting branch or agency or its agents
for money or its equivalent, including drafts
accepted against a letter of credit issued for
money or its equivalent.
SCHEDULE E-5

Schedule E

(h) Checks or drafts drawn by the reporting branch
or agency on itself on behalf of the head office
and other foreign related institutions. Such drafts
are, for purposes of this report and federal deposit
insurance assessments, the same as officers’
checks. This would include ‘‘London checks,’’
‘‘Eurodollar bills payable checks,’’ and any other
credit items that the branch or agency issues in
connection with such transactions.
Exclude from this item deposits of:
(1) The U.S. Government and states and political subdivisions in the U.S. (report in item 5).
(2) Commercial banks in the U.S. (report in item 2).
(3) Other depository institutions in the U.S. (report in
item 5).
(4) Banks in foreign countries (report in item 3).
(5) The head office or other related depository institutions (report in Schedule M).
Item 1(a) U.S. addressees (domicile).
Report in the appropriate column all deposits of individuals, partnerships, and corporations domiciled in the
U.S., i.e., U.S. addressees (as well as all certified and
official checks). (See the Glossary entry for ‘‘domicile’’
for further discussion of ‘‘addressee.’’)
NOTE: Report in column D (IBF deposit liabilities) all
deposits of individuals, partnerships, and corporations
domiciled in Puerto Rico and the U.S. territories and
possessions.
Item 1(b) Non-U.S. addressees (domicile).
Report in the appropriate column all deposits of individuals, partnerships, and corporations domiciled in
foreign countries, i.e., non-U.S. addressees. (See the
Glossary entry for ‘‘domicile’’ for further discussion of
‘‘addressee.’’) Exclude all certified and official checks,
which are to be reported in item 1(a), above.
NOTE: Report in column D all deposits of individuals,
partnerships, and corporations domiciled outside of the
50 states of the U.S., Puerto Rico, and the U.S. territories
and possessions.
Item 2 Deposits and credit balances of commercial
banks in the U.S. (including their IBFs).
Report in the appropriate column (as described above
under ‘‘Column Instructions’’) all deposit liabilities and
SCHEDULE E-6

credit balances of commercial banks in the U.S. (including IBFs). For purposes of this item, commercial banks in
the U.S. include:
(1) U.S. branches and agencies of other foreign banks;
(2) all other commercial banks in the U.S., i.e., U.S.
domiciled branches of U.S. banks; and
(3) IBFs of U.S. branches and agencies of foreign banks
and other commercial banks in the U.S.
Exclude any of these institutions that are related to the
reporting institution (report in Schedule M). Refer to
the Glossary entries for ‘‘banks, U.S. and foreign’’ and
‘‘international banking facilities (IBF)’’ for further discussion of these terms.
For purposes of this schedule, U.S. branches and agencies
of other foreign banks include U.S. branches and agencies of foreign official banking institutions (including
central banks and nationalized banking and other banking
institutions owned by foreign governments that have as
an important part of their function activities similar to
those of a central bank) and investment companies that
are chartered under Article XII of the New York State
banking law and that are majority-owned by one or more
nonrelated foreign banks.
Exclude from this item, and from items 2(a) and 2(b)
below, deposits of the following depository institutions:
(1) Building or savings and loan associations, home
stead associations, cooperative banks, credit unions,
and mutual or stock savings banks (report in item 5
below).
(2) Banks in foreign countries (report in item 3 below).
(See the Glossary entry for ‘‘banks, U.S. and foreign’’ for the definition of this term.)
Item 2(a) U.S. branches and agencies of other
foreign banks.
Report in the appropriate column deposits and credit
balances of U.S. branches and agencies of other foreign
banks and deposits of U.S.-domiciled offices of New York
State (Article XII) investment companies that are
majority-owned by one or more other foreign banks.
Also included in this item are deposits of IBFs of U.S.
branches and agencies of foreign banks. Exclude deposits
and credit balances of institutions that are related to the
reporting institution (to be reported in Schedule M).
Schedule E

FFIEC 002
September 2008

Schedule E

Exclude deposits of U.S.-chartered banks owned by foreign banks or by foreign official banking institutions (to
be reported in item 2(b) below).

Item 3(a)

Item 2(b)

Exclude deposits of foreign-domiciled banking subsidiaries of nonrelated U.S. banks and Edge and Agreement
corporations (report in item 3(b) below).

Other commercial banks in the U.S.

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

Foreign branches of U.S. banks.

Report in the appropriate column all deposits of foreign
(non-U.S.) branches of nonrelated (1) U.S. banks and
(2) Edge and Agreement corporations.

Item 3(b)

Other banks in foreign countries.

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

Item 3

Deposits of banks in foreign countries.

Report in the appropriate column all deposits of nonrelated banks located in foreign countries. For purposes of
this item, nonrelated banks in foreign countries include:
(1) foreign-domiciled branches of U.S. banks; and
(2) foreign-domiciled branches of other foreign banks.
Exclude from this item and from items 3(a) and 3(b)
below, deposits of foreign official institutions and foreign
central banks (to be reported in item 4 below), deposits of
U.S. branches and agencies of other foreign banks and of
New York State investment companies (to be reported in
item 2(a) above), and deposits of related banking institutions (to be reported in Schedule M).
Reciprocal demand balances with nonrelated banks in
foreign countries should be reported gross.
See the Glossary entry for ‘‘banks, U.S. and foreign’’ for
further discussion of these terms.
FFIEC 002
Schedule E

September 2008

(1) U.S. branches and agencies of foreign official banking institutions (report in item 2(a) above).
(2) Nationalized banks and other banking institutions
that are owned by foreign governments and that do
not function as central banks, banks of issue, or
development banks (report in item 3(b) above).
(3) Foreign government-owned nonbank commercial
and industrial enterprises (report in item 1(a) or 1(b)
above).
(4) Deposits of the reporting institution’s parent if the
parent is a foreign government or official institution.
Such transactions are reported in Schedule M.
Item 5

All other deposits and credit balances.

Report in the appropriate column, all other deposits and
credit balances due to nonrelated institutions not covered
in items 1 through 4 above. Included in this item are
deposits of:
SCHEDULE E-7

Schedule E

(1) The United States Government. Such deposits
include:
(a) U.S. Treasury Tax and Loan Accounts, including
deposits of federal income tax withheld from
employee salaries, from interest and dividend
payments, and from distributions or payments
from pensions, annuities, and other deferred
income including IRAs; social security tax deposits and other federal tax payments; and the proceeds from sales of U.S. Savings Bonds.
(b) NOTE: Only deposits credited to the U.S. Treasury Tax and Loan demand deposit accounts that
represent funds received as of the close of business of the ‘‘current’’ day should be reported as
Treasury Tax and Loan Demand Deposits. (The
‘‘current’’ day’s deposits should reflect those
deposits on the branch or agency’s books standing to the credit of the U.S. Treasury’s Tax and
Loan Account as of the report date.) Funds
credited to Tax and Loan Demand Deposit
Accounts as of the close of business on previous
days should already have been remitted to the
Federal Reserve Bank (and thus excluded from
this report) or automatically converted into openended interest-bearing notes (to be reported
in Schedule RAL, item 4(c)), depending on the
option selected by the reporting institution.
(c) Deposits standing to the credit of certain quasigovernmental institutions when the reporting
branch or agency has been designated by the U.S.
Treasury as a depository for such funds.
(d) Deposits of the U.S. Postal Service and local post
offices.
Exclude from this item deposits of U.S. Government agencies and instrumentalities. (Such deposits are to be reported in item 1 above.)
(2) States and political subdivisions in the U.S. Deposits
of these entities include deposits of public funds
standing to the credit of states, counties, municipalities, and local housing authorities; school, irrigation,
drainage, and reclamation districts; or other instrumentalities of one or more states of the United States,
the District of Columbia, Puerto Rico, and U.S.
territories and possessions.
SCHEDULE E-8

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

Not applicable.

Item 7

Total deposits and credit balances.

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

Memoranda
Item M1 Components of total nontransaction
accounts.
The amounts to be reported in items 1(a) and 1(c) below
are included as components of total nontransaction
accounts (excluding IBF) in item 7, column C above.
(See the Glossary entry for ‘‘deposits’’ for a discussion of
nontransaction accounts).
NOTE: These amounts exclude amounts outstanding to
the head office and related depository institutions (to be
reported in Schedule M, as appropriate).
Item M1(a)

Time deposits of $100,000 or more.

Report in this item all time deposits included in item 7,
column C, with balances of $100,000 or more, regardless
Schedule E

FFIEC 002
September 2008

Schedule E

of negotiability or transferability. Include in this item
time certificates of deposit and open-account time deposits with balances of $100,000 or more, including brokered deposits issued to brokers or dealers in the form of
large ($100,000 or more) certificates of deposit, regardless of whether the underlying depositors’ shares are in
denominations of less than $100,000. (See the Glossary
entry for ‘‘deposits’’ for the definition of time certificates
of deposit.)
Item M1(b) Individual Retirement Accounts
(IRAs) and Keogh Plan accounts included in
Memorandum item 1.a “Total time deposits of
$100,000 or more,” above.
Report in this item all IRA and Keogh Plan time deposits
of $100,000 or more included above in Schedule E,
Memorandum item 1.a. IRAs include traditional IRAs,
Roth IRAs, Simplified Employee Pension (SEP) IRAs,
and SIMPLE IRAs.

which are primarily 401(k) plan accounts. Also exclude
deposits in Health Savings Accounts, Medical Savings
Accounts, and Coverdell Education Savings Accounts
(formerly known as Education IRAs).
Item M1(c) Time certificates of deposit in
denominations of $100,000 or more with remaining
maturity of more than 12 months.
Enter the dollar amount outstanding of all time certificates of deposit included in item 7, column C, both
negotiable and nonnegotiable, issued in denominations of
$100,000 or more with remaining maturity of more than
12 months.
So called ‘‘roll-over’’ negotiable certificates of deposit
should be reported according to the remaining maturity
of the overall long-term deposit contract, or master
contract, rather than that of the shorter-term certificates
of deposit actually issued.

Exclude deposits in ‘‘Section 457’’ deferred compensation plans and self-directed defined contribution plans,

FFIEC 002
Schedule E

September 2008

SCHEDULE E-9

INSTRUCTIONS FOR THE PREPARATION OF

Quarterly Averages
Schedule K

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

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

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

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

September 2008

Total loans, net of unearned income.

Total claims on nonrelated parties.

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

Schedule K

Item 7 Interest-bearing deposits and credit
balances.

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

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

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

SCHEDULE K-2

Item 9

Other borrowed money.

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

Schedule K

FFIEC 002
September 2008

INSTRUCTIONS FOR THE PREPARATION OF

Derivatives and
Off-Balance Sheet Items
Schedule L

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

Item Instructions
Item 1

Commitments to make or purchase loans.

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

September 2008

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

Spot foreign exchange contracts.

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

Standby letters of credit.

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

Schedule L

(and all legally binding commitments to issue standby
letters of credit) issued by the reporting branch or agency,
including it IBF, or acquired from others. Include those
standby letters of credit that are collateralized by cash on
deposit and those in which participations have been
conveyed to others where (a) the originating branch or
agency, including IBF, is to pay the full amount of any
draft drawn under the terms of the standby letter of credit
and (b) the participating institutions have an obligation to
partially or wholly reimburse the originating branch
or agency, including its IBF, either directly in cash or
through a participation in a loan to the account party. (See
the Glossary entry for ‘‘letter of credit’’ for the definition
of standby letter of credit.)
Originating branches or agencies, including their IBFs,
also must report the amount of standby letters of credit
conveyed to others through participations in item 3(b).
Branches or agencies, including their IBFs, participating
in such arrangements must report in item 3(a) the full
amount of their contingent liabilities to participate in
such standby letters of credit without deducting any
amounts that they may have reparticipated to others.
Participating branches or agencies, including their IBFs,
also must report the amount of participation interests in
such transactions they have reparticipated to others, if
any, in item 3(b).

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

Total.

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

To U.S. addressees (domicile).

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

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

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

For syndicated standby letters of credit where each
institution or branch or agency has a direct obligation to
the beneficiary, each financial institution must report only
its share in the syndication. Similarly, if several financial
institutions participate in the issuance of a standby letter
of credit under a bona fide binding agreement which
provides that (a) regardless of any event, each participant
shall be liable only up to a certain percentage or to a
certain amount and (b) the beneficiary is advised and has
agreed that each participant is only liable for a certain
portion of the entire amount, each bank or branch or
agency shall report only its proportional share of the total
standby letter of credit.

Item 3(b) Amount of total standby letters of credit
in item 3(a) conveyed to others through
participations.

For a standby letter of credit that is in turn backed by a
standby letter of credit issued by another financial institution, each branch or agency, including its IBF, must
report the entire amount of the standby letter of credit it
has issued in item 3(a) The amount of the branch or
agency’s standby letter of credit must be included in
item 3(b) since the backing of a standby letter of credit

Item 4

SCHEDULE L-2

Report that portion of the branch or agency’s (including
its IBF’s) total contingent liability for standby letters of
credit reported in items 3(a)(1) and 3(a)(2) that the
branch or agency has conveyed to others. Participations
and backings may be for any part or all of a given
obligation. Also, include that portion of the branch or
agency’s standby letters of credit reported in items 3(a)(1)
and 3(a)(2) that are backed by other banks’ standby
letters of credit.
Commercial and similar letters of credit.

Report the amount outstanding and unused as of the
report date of issued or confirmed commercial letters of
credit, travelers’ letters of credit not issued for money or
its equivalent, and all similar letters of credit, but excluding standby letters of credit (which are to be reported in
item 3 above). Legally binding commitments to issue
Schedule L

FFIEC 002
September 2008

Schedule L

commercial letters of credit are also to be reported in this
item. (See the Glossary entry for ‘‘letter of credit.’’)
Travelers’ letters of credit or other letters of credit issued
for money or its equivalent by the reporting branch or
agency or its agents should be reported as demand
deposit liabilities in Schedule E.
Item 5

Not applicable.

Item 6

Credit derivatives.

Report in the appropriate subitem and column the
notional amount and fair value of all credit derivatives. In
general, credit derivatives are arrangements that allow
one party (the ‘‘beneficiary’’) to transfer the credit risk of
a ‘‘reference asset’’ or “reference entity” to another party
(the ‘‘guarantor’’). Branches and agencies should report
the notional amounts of credit derivatives by type of
instrument in Schedule L, items 6.a.(1) through 6.a.(4).
Branches and agencies should report the gross positive
and negative fair values of all credit derivatives in
Schedule L, items 6.b.(1) and 6.b.(2). For both the
notional amounts and gross fair values, report credit
derivatives for which the branch or agency is the guarantor in column A and those on which the branch or agency
is the beneficiary in column B.
No netting of contracts is permitted for purposes of this
item. Therefore, do not net the notional amounts or fair
values of: (1) credit derivatives with third parties on
which the reporting branch or agency is the beneficiary
against credit derivatives with third parties on which the
reporting branch or agency is the guarantor, or (2)
contracts subject to bilateral netting agreements. The
notional amount of credit derivatives should not be
included in Schedule L, items 9 through 11, and the fair
value of credit derivatives should not be included in
Schedule L, item 12.
Item 6.a Notional amounts
Report in the appropriate subitem and column the
notional amount (stated in U.S. dollars) of all credit
derivatives. For tranched credit derivative transactions
that relate to an index, e.g., the Dow Jones CDX NA
index, report as the notional amount the dollar amount of
the tranche upon which the reporting branch or agency’s
credit derivative cash flows are based.
FFIEC 002
Schedule L

September 2008

Item 6.a.(1) Credit default swaps
Report in the appropriate column the notional amount of
all credit default swaps. A credit default swap is a
contract in which a guarantor (risk taker), for a fee,
agrees to reimburse a beneficiary (risk hedger) for any
losses that occur due to a credit event on a particular
entity, called the “reference entity.” If there is no credit
default event (as defined by the derivative contract), then
the guarantor makes no payments to the beneficiary and
receives only the contractually specified fee. Under standard industry definitions, a credit event is normally
defined to include bankruptcy, failure to pay, and restructuring. Other potential credit events include obligation
acceleration, obligation default, and repudiation/
moratorium.
Item 6.a.(2) Total return swaps
Report in the appropriate column the notional amount of
all total return swaps. A total return swap transfers the
total economic performance of a reference asset, which
includes all associated cash flows, as well as capital
appreciation or depreciation. The protection buyer
receives a floating rate of interest and any depreciation on
the reference asset from the protection seller. The protection seller (guarantor) has the opposite profile. The
guarantor receives cash flows on the reference asset, plus
any appreciation, and it pays any depreciation to the
beneficiary, plus a floating interest rate. A total return
swap may terminate upon a default of the reference asset.
Item 6.a.(3) Credit options
Report in the appropriate column the notional amount of
all credit options. A credit option is a structure that
allows investors to trade or hedge changes in the credit
quality of the reference asset. For example, in a credit
spread option, the option writer (guarantor) assumes the
obligation to purchase or sell the reference asset at a
specified “strike” spread level. The option purchaser
(beneficiary) buys the right to sell the reference asset to,
or purchase it from, the option writer at the strike spread
level.
Item 6.a.(4) Other credit derivatives
Report in the appropriate column the notional amount of
all other credit derivatives. Other credit derivatives consist of any credit derivatives not reportable as a credit
default swap, a total return swap, or a credit option.
SCHEDULE L-3

Schedule L

Credit linked notes are cash securities and should not be
reported as other credit derivatives.
Item 6.b

Gross fair values

Report in the appropriate subitem and column the gross
fair values of all credit derivatives. As defined in FASB
Statement No. 133, fair value is the amount at which an
asset (liability) could be bought (incurred) or sold
(settled) in a current transaction between willing parties,
that is, other than in a forced or liquidation sale. Quoted
market prices in active markets are the best evidence of
fair value and should be used as the basis for the
measurement, if available. If a quoted market price is
available, the fair value is the product of the number of
trading units times that market price. If a quoted market
price is not available, the estimate of fair value should be
based on the best information available in the circumstances. The estimate of fair value should consider prices
for similar assets or similar liabilities and the results of
valuation techniques to the extent available in the circumstances. For purposes of this item, the reporting branch or
agency should determine the fair value of its credit
derivative contracts in the same manner that it determines
the fair value of these contracts for other financial
reporting purposes.
Item 6.b.(1)

Gross positive fair value

Report in the appropriate column the total fair value of
those credit derivatives reported in Schedule L, items
6.a.(1) through 6.a.(4), above, with positive fair values.
Item 6.b.(2)

Gross negative fair value

Report in the appropriate column the total fair value of
those credit derivatives reported in Schedule L, items
6.a.(1) through 6.a.(4), above, with negative fair values
Report the total fair value as an absolute value; do not
enclose the total fair value in parentheses or use a minus
(-) sign.
Item 7 All other off-balance sheet contingent
liabilities greater than or equal to 1⁄2 percent of total
claims on nonrelated parties as reported on
Schedule RAL, item 1(i).
Report all significant types of off-balance sheet contingent liabilities not covered in other items of this
schedule.
SCHEDULE L-4

Report only the aggregate amount of those types of
‘‘other off-balance sheet contingent liabilities’’ that individually equal or exceed one half percent of the reporting
institution’s total claims on nonrelated parties (Schedule RAL, item 1(I), column A). If the branch or agency
has no types of ‘‘other off-balance sheet contingent
liabilities’’ that individually equal or exceed one half
percent of total claims on nonrelated parties, report a zero
or the word ‘‘none.’’
In addition, itemize with clear but concise captions those
types of ‘‘other off-balance sheet contingent liabilities’’
reportable in this item that individually equal or exceed
one percent of the institution’s total claims on nonrelated
parties (Schedule RAL, item 1(I), column A). Enter such
items in the inset boxes provided.
Include as ‘‘other off-balance sheet contingent liabilities’’:
(1) The unsold portion of the reporting branch or agency’s own takedown in syndicated securities underwriting transactions, including revolving underwriting facilities (RUFs), note issuance facilities (NIFs),
and other similar arrangements. These are facilities
under which a borrower can issue on a revolving
basis short-term paper in its own name, but for which
the underwriting institutions have a legally binding
commitment either to purchase any notes the borrower is unable to sell by the roll-over date or to
advance funds to the borrower.
(2) Letters of indemnity other than those issued in
connection with the replacement of lost or stolen
official checks.
(3) Shipside or dockside guarantees or similar guarantees relating to missing bills-of-lading or title documents and other document guarantees that facilitate
the replacement of lost or destroyed documents and
negotiable instruments.
(4) Securities borrowed against collateral (other than
cash), or on an uncollateralized basis. For borrowed
securities that are fully collateralized by similar
securities of equivalent value, report the market
value of the borrowed securities at the time they were
borrowed. For other borrowed securities, report their
market value as of the report date.
(5) Commitments to purchase when-issued securities
that are excluded from the requirements of FASB
Schedule L

FFIEC 002
September 2008

Schedule L

Statement No. 133 (and therefore not reported as
forward contracts in Schedule L, item 9(b) below).
(6) Risk participations that the reporting branch or
agency has aquired in acceptances of other (accepting) banking institutions.
Exclude from ‘‘other off-balance sheet contingent
liabilities’’:
(1) All liabilities to nonrelated parties which are required
to be reported in Schedule RAL, such as repurchase
and resale agreements and loans sold with recourse.
(2) Commitments to purchase property being acquired
for lease to others (report in Schedule L, item 1,
above).
(3) Contingent liabilities arising in connection with litigation in which the reporting branch or agency,
including its IBF, is involved.
(4) Any unused portion of retail credit cards, check
credit, and related plans.
(5) Signature or endorsement guarantees of the type
associated with the regular clearing of negotiable
instruments or securities in the normal course of
business.
(6) Commitments to sell foreign currencies and U.S.
dollar exchange (spot and forward).
(7) Commitments that meet the definition of a derivative
and must be accounted for in accordance with FASB
Statement No. 133, which should be reported in
Schedule L, item 9.
Item 8 All other off-balance sheet contingent
claims (assets) greater than or equal to 1⁄2 percent
of total claims on nonrelated parties as reported
on Schedule RAL, item 1(i).
Report to the extent feasible and practicable all significant types of off-balance sheet contingent claims (assets)
not covered in other items of this schedule. Exclude all
items which are required to be reported as claims on
nonrelated parties on the schedule of assets and liabilities
in this report (Schedule RAL) and contingent claims
arising in connection with litigation in which the reporting branch or agency is involved, and assets held in or
administered by the reporting branch or agency’s trust
department.
FFIEC 002
Schedule L

September 2008

Report only the aggregate amount of those types of
‘‘other off-balance sheet contingent claims’’ that individually equal or exceed one half percent of the reporting
institution’s total claims on nonrelated parties (Schedule
RAL, item 1(i), column A). If the branch or agency has
no types of ‘‘other off-balance sheet contingent claims’’
that individually equal or exceed one half percent of total
claims on nonrelated parties for which the reporting
is feasible and practicable, report a zero or the word
‘‘none.’’
In addition, itemize with clear but concise captions those
types of ‘‘other off-balance sheet contingent claims’’
reportable in this item that individually equal or exceed
one percent of the institution’s total claims on nonrelated
parties (Schedule RAL, item 1(i), column A). Enter such
items in the inset boxes provided.
Include as ‘‘other off-balance sheet contingent claims’’
such items as (a) securities lent against collateral (other
than cash) or on an uncollateralized basis, (b) internally
developed intangible assets, and (c) commitments to
sell when-issued securities that are excluded from the
requirements of FASB Statement No. 133 (and therefore
not reported as forward contracts in Schedule L, item 9(b)
below).
Item 9 Gross amounts (e.g., notional amounts) of
derivatives.
Report in the appropriate column and subitem the gross
par value (stated in U.S. dollars) (e.g., for futures,
forwards, and option contracts) or the notional amount
(stated in U.S. dollars) (e.g., for forward rate agreements
and swaps), as appropriate, of all contracts that meet the
definition of a derivative and must be accounted for in
accordance with FASB Statement No. 133Report each
contract according to its underlying risk exposure: interest rate, foreign exchange, equity, and commodity and
other. Contracts with multiple risk characteristics should
be classified based upon the predominant risk characteristics at the origination of the derivative. However,
exclude all credit derivatives, which should be reported
in Schedule L, Memorandum item 1 or 2.
The notional amount to be reported for a derivative
contract with a multiplier component is the contract’s
effective notional amount or par value. For example,
a swap contract with a stated notional amount of
$1,000,000 whose terms called for quarterly settlementof
SCHEDULE L-5

Schedule L

the difference between 5% and LIBOR multiplied by 10
has an effective notional amount of $10,000,000.
No netting of contracts is permitted for purposes of this
item. Therefore, do not net: (1) obligations of the reporting branch or agency to purchase from third parties
against the branch or agency’s obligations to sell to third
parties, (2) written options against purchased options, or
(3) contracts subject to bilateral netting agreements.
For each column, the sum of items 9(a) through 9(e) must
equal the sum of items 10 and 11.

Column Instructions

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

Column A, Interest Rate Contracts: Interest rate contracts are contracts related to an interest-bearing financial
instrument or whose cash flows are determined by referencing interest rates or another interest rate contract (e.g.,
an option on a futures contract to purchase a Treasury
bill). These contracts are generally used to adjust the
branch or agency’s interest rate exposure or, if the branch
or agency is an intermediary, the interest rate exposure of
others. Interest rate contracts include interest rate futures,
single currency interest rate swaps, basis swaps, forward
rate agreements, and interest rate options, including caps,
floors, collars, and corridors.

All amounts in column B are to be reported in U.S. dollar
equivalent values.

Exclude contracts involving the exchange of one or more
foreign currencies (e.g., cross-currency swaps and currency options) and other contracts whose predominant
risk characteristic is foreign exchange risk, which are to
be reported in column B as foreign exchange contracts.

Column D, Commodity and Other Contracts: Commodity contracts are contracts that have a return, or a portion
of their return, linked to the price of or to an index of
precious metals, petroleum, lumber, agricultural products, etc. Commodity and other contracts also include
any other contracts that are not reportable as interest rate,
foreign exchange, or equity derivative contracts.

Unsettled securities transactions that exceed the regular
way settlement time limit that is customary in each
relevant market must be reported as forward contracts in
Schedule L, item 9(b).
Column B, Foreign Exchange Contracts: Foreign
exchange contracts are contracts to purchase foreign
(non-U.S.) currencies and U.S. dollar exchange in the
forward market, i.e., on an organized exchange or in
an over-the-counter market. A purchase of U.S. dollar
exchange is equivalent to a sale of foreign currency.
Foreign exchange contracts include cross-currency interest rate swaps where there is an exchange of principal,
forward foreign exchange contracts (usually settling three
or more business days from trade date), and currency
futures and currency options. Exclude spot foreign
exchange contracts which are to be reported in Schedule L, item 2.
SCHEDULE L-6

Column C, Equity Derivative Contracts: Equity derivative contracts are contracts that have a return, or a portion
of their return, linked to the price of a particular equity or
to an index of equity prices, such as the Standard and
Poor’s 500.
The contract amount to be reported for equity derivative
contracts is the quantity, e.g., number of units, of the
equity instrument or equity index contracted for purchase
or sale multiplied by the contract price of a unit.

The contract amount to be reported for commodity and
other contracts is the quantity, e.g., number of units, of
the commodity or product contracted for purchase or sale
multiplied by the contract price of a unit.
The notional amount to be reported for commodity
contracts with multiple exchanges of principal is the
contractual amount multiplied by the number of remaining payments (i.e., exchanges of principal) in the contract.
Item 9(a)

Futures contracts.

Futures contracts represent agreements for delayed delivery of financial instruments or commodities in which the
buyer agrees to purchase and the seller agrees to deliver,
at a specified future date, a specified instrument at a
Schedule L

FFIEC 002
September 2008

Schedule L

specified price or yield. Futures contracts are standardized and are traded on organized exchanges.
Report, in the appropriate column, the aggregate par
value of futures contracts that have been entered into by
the reporting branch or agency and are outstanding (i.e.,
open contracts) as of the report date. Do not report the par
value of financial instruments intended to be delivered
under such contracts if this par value differs from the par
value of the contracts themselves.
Contracts are outstanding (i.e., open) until they have
been cancelled by acquisition or delivery of the underlying financial instruments or by offset. Offset is the
liquidating of a purchase of futures through the sale of an
equal number of contracts of the same delivery month on
the same underlying instrument on the same exchange, or
the covering of a short sale of futures through the
purchase of an equal number of contracts of the same
delivery month on the same underlying instrument on the
same exchange.
Column A, Interest Rate Futures: Report futures contracts committing the reporting branch or agency to
purchase or sell financial instruments and whose predominant risk characteristic is interest rate risk. Some of
the more common interest rate futures include futures on
90-day U.S. Treasury bills; 12-year GNMA pass-through
securities; and 2-, 4-, 6-, and 10-year U.S. Treasury notes.
Column B, Foreign Exchange Futures: Report the
gross amount (stated in U.S. dollars) of all futures
contracts committing the reporting branch or agency to
purchase foreign (non-U.S.) currencies and U.S. dollar
exchange and whose predominant risk characteristic is
foreign exchange risk.
A currency futures contract is a standardized agreement
for delayed delivery of a foreign (non-U.S.) currency or
U.S. dollar exchange in which the buyer agrees to
purchase and the seller agrees to deliver, at a specified
future date, a specified amount at a specified exchange
rate.
Column C, Equity Derivative Futures: Report futures
contracts committing the reporting branch or agency to
purchase or sell equity securities or instruments based on
equity indexes such as the Standard and Poor’s 500 or the
Nikkei.
Column D, Commodity and Other Futures: Report the
contract amount for all futures contracts committing the
reporting branch or agency to purchase or sell commodiFFIEC 002
Schedule L

September 2008

ties such as agricultural products (e.g., wheat, coffee),
precious metals (e.g., gold, platinum), and non-ferrous
metals (e.g., copper, zinc). Include any other futures
contract that is not reportable as an interest rate, foreign
exchange, or equity derivative contract in column A, B,
or C.
Item 9(b)

Forward contracts.

Forward contracts represent agreements for delayed
delivery of financial instruments or commodities in which
the buyer agrees to purchase and the seller agrees to
deliver, at a specified future date, a specified instrument
or commodity at a specified price or yield. Forward
contracts are not traded on organized exchanges and their
contractual terms are not standardized.
Report the aggregate par value of forward contracts that
have been entered into by the reporting branch or
agency and are outstanding (i.e., open contracts) as
of the report date. Do not report the par value of financial
instruments intended to be delivered under such contracts
if this par value differs from the par value of the contracts
themselves.
Contracts are outstanding (i.e., open) until they have
been cancelled by acquisition or delivery of the underlying financial instruments or settled in cash. Such contracts can only be terminated, other than by receipt of the
underlying asset, by agreement of both buyer and seller.
Include commitments to purchase and sell when-issued
securities that are not excluded from the requirements
of FASB Statement No. 133 as a regular security tradeReport commitments to purchase when-issued securities
that are excluded from the requirements of FASB Statement No. 133 as ‘‘All other off-balance sheet contingent
liabilities’’ in Schedule L, item 7, and commitments
to sell when-issued securities that are excluded from
the requirements of FASB Statement No. 133 as ‘‘Other
off-balance sheet contingent claims’’ in Schedule L,
item 8, subject to the existing reporting thresholds for
these two items.
Column A, Interest Rate Forwards: Report forward
contracts committing the reporting branch or agency to
purchase or sell financial instruments and whose predominant risk characteristic is interest rate risk. Include
in this item firm commitments (i.e., commitments that
have a specific interest rate, selling date, and dollar
amount) to sell loans secured by 1-to-4 family residential
SCHEDULE L-7

Schedule L

properties that meet the definition of a derivative contract
under FASB Statement No. 133.
Column B, Foreign Exchange Forwards: Report the
gross amount (stated in U.S. dollars) of all forward
contracts committing the reporting branch or agency to
purchase foreign (non-U.S.) currencies and U.S. dollar
exchange and whose predominant risk characteristic is
foreign exchange risk.
A forward foreign exchange contract is an agreement for
delayed delivery of a foreign (non-U.S.) currency or U.S.
dollar exchange in which the buyer agrees to purchase
and the seller agrees to deliver, at a specified future date,
a specified amount at a specified exchange rate.
Column C, Equity Derivative Forwards: Report forward
contracts committing the reporting branch or agency to
purchase or sell equity instruments.
Column D, Commodity and Other Forwards: Report the
contract amount for all forward contracts committing the
reporting branch or agency to purchase or sell commodities such as agricultural products (e.g., wheat, coffee),
precious metals (e.g., gold, platinum), and non-ferrous
metals (e.g., copper, zinc). Include any other forward
contract that is not reportable as an interest rate, foreign
exchange, or equity derivative contract in column A, B,
or C.
Item 9(c) Exchange-traded option contracts.
Option contracts convey either the right or the obligation,
depending upon whether the reporting branch or agency
is the purchaser or the writer, respectively, to buy or sell a
financial instrument or commodity at a specified price by
a specified future date. Some options are traded on
organized exchanges.
The buyer of an option contract has, for compensation
(such as a fee or premium), acquired the right (or option)
to sell to, or purchase from, another party some financial
instrument or commodity at a stated price on a specified
future date. The seller of the contract has, for such
compensation, become obligated to purchase or sell the
financial instrument or commodity at the option of the
buyer of the contract. A put option contract obligates the
seller of the contract to purchase some financial instrument or commodity at the option of the buyer of the
contract. A call option contract obligates the seller of the
contract to sell some financial instrument or commodity
at the option of the buyer of the contract.
SCHEDULE L-8

Item 9(c)(1) Written options.
Report in this item the aggregate par value of the
financial instruments or commodities that the reporting
branch or agency has, for compensation (such as a fee or
premium), obligated itself to either purchase or sell under
exchange-traded option contracts that are outstanding as
of the report date.
Column A, Written Exchange-Traded Interest Rate
Options: For exchange-traded option contracts obligating
the reporting branch or agency to either purchase or sell
an interest rate futures contract and whose predominant
risk characteristic is interest rate risk, report the par value
of the financial instrument underlying the futures contract. An example of such a contract is a Chicago Board
Options Exchange option on the 13-week Treasury bill
rate.
Column B, Written Exchange-Traded Foreign Exchange Options: Report in this item the gross amount
(stated in U.S. dollars) of foreign (non-U.S.) currency and
U.S. dollar exchange that the reporting branch or agency
has, for compensation, obligated itself to either purchase
or sell under exchange-traded option contracts whose
predominant risk characteristic is foreign exchange risk.
In the case of option contracts obligating the reporting
branch or agency to either purchase or sell a foreign
exchange futures contract, report the gross amount (stated
in U.S. dollars) of the foreign (non-U.S.) currency underlying the futures contract. Exchange-traded options on
major currencies such as the Japanese Yen, British Pound
Sterling and Euro and options on futures contracts of
major currencies are examples of such contracts.
Column C, Written Exchange-Traded Equity Derivative
Options: Report the contract amount for those exchangetraded option contracts where the reporting branch or
agency has obligated itself, for compensation, to purchase or sell an equity instrument or equity index.
Column D, Written Exchange-Traded Commodity and
Other Exchange-Traded Options: Report the contract
amount for those exchange-traded option contracts where
the reporting branch or agency has obligated itself, for
compensation, to purchase or sell a commodity or product. Include any other written, exchange-traded option
that is not reportable as an interest rate, foreign exchange,
or equity derivative contract in column A, B, or C.
Item 9(c)(2) Purchased options.
Report in this item the aggregate par value of the
financial instruments or commodities that the reporting
Schedule L

FFIEC 002
September 2008

Schedule L

branch or agency has, for a fee or premium, purchased
the right to either purchase or sell under exchange-traded
option contracts that are outstanding as of the report date.
Column A, Purchased Exchange-Traded Interest Rate
Options: For exchange-traded option contracts giving the
reporting branch or agency the right to either purchase or
sell an interest rate futures contract and whose predominant risk characteristic is interest rate risk, report the par
value of the financial instrument underlying the futures
contract. An example of such a contract is a Chicago
Board Options Exchange option on the 13-week Treasury
bill rate.
Column B, Purchased Exchange-Traded Foreign
Exchange Options: Report in this item the gross amount
(stated in U.S. dollars) of foreign (non-U.S.) currency and
U.S. dollar exchange that the reporting branch or agency
has, for a fee, purchased the right to either purchase or
sell under exchange-traded option contracts whose predominant risk characteristic is foreign exchange risk. In
the case of option contracts giving the reporting branch
or agency the right to either purchase or sell a currency
futures contract, report the gross amount (stated in U.S.
dollars) of the foreign (non-U.S.) currency underlying the
futures contract. Exchange-traded options on major currencies such as the Japanese Yen, British Pound Sterling
and Euro and options on futures contracts of major
currencies are examples of such contracts.
Column C, Purchased Exchange-Traded Equity
Derivative Options: Report the contract amount of those
exchange-traded option contracts where the reporting
branch or agency has, for a fee, purchased the right to
purchase or sell an equity instrument or equity index.
Column D, Purchased Exchange-Traded Commodity
and Other Exchange-Traded Options: Report the contract amount for those exchange-traded option contracts
where the reporting branch or agency has, for a fee
or premium, purchased the right to purchase or sell a
commodity or product. Include any other purchased,
exchange-traded option that is not reportable as an
interest rate, foreign exchange, or equity derivative contract in column A, B, or C.
Item 9(d)

Over-the-counter option contracts.

Option contracts convey either the right or the obligation,
depending upon whether the reporting branch or agency
is the purchaser or the writer, respectively, to buy or sell a
financial instrument or commodity at a specified price by
FFIEC 002
Schedule L

September 2008

a specified future date. Options can be written to meet the
specialized needs of the counterparties to the transaction.
These customized option contracts are known as overthe-counter (OTC) options. Thus, over-the-counter option
contracts include all option contracts not traded on an
organized exchange.
The buyer of an option contract has, for compensation
(such as a fee or premium), acquired the right (or option)
to sell to, or purchase from, another party some financial
instrument or commodity at a stated price on a specified
future date. The seller of the contract has, for such
compensation, become obligated to purchase or sell the
financial instrument or commodity at the option of the
buyer of the contract. A put option contract obligates
the seller of the contract to purchase some financial
instrument or commodity at the option of the buyer of the
contract. A call option contract obligates the seller of the
contract to sell some financial instrument or commodity
at the option of the buyer of the contract.
In addition, swaptions, i.e., options to enter into a swap
contract, and contracts known as caps, floors, collars, and
corridors should be reported as options. A cap is a
contract under which the purchaser has, for compensation (such as a fee or premium), acquired the right to
receive a payment from the seller if a specified index rate,
e.g., LIBOR, rises above a designated strike rate. Payments are based on the principal amount or notional
amount of the cap, although no exchange of principal
takes place. A floor is similar to a cap except that the
purchaser has, for compensation (such as a fee or premium), acquired the right to receive a payment from the
seller if the specified index rate falls below the strike rate.
A collar is the simultaneous purchase of a cap (with a
strike rate at one index rate) and sale of a floor (with the
strike rate at a lower index rate), designed to maintain
interest rates within a specified range. The premium
income from the sale of the floor reduces or offsets the
cost of buying the cap. A corridor is the simultaneous
purchase of a cap (with a strike rate at one index rate) and
sale of a cap (with a strike rate at a higher index rate),
designed to reduce the cost of the lower strike cap. The
premium income from the sale of one cap reduces or
offsets the cost of buying the other cap.
Commitments to lend that meet the definition of a
derivative and must be accounted for in accordance with
FASB Statement No. 133 are considered options for
SCHEDULE L-9

Schedule L

purposes of Schedule L, item 9. All other commitments
to lend should be reported in Schedule L, item 1.
Item 9(d)(1)

Written options.

Report in this item the aggregate par value of the
financial instruments or commodities that the reporting
branch or agency has, for compensation (such as a fee or
premium), obligated itself to either purchase or sell under
OTC option contracts that are outstanding as of the report
date. Also report an aggregate notional amount for
written caps, floors, and swaptions and for the written
portion of collars and corridors.
Column A, Written OTC Interest Rate Options: Interest
rate options include options to purchase and sell interestbearing financial instruments and whose predominant
risk characteristic is interest rate risk as well as contracts
known as caps, floors, collars, corridors, and swaptions.
Include in this item the notional principal amount for
interest rate caps and floors that the reporting branch or
agency sells. For interest rate collars and corridors,
report a notional amount for the written portion of the
contract in Schedule L, item 9(d)(1), column A, and for
the purchased portion of the contract in Schedule L,
item 9(d)(2), column A.
Column B, Written OTC Foreign Exchange Options: A
written currency option contract conveys the obligation
to exchange two different currencies at a specified
exchange rate. Report in this item the gross amount
(stated in U.S. dollars) of foreign (non-U.S.) currency and
U.S. dollar exchange that the reporting branch or agency
has, for compensation, obligated itself to either purchase
or sell under OTC option contracts whose predominant
risk characteristic is foreign exchange risk.
Column C, Written OTC Equity Derivative Options:
Report the contract amount for those OTC option contracts where the reporting branch or agency has obligated
itself, for compensation, to purchase or sell an equity
instrument or equity index.
Column D, Written OTC Commodity and Other OTC
Options: Report the contract amount for those OTC
option contracts where the reporting branch or agency
has obligated itself, for compensation, to purchase or sell
a commodity or product. Include any other written, OTC
option that is not reportable as an interest rate, foreign
exchange, or equity derivative contract in column A, B,
or C.
SCHEDULE L-10

Item 9(d)(2)

Purchased options.

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

Swaps.

Swaps are contracts in which two parties agree to
exchange payment streams based on a specified notional
amount for a specified period. Forward starting swap
Schedule L

FFIEC 002
September 2008

Schedule L

contracts should be reported as swaps. The notional
amount of a swap is the underlying principal amount
upon which the exchange of interest, foreign exchange or
other income or expense is based. The notional amount to
be reported for a swap contract with a multiplier component is the contract’s effective notional amount. In those
cases where the reporting branch or agency is acting as
an intermediary, both sides of the transaction are to be
reported.
Column A, Interest Rate Swaps: Report the notional
amount of all outstanding interest rate and basis swaps
whose predominant risk characteristic is interest rate risk.
Column B, Foreign Exchange Swaps: Report the
notional principal amount (stated in U.S. dollars) of all
outstanding cross-currency interest rate swaps.
A cross-currency interest rate swap is a contract in which
two parties agree to exchange principal amounts of
different currencies, usually at the prevailing spot rate, at
the inception of an agreement which lasts for a certain
number of years. At defined intervals over the life of the
swap, the counterparties exchange payments in the different currencies based on specified rates of interest. When
the agreement matures, the principal amounts will be
re-exchanged at the same spot rate. The notional amount
of a cross-currency interest rate swap is generally the
underlying principal amount upon which the exchange is
based.
Column C, Equity Swaps: Report the notional amount of
all outstanding equity or equity index swaps.
Column D, Commodity and Other Swaps: Report the
notional principal amount of all other swap contracts
that are not reportable as either interest rate, foreign
exchange, or equity derivative contracts in column A, B,
or C. The notional amount to be reported for commodity
contracts with multiple exchanges of principal is the
contractual amount multiplied by the number of remaining payments (or exchanges of principal) in the contract.
Item 10 Total gross notional amount of derivative
contracts held for trading.
Report, in the appropriate column, the total notional
amount or par value of those derivative contracts in
Schedule L, item 9 above that are held for trading
purposes. Contracts held for trading purposes include
those used in dealing and other trading activities. DerivaFFIEC 002
Schedule L

September 2008

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

Gross fair values of derivative contracts.

Report in the appropriate column and subitem below the
fair (or market) value of all derivative contracts reported
in Schedule L, items 10 and 11 above. For each of the
four types of underlying risk exposure in columns A
through D, the gross positive and gross negative fair
values will be reported separately for (i) contracts held
for trading purposes (in item 12(a)) and (ii) contracts held
for purposes other than trading (in item 12(b)). Guidance
for reporting by type of underlying risk exposure is
provided in the instructions for Schedule L, item 9 above.
Guidance for reporting by purpose and accounting methodology is provided in the instructions for Schedule L,
items 10 and 11 above.
No netting of contracts is permitted for purposes of this
item. Therefore, do not net (1) obligations of the reporting branch or agency to buy against the branch or
agency’s obligations to sell, (2) written options against
purchased options, (3) positive fair values against negative fair values, or (4) contracts subject to bilateral
netting agreements.
As defined in FASB Statement No. 133, fair value is the
amount at which an asset (liability) could be bought
(incurred) or sold (settled) in a current transaction
between willing parties, that is, other than in a forced or
liquidation sale. Quoted market prices in active markets
are the best evidence of fair value and should be used as
the basis for the measurement, if available. If a quoted
market price is available, the fair value is the product of
SCHEDULE L-11

Schedule L

the number of trading units times that market price. If a
quoted market price is not available, the estimate of fair
value should be based on the best information available
in the circumstances. The estimate of fair value should
consider prices for similar assets or similar liabilities and
the results of valuation techniques to the extent available
in the circumstances. For purposes of item 12, the
reporting branch or agency should determine the fair
value of its derivative contracts in the same manner that it
determines the fair value of these contracts for other
financial reporting purposes.
Item 12(a)

Contracts held for trading.

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

Gross positive fair value.

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

SCHEDULE L-12

negative fair values. Report the total fair value as an
absolute value, do not enclose the total fair value in
parentheses or use a minus (−) sign.
Item 12(b)
trading.

Contracts held for purposes other than

Report in the appropriate column and subitem the gross
positive and gross negative fair values of those contracts
held for purposes other than trading that are reported in
Schedule L, item 11 above.
Item 12(b)(1)

Gross positive fair value.

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

Gross negative fair value.

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

Schedule L

FFIEC 002
September 2008

INSTRUCTIONS FOR THE PREPARATION OF

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

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

September 2008

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

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

Schedule M

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

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

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

FFIEC 002
September 2008

Schedule M

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

Offices of the parent bank in the

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

Other non-U.S. offices of the parent

Item 2(b)(2) includes those offices of the parent bank
domiciled in foreign countries outside the Caribbean and
in U.S. territories and possessions outside the Caribbean.
FFIEC 002
Schedule M

September 2008

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

Total.

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

Schedule M

Schedule RAL and must be corrected to make them
consistent.

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

Related depository offices domiciled in

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

Trading assets and liabilities, related

Report in the appropriate column the amounts of trading
assets and trading liabilities included in the gross due
from and gross due to related depository institutions
SCHEDULE M-4

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

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

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

FFIEC 002
September 2008

Schedule M

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

Head office of parent bank; and

Item 1(b)(2) Non-U.S. branches and agencies of
the parent bank.
Item 1(b)(2) is further subdivided in reporting into:
Item 1(b)(2)(a)

Offices in the Caribbean, and

Item 1(b)(2)(b)

Other offices.

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

Total.

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

IBF net due from establishing entity.

Report the net amount due from the IBF’s establishing
entity (i.e., from the reporting institution) to the IBF.
(This item is the only item in Schedule M in which
transactions between the reporting branch or agency and
its own IBF are reported.) This amount must be derived
from the accounts of the reporting institution’s IBF by
subtracting the sum of the IBF’s permissible assets,
including claims on related institutions other than the
reporting branch or agency, from the sum of the IBF’s
permissible liabilities, including liabilities to related
institutions other than the reporting branch or agency.
(Since the individual asset and liability items in column B of Schedule RAL exclude claims on or by related
depository institutions, Schedule RAL, column B, cannot
be used to derive this item.) Item 2 can be either positive
or negative; if negative, a minus sign (2) must be entered
FFIEC 002
Schedule M

September 2008

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

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

Schedule M

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

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

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

Other real estate owned.

Report the net book value of all other real estate owned.
(NOTE: This information does not relate to due from/due
to related depository institutions transactions.) Include as
all other real estate owned:
(1) Foreclosed real estate, i.e.,
(a) Real estate acquired in any manner for debts
previously contracted (including, but not limited
to, real estate acquired through foreclosure and
real estate acquired by deed in lieu of foreclosure), even if the branch or agency has not yet
received title to the property.
SCHEDULE M-6

(b) Real estate collateral underlying a loan when the
branch or agency has obtained physical possession of the collateral, regardless of whether
formal foreclosure proceedings have been instituted against the borrower.
Foreclosed real estate received in full or partial
satisfaction of a loan should be recorded at the fair
value less cost to sell of the property at the time of
foreclosure. This amount becomes the ‘‘cost’’ of the
foreclosed real estate. When foreclosed real estate is
received in full satisfaction of a loan, the amount, if
any, by which the recorded amount of the loan
exceeds the fair value less cost to sell of the property
is a loss which must be charged to the allowance for
loan and lease losses at the time of foreclosure. The
amount of any senior debt (principal and accrued
interest) to which foreclosed real estate is subject
at the time of foreclosure must be reported as a
liability in Schedule RAL, item 4(c), ‘‘Other borrowed money.’’
After foreclosure, each foreclosed real estate asset
must be carried at the lower of (1) the fair value of
the asset minus the estimated costs to sell the asset or
(2) the cost of the asset (as defined in the preceding
paragraph). This determination must be made on an
asset-by-asset basis. If the fair value of a foreclosed
real estate asset minus the estimated costs to sell the
asset is less than the asset’s cost, the deficiency must
be recognized as a valuation allowance against the
asset which is created through a charge to expense.
The valuation allowance should thereafter be
increased or decreased (but not below zero) through
charges or credits to expense for changes in the
asset’s fair value or estimated selling costs.
(2) Property originally acquired for future expansion but
no longer intended to be used for that purpose.
(3) Foreclosed real estate sold under contract and
accounted for under the deposit method of accounting in accordance with FASB Statement No. 66,
‘‘Accounting for Sales of Real Estate.’’ Under this
method, the seller does not record notes receivable,
but continues to report the real estate and any related
existing debt on its balance sheet. The deposit
method is used when a sale has not been consummated and is commonly used when recovery of the
carrying value of the property is not reasonably
assured. If the full accrual, installment, cost recovery,
Schedule M

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September 2008

Schedule M

reduced profit, or percentage-of-completion method
of accounting under FASB Statement No. 66 is being
used to account for the sale, the receivable resulting
from the sale of the foreclosed real estate should be
reported as a loan in Schedule C and any gain on the
sale should be recognized in accordance with FASB
Statement No. 66.
Property formerly but no longer used for banking may be
reported in this item as ‘‘Other real estate owned.’’ In
addition, regardless of whether such property is reported
in this item, it should be reported in Schedule RAL,
item 1(h), ‘‘Other assets including other claims on nonrelated parties.’’

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

Commitments to make or purchase loans.

Report the unused portions of commitments that obligate
the reporting branch or agency, including its IBF, to
extend credit to related depository institutions in the form
of loans or participations in loans, lease financing receivables, or similar transactions. Exclude commitments that
obligate the reporting branch or agency to extend credit
in the form of retail credit cards, check credit, and related
plans. Also exclude commitments that meet the definition
of a derivative and must be accounted for in accordance
with FASB Statement No. 133, which should be reported
in Schedule M, Part V, item 9.
Report only those commitments to related depository
institutions for which the reporting branch or agency,
including its IBF, has charged a commitment fee or other
consideration, or otherwise has a legally binding commitment. Such commitments are to be reported regardless of
FFIEC 002
Schedule M

September 2008

whether they contain ‘‘material adverse change’’ clauses
or other provisions that are intended to relieve the issuer
of its funding obligations under certain conditions and
regardless of whether they are unconditionally cancellable at any time. In the case of commitments for
syndicated loans or participated loans, report only the
branch or agency’s (or IBF’s) proportional share of the
commitment.
Include loan proceeds that the branch or agency, including its IBF, is obligated to advance to related depository
institutions.
Item 2

Spot foreign exchange contracts.

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

Total standby letters of credit.

Report the total amount outstanding and unused as of the
report date of all standby letters of credit (and all legally
binding commitments to issue standby letters of credit)
issued to related depository institutions that have been
originated by the reporting branch or agency, including
its IBF, or acquired from others. Include those standby
letters of credit that are collateralized by cash on deposit
SCHEDULE M-7

Schedule M

and those in which participations have been conveyed to
others where (a) the originating branch or agency, including its IBF, is obligated to pay the full amount of any
draft drawn under the terms of the standby letter of credit
and (b) the participating institutions have an obligation to
partially or wholly reimburse the originating branch
or agency, including its IBF, either directly in cash or
through a participation in a loan to the account party.
Branches or agencies, including their IBFs, participating
in standby letters of credit issued to related depository
institutions must report the full amount of their contingent liabilities to participate in such standby letters of
credit without deducting any amounts that they may have
reparticipated to others. (See the Glossary entry for
‘‘letter of credit’’ for the definition of standby letter of
credit.)
For syndicated standby letters of credit issued to related
depository institutions where each institution or branch
or agency has a direct obligation to the beneficiary, each
financial institution must report only its share in the
syndication. Similarly, if several financial institutions
participate in the issuance of a standby letter of credit to a
related depository institution under a bona fide binding
agreement which provides that (a) regardless of any
event, each participant shall be liable only up to a certain
percentage or to a certain amount and (b) the beneficiary
is advised and has agreed that each participant is only
liable for a certain portion of the entire amount, each
bank or branch or agency shall report only its proportional share of the total standby letter of credit.
For a standby letter of credit issued to a related depository institution that is in turn backed by a standby letter
of credit issued by another bank, each branch or agency,
including its IBF, must report the entire amount of the
standby letter of credit it has issued to the related
depository institution in this item.
Exclude from standby letters of credit signature or
endorsement guarantees issued to related depository
institutions that are of the type associated with the
clearing of negotiable instruments or securities in the
normal course of business.

to related depository institutions, but excluding standby
letters of credit issued to related depository institutions
(which are to be reported in item 3 above). (See the
Glossary entry for ‘‘letter of credit.’’)
Travelers’ letters of credit or other letters of credit issued
to related depository institutions for money or its equivalent by the reporting branch or agency or its agents
should be included in the calculation of the ‘‘Net due
from/due to related depository institutions,’’ items 2 and
5 of Schedule RAL.
Item 5

Not applicable.

Item 6

Credit derivatives

Report in the appropriate subitem and column the
notional amount and fair value of all credit derivatives. In
general, credit derivatives are arrangements that allow
one party (the ‘‘beneficiary’’) to transfer the credit risk of
a ‘‘reference asset’’ or “reference entity” to another party
(the ‘‘guarantor’’). Branches and agencies should report
the notional amounts of credit derivatives by type of
instrument in Schedule M, items 6.a.(1) through 6.a.(4).
Branches and agencies should report the gross positive
and negative fair values of all credit derivatives in
Schedule M, items 6.b.(1) and 6.b.(2). For both the
notional amounts and gross fair values, report credit
derivatives for which the branch or agency is the guarantor in column A and those on which the branch or agency
is the beneficiary in column B.
No netting of contracts is permitted for purposes of this
item. Therefore, do not net the notional or fair value of:
(1) credit derivatives with related parties on which the
reporting branch or agency is the beneficiary against
credit derivatives with related parties on which the
reporting branch or agency is the guarantor, or (2)
contracts subject to bilateral netting agreements. The
notional amount of credit derivatives should not be
included in Schedule M, items 9 through 11, and the fair
value of credit derivatives should not be included in
Schedule M, item 12.
Item 6.a Notional amounts

Item 4

Commercial and similar letters of credit.

Report the amount outstanding and unused as of the
report date of issued or confirmed commercial letters of
credit, travelers’ letters of credit not issued for money or
its equivalent, and all similar letters of credit issued
SCHEDULE M-8

Report in the appropriate subitem and column the
notional amount (stated in U.S. dollars) of all credit
derivatives. For tranched credit derivative transactions
that relate to an index, e.g., the Dow Jones CDX NA
index, report as the notional amount the dollar amount of
Schedule M

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September 2008

Schedule M

the tranche upon which the reporting branch or agency’s
credit derivative cash flows are based.
Item 6.a.(1)

Credit default swaps.

Report in the appropriate column the notional amount of
all credit default swaps. A credit default swap is a
contract in which a guarantor (risk taker), for a fee,
agrees to reimburse a beneficiary (risk hedger) for any
losses that occur due to a credit event on a particular
entity, called the ‘‘reference entity.’’ If there is no credit
default event (as defined by the derivative contract), then
the guarantor makes no payments to the beneficiary and
receives only the contractually specified fee. Under standard industry definitions, a credit event is normally
defined to include bankruptcy, failure to pay, and restructuring. Other potential credit events include obligation
acceleration, obligation default, and repudiation/
moratorium.
Item 6.a.(2)

Total return swaps.

Report in the appropriate column the notional amount of
all total return swaps. A total return swap transfers the
total economic performance of a reference asset, which
includes all associated cash flows, as well as capital
appreciation or depreciation. The protection buyer
receives a floating rate of interest and any depreciation on
the reference asset from the protection seller.
The protection seller (guarantor) has the opposite profile.
The guarantor receives cash flows on the reference asset,
plus any appreciation, and it pays any depreciation to the
beneficiary, plus a floating interest rate. A total return
swap may terminate upon a default of the reference asset.
Item 6.a.(3)

Credit options.

Report in the appropriate column the notional amount of
all credit options. A credit option is a structure that
allows investors to trade or hedge changes in the credit
quality of the reference asset. For example, in a credit
spread option, the option writer (guarantor) assumes the
obligation to purchase or sell the reference asset at a
specified ‘‘strike’’ spread level. The option purchaser
(beneficiary) buys the right to sell the reference asset to,
or purchase it from, the option writer at the strike spread
level.
FFIEC 002
Schedule M

September 2008

Item 6.a.(4)

Other credit derivatives.

Report in the appropriate column the notional amount of
all other credit derivatives. Other credit derivatives consist of any credit derivatives not reportable as a credit
default swap, a total return swap, or a credit option.
Credit linked notes are cash securities and should not be
reported as other credit derivatives.

Item 6.b

Gross fair values.

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

Item 6.b.(1)

Gross positive fair value.

Report in the appropriate column the total fair value of
those credit derivatives reported in Schedule M, items
6.a.(1) through 6.a.(4), above, with positive fair values.

Item 6.b.(2)

Gross negative fair value.

Report in the appropriate column the total fair value of
those credit derivatives reported in Schedule M, items
6.a.(1) through 6.a.(4), above, with negative fair values.
Report the total fair value as an absolute value; do not
enclose the total fair value in parentheses or use a minus
(-) sign.
SCHEDULE M-9

Schedule M

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

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

(2) Letters of indemnity, other than those issued in
connection with the replacement of lost or stolen
official checks, where the party being indemnified is
a related depository institution.

(5) Signature or endorsement guarantees of the type
associated with the regular clearing of negotiable
instruments or securities in the normal course of
business.

(3) Shipside or dockside guarantees or similar guarantees relating to missing bills-of-lading or title documents and other document guarantees that facilitate

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

SCHEDULE M-10

Schedule M

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Schedule M

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

(stated in U.S. dollars) (e.g., for forward rate agreements
and swaps), as appropriate, of all contracts between the
reporting branch or agency and related depository institutions that meet the definition of a derivative and must
be accounted for in accordance with FASB Statement
No. 133. Report the contract according to its underlying
risk exposure: interest rate, foreign exchange, equity,
and commodity and other. Contracts with multiple risk
characteristics should be classified based upon the predominant risk characteristics at the origination of the
derivative. However, exclude all credit derivatives with
related depository institutions, which should be reported
in Schedule M, Part V, Memorandum items 1 or 2.
The notional amount to be reported for a derivative
contract with a multiplier component is the contract’s
effective notional amount. For example, a swap contract
with a stated notional amount of $1,000,000 whose terms
called for quarterly settlement of the difference between
5% and LIBOR multiplied by 10 has an effective notional
amount of $10,000,000.
Consistent with FASB Statement No. 133 and its implementation guidance, intercompany derivatives between a
U.S. branch or agency and a related party, including the
reporting branch or agency’s parent bank, may qualify
for hedge accounting if it meets the criteria outlined in
the guidance.

In addition, itemize with clear but concise captions those
types of ‘‘other off-balance sheet contingent claims’’ on
related depository institutions reportable in this item that
individually equal or exceed one percent of the institution’s total claims on related depository institutions
(Schedule M, Part I, item 3, column A). Enter such items
in the inset boxes provided.

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

Include as ‘‘other off-balance sheet contingent claims’’
such items as (1) securities lent to related depository
institutions against collateral (other than cash) or on
an uncollateralized basis, and (2) commitments to sell
when-issued securities to related depository institutions,
that are excluded from the requirements of FASB Statement No. 133 (and therefore not reported as forward
contracts in Schedule M, Part V, item 9(b) below).

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

Item 9 Gross amounts (e.g., notional amounts)
of derivatives.
Report in the appropriate column and subitem the gross
par value (stated in U.S. dollars) (e.g., for futures,
forwards, and option contracts) or the notional amount
FFIEC 002
Schedule M

September 2008

Column Instructions
Column A, Interest Rate Contracts: Interest rate contracts are contracts related to an interest-bearing financial
instrument or whose cash flows are determined by
referencing interest rates or another interest rate contract (e.g., an option on a futures contract to purchase a
Treasury bill). These contracts are generally used to
adjust the branch or agency’s interest rate exposure or, if
the branch or agency is an intermediary, the interest rate
exposure of others. Interest rate contracts include interest
SCHEDULE M-11

Schedule M

rate futures, single currency interest rate swaps, basis
swaps, forward rate agreements, and interest rate options,
including caps, floors, collars, and corridors.
Exclude contracts involving the exchange of one or more
foreign currencies (e.g., cross-currency swaps and currency options) and other contracts whose predominant
risk characteristic is foreign exchange risk, which are to
be reported in column B as foreign exchange contracts.
Unsettled securities transactions that exceed the regular
way settlement time limit that is customary in each
relevant market must be reported as forward contracts in
Schedule M, Part V, item 9(b).
Column B, Foreign Exchange Contracts: Foreign
exchange contracts are contracts to purchase foreign
(non-U.S.) currencies and U.S. dollar exchange in the
forward market, i.e., on an organized exchange or in an
over-the-counter market. A purchase of U.S. dollar
exchange is equivalent to a sale of foreign currency.
Foreign exchange contracts include cross-currency interest rate swaps where there is an exchange of principal,
forward foreign exchange contracts (usually settling three
or more business days from trade date), and currency
futures and currency options. Exclude spot foreign
exchange contracts which are to be reported in Schedule M, Part V, item 2.
Only one side of a foreign currency transaction is to be
reported. In those transactions where foreign (non-U.S.)
currencies are bought or sold against U.S. dollars, report
only that side of the transaction that involves the foreign
(non-U.S.) currency. For example, if the reporting branch
or agency enters into a futures contract which obligates
the branch or agency to purchase U.S. dollar exchange
against which it sells Japanese yen, then the branch or
agency would report (in U.S. dollar equivalent values) the
amount of Japanese yen sold in Schedule M, Part V,
item 9(a). In cross-currency transactions, which involve
the purchase and sale of two non-U.S. currencies, only
the purchase side is to be reported.
All amounts in column B are to be reported in U.S. dollar
equivalent values.
Column C, Equity Derivative Contracts: Equity derivative contracts are contracts that have a return, or a portion
of their return, linked to the price of a particular equity or
to an index of equity prices, such as the Standard and
Poor’s 500.
SCHEDULE M-12

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

Futures contracts.

Futures contracts represent agreements for delayed delivery of financial instruments or commodities in which the
buyer agrees to purchase and the seller agrees to deliver,
at a specified future date, a specified instrument at a
specified price or yield. Futures contracts are standardized and are traded on organized exchanges.
Report, in the appropriate column, the aggregate par
value of futures contracts that have been entered into
between the reporting branch or agency and related
depository institutions and are outstanding (i.e., open
contracts) as of the report date. Exclude all futures
contracts that are traded on organized exchanges that act
as the counterparty to each contract (report such futures
in Schedule L, item 9(a)). Do not report the par value of
financial instruments intended to be delivered under such
contracts if this par value differs from the par value of the
contracts themselves.
Contracts are outstanding (i.e., open) until they have
been cancelled by acquisition or delivery of the underlying financial instruments or by offset. Offset is the
liquidating of a purchase of futures through the sale of an
equal number of contracts of the same delivery month on
the same underlying instrument on the same exchange, or
the covering of a short sale of futures through the
Schedule M

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Schedule M

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

Forward contracts.

Forward contracts represent agreements for delayed
delivery of financial instruments or commodities in which
the buyer agrees to purchase and the seller agrees to
deliver, at a specified future date, a specified instrument
or commodity at a specified price or yield. Forward
contracts are not traded on organized exchanges and their
contractual terms are not standardized.
Report the aggregate par value of forward contracts that
have been entered into between the reporting branch
or agency and are outstanding (i.e., open contracts) as of
the report date. Do not report the par value of financial
instruments intended to be delivered under such contracts
FFIEC 002
Schedule M

September 2008

if this par value differs from the par value of the contracts
themselves.
Contracts are outstanding (i.e., open) until they have
been cancelled by acquisition or delivery of the underlying financial instruments or settled in cash. Such contracts can only be terminated, other than by receipt of the
underlying asset, by agreement of both buyer and seller.
Include commitments to purchase and sell when-issued
securities that are not excluded from the requirements of
FASB Statement No. 133 as a regular-way security trade.
Report commitments to purchase when-issed securities
that are excluded from the requirements of FASB Statement No. 133 as ‘‘All other off-balance sheet contingent
liabilities’’ in Schedule M, Part V, item 7, and commitments to sell when-issued securities that are excluded
from the requirements of FASB Statement No. 133 as
‘‘Other off-balance sheet contingent claims’’ in Schedule M, Part V, item 8, subject to the existing reporting
thresholds for these two items.
Column A, Interest Rate Forwards: Report forward
contracts committing the reporting branch or agency to
purchase or sell financial instruments and whose predominant risk characteristic is interest rate risk. Include
in this item firm commitments (e.g., commitments that
have a specified interest rate, selling date, and dollar
amount) to sell loans secured by 1-to-4 family residential
properties that meet the definition of a derivative contract
under FASB Statement No. 133.
Column B, Foreign Exchange Forwards: Report the
gross amount (stated in U.S. dollars) of all forward
contracts committing the reporting branch or agency to
purchase foreign (non-U.S.) currencies and U.S. dollar
exchange and whose predominant risk characteristic is
foreign exchange risk.
A forward foreign exchange contract is an agreement for
delayed delivery of a foreign (non-U.S.) currency or U.S.
dollar exchange in which the buyer agrees to purchase
and the seller agrees to deliver, at a specified future date,
a specified amount at a specified exchange rate.
Column C, Equity Derivative Forwards: Report forward
contracts committing the reporting branch or agency to
purchase or sell equity instruments.
Column D, Commodity and Other Forwards: Report the
contract amount for all forward contracts committing the
reporting branch or agency to purchase or sell commodities such as agricultural products (e.g., wheat, coffee),
SCHEDULE M-13

Schedule M

precious metals (e.g., gold, platinum), and non-ferrous
metals (e.g., copper, zinc). Include any other forward
contract that is not reportable as an interest rate, foreign
exchange, or equity derivative contract in column A, B,
or C.
Item 9(c)

Exchange-traded option contracts.

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

Written options.

Report in this item the aggregate par value of the
financial instruments or commodities that the reporting
branch or agency has, for compensation (such as a fee or
premium), obligated itself to either purchase from or sell
to a related depository institution under exchange-traded
option contracts that are outstanding as of the report date.
Exclude all written exchange-traded options that are
traded on organized exchanges that act as the counterparty to each contract (report such options in Schedule L,
item 9(c)(1)).
Column A, Written Exchange-Traded Interest Rate
Options: For exchange-traded option contracts obligating
the reporting branch or agency to either purchase or sell
an interest rate futures contract and whose predominant
risk characteristic is interest rate risk, report the par value
of the financial instrument underlying the futures contract.
Column B, Written Exchange-Traded Foreign Exchange Options: Report in this item the gross amount
SCHEDULE M-14

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

Purchased options.

Report in this item the aggregate par value of the
financial instruments or commodities that the reporting
branch or agency has, for a fee or premium, purchased
the right to either purchase from or sell to a related
depository institution under exchange-traded option contracts that are outstanding as of the report date. Exclude
all purchased exchange-traded options that are traded on
organized exchanges that act as the counterparty to
each contract (report such options in Schedule L,
item 9(c)(2)).
Column A, Purchased Exchange-Traded Interest Rate
Options: For exchange-traded option contracts giving the
reporting branch or agency the right to either purchase or
sell an interest rate futures contract and whose predominant risk characteristic is interest rate risk, report the par
value of the financial instrument underlying the futures
contract.
Column B, Purchased Exchange-Traded Foreign
Exchange Options: Report in this item the gross amount
(stated in U.S. dollars) of foreign (non-U.S.) currency and
U.S. dollar exchange that the reporting branch or agency
has, for a fee, purchased the right to either purchase or
Schedule M

FFIEC 002
September 2008

Schedule M

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

Over-the-counter option contracts.

Option contracts convey either the right or the obligation,
depending upon whether the reporting branch or agency
is the purchaser or the writer, respectively, to buy or sell a
financial instrument or commodity at a specified price by
a specified future date. Options can be written to meet the
specialized needs of the counterparties to the transaction.
These customized option contracts are known as overthe-counter (OTC) options. Thus, over-the-counter option
contracts include all option contracts not traded on an
organized exchange.
The buyer of an option contract has, for compensation
(such as a fee or premium), acquired the right (or option)
to sell to, or purchase from, another party some financial
instrument or commodity at a stated price on a specified
future date. The seller of the contract has, for such
compensation, become obligated to purchase or sell the
financial instrument or commodity at the option of the
buyer of the contract. A put option contract obligates
the seller of the contract to purchase some financial
instrument or commodity at the option of the buyer of the
contract. A call option contract obligates the seller of the
contract to sell some financial instrument or commodity
at the option of the buyer of the contract.
FFIEC 002
Schedule M

September 2008

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

Written options.

Report in this item the par value of the financial instruments or commodities that the reporting branch or agency
has, for compensation (such as a fee or premium),
obligated itself to either purchase from or sell to a related
depository institution under OTC option contracts that
are outstanding as of the report date. Also report an
aggregate notional amount for written caps, floors, and
swaptions and for the written portion of collars and
corridors.
Column A, Written OTC Interest Rate Options: Interest
rate options include options to purchase and sell interestbearing financial instruments and whose predominant
risk characteristic is interest rate risk as well as contracts
known as caps, floors, collars, corridors, and swaptions.
Include in this item the notional principal amount for
SCHEDULE M-15

Schedule M

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

Purchased options.

Report in this item the aggregate par value of the
financial instruments or commodities that the reporting
branch or agency has, for a fee or premium, purchased
the right to either purchase from or sell to a related
depository institution under OTC option contracts that
are outstanding as of the report date. Also report an
aggregate notional amount for purchased caps, floors,
and swaptions and for the purchased portion of collars
and corridors.
Column A, Purchased OTC Interest Rate Options:
Interest rate options include options to purchase and sell
interest-bearing financial instruments and whose predominant risk characteristic is interest rate risk as well as
contracts known as caps, floors, collars, corridors, and
swaptions. Include in this item the notional principal
amount for interest rate caps and floors that the reporting
branch or agency purchases. For interest rate collars and
SCHEDULE M-16

corridors, report a notional amount for the written portion
of the contract in Schedule M, Part V, item 9(d)(1),
column A, and for the purchased portion of the contract
in Schedule M, Part V, item 9(d)(2), column A.
Column B, Purchased OTC Foreign Exchange
Options: Report in this item the gross amount (stated
in U.S. dollars) of foreign (non-U.S.) currency and U.S.
dollar exchange that the reporting branch or agency has,
for a fee, purchased the right to either purchase or sell
under option contracts whose predominant risk characteristic is foreign exchange risk.
Column C, Purchased OTC Equity Derivative Options:
Report the contract amount of those OTC option contracts where the reporting branch or agency has, for a fee,
purchased the right to purchase or sell an equity instrument or equity index.
Column D, Purchased OTC Commodity and Other
OTC Options: Report the contract amount for those
option contracts where the reporting branch or agency
has, for a fee or premium, purchased the right to purchase
or sell a commodity or product. Include any other
purchased OTC option that is not reportable as an interest
rate, foreign exchange or equity derivative contract in
column A, B, or C.
Item 9(e)

Swaps.

Swaps are contracts in which two parties agree to
exchange payment streams based on a specified notional
amount for a specified period. Forward starting swap
contracts should be reported as swaps. The notional
amount of a swap is the underlying principal amount
upon which the exchange of interest, foreign exchange or
other income or expense is based. The notional amount to
be reported for a swap contract with a multiplier component is the contract’s effective notional amount. In those
cases where the reporting branch or agency is acting as
an intermediary, both sides of the transaction are to be
reported.
Column A, Interest Rate Swaps: Report the notional
amount of all outstanding interest rate and basis swaps
between the reporting branch or agency and related
depository institutions whose predominant risk characteristic is interest rate risk.
Column B, Foreign Exchange Swaps: Report the
notional principal amount (stated in U.S. dollars) of all
outstanding cross-currency interest rate swaps between
Schedule M

FFIEC 002
September 2008

Schedule M

the reporting branch or agency and related depository
institutions.
A cross-currency interest rate swap is a contract in which
two parties agree to exchange principal amounts of
different currencies, usually at the prevailing spot rate, at
the inception of an agreement which lasts for a certain
number of years. At defined intervals over the life of the
swap, the counterparties exchange payments in the different currencies based on specified rates of interest. When
the agreement matures the principal amounts will be
re-exchanged at the same spot rate. The notional amount
of a cross-currency interest rate swap is generally the
underlying principal amount upon which the exchange is
based.
Column C, Equity Swaps: Report the notional amount
of all outstanding equity or equity index swaps between
the reporting branch or agency and related depository
institutions.
Column D, Commodity and Other Swaps: Report the
notional principal amount of all other swap agreements
between the reporting branch or agency and related
depository institutions that are not reportable as either
interest rate, foreign exchange, or equity derivative contracts in column A, B, or C. The notional amount to be
reported for commodity contracts with multiple exchanges
of principal is the contractual amount multiplied by the
number of remaining payments (or exchanges of principal) in the contract.
Item 10 Total gross notional amount of derivative
contracts held for trading.
Report, in the appropriate column, the total notional
amount or par value of those derivative contracts with
related depository institutions in Schedule M, Part V,
item 9 above that are held for trading purposes. Contracts
held for trading purposes include those used in dealing
and other trading activities. Derivative instruments used
to hedge trading activities should also be reported in this
item.
Derivative trading activities include (a) regularly dealing
in interest rate contracts, foreign exchange contracts,
equity derivative contracts, and other derivative commodity contracts, (b) acquiring or taking positions in such
items principally for the purpose of selling in the near
term or otherwise with the intent to resell (or repurchase)
in order to profit from short-term price movements, or
FFIEC 002
Schedule M

September 2008

(c) acquiring or taking positions to make a market for
customers.
Item 11 Total gross notional amount of derivative
contracts held for purposes other than trading.
Report, in the appropriate column, the total notional
amount or par value of those contracts with related
depository institutions reported in Schedule M, Part V,
item 9 above that are held for purposes other than trading.
Item 12

Gross fair values of derivative contracts.

Report in the appropriate column and subitem below the
fair (or market) value of all derivative contracts with
related depository institutions reported in Schedule L,
items 10 and 11 above. For each of the four types of
underlying risk exposure in columns A through D, the
gross positive and gross negative fair values will be
reported separately for (i) contracts held for trading
purposes (in item 12(a)), and (ii) contracts held for
purposes other than trading (in item 12(b)). Guidance for
reporting by type of underlying risk exposure is provided
in the instructions for Schedule M, Part V, item 9 above.
Guidance for reporting by purpose and accounting methodology is provided in the instructions for Schedule M,
Part V, items 10 and 11 above.
No netting of contracts with related depository institutions is permitted for purposes of this item. Therefore, do
not net (1) obligations of the reporting branch or agency
to buy against the branch or agency’s obligations to sell,
(2) written options against purchased options, (3) positive fair values against negative fair values, or (4) contracts subject to bilateral netting agreements.
As defined in FASB Statement No. 133, fair value is the
amount at which an asset (liability) could be bought
(incurred) or sold (settled) in a current transaction
between willing parties, that is, other than in a forced or
liquidation sale. Quoted market prices in active markets
are the best evidence of fair value and should be used as
the basis for the measurement, if available. If a quoted
market price is available, the fair value is the product of
the number of trading units times that market price. If a
quoted market price is not available, the estimate of fair
value should be based on the best information available
in the circumstances. The estimate of fair value should
consider prices for similar assets or similar liabilities and
the results of valuation techniques to the extent available
in the circumstances. For purposes of item 12, the
SCHEDULE M-17

Schedule M

reporting branch or agency should determine the fair
value of its derivative contracts in the same manner that it
determines the fair value of these contracts for other
financial reporting purposes.

absolute value, do not enclose the total fair value in
parentheses or use a minus (−) sign.

Item 12(a)

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

Contracts held for trading.

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

Gross positive fair value.

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

Gross negative fair value.

Report in the appropriate column the total fair value of
those contracts in Schedule M, Part V, item 10 above with
negative fair values. Report the total fair value as an

SCHEDULE M-18

Item 12(b)
trading.

Contracts held for purposes other than

Item 12(b)(1)

Gross positive fair value.

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

Gross negative fair value.

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

Schedule M

FFIEC 002
September 2008

INSTRUCTIONS FOR THE PREPARATION OF

Past Due, Nonaccrual, and
Restructured Loans
Schedule N

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

Definitions
Past due. For purposes of this schedule, grace periods
allowed by the branch or agency, including its IBF, after a
loan technically has become past due, but before the
imposition of late charges, are not to be taken into
account in determining past due status. Furthermore,loans and lease financing receivables are to be reported
FFIEC 002
Schedule N

September 2008

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

Schedule N

90 percent or more of the contractual payment may be
considered a full payment in computing delinquency.
Alternatively, a branch or agency may aggregate payments and give credit for any partial payment received.
For example, if a regular monthly installment is $300 and
the borrower makes payments of only $150 per month for
a six-month period, the loan would be $900 ($150
shortage times six payments), or three monthly payments
past due. A branch or agency may use either or both
methods for its retail credit but may not use both methods
simultaneously with a single loan.
Nonaccrual. For purposes of this schedule, loans and
lease financing receivables are to be reported as being in
nonaccrual status if: (1) they are maintained on a cash
basis because of deterioration in the financial position of
the borrower, (2) payment in full of interest or principal is
not expected, or (3) principal or interest has been in
default for a period of 90 days or more unless the
obligation is both well secured and in the process of
collection.
A debt is ‘‘well secured’’ if it is secured (1) by collateral
in the form of liens on or pledges of real or personal
property, including securities, that have a realizable value
sufficient to discharge the debt (including accrued interest) in full, or (2) by the guarantee of a financially
responsible party. A debt is ‘‘in the process of collection’’
if collection of the debt is proceeding in due course either
(1) through legal action, including judgment enforcement
procedures, or (2) in appropriate circumstances, through
collection efforts not involving legal action which are
reasonably expected to result in repayment of the debt or
in its restoration to a current status in the near future.
For purposes of applying the third test for nonaccrual
status listed above, the date on which a loan reaches
nonaccrual status is determined by its contractual terms.
If the principal or interest on a loan becomes due and
unpaid for 90 days or more on a date that falls between
report dates, the loan should be placed in nonaccrual
status as of the date it becomes 90 days past due and it
should remain in nonaccrual status until it meets the
criteria for restoration to accrual status described below.
In the following situations, a loan need not be placed in
nonaccrual status:
(1) The criteria for amortization (i.e., accretion of discount) specified in AICPA Practice Bulletin No. 6 are
met with respect to a loan or other debt instrument
acquired at a discount (because there is uncertainty as
SCHEDULE N-2

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

FFIEC 002
September 2008

Schedule N

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

Column Instructions
Report in columns A and B (except for Memoranda
item 2) the full outstanding balances (not just delinquent
payments) of loans, including lease financing receivables, that are past due and upon which the branch or
agency, including its IBF, continues to accrue interest, as
follows:
(1) In column A, report closed-end monthly installment
loans, amortizing loans secured by real estate, lease
FFIEC 002
Schedule N

September 2008

financing receivables, and open-end credit in arrears
two or three monthly payments; other multipayment
obligations, with payments scheduled other than
monthly, when one scheduled payment is due and
unpaid for 30 through 89 days; single payment and
demand notes providing for payment of interest at
stated intervals after one interest payment is due and
unpaid for 30 through 89 days; single payment notes
providing for payment of interest at maturity, on
which interest or principal remains unpaid for 30
through 89 days after maturity; unplanned overdrafts,
whether or not the branch or agency is accruing
interest on them, if the account remains continuously
overdrawn for 30 through 89 days.
(2) In column B, report the loans, including lease financing receivables, as specified above on which payment
is due and unpaid for 90 days or more.
Report in columns A and B of Memoranda item 2 the fair
value, if positive, of all interest rate, foreign exchange
rate, equity, and commodity and other contracts or which
a required payment by the branch or agency’s counterparty is due and unpaid for 30 through 89 days and due
and unpaid for 90 days or more, respectively.
Exclude from columns A and B all loans and lease
financing receivables that are in nonaccrual status and all
loans and leases that are restructured and in compliance
with their modified terms.
Report in column C the outstanding balances of loans,
including lease financing receivables, that the branch or
agency, including its IBF, has placed in nonaccrual status.
Also include in this column all restructured loans and
leases that are in nonaccrual status.
Report in column D the outstanding balances of loans,
including lease financing receivables, that have been
restructured and are in compliance with their modified
terms.
Exclude from column D (1) those restructured loans and
leases on which under the modified repayment terms
either principal or interest is 30 days or more past due
(report in Schedule N, column A or B, as appropriate)
and (2) those restructured loans and leases that are in
nonaccrual status under the modified repayment terms
(report in Schedule N, column C).
NOTE: Columns A, B, C, and D are mutually exclusive.
The full outstanding balance of any loan, including any
lease financing receivable, should be reported in no more
SCHEDULE N-3

Schedule N

than one of these four columns. Information reported for
any derivative contract should be reported in only column A or column B.

Item 3

Total.

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

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

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

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

Commercial and industrial loans.

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

Loans secured by real estate.

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

All other loans.

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

SCHEDULE N-4

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

Schedule N

FFIEC 002
September 2008

INSTRUCTIONS FOR THE PREPARATION OF

Other Data for Deposit Insurance
Assessments
Schedule O

General Instructions
This schedule is to be completed only by branches whose
deposits are insured by the FDIC.
Each FDIC-insured branch must complete items 1 through
3, Memorandum items M1 and M5, and, if applicable,
Memorandum items M2 through M4 of Schedule O on an
unconsolidated single FDIC certificate number basis.
In addition, an FDIC-insured branch that meets one of the
criteria discussed below must complete items 4 through 6
of Schedule O on an unconsolidated single FDIC certificate number basis each quarter.
Effective March 31, 2009, an FDIC-insured branch that
reported $1 billion or more in total claims on nonrelated
parties in item 1.i, column A, of Schedule RAL as of the
March 31, 2008, report date (regardless of its total claims
on nonrelated parties in subsequent quarters) must report
quarter-end balances and daily averages for the quarter in
Schedule O. In addition, if an FDIC-insured branch
reports $1 billion or more in total claims on nonrelated
parties in two consecutive Reports of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks
(FFIEC 002) subsequent to its March 31, 2008, report,
the branch must begin reporting both quarter-end balances and daily averages for the quarter beginning on the
later of the March 31, 2009, report date or the report date
six months after the second consecutive quarter in which
it reports total claims on nonrelated parties of $1 billion
or more. For example, if an FDIC-insured branch reports
$1 billion or more in total claims on nonrelated parties in
its reports for June 30 and September 30, 2008, it would
have to begin reporting daily averages in Schedule O of
its FFIEC 002 report for March 31, 2009. If the branch
reports $1 billion or more in total claims on nonrelated
parties in its reports for December 31, 2008, and March
31, 2009, it would have to begin reporting daily averages
in its report for September 30, 2009.
FFIEC 002
Schedule O

December 2010

Any FDIC-insured branch that reports less than $1 billion
in total claims on nonrelated parties in its March 31,
2008, report may continue to report only quarter-end
total deposits, allowable exclusions, and foreign deposits
until it meets the two-consecutive-quarter total claims
size test for reporting daily averages. Alternatively, the
branch may opt permanently at any time to begin reporting daily averages for purposes of determining its assessment base. After an FDIC-insured branch begins to
report daily averages for its total deposits, allowable
exclusions, and foreign deposits, either voluntarily or
because it is required to do so, the branch is not permitted
to switch back to reporting only quarter-end balances.
The deposit insurance assessment base of an FDICinsured branch that reports daily averages for total deposits and allowable exclusions will be determined using the
daily averages rather than the branch’s quarter-end balances.
The amounts to be reported as daily averages are the sum
of the gross amounts of total deposits (domestic and
foreign), allowable exclusions, and foreign deposits for
each calendar day during the quarter divided by the
number of calendar days in the quarter. For days that the
reporting FDIC-insured branch (or any of its subsidiaries) is closed (e.g., Saturdays, Sundays, or holidays),
the amounts outstanding from the previous business day
would be used. An FDIC-insured branch is considered
closed if there are no transactions posted to the general
ledger as of that date.

Item Instructions
Item 1 Total deposit liabilities before exclusions
(gross) as defined in Section 3(l) of the Federal
Deposit Insurance Act and FDIC regulations.
Report on an unconsolidated single FDIC certificate
number basis the gross total deposit liabilities as of the
calendar quarter-end report date that meet the statutory
SCHEDULE O-1

Schedule O

definition of deposits in Section 3(l) of the Federal
Deposit Insurance Act before deducting exclusions from
total deposits that are allowed in the determination of the
assessment base upon which deposit insurance assessments are calculated. Since the FDIC’s amendments to
its assessment regulations in 2006 did not substantially
change the definition of deposits for assessment purposes, an FDIC-insured branch’s gross total deposit
liabilities are the combination of:
• All deposits and credit balances to nonrelated parties
reported in Schedule RAL, item 4.a, column A;
• Interest accrued and unpaid on all deposits and credit
balances to nonrelated parties included in Schedule
RAL, item 4.f, column A;
• Deposits of majority-owned depository subsidiaries of
the parent foreign bank and the interest accrued and
unpaid on such deposits;
• The amount by which demand deposits reported in
Schedule RAL, item 4.a, column A, have been reduced
from the netting of the reporting branch’s reciprocal
demand balances with U.S. branches and agencies of
foreign banks;
• The amount by which any other deposit liabilities
reported in Schedule RAL, item 4.a, column A, have
been reduced by assets netted against these liabilities in
accordance with generally accepted accounting principles;
• Deposits in the insured branch to the credit of the
branch’s parent foreign bank or any of its offices,
branches, agencies, or wholly owned subsidiaries; and
• Other obligations meeting the Section 13(l) statutory
definition of a deposit that may be housed in systems of
record not normally thought of as deposit systems,
such as loan, payroll, and escrow systems and manual
records that contain information needed to answer
depositors’ questions on their deposits.
See the Glossary entry for ‘‘deposits’’ for the statutory
definition of deposits.
An FDIC-insured branch’s documentation to support the
amounts reported for purposes of determining its assessment base has always been, and continues to be, subject
to verification. This documentation includes the actual
system control summaries in the branch’s systems that
provide the detail sufficient to track, control, and handle
SCHEDULE O-2

inquiries from depositors about their specific individual
accounts. These systems can be automated or manual. If
the system control summaries have been reduced by
accounts that are overdrawn, these overdrawn accounts
are extensions of credit that must be treated and reported
as ‘‘loans’’ rather than being treated as negative deposit
balances.
Unposted debits and unposted credits should not be
included in an FDIC-insured branch’s system control
summaries. However, if they are included in the gross
total deposit liabilities reported in this item, they may be
excluded in Schedule RC-O, item 2 below.
Item 2 Total allowable exclusions, including
interest accrued and unpaid on allowable exclusions
(including foreign deposits).
Report on an unconsolidated single FDIC certificate
number basis the total amount of allowable exclusions
from deposits as of the calendar quarter-end report date if
the branch maintains such records as will readily permit
verification of the correctness of its reporting of exclusions.
Any accrued and unpaid interest on the allowable exclusions listed below should also be reported in this item as
an allowable exclusion.
The allowable exclusions include:
(1) Foreign Deposits: As defined in Section 3(l)(5) of the
Federal Deposit Insurance Act, foreign deposits
include
(A) any obligation of a depository institution which is
carried on the books and records of an office of
such bank or savings association located outside
of any State, unless
(i) such obligation would be a deposit if it were
carried on the books and records of the depository institution, and would be payable at, an
office located in any State; and
(ii) the contract evidencing the obligation provides by express terms, and not by implication, for payment at an office of the depository institution located in any State; and
(B) any international banking facility deposit, including an international banking facility time deposit,
as such term is from time to time defined by the
Schedule O

FFIEC 002
March 2009

Schedule O

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.
(2) Reciprocal balances: Any demand deposit due from
or cash item in the process of collection due from any
depository institution (not including a foreign bank
or foreign office of another U.S. depository institution) up to the total amount of deposit balances due to
and cash items in the process of collection due such
depository institution.
(3) Drafts drawn on other depository institutions: Any
outstanding drafts (including advices and authorization to charge the depository institution’s balance in
another bank) drawn in the regular course of business
by the reporting depository institution.
(4) Pass-through reserve balances: Reserve balances
passed through to the Federal Reserve by the reporting institution that are also reflected as deposit
liabilities of the reporting institution. This exclusion
is not applicable to an institution that does not act as
a correspondent bank in any pass-through reserve
balance relationship. A state nonmember bank generally cannot act as a pass-through correspondent
unless it maintains an account for its own reserve
balances directly with the Federal Reserve.
(5) Depository institution investment contracts: Liabilities arising from depository institution investment
contracts that are not treated as insured deposits
under section 11(a)(5) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(5)). A Depository Institution Investment Contract is a separately negotiated
depository agreement between an employee benefit
plan and an insured depository institution that guarantees a specified rate for all deposits made over a
prescribed period and expressly permits benefitresponsive withdrawals or transfers.
(6) Accumulated deposits: Deposits accumulated for the
payment of personal loans that are assigned or
pledged to assure payment of the loans at maturity.
Deposits that simply serve as collateral for loans are
not an allowable exclusion.
(7) Deposits of the parent foreign bank: Deposits in the
insured branch to the credit of the branch’s parent
foreign bank or any of its offices, branches, agencies,
or wholly owned subsidiaries may be deducted from
FFIEC 002
Schedule O

March 2009

the assessment base of the insured branch pursuant to
Section 347.208 of the FDIC’s regulations.
Item 3 Total foreign deposits, including interest
accrued and unpaid thereon (included in item 2
above).
Report on an unconsolidated single FDIC certificate
number basis the total amount of foreign deposits (including International Banking Facility deposits reported in
Schedule RAL, item 4.a, column B) as of the calendar
quarter-end report date included in Schedule O, item 2,
above.
Item 4 Total daily average of deposit liabilities
before exclusions (gross) as defined in Section 3(l) of
the Federal Deposit Insurance Act and FDIC
regulations.
Report on an unconsolidated single FDIC certificate
number basis the total daily average for the quarter of
gross total deposit liabilities that meet the statutory
definition of deposits in Section 3(l) of the Federal
Deposit Insurance Act before deducting exclusions from
total deposits that are allowed in the determination of the
assessment base upon which deposit insurance assessments are calculated. For further information on deposit
amounts to be included, see the instructions for Schedule
O, item 1, above. For information on calculating the total
daily average for the quarter, see the General Instructions
for Schedule O above.
Item 5 Total daily average of allowable exclusions,
including interest accrued and unpaid on allowable
exclusions (including foreign deposits).
Report on an unconsolidated single FDIC certificate
number basis the total daily average for the quarter of the
total amount of allowable exclusions from deposits (as
defined in Schedule O, item 2, above) if the institution
maintains such records as will readily permit verification
of the correctness of its reporting of exclusions.
Item 6 Total daily average of foreign deposits,
including interest accrued and unpaid thereon
(included in item 5 above).
Report on an unconsolidated single FDIC certificate
number basis the total daily average for the quarter of the
total amount of foreign deposits (including International
Banking Facility deposits) included in Schedule O, item
5, above.
SCHEDULE O-3

Schedule O

Memoranda
Item M1 Total assessable deposits of the branch,
including related interest accrued and unpaid.
Memorandum items M1(a)(1), M1(b)(1), M1(b)(2),
M1(c)(1), M1(d)(1), and M1(d)(2) are to be completed
each quarter. Memorandum items M1(a)(2) and M1(c)(2)
are to be completed for the June report only. These
Memorandum items should be reported on an unconsolidated single FDIC certificate number basis.
The sum of Memorandum items M1(a)(1), M1(b)(1),
M1(c)(1), and M1(d)(1) must equal the FDIC-insured
branch’s assessable deposits, i.e., Schedule O, item 1,
‘‘Total deposit liabilities before exclusions (gross) as
defined in Section 3(l) of the Federal Deposit Insurance
Act and FDIC regulations,’’ less item 2, ‘‘Total allowable
exclusions, including interest accrued and unpaid on
allowable exclusions (including foreign deposits).’’
Accordingly, all amounts included in the branch’s assessable deposits, not just those included in its ‘‘Total
deposits and credit balances’’ (reported in Schedule
RAL, item 4.a, column A), should be reported in the
appropriate subitem of Memorandum item M1. For
example, the interest accrued and unpaid that is included
in the branch’s assessable deposits should be reported
together with the related account in Memorandum items
M1(a)(1), M1(b)(1), M1(c)(1), and M1(d)(1).
The dollar amounts used as the basis for reporting the
number and amount of deposit accounts in these eight
Schedule O Memorandum items reflect the deposit insurance limits of $250,000 for ‘‘retirement deposit accounts’’
and $250,000 for other deposit accounts, which takes into
account the temporary increase in deposit insurance for
other deposit accounts that is in effect through December
31, 2013.

• Self-directed defined contribution plans, which are
primarily 401(k) plan accounts.
The term ‘‘self-directed’’ means that the plan participants
have the right to direct how their funds are invested,
including the ability to direct that the funds be deposited
at an FDIC-insured institution.
Retirement deposit accounts exclude Coverdell Education Savings Accounts, formerly known as Education
IRAs.
When determining the number and size of deposit
accounts, each individual certificate, passbook, account,
and other evidence of deposit is to be treated as a separate
account. For purposes of completing this Memorandum
item, multiple accounts of the same depositor should not
be aggregated. In situations where a branch assigns a
single account number to each depositor so that one
account number may represent multiple deposit contracts
between the branch and the depositor (e.g., one demand
deposit account, one money market deposit account, and
three certificates of deposit), each deposit contract is a
separate account.
Item M1(a) Deposit accounts (excluding retirement
accounts) of $250,000 or less.
Report in the appropriate subitem the amount outstanding
and the number of deposit accounts, excluding retirement
deposit accounts (as defined in Schedule O, Memorandum item M1), with a balance of $250,000 or less as of
the report date.
Item M1(a)(1) Amount of deposit accounts
(excluding retirement accounts) of $250,000 or less.

‘‘Retirement deposit accounts’’ that are eligible for
$250,000 in deposit insurance coverage are deposits
made in connection with the following types of retirement plans:

Report the aggregate balance of all deposit accounts,
certificates, or other evidences of deposit (demand, savings, and time), excluding retirement deposit accounts,
with a balance on the report date of $250,000 or less.
This amount should represent the total of the balances of
the deposit accounts enumerated in Schedule O, Memorandum item M1(a)(2) below.

• Individual Retirement Accounts (IRAs), including traditional and Roth IRAs;

Item M1(a)(2) Number of deposit accounts
(excluding retirement accounts) of $250,000 or less.

• Simplified Employee Pension (SEP) plans;

(To be completed for the June report only.) Report the
total number of deposit accounts (demand, savings, and
time), excluding retirement deposit accounts, with a
balance on the report date of $250,000 or less. Count

• ‘‘Section 457’’ deferred compensation plans;
• Self-directed Keogh (HR 10) plans; and
SCHEDULE O-4

Schedule O

FFIEC 002
September 2009

Schedule O

each certificate, passbook, account, and other evidence of
deposit that has a balance of $250,000 or less.

Item M1(c)(2) Number of retirement deposit
accounts of $250,000 or less.

Item M1(b) Deposit accounts (excluding
retirement accounts) of more than $250,000.

(To be completed for the June report only.) Report the
total number of retirement deposit accounts (demand,
savings, and time) with a balance on the report date of
$250,000 or less. Count each certificate, passbook,
account, and other evidence of deposit which has a
balance of $250,000 or less.

Report in the appropriate subitem the amount outstanding
and the number of deposit accounts, excluding retirement
deposit accounts (as defined in Schedule O, Memorandum item M1), with a balance of more than $250,000 as
of the report date.
Item M1(b)(1) Amount of deposit accounts
(excluding retirement accounts) of more than
$250,000.
Report the aggregate balance of all deposit accounts,
certificates, or other evidences of deposit (demand, savings, and time), excluding retirement deposit accounts,
with a balance on the report date of more than $250,000.
This amount should represent the total of the balances of
the deposit accounts enumerated in Schedule O, Memorandum item M1(b)(2) below.
Item M1(b)(2) Number of deposit accounts
(excluding retirement accounts) of more than
$250,000.
Report the total number of deposit accounts (demand,
savings, and time), excluding retirement deposit accounts,
with a balance on the report date of more than $250,000.
Count each certificate, passbook, account, and other
evidence of deposit that has a balance of more than
$250,000.
Item M1(c) Retirement deposit accounts of
$250,000 or less.
Report in the appropriate subitem the amount outstanding
and the number of retirement deposit accounts (as defined
in Schedule O, Memorandum item M1) with a balance of
$250,000 or less as of the report date.
Item M1(c)(1) Amount of retirement deposit
accounts of $250,000 or less.
Report the aggregate balance of all retirement deposit
accounts, certificates, or other evidences of deposit
(demand, savings, and time) with a balance on the report
date of $250,000 or less. This amount should represent
the total of the balances of the retirement deposit accounts
enumerated in Schedule O, Memorandum item M1(c)(2)
below.
FFIEC 002
Schedule O

December 2010

Item M1(d) Retirement deposit accounts of more
than $250,000.
Report in the appropriate subitem the amount outstanding
and the number of retirement deposit accounts (as defined
in Schedule O, Memorandum item M1) with a balance of
more than $250,000 as of the report date.
Item M1(d)(1) Amount of retirement deposit
accounts of more than $250,000.
Report the aggregate balance of all retirement deposit
accounts, certificates, or other evidences of deposit
(demand, savings, and time) with a balance on the report
date of more than $250,000. This amount should represent the total of the balances of the retirement deposit
accounts enumerated in Schedule O, Memorandum item
M1(d)(2) below.
Item M1(d)(2) Number of retirement deposit
accounts of more than $250,000.
Report the total number of retirement deposit accounts
(demand, savings, and time) with a balance on the report
date of more than $250,000. Count each certificate,
passbook, account, and other evidence of deposit which
has a balance of more than $250,000.
Item M2 Estimated amount of uninsured
assessable deposits in the branch, including related
interest accrued and unpaid.
Schedule O, Memorandum item M2, is to be completed
by branches with $1 billion or more in total claims on
nonrelated parties.
Report the estimated amount of the branch’s deposits that
is not covered by federal deposit insurance. This estimate
SCHEDULE O-5

Schedule O

should reflect the temporary unlimited insurance coverage on noninterest-bearing transaction accounts1 (as
defined in Schedule O, Memorandum item M5) as well as
the deposit insurance limits of $250,000 for ‘‘retirement
deposit accounts’’ (as defined in Schedule O, Memorandum item M1) and $250,000 for other deposit accounts
(exclusive of noninterest-bearing transaction accounts).
The reporting of this uninsured deposit information is
mandated by Section 7(a)(9) of the Federal Deposit
Insurance Act.
The estimated amount of uninsured deposits reported in
this item should be based on the branch’s deposits
included in Schedule O, item 1, ‘‘Total deposit liabilities
before exclusions (gross) as defined in Section 3(l) of the
Federal Deposit Insurance Act and FDIC regulations,’’
less item 2, ‘‘Total allowable exclusions, including interest accrued and unpaid on allowable exclusions (including foreign deposits).’’ In addition to the uninsured
portion of a branch’s ‘‘Total deposits and credit balances’’ (reported in Schedule RAL, item 4.a, column A),
the estimate of uninsured deposits should take into
account all other items included in Schedule O, item 1
less item 2, including, but not limited to:
• Interest accrued and unpaid on deposits and credit
balances;
• Deposits of majority-owned depository subsidiaries of
the parent foreign bank and the interest accrued and
unpaid on such deposits;
• Deposit liabilities that have been reduced by assets
netted against these liabilities in accordance with generally accepted accounting principles; and
• Deposits in the insured branch to the credit of the
branch’s parent foreign bank or any of its offices,
branches, agencies, or wholly owned subsidiaries.
The branch’s estimate of its uninsured deposits should be
reported in accordance with the following criteria. Regardless of these criteria, all noninterest-bearing transaction
accounts (as defined in Schedule O, Memorandum item
M5) must be treated as insured deposits and excluded

1. Pursuant to Section 343 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, unlimited insurance coverage on noninterestbearing transaction accounts is in effect from December 31, 2010, through
December 31, 2012.

SCHEDULE O-6

from the estimate of uninsured deposits. Furthermore, it
is recognized that a branch may have multiple automated
information systems for different types of deposits and
that the capabilities of a branch’s information systems to
provide an estimate of its uninsured deposits will differ
from branch to branch at any point in time and, within an
individual institution, may improve over time.
(1) If the branch has deposit accounts whose ownership
is based on a fiduciary relationship, Part 330 of the
FDIC’s regulations generally states that the titling of
the deposit account (together with the underlying
records) must indicate the existence of the fiduciary
relationship in order for insurance coverage to be
available on a ‘‘pass-through’’ basis. Fiduciary relationships include, but are not limited to, relationships
involving a trustee, agent, nominee, guardian, executor, or custodian.
A branch with fiduciary deposit accounts with balances of more than $250,000 must diligently use the
available data on these deposit accounts, including
data indicating the existence of different principal
and income beneficiaries and data indicating that
some or all of the funds on deposit represent retirement deposit accounts eligible for $250,000 in
deposit insurance coverage, to determine its best
estimate of the uninsured portion of these accounts.
(2) If the branch has deposit accounts of employee
benefit plans, Part 330 of the FDIC’s regulations
states that these accounts are insured on a ‘‘passthrough’’ basis for the non-contingent interest of
each plan participant provided that certain prescribed
recordkeeping requirements are met. A branch with
employee benefit plan deposit accounts with balances
of more than $250,000 must diligently use the available data on these deposit accounts to determine its
best estimate of the uninsured portion of these
accounts.
(3) If the branch has deposit accounts with balances in
excess of the federal deposit insurance limit for
which it has acquired private deposit insurance to
cover this excess amount, the branch should make a
reasonable estimate of the portion of these deposits
that is not insured by the FDIC using the data
available from its information systems.
(4) For all other deposit accounts, the branch should
make a reasonable estimate of the portion of these
Schedule O

FFIEC 002
December 2010

Schedule O

deposits that is uninsured using the data available
from its information systems. In developing this
estimate, if the branch has automated information
systems in place that enable it to identify jointly
owned accounts and estimate the deposit insurance
coverage of these deposits, the higher level of insurance afforded these joint accounts should be taken
into consideration. Similarly, if the branch has automated information systems in place that enable it to
classify accounts by deposit owner and/or ownership
capacity, the branch should incorporate this information into its estimate of the amount of uninsured
deposits by aggregating accounts held by the same
deposit owner in the same ownership capacity before
applying the $250,000 insurance limit. Ownership
capacities include, but are not limited to, single
ownership, joint ownership, business (excluding sole
proprietorships), revocable trusts, irrevocable trusts,
and retirement accounts.
In the absence of automated information systems, a
branch may use nonautomated information such as paper
files or less formal knowledge of its depositors if such
information provides reasonable estimates of appropriate
portions of its uninsured deposits. A branch’s use of such
nonautomated sources of information is considered appropriate unless errors associated with the use of such
sources would contribute significantly to an overall error
in the FDIC’s estimate of the amount of insured and
uninsured deposits in the banking system.
Item M3

Preferred deposits.

(To be completed for the December report only.) Report
in this item all deposits of states and political subdivisions in the U.S. included in Schedule E, item 5, columns
A and C, which are secured or collateralized as required
under state law. Exclude deposits of the U.S. Government
which are secured or collateralized as required under
federal law. Also exclude deposits of trust funds which
are secured or collateralized as required under state law
unless the beneficiary is a state or political subdivision in
the U.S. The amount reported in this memorandum item
must be less than or equal to the sum of Schedule E, item
5, column A, and item 5, column C.
Deposits of states and political subdivisions in the U.S.
include deposits of public funds standing to the credit of
states, counties, municipalities, and local housing authorities; school, irrigation, drainage, and reclamation districts; or other instrumentalities of one or more states of
FFIEC 002
Schedule O

December 2010

the United States, the District of Columbia, Puerto Rico,
and U.S. territories and possessions. Deposits of states
and political subdivisions in the U.S. also include deposits of funds advanced to states and political subdivisions
by U.S. Government agencies and corporations and
deposits of withheld income taxes of states and political
subdivisions.
State law may require an institution to pledge securities
(or other readily marketable assets) to cover the uninsured portion of the deposits of a state or political
subdivision. If the institution has pledged securities with
a value that exceeds the amount of the uninsured portion
of the state or political subdivision’s deposits, only the
uninsured amount (and none of the insured portion of the
deposits) should be reported as a ‘‘preferred deposit.’’ For
example, a political subdivision has $350,000 in deposits
at an institution which, under state law, is required to
pledge securities to cover only the uninsured portion of
such deposits ($250,000 in this example). The institution
has pledged securities with a value of $300,000 to secure
these deposits. Only $250,000 of the political subdivision’s $350,000 in deposits (the uninsured amount)
would be considered ‘‘preferred deposits.’’
Item M4 Noninterest-bearing transaction accounts
(as defined in Part 370 of the FDIC’s regulations) of
more than $250,000.
NOTE: Memorandum items M4(a) and M4(b) below for
the average daily amount and average daily number of
noninterest-bearing transaction accounts of more than
$250,000 are to be completed only by those institutions
that have opted to participate in the FDIC’s Transaction
Account Guarantee Program.
For the calendar quarter ending on the report date, report
in the appropriate subitem the average daily amount and
the average daily number of noninterest-bearing transaction accounts with a balance of more than $250,000. An
institution may exclude noninterest-bearing transaction
accounts with a balance of more than $250,000 if the
entire balance in the account is fully insured under the
FDIC’s deposit insurance rules, such as joint account
relationship rules or ‘‘pass-through’’ insurance coverage
rules. In noninterest-bearing transaction accounts with a
balance of more than $250,000 where the entire balance
is not fully insured, an institution may exclude any
amounts over $250,000 that are otherwise insured under
the FDIC’s deposit insurance rules. These amounts may
be excluded to the extent that they can be determined by
SCHEDULE O-7

Schedule O

the institution and fully supported in the institution’s
workpapers for this report. An institution is not required
to make a determination of amounts otherwise insured
but may do so at its option.
For days that the reporting FDIC-insured branch is closed
(e.g., Saturdays, Sundays, or holidays), the amounts
outstanding and the number of noninterest-bearing transaction accounts with a balance of more than $250,000
from the previous business day should be used in the
calculation of the daily averages for the quarter. An
FDIC-insured branch is considered closed if there are no
transactions posted to the general ledger as of that date.
For purposes of Schedule O, Memorandum items M4(a)
and M4(b), and the FDIC’s Transaction Account Guarantee Program, the term ’’noninterest-bearing transaction
account’’ means a transaction account as defined in
Federal Reserve Regulation D that is:
(1) Maintained at an insured depository institution;
(2) With respect to which interest is neither accrued nor
paid; and
(3) On which the insured depository institution does not
reserve the right to require advance notice of an
intended withdrawal.
Thus, the term ‘‘noninterest-bearing transaction account’’
includes all demand deposits, including certified checks
and official checks (such as cashiers’ checks and money
orders) drawn on the reporting institution.
In addition, for purposes of Schedule O, Memorandum
items M4(a) and M4(b), and the Transaction Account
Guarantee Program, the term ‘‘noninterest-bearing transaction account’’ also includes:
(1) Accounts commonly known as Interest on Lawyers
Trust Accounts (IOLTAs) (or functionally equivalent
accounts); and
(2) Negotiable order of withdrawal (NOW) accounts
with interest rates no higher than 0.25 percent for
which the insured depository institution at which the
account is held has committed to maintain the interest rate at or below 0.25 percent.2

2. A NOW account with an interest rate above 0.50 percent as of
November 21, 2008, may be treated as a noninterest-bearing transaction
account for purposes of the Transaction Account Guarantee Program if (1)
through June 30, 2010, the insured depository institution at which the

SCHEDULE O-8

For purposes of Schedule O, Memorandum items M4(a)
and M4(b), and the FDIC’s Transaction Account Guarantee Program, a ‘‘noninterest-bearing transaction account’’
does not include, for example, a money market deposit
account (MMDA) as defined in Federal Reserve Regulation D.
Account features such as the waiver of fees or the
provision of fee-reducing credits do not prevent an
account from qualifying as noninterest-bearing as long as
the account is otherwise noninterest-bearing.
In determining whether funds are in a noninterest-bearing
transaction account for purposes of Schedule O, Memorandum items 4(a) and 4(b), and the Transaction Account
Guarantee Program, the FDIC will apply its normal rules
and procedures under Section 360.8 of the FDIC’s regulations for determining account balances at a failed
insured depository institution. Under these procedures,
funds may be swept or transferred from a noninterestbearing transaction account to another type of deposit or
nondeposit account. Except as described in the following
sentence, unless the funds are in a noninterest-bearing
transaction account after the completion of a sweep under
Section 360.8, the funds will not be guaranteed under the
Transaction Account Guarantee Program and they should
not be reported in Schedule O, Memorandum items
M4(a) and M4(b). However, in the case of funds swept
from a noninterest-bearing transaction account to a
noninterest-bearing savings deposit account as defined in
Federal Reserve Regulation D, the FDIC will treat the
swept funds as being in a noninterest-bearing transaction
account. If the sum of the swept funds in the noninterestbearing savings deposit account plus any amount remaining in the related noninterest-bearing transaction account
is more than $250,000 on a particular day during the
calendar quarter ending on the report date, this sum
should be included in the calculation of the average daily
amount to be reported in Schedule O, Memorandum item
M4(a), and the swept funds and the related noninterestbearing transaction account should be treated as one
account is held reduced the interest rate on that account to 0.50 percent or
lower before January 1, 2009, and committed to maintain that interest rate
at no more than 0.50 percent through June 30, 2010, and (2) after June 30,
2010, through the expiration date of the Transaction Account Guarantee
Program, the insured depository institution at which the account is held
reduces the interest rate on that account to 0.25 percent or lower before
July 1, 2010, and commits to maintain that interest rate at no more than
0.25 percent through the expiration date of the Transaction Account
Guarantee Program.

Schedule O

FFIEC 002
December 2010

Schedule O

account when calculating the average daily number of
accounts to be reported in Schedule O, Memorandum
item M4(b).

Item M5 Noninterest-bearing transaction accounts
(as defined in Section 343 of the Dodd-Frank Act)
of more than $250,000.

Include public funds held in noninterest-bearing transaction accounts of more than $250,000 whether or not they
are collateralized with pledged securities or other pledged
assets.

NOTE: Schedule O, Memorandum items M5.a and
M5.b, below, for the amount and number of
noninterest-bearing transaction accounts of more
than $250,000 are to be completed - beginning in the
reports for December 31, 2010 - by all FDIC-insured
depository institutions, whether or not they had previously opted to participate in the FDIC’s Transaction
Account Guarantee Program. Memorandum items
M5.a and M5.b are to be reported as of the quarterend report date, not as daily averages for the quarter.

For further information on the reporting of the average
daily amount and the average daily number of noninterestbearing transaction accounts of more than $250,000, see
the ‘‘Guidance on Revised Transaction Account Guarantee Program Reporting Requirements Effective September 30, 2010’’ at http://www.fdic.gov/regulations/
resources/TLGP/tagp-programReportingGuidance.pdf.
Item M4(a) Average daily amount of
noninterest-bearing transaction accounts of more
than $250,000.
Report the average daily amount of noninterest-bearing
transaction accounts (as defined in the instructions for
Schedule O, Memorandum item M4, above) with a
balance of more than $250,000. This average daily
amount can be calculated by (1) summing, for each
calendar day during the quarter, the amounts of all
noninterest-bearing transaction accounts with a balance
of more than $250,000 on that day, (2) totaling the daily
sums for all of the days during the calendar quarter, and
(3) dividing the total of the daily sums by the number of
calendar days in the quarter ending on the report date.

Section 343 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act amended the Federal Deposit
Insurance Act with respect to the insurance coverage of
noninterest-bearing transaction accounts. These amendments take effect December 31, 2010, and require the
FDIC to ‘‘fully insure the net amount that any depositor
at an insured depository institution maintains in a
noninterest-bearing transaction account.’’ This unlimited
insurance coverage will be in effect only through December 31, 2012.

Item M4(b) Average daily number of
noninterest-bearing transaction accounts of more
than $250,000.

As defined in Section 343 of the Dodd-Frank Act, a
‘‘noninterest-bearing transaction account’’ is an account
‘‘(I) with respect to which interest is neither accrued nor
paid; (II) on which the depositor or account holder is
permitted to make withdrawals by negotiable or transferable instrument, payment orders of withdrawal, telephone or other electronic media transfers, or other similar
items for the purpose of making payments or transfers to
third parties or others; and (III) on which the insured
depository institution does not reserve the right to require
advance notice of an intended withdrawal.’’

Report the average daily number, rounded to two decimal
places, of noninterest-bearing transaction accounts (as
defined in the instructions for Schedule O, Memorandum
item M4, above) with a balance of more than $250,000.
This average daily number can be calculated by (1)
determining, for each calendar day during the quarter, the
number of all noninterest-bearing transaction accounts
with a balance of more than $250,000 on that day, (2)
totaling the daily number of such accounts for all of the
days during the quarter, and (3) dividing the total of the
daily numbers by the number of calendar days in the
quarter.

Thus, the term ‘‘noninterest-bearing transaction account’’
includes all demand deposits, including certified checks
and official checks (such as cashiers’ checks and money
orders) drawn on the reporting institution. However,
pursuant to Section 627 of the Dodd-Frank Act, as of July
21, 2011, institutions will no longer be restricted from
paying interest on demand deposit accounts. At that time,
if an institution modifies the terms of its demand deposit
account agreement so that the account may earn interest,
the account will no longer satisfy the definition of a
noninterest-bearing transaction account, will no longer
be eligible for full deposit insurance coverage, and

FFIEC 002
Schedule O

December 2010

SCHEDULE O-9

Schedule O

should no longer be reported in Memorandum items
M5.a and M5.b.
Even if checks may be drawn on the account, a
‘‘noninterest-bearing transaction account’’ does not
include, for example, any transaction account that may
earn interest, such as a negotiable order of withdrawal
(NOW) account; a money market deposit account
(MMDA) as defined in Federal Reserve Regulation D; or
an Interest on Lawyers Trust Account (IOLTA). Account
features such as the waiver of fees or the provision of
fee-reducing credits do not prevent an account from
qualifying as a noninterest-bearing transaction account as
long as the account otherwise satisfies the definition of a
noninterest-bearing transaction account.
In determining whether funds are in a noninterest-bearing
transaction account for purposes of reporting in Memorandum items M5.a and M5.b, the FDIC will apply its
normal rules and procedures under Section 360.8 of the
FDIC’s regulations for determining account balances at a
failed insured depository institution. Under these procedures, funds may be swept or transferred from a
noninterest-bearing transaction account to another type
of deposit account or product that is not a noninterestbearing transaction account. Except as described in the
following sentence, unless the funds are in a noninterestbearing transaction account after the completion of a
sweep under Section 360.8, the funds in the resulting
account or product will not be eligible for full deposit
insurance coverage and they should not be reported in
Memorandum items M5.a and M5.b. However, in the
case of funds swept from a noninterest-bearing transaction account to a noninterest-bearing savings account as
defined in Federal Reserve Regulation D, the FDIC will
treat the swept funds as being in a noninterest-bearing
transaction account. If the sum of the swept funds in the
noninterest-bearing savings account plus any amount
remaining in the related noninterest-bearing transaction
account is more than $250,000, this sum should be
reported in Memorandum item M5.a and the swept funds
and the related noninterest-bearing transaction account
should be reported as one account in Memorandum item
M5.b.

SCHEDULE O-10

Include public funds held in ‘‘noninterest-bearing transaction accounts’’ of more than $250,000 whether or not
they are collateralized with pledged securities or other
pledged assets.
Report in the appropriate subitem the amount outstanding
and the number of noninterest-bearing transaction
accounts (as defined above and in any FDIC regulations
implementing Section 343) with a balance on the report
date of more than $250,000. An institution may exclude
noninterest-bearing transaction accounts with a balance
of more than $250,000 if the entire balance in the account
is fully insured under the FDIC’s regular deposit insurance rules (i.e., without considering the insurance protection provided under Section 343), such as joint account
relationship rules or ‘‘pass-through’’ insurance coverage
rules. In noninterest-bearing transaction accounts with a
balance of more than $250,000 where the entire balance
is not fully insured, an institution may exclude any
amounts over $250,000 that are otherwise insured under
the FDIC’s regular deposit insurance rules. These amounts
may be excluded to the extent that they can be determined by the institution and fully supported in the
institution’s workpapers for this report. An institution is
not required to make a determination of amounts otherwise insured but may do so at its option.
M5(a) Amount of noninterest-bearing transaction
accounts of more than $250,000.
Report the aggregate balance of all noninterest-bearing
transaction accounts (as defined in Schedule O, Memorandum item M5, above) with a balance on the report
date of more than $250,000. This amount should represent the total of the balances of the noninterest-bearing
transaction accounts enumerated in Schedule O, Memorandum item M5.b, below.
M5(b) Number of noninterest-bearing transaction
accounts of more than $250,000.
Report the total number of noninterest-bearing transaction accounts (as defined in Schedule O, Memorandum
item M5, above) with a balance on the report date of
more than $250,000.

Schedule O

FFIEC 002
December 2010

INSTRUCTIONS FOR THE PREPARATION OF

Other Borrowed Money
Schedule P

General Instructions
The amounts reported in column A are for the reporting
branch or agency, including its IBF, and those reported in
column B are for the reporting branch or agency’s IBF
only. If the reporting branch or agency has no IBF, no
amounts are to be reported in column B. Exclude borrowings from related depository institutions as defined in the
Glossary for this report (report in Schedule M).
Report in column A and B, as appropriate, the total
amount borrowed by the reporting branch or agency,
including its IBF, or by the IBF only,
(1) on its promissory notes;
(2) on notes and bills rediscounted (including commodity drafts rediscounted);
(3) on financial assets (other than securities) sold under
repurchase agreements that have an original maturity of more than one business day and sales of
participations in pools of loans that have an original
maturity of more than one business day;
(4) by the creation of due bills representing the reporting institution’s receipt of payment and similar
instruments, whether collateralized or uncollateralized (see the Glossary entry for ‘‘due bills’’);
(5) from Federal Reserve Banks;
(6) by overdrawing ‘‘due from’’ balances with depository institutions, except overdrafts arising from
transactions with related parties (report in Schedule M), or through another depository institution
either on a zero-balance account or on an account
that is not routinely maintained with sufficient
balances to cover checks drawn in the normal
course of business during the period until the
amount of the checks or drafts is remitted to the
other depository institution (in which case, report
the fund received or held in connection with such
FFIEC 002
Schedule P September 2008

checks or drafts as deposits in Schedule E until the
funds are remitted);
(7) on purchases of ‘‘term federal funds’’ (as defined
in the Glossary entry for ‘‘federal funds
transactions’’);
(8) on subordinated notes and debentures;
(9) on interest-bearing demand notes (note balances)
issued by the reporting institution to the U.S. Treasury; and
(10) on any other obligation for the purpose of borrowing money and that is not reported elsewhere.
Exclude from this item the following:
(1) Federal funds purchased and securities sold under
agreements to repurchase (report in Schedule RAL,
item 4(b); and
(2) liabilities resulting from sales of assets that the
reporting institution does not own (see Glossary
entry for ‘‘short position’’) (report in Schedule RAL,
item 4(e)).

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

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

Report the amount owed to (borrowed from) U.S. offices
of nonrelated U.S. banks, including their IBFs.
SCHEDULE P-1

Schedule P

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

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

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

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

(1) the U.S. branches and agencies of other foreign
banks;

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

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

Item 3

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

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

Owed to others.

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

Total.

Report the sum of items 1 through 3.

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

SCHEDULE P-2

Item M1 Immediately available funds with a
maturity greater than one day included in other
borrowed money.
Report the amount borrowed in the form of immediately
available funds with a maturity greater than one day that
is included in item 4 above. For a discussion of immediately available funds, see the Glossary entry for ‘‘federal
funds transactions.’’

Schedule P

FFIEC 002
September 2008

INSTRUCTIONS FOR THE PREPARATION OF

Financial Assets and Liabilities
Measured at Fair Value
Schedule Q

General Instructions
Schedule RC-Q is to be completed by institutions that
have adopted FASB Statement No. 157, “Fair Value
Measurements” (FAS 157), and either:
(1) Have elected to report certain assets and liabilities at
fair value with changes in fair value recognized in
earnings in accordance with U.S. generally accepted
accounting principles (GAAP) (i.e., FASB Statement
No. 159, “The Fair Value Option for Financial Assets
and Financial Liabilities” (FAS 159); FASB Statement No. 155, “Accounting for Certain Hybrid
Financial Instruments” (FAS 155); and FASB Statement No. 156, “Accounting for Servicing of Financial Assets” (FAS 156)). This election is generally
referred to as the fair value option.
OR
(2) Have trading assets of $2 million or more for any
quarter of the preceding calendar year. For purposes
of the Report of Assets and Liabilities of U.S.
Branches and Agencies of Foreign Banks (RAL),
institutions must adopt FAS 157 in accordance with
its effective date. Except for institutions that have
issued financial statements and filed RALs that
include the adoption of FAS 157 in its entirety,
institutions must adopt FAS 157 for all financial
assets and financial liabilities and for nonfinancial
assets and nonfinancial liabilities that are recognized
or disclosed at fair value in the financial statements
on a recurring basis (at least annually) in the first
fiscal quarter of their first fiscal year beginning after
November 15, 2007. Institutions must adopt FAS 157
for all other nonfinancial assets and nonfinancial
liabilities in the first fiscal quarter of their first fiscal
year beginning after November 15, 2008. Thus,
branches and agencies with a calendar year fiscal
year that did not early adopt FAS 157 must adopt this
accounting standard for all financial assets and finanFFIEC 002
Schedule Q

September 2008

cial liabilities and for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at
fair value on a recurring basis as of January 1, 2008,
and for all other nonfinancial assets and nonfinancial
liabilities as of January 1, 2009.

Column Instructions
Column A, Total Fair Value Reported on Schedule
RAL: For items 1, 2.a, 3, 4, 6, and 7, include in
Column A the total fair value of those assets and
liabilities reported on Schedule RAL, Assets and
Liabilities, that the branch or agency has elected to
report at fair value under a fair value option. For items
2 and 5, include in Column A the total amount of
trading assets and trading liabilities, including items
accounted for under a fair value option that are
designated as trading, reported in Schedule RAL C,
item 1.f and item 4.e, respectively.
Columns B through E, Fair Value Measurements
and Netting Adjustments: For items reported in
Column A, report in Columns C, D, and E the fair
value amounts which fall in their entirety in Levels 1,
2, and 3, respectively. The level in the fair value
hierarchy within which a fair value measurement in its
entirety falls should be determined based on the lowest
level input that is significant to the fair value
measurement in its entirety. Thus, for example, if the
fair value of an asset or liability has elements of both
Level 2 and Level 3 measurement inputs, report the
entire fair value of the asset or liability in Column D
or Column E based on the lowest level measurement
input with the most significance to the fair value of the
asset or liability in its entirety as described in FAS
157. For assets and liabilities that the branch or agency
has netted under legally enforceable master netting
agreements in accordance with FASB
Interpretation No. 39, “Offsetting of Amounts Related to
Certain Contracts,” or FASB Interpretation No. 41, “Offsetting of Amounts Related to Certain Repurchase and
SCHEDULE Q-1

Schedule Q

Reverse Repurchase Agreements,” report the gross
amounts in Columns C, D, and E and the related netting
adjustment in Column B. For more information on Level
1, 2, and 3 measurement inputs, see the Glossary entry
for “fair value.”

ule Q, item 7 below) the branch or agency has elected to
report under the fair value option that is included in
Schedule RAL, Assets and Liabilities, and is not reported
in Schedule Q, items 1 and 2 above; the fair values
determined using Level 1, Level 2, and Level 3 measurement inputs; and any netting adjustments.

Item Instructions

Exclude assets required to be measured at fair value for
which the fair value option would not be applicable, such
as derivative assets held for purposes other than trading
and interest only strips receivable (not in the form of a
security). Because these categories of assets are required
to be reported at fair value on the balance sheet under
applicable accounting standards, the fair value option
cannot be applied to them.

For each item in Schedule Q, the sum of columns C, D,
and E less column B must equal column A.
Item 1

Loans and leases.

Report in the appropriate column the total fair value of
those loans reported in Schedule C that the branch or
agency has elected to report under the fair value option;
the fair values determined using Level 1, Level 2, and
Level 3 measurement inputs; and any netting adjustments. Loans held for investment that the bank has
elected to report under the fair value option are included
in Schedule C and Schedule RAL, item 1.e. Leases are
generally not eligible for the fair value option. Exclude
loans that have been reported as trading assets in Schedule RAL, item 1.f.
Item 2

Trading assets.

Report in the appropriate column the total fair value of
trading assets as reported in Schedule RAL, item 1.f; the
fair values determined using Level 1, Level 2, and Level
3 measurement inputs, including loans that have been
reported as trading; and any netting adjustments.
Item 2.a Nontrading securities at fair value with
changes in fair value reported in current earnings.
Report in the appropriate column the total fair value of
those securities the bank has elected to report under the
fair value option that is included in Schedule Q, item 2
above; the fair values determined using Level 1, Level 2,
and Level 3 measurement inputs; and any netting adjustments. Securities that the branch or agency has elected to
report at fair value under the fair value option are
reported as trading securities pursuant to FAS 159 even
though management did not acquire the securities principally for the purpose of trading.
Item 3
assets.

All other financial assets and servicing

Report in the appropriate column the total fair value of all
other assets (except loan commitments reported in SchedSCHEDULE Q-2

Item 4

Deposits.

Report in the appropriate column the total fair value of
those deposits the branch or agency has elected to report
under the fair value option that is included in Schedule
RAL, item 4.a; the fair values determined using Level 1,
Level 2, and Level 3 measurement inputs; and any
netting adjustments. Deposits withdrawable on demand
(e.g., demand and savings deposits in domestic offices)
are generally not eligible for the fair value option.
Item 5

Trading liabilities.

Report in the appropriate column the total fair value of
trading liabilities as reported in Schedule RAL, item 4.e;
the fair values determined using Level 1, Level 2, and
Level 3 measurement inputs; and any netting adjustments.
Item 6 All other financial liabilities and servicing
liabilities.
Report in the appropriate column the total fair value of all
other liabilities (except loan commitments reported in
Schedule Q, item 7 below) the branch or agency has
elected to report under the fair value option that is
included in Schedule RAL, Assets and Liabilities, and is
not reported in Schedule Q, items 4 and 5 above; the fair
values determined using Level 1, Level 2, and Level 3
measurement inputs; and any netting adjustments.
Exclude liabilities required to be measured at fair value
for which the fair value option would not be applicable,
such as derivative liabilities held for purposes other than
trading. Because these liabilities are required to be
Schedule Q

FFIEC 002
September 2008

Schedule Q

reported at fair value on the balance sheet under applicable accounting standards, the fair value option cannot be
applied to them.
Item 7 Loan commitments (not accounted for as
derivatives).
Report in the appropriate column the total fair value of
those unused loan commitments the branch or agency has
elected to report under the fair value option that is

FFIEC 002
Schedule Q

September 2008

included in Schedule RAL, Assets and Liabilities; the
fair values determined using Level 1, Level 2, and Level
3 measurement inputs; and any netting adjustments.
Exclude unused loan commitments that meet the definition of a derivative under GAAP. For purposes of this
item, report the net fair value of unused loan commitments reported as assets and those reported as liabilities.
If the net fair value is a liability, report it as a negative
number.

SCHEDULE Q-3

INSTRUCTIONS FOR THE PREPARATION OF

Servicing, Securitization and
Asset Sale Activities
Schedule S

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

Column Instructions
Column A, 1–4 Family Residential Loans: 1–4 family residential loans are permanent closed-end loans
secured by first or junior liens on 1-to-4 family residential properties.
Column B, Home Equity Lines: Home equity lines
are revolving, open-end lines of credit secured by
1-to-4 family residential properties.
Column C, Credit Card Receivables: Credit card
receivables are extensions of credit to individuals for
household, family, and other personal expenditures arising from credit cards.
Column D, Auto Loans: Auto loans are loans to
individuals for the purpose of purchasing private passenger vehicles, including minivans, vans, sport-utility vehicles, pickup trucks, and similar light trucks for personal
use.
Column E, Other Consumer Loans: Other consumer
loans are loans to individuals for household, family, and
other personal expenditures, excluding credit card receivables and auto loans as described in Columns C and D of
this schedule.
Column F, Commercial and Industrial Loans: Commercial and industrial loans are loans for commercial and
industrial purposes to sole proprietorships, partnerships,
FFIEC 002
Schedule S September 2008

corporations, and other business enterprises, whether
secured (other than by real estate) or unsecured, singlepayment or installment.
Column G, All Other Loans, All Leases, and All
Other Assets: All other loans are loans that cannot
properly be reported in Columns A through F of this
schedule as defined for Schedule C, part I, items 1.a,
1.b, 1.d, 1.e, 2, 3, and 6 through 8. All leases are all
lease financing receivables as defined for Schedule C,
part I, item 9. All other assets are all assets other than
loans and leases, e.g., securities.
For purposes of items 1 through 10 of Schedule S on
securitization activities and other securitization facilities,
information about each separate securitization should be
included in only one of the seven columns of this
schedule. The appropriate column for a particular securitization should be based on the predominant type of loan
included in the securitization and this column should be
used consistently over time. For example, a securitization
may include auto loans to individuals and to business
enterprises. If these auto loans are predominantly loans to
individuals, all of the requested information about this
securitization should be included in Column D, Auto
Loans.

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

Schedule S

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

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

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

FFIEC 002
September 2008

Schedule S

seller-provided credit enhancements in Schedule S,
item 11, column A, and report the maximum credit
exposure arising from the enhancements in item 12,
column A.
Exclude securitizations that the reporting institution has
accounted for as secured borrowings because the transactions do not meet the criteria for sale accounting under
generally accepted accounting principles. The securitized
loans and leases should continue to be carried as assets
on the reporting institution’s balance sheet.
Item 2 Maximum amount of credit exposure
arising from recourse or other seller-provided credit
enhancements provided to structures reported in
item 1.
Report in the appropriate subitem the maximum contractual credit exposure remaining as of the report date under
recourse arrangements and other seller-provided credit
enhancements provided by the reporting branch or agency
to securitization structures reported in Schedule S, item 1,
above. Do not report as the remaining maximum contractual exposure a reasonable estimate of the probable loss
under the recourse arrangements or credit enhancement
provisions or the fair value of any liability incurred under
such provisions. Furthermore, do not reduce the remaining maximum contractual exposure by the amount of any
associated recourse liability account. Report exposure
amounts gross rather than net of any tax effects, e.g., any
associated deferred tax liability.
Do not include unused portions of commitments that
function as liquidity facilities (report such unused commitments in Schedule S, item 3).
Item 2(a)

Retained interest-only strips.

Report in the appropriate column the carrying value of
credit-enhancing interest-only strips included as securities, as other assets, or as trading assets in Schedule RAL,
that the reporting branch or agency has
retained as credit enhancements in connection with the
securitization structures reported in Schedule S, item 1,
above.
Item 2(b) Subordinated securities and other
residual interests.
Report in the appropriate column the carrying value of
subordinated securities and other residual interests carried as on-balance sheet assets that the reporting branch
FFIEC 002
Schedule S September 2008

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

Past due loan amounts included in item 1.

Report in the appropriate subitem the outstanding principal balance of loans and leases reported in Schedule S,
item 1, above that are 30 days or more past due as of the
report date. For purposes of determining whether a loan
or lease reported in item 1 above is past due, the reporting
criteria to be used are the same as those for columns A
and B of Schedule N.
Item 4(a)

30–89 days past due.

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

90 days or more past due.

Report in the appropriate column the outstanding principal balance of loans and leases reported in Schedule S,
item 1, above that are 90 days or more past due as of the
report date.
SCHEDULE S-3

Schedule S

Item 5

Not applicable.

Item 6 Amount of ownership (or seller’s) interests
carried as securities or loans.
Report in the appropriate subitem the carrying value of
the reporting institution’s ownership (or seller’s) interests
associated with the securitization structures reported in
Schedule S, item 1, above.
Item 6(a)

Securities.

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

Loans.

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

30–89 days past due.

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

90 days or more past due.

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

Item 8

Not applicable.

For Securitization Facilities Sponsored
By or Otherwise Established By Other
Institutions
Item 9 Maximum amount of credit exposure
arising from credit enhancements provided by
the reporting institution to other institutions’
securitization structures in the form of standby
letters of credit, purchased subordinated securities,
and other enhancements.
Report in the appropriate column the maximum contractual credit exposure remaining as of the report date under
credit enhancements provided by the reporting branch or
agency to securitization structures sponsored by or otherwise established by other institutions or entities, i.e.,
securitizations not reported in Schedule S, item 1, above.
Report the unused portion of standby letters of credit, the
carrying value of purchased subordinated securities, and
the maximum contractual amount of credit exposure
arising from other on- and off-balance sheet credit
enhancements that provide credit support to these securitization structures. Do not report as the remaining maximum contractual exposure a reasonable estimate of the
probable loss under credit enhancement provisions or the
fair value of any liability incurred under such provisions.
Furthermore, do not reduce the remaining maximum
contractual exposure by the amount of any associated
recourse liability account. Report exposure amounts gross
rather than net of any tax effects, e.g., any associated
deferred tax liability.
Exclude the amount of credit exposure arising from loans
and leases that the reporting branch or agency has sold
with recourse or other seller-provided credit enhancements to other institutions or entities, which then securitized the loans and leases purchased from the branch or
agency (report this exposure in Schedule S, item 12,
below).
Also exclude the amount of credit exposure arising from
credit enhancements provided to asset-backed commercial paper conduits (report this exposure in Schedule S,
Memorandum item 1(a)).
Item 10 Reporting institution’s unused
commitments to provide liquidity to other
institutions’ securitization structures.
Report in the appropriate column the unused portions of
commitments provided by the reporting branch or agency
Schedule S

FFIEC 002
September 2008

Schedule S

that function as liquidity facilities to securitization structures sponsored by or otherwise established by other
institutions or entities, i.e., securitizations not reported in
Schedule S, item 1, above.
Exclude the amount of unused commitments to provide
liquidity to asset-backed commercial paper conduits
(report this amount in Schedule S, Memorandum
item 1(b)).

Asset Sales
Item 11 Assets sold with recourse or other
seller-provided credit enhancements and not
securitized by the reporting institution.
Report in the appropriate column the unpaid principal
balance as of the report date of loans and leases, which
the reporting branch or agency has sold with recourse or
other seller-provided credit enhancements, but which
were not securitized by the reporting branch or agency.
Include loans and leases that the reporting branch or
agency has sold with recourse or other seller-provided
credit enhancements to other institutions or entities,
whether or not the purchaser has securitized the loans and
leases purchased from the institution. Include 1–4 family
residential mortgages that the reporting institution has
sold to the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac) with recourse or other seller-provided
credit enhancements.
Item 12 Maximum amount of credit exposure
arising from recourse or other seller-provided credit
enhancements provided to assets reported in
item 11.
Report in the appropriate column the maximum contractual credit exposure remaining as of the report date under
recourse arrangements or other seller-provided credit
enhancements provided by the reporting branch or agency
in connection with its sales of the loans and leases
reported in Schedule S, item 11, above. Report the
unused portion of standby letters of credit, the carrying
value of retained interests, and the maximum contractual
amount of recourse or other credit exposure arising from
other on- and off-balance sheet credit enhancements that
the reporting branch or agency has provided. Do not
report as the remaining maximum contractual exposure
a reasonable estimate of the probable loss under the
recourse arrangements or credit enhancement provisions
FFIEC 002
Schedule S September 2008

or the fair value of any liability incurred under such
provisions. Furthermore, do not reduce the remaining
maximum contractual exposure by the amount of any
associated recourse liability account. Report exposure
amounts gross rather than net of any tax effects, e.g., any
associated deferred tax liability.

Memoranda
Item M1

Asset-backed commercial paper conduits:

Item M1(a) Maximum amount of credit exposure
arising from credit enhancements provided to
conduit structures in the form of standby letters
of credit, subordinated securities, and other
enhancements.
Report in the appropriate subitem the maximum contractual credit exposure remaining as of the report date under
standby letters of credit, subordinated securities, and
other credit enhancements provided by the reporting
branch or agency to asset-backed commercial paper
conduit structures. Do not report in these subitems a
reasonable estimate of the probable loss under the credit
enhancement provisions or the fair value of any liability
incurred under such provisions. For the definition of
‘‘related institution,’’ as that term is used in Memorandum items 1(a) and 1(b), see the entry for ‘‘related
institutions’’ in the Glossary section of these instructions.
Item M1(a)(1) Conduits sponsored by the
reporting institution or a related institution.
Report the unused portion of standby letters of credit, the
carrying value of subordinated securities, and the maximum contractual amount of credit exposure arising from
other credit enhancements that the reporting branch or
agency has provided to asset-backed commercial paper
conduit structures sponsored by the reporting branch or
agency or a related institution.
Item M1(a)(2) Conduits sponsored by other
unrelated institutions.
Report the unused portion of standby letters of credit, the
carrying value of subordinated securities, and the maximum contractual amount of credit exposure arising from
other credit enhancements that the reporting branch or
agency has provided to asset-backed commercial paper
conduit structures other than those sponsored by the
reporting branch or agency or a related institution.
SCHEDULE S-5

Schedule S

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

SCHEDULE S-6

Item M1(b)(1) Conduits sponsored by the
reporting institution or a related institution.
Report the unused portions of commitments provided by
the reporting branch or agency that function as liquidity
facilities to asset-backed commercial paper conduit structures sponsored by the reporting institution or a related
institution.

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

Schedule S

FFIEC 002
September 2008

INSTRUCTIONS FOR THE PREPARATION OF

Fiduciary and Related Services
Schedule T

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

Line Item Instructions
Line Item 1
powers?

Does the institution have fiduciary

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

September 2008

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

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

Schedule T

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

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

FFIEC 002
September 2008

Schedule T

range of alternatives does not create a managed fiduciary
account for the purposes of this schedule.
Column C, Number of Managed Accounts: Report the
total number of managed fiduciary accounts.
Column D, Number of Non-managed Accounts: Report
the total number of non-managed fiduciary accounts.
Line Item 4

Personal trust and agency accounts.

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

Retirement related trust and agency

Line Item 5(a)
contribution.

Employee benefit-defined

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

Employee benefit-defined benefit.

Report the market value and number of accounts for all
employee benefit defined benefit plans in which the
institution serves as either trustee or agent. The number
of accounts reported should reflect the total number of
plans administered rather than the number of plan participants. Employee benefit accounts that are solely custody
and safekeeping accounts should be reported in Schedule T, item 10.
FFIEC 002
Schedule T

September 2008

Line Item 5(c)

Other retirement accounts.

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

Corporate trust and agency accounts.

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

Investment mangement agency

Report the market value and number of accounts for all
individual and institutional investment management
agency accounts that are administered within the fiduciary area of the institution. Investment management
agencies are those agency accounts in which the institution has investment discretion; however, title to the assets
remain with the client. Include accounts in which the
institution serves as a sub-advisor. Exclude investment
management agency accounts that are administered in
subsidiaries that are SEC registered investment advisors.
Include those mutual funds that are advised by the
fiduciary area that is a separately identifiable department
or division (as defined in section 217 of the Gramm–
SCHEDULE T-3

Schedule T

Leach–Bliley Act). Classes of the same mutual fund
should be combined and reported as a single account.
Line Item 8

Other fiduciary accounts.

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

Total fiduciary accounts.

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

Custody and safekeeping accounts.

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

tutional brokerage assets, securities safekeeping services
for correspondent banks, escrow assets held for the
benefit of third parties, safety deposit box assets, and any
other similar commercial arrangement.

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

Noninterest-bearing deposits.

Report all noninterest-bearing deposits. Report
noninterest-bearing deposits of both principal and income
cash.
Line Item M1(b)

Interest-bearing deposits.

Report all interest-bearing saving and time deposits.
Include NOW accounts, MMDA accounts, ‘‘BICs’’ (bank
Schedule T

FFIEC 002
September 2008

Schedule T

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

State, county, and municipal

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

Money market mutual funds.

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

this would include such money market instruments as
master note arrangements, commercial paper, bankers
acceptances, securities repurchase agreements, and other
short-term liquidity investments. Exclude state, county,
and municipal obligations.
Line Item M1(g)

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

Other short-term obligations.

Report all short-tem obligations (i.e., original maturities
of less than 1 year, or 13 months in the case of the time
portion of master notes). In addition to short-term notes,
FFIEC 002
Schedule T

September 2008

Common and preferred stocks.

Report all holdings of domestic and foreign common and
preferred equities, including warrants and options. Include
holdings of all mutual funds (open-end and closed-end)
except money market funds which are reported in Schedule T, Memorandum item 1(e), above. Also include all
unit investment trusts, regardless of the securities they
are invested in (e.g., stocks, corporate bonds, and municipal bonds). Include ownership interests in private equity
investments, limited liability companies, and any other
pooled investment vehicle except those that are primarily
invested in real estate which should be included in
Schedule T, Memorandum item 1(j).
Line Item M1(i)

Line Item M1(f)

Other notes and bonds.

Real estate mortgages.

Report real estate mortgages, real estate contracts, land
trust certificates, and ground rents. These assets may be
reported at unpaid balance if that figure is a fair approximation of market value.
SCHEDULE T-5

Schedule T

Line Item M1(j)

Real estate.

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

Miscellaneous assets.

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

Corporate trust and agency

Line Item M2(a)
trusteeships.

Corporate and municipal

Report in column A the total number of corporate and
municipal issues, as well as other debt issues such as unit
investment trusts, for which the institution serves as
trustee. If more than one institution is trustee for an issue,
each institution should report the issue. Securities with
different CUSIP numbers should be considered separate
issues; however, serial bond issues should be considered
as a single issue. When an institution serves as trustee of
a bond issue, it may also perform agency functions for
the issue such as registrar (transfer agent) or interest and
principal paying agent. In those cases, report the issue
only in Memorandum item 2(a), ‘‘Corporate and Municipal Trusteeships,’’ as the trustee appointment is considered the primary function. Consider the primary function
of the appointment when selecting the item in which to
report the appointment. Exclude issues that have been
called in their entirety or have matured even if there are
unpresented bonds or coupons for which funds are being
held.
Report in column B the total par value of outstanding
debt securities for the issues reported in column A for
which the institution serves as trustee. For zero-coupon
SCHEDULE T-6

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

Domestic equity.

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

FFIEC 002
September 2008

Schedule T

Line Item M3(b)

International/Global equity.

Line Item M3(e)

Municipal bond.

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

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

Line Item M3(c)

Line Item M3(f)
market.

Stock/Bond blend.

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

Taxable bond.

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

FFIEC 002
Schedule T

September 2008

Short term investments/Money

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

Specialty/Other.

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

Total collective investment funds.

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

SCHEDULE T-7

Glossary

The definitions in this Glossary apply to the Report of
Assets and Liabilities of U.S. Branches and Agencies
of Foreign Banks (FFIEC 002) and are not necessarily
applicable for other regulatory or legal purposes. Similarly, the accounting discussions in this Glossary are
those relevant to the preparation of this report and are not
intended to constitute a comprehensive presentation on
bank accounting.
Accounting Errors, Corrections of: A branch or agency
may become aware of an error in a report after it has been
submitted to the appropriate federal bank regulatory
agency through either its own or its regulator’s discovery
of the error. An error in a report for a prior period may
result from:
(1) mathematical mistake;
(2) a mistake in applying accounting principles; or
(3) the improper use of information that existed when the
reports for prior periods were prepared.
When a material error of one of these types is discovered
in a report, the branch or agency may be directed to file
amended report data.

as of the end of the reporting period and the amount of
the loss can be reasonably estimated. Contingencies
which might result in gains should not be recognized
prior to their realization.
Agreement Corporation: See ‘‘Edge and Agreement
corporation.’’
Allowance for Loan Losses: Branches and agencies
may choose to, but are not required to, maintain an
allowance for loan losses on an office level. As of the end
of each quarter, or more frequently if warranted, the
management of each branch or agency must evaluate,
subject to examiner review, the collectibility of the loan
and lease portfolio, including any recorded accrued and
unpaid interest (i.e., not already reversed or charged off).
When available information confirms that specific loans
and leases, or portions thereof, are uncollectible, the U.S.
branch or agency should promptly charge off, or establish
specific reserves for, these uncollectible amounts. Management must maintain reasonable records in support of
their evaluations and entries.

Accretion of Discount on Securities: Accretion of
discount on securities purchased below par or face value
is required of all reporting institutions. The discount on
securities should be accreted from date of purchase to
maturity, not to call or put date.

When a branch or agency makes a full or partial direct
write-down of a loan or lease through a charge-off, the
institution establishes a new cost basis for the asset.
Consequently, once a new cost basis has been established
for a loan or lease, this cost basis may not be ‘‘written
up’’ at a later date. Reversing the previous write-down
and ‘‘re-booking’’ the charged-off asset after the institution concludes that the prospects for recovering the
charge-off have improved, regardless of whether the
institution assigns a new account number to the asset or
the borrower signs a new note, is not an acceptable
accounting practice.

Accrual of Loss Contingencies: An estimated loss (or
expense) from a loss contingency (for example, pending
or threatened litigation) should be accrued if it is probable that an asset had been impaired or a liability incurred

Amortization of Premiums on Securities: Amortization on securities purchased above par or face value is
required. The premium on securities should be amortized
from date of purchase to maturity, not to call or put date.

Accounting Principles, Changes in: Changes in accounting principles should be made only if such changes result
in the adoption of preferable accounting practices. Most
changes in accounting principles will require an adjustment of the net due from/due to account balance.

FFIEC 002
Glossary September 2008

GL-1

Glossary

Bankers Acceptances: A bankers acceptance, for purposes of this report, is a draft or bill of exchange that has
been drawn on and accepted by a banking institution (the
‘‘accepting bank’’), or its agent, for payment by the
institution at a future date that is specified in the instrument. Drafts accepted by a banking institution are
referred to as ‘‘acceptances executed’’ by that institution.
The customer named in the draft as responsible for
payment to the accepting banking institution is referred
to as the ‘‘account party.’’ Funds are advanced to the
drawer of the acceptance by the discounting of the
accepted draft either by the accepting banking institution
or by others. The accepted draft is negotiable and may be
sold and resold subsequent to its original discounting. At
the maturity date specified, the holder or owner of the
acceptance at that date presents the acceptance to the
accepting banking institution for payment.
The accepting banking institution has an unconditional
obligation to pay the holder of the acceptance the fare
amount of the draft or presentation on the specified
maturity date. The account party (customer) has an
unconditional obligation to put the accepting banking
institution in funds at or before the maturity date specified in the instrument.
The following description covers the treatment in this
report of:
(1) acceptances that have been executed by the reporting
branch or agency, that is, those drafts that have been
drawn on and accepted by it;
(2) ‘‘participations’’ in acceptances, that is, ‘‘participations’’ in the accepting branch or agency’s obligation to put the holder of the acceptance in funds at
maturity, or ‘‘participations’’ in the accepting branch
or agency’s risk of loss in the event of default by the
account party;
(3) bankers acceptances owned and held by the reporting
branch or agency, whether executed by it or by
others, that the branch or agency has discounted or
purchased; and
(4) ‘‘refinancing’’ of acceptances.
In the following discussion, the term ‘‘acceptances’’ is
used to mean ‘‘bankers acceptances.’’ Where, as in
section 4(c) below, ‘‘trade acceptances’’ are referred to,
that term is used explicitly.
GL-2

(1) Acceptances executed by the reporting branch or
agency: With the exceptions described below, the
accepting branch or agency must report on its Report
of Assets and Liabilities the full amount of the
outstanding acceptances that it has executed both
in (i) the liability item, ‘‘Branch or agency liability
on acceptances executed and outstanding’’ (Schedule RAL, item 4(d)), reflecting the accepting branch
or agency’s obligation to put the holder of the
acceptance in funds at maturity, and in (ii) the
asset item, ‘‘Customers’ liability to this branch or
agency on acceptances outstanding’’ (Schedule RAL,
item 1(g)), reflecting the account party’s liability to
put the accepting branch or agency in funds at or
before maturity of the acceptance. The reporting of
the full amount of an acceptance executed by the
reporting branch or agency in both the acceptance
asset and acceptance liability items also applies to the
situation where a branch or agency accepts a draft on
it drawn by a customer of its head office and where as
a matter of internal control the head office shows the
claim on the account party on head office books
rather than on the branch or agency’s books. For
purposes of this report, if the branch or agency has
accepted the draft, it should report both the acceptance liability and the acceptance asset (customers’
liability on acceptances) rather than only the acceptance liability balanced by a due from item on the
head office. Exceptions to the mandatory reporting
by the accepting branch or agency of the full amount
of all outstanding drafts accepted by the reporting
branch or agency in both Liability item 4(d) and
Asset item 1(g) on schedule RAL of this report occur
only in the following situations:
(a) One exception occurs in situations where the
accepting branch or agency acquires—through
initial discounting or subsequent purchase—and
holds its own acceptance (i.e., draft that it has
itself accepted). In this case, acceptances executed by the reporting branch or agency that are
held by it are not to be reported in ‘‘Branch or
agency liability on acceptances executed and
outstanding’’ and ‘‘Customers’ liability to this
branch or agency on acceptances outstanding’’ as
noted above. Instead, the branch or agency’s
holdings of its own acceptances will be reported
as loans (in item 1(e) of Schedule RAL and in

Glossary

FFIEC 002
September 2008

Glossary

Schedule C in item 4, ‘‘Commercial and industrial loans,’’ item 2, ‘‘Loans to depository institutions and acceptances of other banks,’’ item 3,
‘‘Loans to other financial institutions,’’ or item 6,
‘‘Loans to foreign governments and official institutions,’’ depending upon the type of customer.)
(NOTE: Holdings of acceptances of other banks
(nonrelated) are reported in Schedule C in item 2,
‘‘Loans to depository institutions and acceptances of other banks.’’)
(b) Another exception occurs in situations where
the account party anticipates its liability to the
accepting branch or agency on an acceptance
outstanding by making payment to the branch or
agency that reduces the customer’s liability in
advance of maturity of the acceptance. In this
case, the reporting branch or agency will decrease
the asset item ‘‘Customers’ liability to this branch
or agency on acceptances outstanding’’ (item 1(g)
of Schedule RAL) by the amount of such prepayment; however, the prepayment will not affect the
liability item ‘‘Branch or agency liability on
acceptances executed and outstanding’’ (item
4(d) of Schedule RAL), which would continue to
reflect the full amount of the acceptance until the
branch or agency has paid the holder of the
acceptance at the maturity date specified in the
instrument. If the account party’s payment to the
accepting branch or agency before the maturity
date is not for the purpose of immediate reduction of its indebtedness to the reporting branch or
agency or if receipt of the payment does not
immediately reduce or extinguish that indebtedness, such advance payment will not reduce
item 1(g) of Schedule RAL but should be reflected in the branch or agency’s deposit liabilities (item 4(a) of Schedule RAL and in Schedule
E, as appropriate).
(c) A third exception occurs in the case of acceptance transactions of the reporting branch oragency with related banking institutions. In
such instances, the reporting treatment specified below is consistent with the general reporting requirements for transactions with related
depository institutions. When the account party is
the reporting branch or agency’s head office or
another related banking institution, the reporting
institutions’s claim on the account party in conFFIEC 002
Glossary September 2008

nection with an acceptance executed by it should
be reported as an item due from a related party
and be reflected in Schedule RAL either in item 2
(‘‘Net due from related depository institutions’’)
or in item 5 (‘‘Net due to related depository
institutions’’); it would not be reported in item 1(g)
(‘‘Customers’ liability to this branch or agency
on acceptances outstanding’’). However, as in the
case of other acceptances executed by the reporting institution, the reporting institution’s liability
for such an acceptance would be reported in
item 4(d) (‘‘Branch or agency liability on acceptances executed and outstanding’’).
(2)

In all situations other than those exceptions discussed above, the accepting branch or agency must
report the full amount of its acceptances both in its
liability item, ‘‘Branch or agency liability on acceptances executed and outstanding,’’ and in its asset
item, ‘‘Customers’ liability to this branch or agency
on acceptances outstanding.’’ There are no other
circumstances in which the accepting branch or
agency can report as a liability in Schedule RAL
anything less than the full amount of the obligation to
put the holder of the acceptance in funds at maturity.
Moreover, there are no circumstances in which the
reporting branch or agency can net its acceptance
assets against its acceptance liabilities.

(3) ‘‘Participations’’ in acceptances: The general
requirement for the accepting branch or agency to
report on its balance sheet the full amount of its
obligation to put the holder of the acceptance in
funds at maturity applies in particular to any situation
in which the accepting branch or agency enters into
any kind of arrangement with others (whether with a
related or a nonrelated institution) for the purpose of
having the latter share, or participate, inthe risk of
loss in the event of default on the part of the account
party.1 The existence of any such sharing arrangement or participation agreement does not reduce the
accepting branch or agency’s obligation to pay to the
holder of the acceptance the full amount of the
acceptance at maturity and does not change the
requirement for the accepting branch or agency to
1. This discussion does not deal with participations in holdings of
bankers acceptances, which are reportable as loans. Such participations are
treated like any participations in loans as described in the Glossary entry
for ‘‘transfers of financial assets.’’

GL-3

Glossary

report the full amount of the acceptance in the
liability and asset items described above; the amount
of the participation is not to be deducted from either
the acceptance liability or the acceptance asset. This
is the case in any such sharing arrangement or
participation agreement, regardless of the form of the
participation agreement or its contract provisions,
regardless of the terminology (e.g., ‘‘funded,’’ ‘‘risk,’’
‘‘unconditional,’’ or ‘‘contingent’’) used to describe it
and the relationships under it, regardless of whether
it is described as a participation in the risk of default
by the account party, in the customer’s liability or in
the accepting branch or agency’s obligation, and
regardless of the system of debits and credits used by
the accepting branch or agency to reflect the participation arrangement. Such participations are not to be
reported in Schedule RAL either by an accepting
branch or agency that conveys shares in its risk of
loss in the event of default on the part of the account
party or by a branch or agency that acquires such
participations. However, a branch or agency that has
conveyed to others such participations in acceptances
it has executed must report the outstanding amount of
such participations in Schedule L, Off-Balance Sheet
Items, item 5, ‘‘Participations in acceptances conveyed to others by the reporting (accepting) branch
or agency.’’
(4) Bankers acceptances owned by the reporting branch
or agency: The treatment of bankers acceptances
owned or held by the reporting branch or agency
(whether acquired by initial discount or subsequent
purchase) depends upon whether the acceptances
held have been accepted by the reporting branch or
agency, by a banking institution related to the reporting branch or agency, or by nonrelated banks, and, in
some cases, upon whether the account party is a
banking institution related to the reporting branch or
agency.
(a) All acceptances held in trading accounts that
were executed by the reporting branch or agency
and for which the account party is not a related
banking institution and all acceptances held in
trading accounts that were executed by nonrelated banking institutions are to be reported in
Schedule RAL, item 1(f), ‘‘Trading assets.’’
(b) Acceptances held by the reporting branch or
agency that were executed by it and for which the
GL-4

account party is not a related banking institution
are to be reported in Schedule RAL, item 1(e),
‘‘Loans,’’ and in Schedule C, part I, Loans,
according to the account party of the draft. Thus,
holdings of own acceptances are to be reported in
Schedule C in ‘‘Commercial and industrial loans’’
(item 4) if the account parties are commercial or
industrial enterprises; in the appropriate subitem
of ‘‘Loans to depository institutions and acceptances of other banks’’ (item 2) if the account
parties are nonrelated banking institutions (e.g.,
in connection with the refinancing of another
acceptance or with the financing of dollar
exchange); in ‘‘Loans to other financial institutions’’ (item 3) if the account parties are finance
companies, etc.; or in ‘‘Loans to foreign governments and official institutions’’ (item 6) if the
account parties are foreign governments or official institutions (e.g., for the financing of dollar
exchange).
(c) Acceptances held by the reporting branch or
agency that were executed by it and for which the
account party is a banking institution related to
the reporting branch or agency, are to be treated
as an item due from a related banking institution.
Consistent with the general treatment in this
report of transactions with related depository
institutions, holdings of such acceptances are not
to be reported under loans but are to be reflected
in Schedule RAL either in item 2 (‘‘Net due from
related depository institutions’’) or in item 5
(‘‘Net due to related depository institutions’’),
and are also to be reported in the appropriate
items of Schedule M.
(d) Acceptances held by the reporting branch or
agency that were executed by nonrelated banking
institutions are to be reported in Schedule RAL in ‘‘Loans’’ (item 1(e)) and in the
appropriate subitem of ‘‘Loans to depository
institutions and acceptances of other banks’’
(item 2) of Schedule C. The difference in treatment in Schedule C between holdings of own
acceptances (according to account party) as set
forth in subparagraph (a) above and holdings of
nonrelated banks’ acceptances (according to the
accepting institution) as set forth in this subparagraph reflects the fact that, for other banks’
acceptances, the holding branch or agency’s
Glossary

FFIEC 002
September 2008

Glossary

immediate claim is on the accepting bank,
regardless of the account party or of the purpose
of the loan. On the other hand, for its holdings
of its own acceptances, the branch or agency’s
immediate claim is on the account party named in
the accepted draft.
(e) Acceptances held by the reporting branch or
agency that were executed by its head office or
any other related banking institution represent
claims of the reporting branch or agency against
a related banking institution. Consistent with the
general treatment of transactions with related
depository institutions, the holding of such acceptances are not to be reported under loans but are
to be reflected in Schedule RAL either in item 2,
‘‘Net due from related depository institutions,’’ or
in item 5, ‘‘Net due to related depository institutions,’’ depending on the overall net position of
the reporting branch or agency vis-a`-vis its head
office and other related depository institutions
and are also to be reported in the appropriate
items of Schedule M.
(5) Refinancing of acceptances: In some cases, a banking institution may refinance an acceptance that it has
discounted and holds as an asset by itself, drawing a
draft on another banking institution and obtaining
these funds from the discounting of the latter acceptances. In these cases, the latter ‘‘refinancing’’ acceptance is to be reported as a transaction separate and
distinct from the underlying original acceptance that
is being financed in this way. The original acceptance
that is being refinanced will continue to be reported
in accordance with the requirements of paragraph 3
above if a bankers acceptance and as a loan if it is a
trade acceptance. (See the discussion in subparagraph (c) below for the treatment of a different form
of trade acceptance refinancing.) The reporting of the
‘‘refinancing’’ acceptance will depend upon the characteristics of the acceptance transaction and of the
parties to it:
(a) If the reporting institution has refinanced its
holdings of acceptances by drafting a draft on
a nonrelated banking institution, it must report its
liability to the accepting bank in item 4(c)
(‘‘Other borrowed money’’) of Schedule RAL
and also in the appropriate item of Schedule P.
The nonrelated banking institution executing the
FFIEC 002
Glossary September 2008

refinancing acceptance will report as it would any
other acceptance executed by it (as described in
previous paragraphs) with no reference to the
original underlying acceptance.
(b) If the reporting branch or agency’s refinancing
draft is drawn on and accepted by a related
banking institution (either a related U.S. bank or a
related branch or agency), then, in accordance
with the instructions on the treatment of transactions with related banking institutions, its liability, as the drawer of the bankers acceptance,
to the accepting banking institution would be
an item due to related banking institutions and be
reflected in Schedule RAL, not in the ‘‘Other
borrowing’’ item, but either in ‘‘Net due to
related depository institutions’’ (item 5) or in
‘‘Net due from related depository institutions’’
(item 2) depending on the overall net position
vis-a`-vis related banking institutions and also be
reported in the appropriate item of Schedule M.
Similarly, the related institution would report the
acceptance it had executed for its related banking
institution as it would any acceptance executed
for a related banking institution as provided by
the appropriate instructions above.
(c) A somewhat different kind of ‘‘refinancing’’ of
trade acceptances involving not the drawing of a
draft by the reporting branch or agency on
another bank but its execution of an acceptance
drawn on it by a trade customer, arises in the case
where (a) a reporting branch or agency has
acquired, through discounting, trade acceptances
of a trading company and (b) the trading company ‘‘subsequently’’ (which may be fairly
immediate) consolidates the trade acceptances by
drawing on the same branch or agency a draft (a
so-called ‘‘accommodation draft’’) collateralized
by the original trade acceptances (which also
serves as part of the documentation permitting
the latter bankers acceptance to be treated as an
eligible acceptance.) The ‘‘accommodation draft’’
is then accepted by the reporting branch or
agency and sold into the secondary market. In
this circumstance (in which the trading company
does not realize any new funds), the use of the
original trade acceptances as collateral for the
subsequent bankers acceptance constitutes, in
effect, a reversal of the original discounting of the
GL-5

Glossary

trade acceptances by the branch or agency. Thus,
once the reporting branch or agency executes
such a ‘‘consolidating’’ bankers acceptance, there
will be no further reflection in the reporting
branch or agency’s Schedule RAL of the holding
of the original trade acceptances; and the ‘‘consolidating’’ bankers acceptance executed by the
reporting branch or agency will be reported as
provided in the basic instructions, i.e., in
items 1(g) and 4(d) of Schedule RAL. If the
report date falls after the original discounting of
the trade acceptances but before the execution of
the consolidating bankers acceptance, the holding of the trade acceptances would be reflected in
‘‘Loans’’ and there would, of course, be no
reflection of the execution of the bankers acceptance in the report for that date.
Banks, U.S. and Foreign: In the classification of banks
as customers of the reporting branch or agency, distinctions are drawn for purposes of this report between ‘‘U.S.
banks’’ and ‘‘commercial banks in the U.S.’’ and between
‘‘foreign banks’’ and ‘‘banks in foreign countries.’’ Some
report items call for one set of these categories and other
items call for the other set. The distinctions center around
the inclusion or exclusion of foreign branches of U.S.
banks and U.S. branches and agencies of foreign banks.
For purposes of describing the office location of banks as
customers of the reporting branch or agency, the term
‘‘United States’’ covers the 50 states of the United States,
the District of Columbia, Puerto Rico, and U.S. territories
and possessions. (However, for the coverage of the term
‘‘United States’’ in Schedule M, see the instructions for
that schedule.)

domiciled branches and agencies, but excluding the
foreign branches of U.S. banks. In contrast, the term
‘‘banks in foreign countries’’ covers foreign-domiciled
branches of banks, including the foreign branches of U.S.
banks, but excluding the U.S. branches and agencies of
foreign banks.
The following table summarizes these contrasting categories of banks considered as customers as used in this
report. (‘‘X’’ indicates inclusion; no entry indicates
exclusion.)

U.S.
banks

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

X

Commercial
banks in
Foreign
the U.S.
banks

Banks in
foreign
countries

X

X

X
X

X

X

X

Commercial banks in the U.S.—The detailed institutional
composition of ‘‘commercial banks in the U.S.’’ includes:
(1) the U.S.-domiciled head offıces and branches of:
(a) national banks;
(b) state-chartered commercial banks;
(c) trust companies that perform a commercial banking business;

U.S. banks—The term ‘‘U.S. banks’’ covers both the U.S.
and foreign branches of banks chartered and headquartered in the U.S. (including U.S.-chartered banks owned
by foreigners), but excluding U.S. branches and agencies
of foreign banks. On the other hand, the term ‘‘banks in
the U.S.’’ or ‘‘commercial banks in the U.S.’’ (the institutional coverage of which is described in detail later in this
entry) covers the U.S. offices of U.S. banks (including
their IBFs) and the U.S. branches and agencies of foreign
banks, but excludes the foreign branches of U.S. banks.

(2) the U.S.-domiciled branches and agencies of foreign
banks (as defined below).

Foreign banks—Similarly, the term ‘‘foreign banks’’
covers all branches of banks chartered and headquartered
in foreign countries (including foreign banks owned by
U.S. nationals and institutions), including their U.S.-

This coverage includes the U.S. institutions listed above
that are owned by foreigners. Excluded from commercial
banks in the U.S. are branches located in foreign countries of U.S. banks.

GL-6

(d) industrial banks;
(e) private or unincorporated banks;
(f) International Banking Facilities (IBFs) of U.S.
banking institutions;
(g) Edge and Agreement corporations; and

Glossary

FFIEC 002
September 2008

Glossary

U.S. savings and loan associations and savings banks are
treated as ‘‘other depository institutions in the U.S.’’ for
purposes of this report.
U.S. branches and agencies of foreign banks—U.S.
branches of foreign banks include any offices or places of
business of foreign banks that are located in the United
States at which deposits are accepted. U.S. agencies of
foreign banks include any offices or places of business of
foreign banks that are located in the United States at
which credit balances are maintained incidental to or
arising out of the exercise of banking powers but at
which deposits may not be accepted from citizens or
residents of the United States.
Banks in foreign countries—The institutional composition of ‘‘banks in foreign countries’’ includes:
(1) the foreign-domiciled head offıces and branches of:
(a) foreign commercial banks (including foreigndomiciled banking subsidiaries of U.S. banks and
Edge and Agreement corporations);
(b) foreign savings banks or discount houses;
(c) nationalized banks not functioning either as central banks, as foreign development banks, or as
banks of issue;
(d) other similar foreign institutions that accept
short-term deposits; and

tion’s deposit account records may indicate that the funds
have been deposited in the name of a third party custodian for the benefit of others (e.g., ‘‘XYZ Corporation as
custodian for the benefit of others,’’ or ‘‘Custodial
account of XYZ Corporation’’). Unless the custodian
meets one of the specific exemptions from the ‘‘deposit
broker’’ definition in Section 29 of the Federal Deposit
Insurance Act and this Glossary entry, these custodial
accounts should be reported as brokered deposits in
Schedule E, Deposit Liabilities.
A deposit listing service whose only function is to
provide information on the availability and terms of
accounts is not facilitating the placement of deposits and
therefore is not a deposit broker per se. However, if a
deposit broker uses a deposit listing service to identify an
institution offering a high rate on deposits and then places
its customers’ funds at that institution, the deposits would
be brokered deposits and the institution should report
them as such in Schedule E. The designation of these
deposits as brokered deposits is based not on the broker’s
use of the listing service but on the placement of the
deposits in the institution by the deposit broker.
Broker’s Security Draft: A broker’s security draft is a
draft with securities or title to securities attached that is
drawn to obtain payment for the securities. This draft is
sent to a bank for collection with instructions to release
the securities only on payment of the draft.

(2) the foreign-domiciled branches of U.S. banks.

Call Option: See ‘‘derivative contracts.’’

See also ‘‘International Banking Facility (IBF).’’

Certificate of Deposit: See ‘‘deposits.’’

Banks in Foreign Countries: See ‘‘banks, U.S. and
foreign.’’

Commercial Banks in the U.S.: See ‘‘banks, U.S. and
foreign.’’

Bill-of-Lading Draft: See ‘‘commodity or bill-of-lading
draft.’’

Commercial Letter of Credit: See ‘‘letter of credit.’’

Brokered Deposits: Brokered deposits represent funds
which the reporting branch obtains, directly or indirectly,
by or through any deposit broker for deposit into one or
more deposit accounts. Thus, brokered deposits include
both those in which the entire beneficial interest in a
given bank deposit account or instrument is held by a
single depositor and those in which the deposit broker
sells participations in a given bank deposit account or
instrument to one or more investors.
In some cases, brokered deposits are issued in the name
of the depositor whose funds have been placed in an
institution by a deposit broker. In other cases, an instituFFIEC 002
Glossary September 2008

Commercial Paper: Commercial paper consists of shortterm negotiable promissory notes issued in the United
States by commercial businesses, including finance companies and banks. Commercial paper usually matures in
270 days or less and is not collateralized. Commercial
paper may be backed by a standby letter of credit from a
bank, as in the case of documented discounted notes.
Holdings of commercial paper are to be reported as
‘‘securities’’ in Schedule RAL, item 1(c)(3), ‘‘Other
asset-backed securities,’’ or item 1(c)(4), ‘‘All other’’
bonds, notes, debentures, and corporate stock, unless
held for trading and therefore reportable in Schedule
RAL, item 1(f), ‘‘Trading assets.’’
GL-7

Glossary

Commodity or Bill-of-Lading Draft: A commodity or
bill-of-lading draft is a draft that is issued in connection
with the shipment of goods. If the commodity or bill-oflading draft becomes payable only when the shipment of
goods against which it is payable arrives, it is an arrival
draft. Arrival drafts are usually forwarded by the shipper
to the collecting depository institution with instructions
to release the shipping documents (e.g., bill of lading)
conveying title to the goods only upon payment of the
draft. Payment, however, cannot be demanded until the
goods have arrived at the drawee’s destination. Arrival
drafts provide a means of insuring payment of shipped
goods at the time that the goods are released.
Credit Balances: Credit balances are balances booked
by the reporting institution as credit balances or maintained by the reporting institution and owed to third
parties that are incidental to or that arise from the
exercise of banking powers.
Custody Account: A custody account is one in which
securities or other assets are held by a branch or agency
on behalf of a customer under a safekeeping arrangement. Assets held in such capacity are not to be reported
in the balance sheet of the reporting branch or agency nor
are such accounts to be reflected as a liability. However,
these assets may be reportable on Schedule T, Fiduciary
and Related Services. Assets of the reporting branch or agency held in custody accounts at other
banks’ branches or agencies are to be reported on the
reporting branch or agency balance sheet in the appropriate asset categories as if held in the physical custody of
the reporting branch or agency.
Demand Deposits: See ‘‘deposits.’’
Depository Institutions in the U.S.: Depository institutions in the U.S. consist of:
(1) U.S. branches and agencies of foreign banks;
(2) U.S.-domiciled head offices and branches of U.S.
banks, i.e.,
(a) national banks,
(b) state-chartered commercial banks,
(c) trust companies that perform a commercial banking business,
(d) industrial banks,
(e) private or unincorporated banks,
GL-8

(f) Edge and Agreement corporations, and
(g) International Banking Facilities (IBFs) of U.S.
banking institutions;
(3) U.S.-domiciled head offices and branches of other
depository institutions in the U.S., i.e.,
(a) mutual or stock savings banks,
(b) savings or building and loan associations,
(c) cooperative banks,
(d) credit unions,
(e) homestead associations,
(f) other similar depository institutions in the U.S.,
and
(g) International Banking Facilities (IBFs) of other
depository institutions in the U.S.
(4) the U.S. branches and agencies of foreign official
banking institutions, including central banks, nationalized banks, and other banking institutions owned
by foreign governments; and
(5) investment companies that are chartered under Article
XII of the New York State banking law and that are
majority-owned by one or more foreign banks.
Deposits: The basic statutory and regulatory definitions
of ‘‘deposits’’ are contained in Section 3(1) of the Federal
Deposit Insurance Act (FDI Act) and in Federal Reserve
Regulation D. The definitions in these two legal sources
differ in certain respects. Furthermore, for purpose of this
report, the reporting standards for deposits specified in
these instructions do not strictly follow the precise legal
definitions in these two sources. The definitions of deposits to be reported in the deposit items of this report are
discussed below under the following headings:
(I) FDI Act definition of deposits.
(II) Transaction–nontransaction deposit
distinction.
(III) Interest-bearing–noninterestbearing deposit distinction.
(I) FDI Act definition of deposits:
that the term ‘‘deposit’’ means—

Section 3(1) states

(1) the unpaid balance of money or its equivalent received
or held by a bank or savings association in the usual
course of business and for which it has given or is
obligated to give credit, either conditionally or
Glossary

FFIEC 002
September 2008

Glossary

unconditionally, to a commercial, checking, savings,
time, or thrift account, or which is evidenced by its
certificate of deposit, thrift certificate, investment
certificate, certificate of indebtedness, or other similar name, or a check or draft drawn against a deposit
account and certified by the bank or savings association, or a letter of credit or a traveler’s check on
which the bank or savings association is primarily
liable: Provided, That, without limiting the generality
of the term ‘‘money or its equivalent,’’ any such
account or instrument must be regarded as evidencing the receipt of the equivalent of money when
credited or issued in exchange for checks or drafts or
for a promissory note upon which the person obtaining any such credit or instrument is primarily or
secondarily liable, or for a charge against a deposit
account, or in settlement of checks, drafts, or other
instruments forwarded to such bank for collection,
(2) trust funds as defined in this Act received or held by
such bank, whether held in the trust department or
held or deposited in any other department of such
bank,
(3) money received or held by a bank, or the credit given
for money or its equivalent received or held by a
bank, in the usual course of business for a special or
specific purpose, regardless of the legal relationship
thereby established, including without being limited
to, escrow funds, funds held as security for an
obligation due to the bank or others (including funds
held as dealers reserves) or for securities loaned by
the bank, funds deposited by debtor to meet maturing
obligations, funds deposited as advance payment on
subscriptions to United States Government securities, funds held for distribution or purchase of securities, funds held to meet its acceptances or letters of
credit, and withheld taxes: Provided, that there shall
not be included funds which are received by the bank
for immediate application to the reduction of an
indebtedness to the receiving bank, or under condition that the receipt thereof immediately reduces or
extinguishes such an indebtedness,
(4) outstanding draft (including advice or authorization
to charge bank’s or savings association’s balance in
another bank or savings association), cashier’s check,
money order, or other officer’s check issued in the
usual course of business for any purpose, including
without being limited to those issued in payment for
services, dividends, or purchases, and
FFIEC 002
Glossary September 2008

(5) such other obligations of a bank or savings association as the Board of Directors, after consultation with
the Comptroller of the Currency, Director of the
Office of Thrift Supervision, and the Board of Governors of the Federal Reserve System, shall find and
prescribe by regulation to be deposit liabilities by
general usage, except that the following shall not be a
deposit for any of the purposes of this Act or be
included as part of the total deposits or of an insured
deposit:
(a) any obligation of a depository institution which is
carried on the books and records of an office of
such bank or savings association located outside
of and State, unless—
(i) such obligation would be a deposit if it were
carried on the books and records of the
depository institution, and would be payable
at, an office located in any State; and
(ii) the contract evidencing the obligation provides by express terms, and not by implication, for payment at an office of the depository institution located in any State; and
(b) any international banking facility deposit, including an international banking facility time deposit,
as such term is from time to time defined by the
Board of Governors of the Federal Reserve System in Regulation D or any successor regulation
issued by the Board of Governors of the Federal
Reserve System; and
(c) any liability of an insured depository institution
that arises under an annuity contract, the income
of which is tax deferred under section 72 of the
Internal Revenue Code of 1986.
(II) Transaction-nontransaction deposit distinction: The
Monetary Control Act of 1980 and the current Federal
Reserve Regulation D, ‘‘Reserve Requirements of Depository Institutions,’’ establish, for purposes of federal
reserve requirements on deposit liabilities, a category of
deposits designated as ‘‘transaction accounts.’’ All deposits that are not transaction accounts are ‘‘nontransaction
accounts.’’
(1) Transaction accounts—With the exceptions noted
below, a ‘‘transaction account,’’ as defined in Regulation D and in these instructions, is a deposit or
account from which the depositor or account holder
GL-9

Glossary

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.)
NOTE: Under the Federal Reserve’s current Regulation D, no transaction account, regardless of its
other characteristics, is classified either as a savings
deposit or as a time deposit. Thus, those transaction
accounts that are not demand deposits—NOW
accounts, ATS (Automatic Transfer Service)
accounts, and telephone and preauthorized transfer
accounts—are excluded from Regulation D time
and savings deposits. However, for FDIC-insured
branches, for FDIC insurance assessment purposes
as set forth in the FDI Act, all such transaction
accounts that are not demand deposits are included in
‘‘time and savings deposits.’’ This FDIC usage is to
be followed by FDIC-insured branches only when
completing Schedule O. For all other items in this
report involving time or savings deposits, a strict
distinction, based on Regulation D definitions, is to
be maintained between transaction accounts and time
and savings accounts.
Transaction accounts consist of the following types
of deposits: (a) demand deposits; (b) NOW accounts
(including accounts previously designated as ‘‘Super
NOWs’’); (c) ATS accounts; and (d) telephone and
preauthorized transfer accounts, all as defined below.
Interest that is paid by the crediting of transaction
accounts is also included in transaction accounts.
GL-10

(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 insurance of a negotiable or transferable instrument. NOW accounts,
as authorized by federal law, are limited to
accounts held by:
(i) Individuals or sole proprietorships;
(ii) Organizations that are operated primarily for
religious, philanthropic, charitable, educational, or other similar purposes and that are
not operated for profit. These include organizations, partnerships, corporations, or associations that are not organized for profit
and are described in section 501(c)(3)
through (13) and (19) and section 528 of
the Internal Revenue Code, such as church
organizations; professional associations;
trade associations; labor unions; fraternities,
sororities and similar social organizations;
and nonprofit recreational clubs; or
(iii) Governmental units including the federal
government and its agencies and instrumentalities; state governments; county and
municipal governments and their political
subdivisions; the District of Columbia; the
Commonwealth of Puerto Rico, American
Samoa, Guam, and any territory or possession of the United States and their political
subdivisions.
Glossary

FFIEC 002
September 2008

Glossary

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 that customer’s savings account an amount sufficient to cover the
overdraft. The availability of the overdraft protection plan would not in and of itself require that
such a savings account be regarded as a transaction account provided that the overall transfer
and withdrawal restrictions of a savings deposit
are not exceeded. Please refer to the definition of
savings deposit for further detail.
(d) Telephone or preauthorized transfer accounts
consist of deposits or accounts, other than savings deposits, (1) in which the entire beneficial
interest is held by a party eligible to hold a NOW
account, (2) on which the reporting institution
has reserved the right to require at least seven
days’ written notice prior to withdrawal or transfer of any funds in the account, and (3) under the
terms of which, or by practice of the reporting
institution, the depositor is permitted or authorized to make more than six withdrawals per
FFIEC 002
Glossary September 2008

month or statement cycle (or similar period) of
at least four weeks for purposes of transferring
funds to another account of the depositor at the
same institution (including a transaction account)
or for making payment to a third party by means
of preauthorized transfer, or telephonic (including data transmission) agreement, order or
instruction. An account that permits or authorizes
more than six such withdrawals in a ‘‘month’’ (a
calendar month or any period approximating a
month that is at least four weeks long, such as a
statement cycle) is a transaction account whether
or not more than six such withdrawals actually
are made in the ‘‘month.’’A ‘‘preauthorized transfer’’ includes any arrangement by the reporting
institution to pay a third party from the account
of a depositor (1) upon written or oral instruction
(including an order received through an automated clearing house (ACH), or (2) at a predetermined time or on a fixed schedule. Telephone and
preauthorized transfer accounts also include:
(i) Deposits or accounts maintained in connection with an arrangement that permits the
depositor to obtain credit directly or indirectly through the drawing of a negotiable or
nonnegotiable check, draft, order or
instruction or other similar device (including
telephone or electronic order or instruction)
on the issuing institution that can be used for
the purpose of making payments or transfers
to third parties or others, or to another
deposit account of the depositor.
(ii) The balance of deposits or accounts that
otherwise meet the definition of time deposits, but from which payments may be made
to third parties by means of a debit card, an
automated teller machine, remote service
unit or other electronic device, regardless of
the number of payments made.
However, an account is not a transaction account
merely by virtue of arrangements that permit the following types of transfer or withdrawals, regardless of
the number:
(i) Transfers for the purpose of repaying loans
and associated expenses at the same depository institution (as originator or servicer).
GL-11

Glossary

(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).
(1) 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 this report. NOTE: Under the Federal
Reserve’s current Regulation D, no transaction
accounts, regardless of other characteristics, are
defined as savings or time deposits. Thus, savings
deposits as defined here, under the heading nontransaction accounts, constitute the entire savings deposit
category. Likewise, time deposits, also defined here
under nontransaction accounts, constitute the entire
time deposits category. However, for FDIC insurance
assessment purposes, as set forth in the FDI Act, all
transaction accounts other than demand deposits—
i.e., NOW accounts, ATS accounts, and telephone
and preauthorized transfer accounts—are included in
‘‘time and savings deposits.’’ This FDIC usage is to
be followed by FDIC-Insured branches only when
completing Schedule O.
(a) Savings deposits are deposits with respect to
which the depositor is not required by the deposit
contract but may at any time be required by the
depository institution to give written notice of an
intended withdrawal not less than seven days
before withdrawal is made, and that is not payable on a specified date or at the expiration of a
specified time after the date of deposit. The term
savings deposit also means a deposit or account,
such as an account commonly known as a passbook savings account, a statement savings
GL-12

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:
(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 institution when made by mail, messenger, automated teller machine, or in
person.
(iii) Withdrawals for payment directly to the
depositor when made by mail, messenger
automated teller machine, in person, or
by telephone (via check mailed to the depositor).
Further, for a savings deposit account, no minimum
balance its required by regulation, there is no regulatory limitation on the amount of interest that may be
paid, and no minimum maturity is required (although
depository institutions must reserve the right to
require at least seven days’ written notice prior to
withdrawal as stipulated above for a savings deposit).
Any depository institution may place restrictions and
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September 2008

Glossary

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:
(i) If the depositor is ineligible to hold a NOW
account, such an account is considered a
demand deposit.
(ii) If the depositor is eligible to hold a NOW
account, the account will be considered
either a NOW account, a telephone or preauthorized transfer account, or an ATS
account:
(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 this report.
(i) Money market deposit accounts (MMDAs)
are deposits or accounts that meet the above
definition of a savings deposit and that permit up to (but no more than) three of the six
allowable transfers to be made by check,
draft, debit card or similar order made by the
depositor and payable to third parties.
(ii) Other savings deposits are deposits or
accounts that meet the above definition of a
savings deposit but that permit no transfers
by check, draft, debit card, or similar order
made by the depositor and payable to third
parties. Other savings deposits are commonly known as passbook savings or statement savings accounts.
FFIEC 002
Glossary September 2008

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

(ii) Time deposits, open account are deposits
(other than time certificates of deposit) for
which there is in force a written contract
with the depositor that neither the whole nor
any part of such deposit may be withdrawn
prior to:
(a) the date of maturity which shall be not
less than seven days after the date of the
deposit, or
(b) the expiration of a specified period of
written notice of not less than seven
days.
These deposits include those club accounts,
such as Christmas club and vacation club
accounts, that are made under written contracts that provide that no withdrawal shall
be made until a certain number of periodic
deposits has been made during a period of
not less than three months, even though
some of the deposits are made within six
days of the end of such period.
Time deposits do not include the following
categories of liabilities even if they have an
original maturity of seven days or more:
(i) Any deposit or account that otherwise meets
the definition of a time deposit but that
allows withdrawals within the first six days
after deposit and that does not require an
early withdrawal penalty of at least seven
days’ simple interest on amounts withdrawn
within those first six days. Such deposits or
accounts that meet the definition of a savings
deposit shall be reported as savings deposits;
otherwise they shall be reported as demand
deposits.
(ii) The remaining balance of a time deposit if
a partial early withdrawal is made and the
remaining balance is not subject to additional early withdrawal penalties of at least
seven days’ simple interest on amounts
withdrawn within six days after each partial
withdrawal. Such time deposits that meet the
definition of a savings deposit shall be
reported as savings deposits; otherwise they
shall be reported as demand deposits.
GL-14

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

Interest-bearing-noninterest-bearing deposit
distinction:

(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
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.
See also ‘‘brokered deposits’’ and ‘‘hypothecated
deposits.’’
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September 2008

Glossary

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

provisions of Statement No. 133 follows. For further
information, see Statement No. 133 and the implementation guidance issued by the FASB’s Derivatives Implementation Group, which may be found at the FASB’s
Web site at www.fasb.org.
Statement No. 133 is effective for fiscal years beginning
after June 15, 2000. For purposes of this report, branches
and agencies must adopt Statement No. 133 upon the
statement’s effective date based on their fiscal year, with
earlier application permitted consistent with the statement. Branches and agencies are also expected to follow
the accounting guidance issued by the Derivatives Implementation Group.
Definition of a Derivative
Statement No. 133 defines a ‘‘derivative instrument’’ as a
financial instrument or other contract with all three of the
following characteristics:

Example 4

(1) It has one or more underlyings (i.e., specified interest rate, security price, commodity price, foreign
exchange rate, index of prices or rates, or other
variable) and one or more notional amounts (i.e.,
number of currency units, shares, bushels, pounds,
or other units specified in the contract) or payment
provisions or both. These terms determine the amount
of the settlement or settlements, and in some cases,
whether or not a settlement is required;

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

(2) It requires no initial net investment or an initial net
investment that is smaller than would be required for
other types of contracts that would be expected to
have similar response to changes in market factors;
and

Report this account as an MMDA.

(3) Its terms require or permit net settlement, it can be
readily settled net by a means outside the contract,
or it provides for delivery of an asset that puts the
recipient in a position not substantially different from
net settlement.

A savings deposit permits no more than six ‘‘preauthorized, automatic, or telephonic’’ transfers to other accounts
or to third parties. Up to three, but no more than three, of
the six transfers may be by check, draft, debit card or
similar order made by the depositor and payable to third
parties.
Report this account as an MMDA.

Derivative Contracts: Branches and agencies commonly use derivative instruments for managing (positioning or hedging) their exposure to market risk (including
interest rate risk and foreign exchange risk), cash flow
risk, and other risks in their operations and for trading.
The accounting and reporting standards for derivative
instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities
are set forth in FASB Statement No. 133, ‘‘Accounting
for Derivative Instruments and Hedging Activities,’’ as
amended. Statement No. 133 requires all derivatives to be
recognized on the balance sheet as either assets or
liabilities at their fair value. A summary of the principal
FFIEC 002
Glossary September 2008

Certain contracts that may meet the definition of a
derivative are specifically excluded from the scope of
Statement No. 133, including:
• ‘‘regular-way’’ securities trades, which are trades that
are completed within the time period generally established by regulations and conventions in the marketplace or by the exchange on which the trade is
executed;
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Glossary

• normal purchases and sales of an item other than a
financial instrument or derivative instrument (e.g., a
commodity) that will be delivered in quantities expected
to be used or sold by the reporting entity over a
reasonable period in the normal course of business;
• traditional life insurance and property and casualty
contracts; and
• certain financial guarantee contracts.
However, a loan commitment may meet Statement
No. 133’s definition of a derivative instrument. For
example, loan commitments to originate or acquire mortgage loans that will be resold as part of an institution’s
mortgage banking operations are derivative instruments.
Types of Derivatives
The most common types of freestanding derivatives
are forwards, futures, swaps, options, caps, floors, and
collars.
Forward contracts are agreements that obligate two
parties to purchase (long) and sell (short) a specific
financial instrument, foreign currency, or commodity at a
specified price with delivery and settlement at a specified
future date.
Futures contracts are standardized forward contracts that
are traded on organized exchanges. Exchanges in the U.S.
are registered with and regulated by the Commodity
Futures Trading Commission. The deliverable financial
instruments underlying interest-rate future contracts are
specified investment-grade financial instruments, such as
U.S. Treasury securities or mortgage-backed securities.
Foreign currency futures contracts involve specified
deliverable amounts of a particular foreign currency. The
deliverable products under commodity futures contracts
are specified amounts and grades of commodities such as
gold bullion. Equity futures contracts are deliverables
that have a portion of their return linked to the price of a
particular equity or to an index of equity prices, such as
the Standard and Poor’s 500.
Other forward contracts are traded over the counter and
their terms are not standardized. Such contracts can only
be terminated, other than by receipt of the underlying
asset, by agreement of both buyer and seller. A forward
rate agreement is a forward contract that specifies a
reference interest rate and an agreed on interest rate (one
to be paid and one to be received), an assumed principal
GL-16

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

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September 2008

Glossary

into a predetermined interest-rate range often at a lower
cost than a cap or a floor.
Embedded Derivatives
Contracts that do not in their entirety meet the definition
of a derivative instrument, such as bonds, insurance
policies, and leases, may contain ‘‘embedded’’ derivative instruments. Embedded derivatives are implicit or
explicit terms within a contract that affect some or all of
the cash flows or the value of other exchanges required
by the contract in a manner similar to a derivative
instrument. The effect of embedding a derivative instrument in another type of contract (‘‘the host contract’’)
is that some or all of the cash flows or other exchanges
that otherwise would be required by the host contract,
whether unconditional or contingent upon the occurrence
of a specified event, will be modified based on one or
more of the underlyings. An embedded derivative instrument shall be separated from the host contract and
accounted for as a derivative instrument if and only if all
three of the following conditions are met:
(1) The economic characteristics and risks of the embedded derivative instrument are not clearly and closely
related to the economic characteristics and risks of
the host contract,
(2) The contract (‘‘the hybrid instrument’’) that embodies the embedded derivative and the host contract is
not remeasured at fair value under otherwise applicable generally accepted accounting principles with
changes in fair value reported in earnings as they
occur, and
(3) A separate instrument with the same terms as the
embedded derivative instrument would be considered a derivative.
An embedded derivative instrument in which the underlying is an interest rate or interest rate index that alters
net interest payments that otherwise would be paid or
received on an interest-bearing host contract is considered to be clearly and closely related to the host contract
unless either of the following conditions exist:
(1) The hybrid instrument can contractually be settled
in such a way that the investor (holder) would not
recover substantially all of its initial recorded investment, or
(2) The embedded derivative could at least double the
investor’s initial rate of return on the host contract
FFIEC 002
Glossary September 2008

and could also result in a rate of return that is at least
twice what otherwise would be the market return for
a contract that has the same terms as the host contract
and that involves a debtor with a similar credit
quality.
Examples of hybrid instruments (not held for trading
purposes) with embedded derivatives which meet the
three conditions listed above and must be accounted for
separately include debt instruments (including deposit
liabilities) whose return or yield is indexed to: changes
in an equity securities index (e.g., the Standard & Poor’s
500); changes in the price of a specific equity security;
or changes in the price of gold, crude oil, or some other
commodity. For purposes of this report, when an embedded derivative must be accounted for separately from
the host contract under Statement No. 133, the carrying
value of the host contract and the fair value of the
embedded derivative may be combined and presented
together in Schedule RAL in the asset or liability category appropriate to the host contract.
Interest-only and principal-only strips are not subject
to the requirements of Statement No. 133 provided they
(1) initially resulted from separating the rights to receive
contractual cash flows of a financial instrument that, in
and of itself, did not contain an embedded derivative that
otherwise would have been accounted for separately and
(2) do not incorporate any terms not present in that
original financial instrument. However, questions have
been raised about how this provision of Statement
No. 133 should be applied in light of other accounting
guidance in FASB Statment No. 140, ‘‘Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.’’ As a result, the FASB Board
has decided that, pending the issuance of further guidance, institutions should continue to account for interestonly and principal-only strips and other beneficial interests in securitizations in accordance with Statement
No. 140. (For further information, see Derivatives Implementation Group Issue No. D1, ‘‘Application of Statement No. 133 to Beneficial Interests in Securitized
Financial Assets.’’)
Recognition of Derivatives and Measurement
of Derivatives and Hedged Items
A branch or agency should recognize all of its derivative
instruments on Schedule RAL as either assets or liabilities at fair value. As defined in FASB Statement No. 133,
fair value is the amount at which an asset (liability) could
GL-17

Glossary

be bought (incurred) or sold (settled) in a current transaction between willing parties, that is, other than in a
forced or liquidation sale. Quoted market prices in active
markets are the best evidence of fair value and should be
used as the basis for the measurement, if available. If a
quoted market price is available, the fair value is the
product of the number of trading units times that market
price. If a quoted market price is not available, the
estimate of fair value should be based on the best
information available in the circumstances. The estimate
of fair value should consider prices for similar assets or
similar liabilities and the results of valuation techniques
to the extent available in the circumstances.
Examples of valuation techniques include the present
value of expected future cash flows using discount rates
commensurate with the risk involved, option-pricing
models, matrix pricing, option-adjusted spread analysis,
and fundamental analysis. Valuation techniques for measuring assets and liabilities should be consistent with
the objective of measuring fair value. Those techniques
should incorporate assumptions that market participants
would use in their estimates of values, future revenues,
and future expenses, including assumptions about interest rates, default, prepayment, and volatility.
If expected future cash flows are used to estimate fair
value, those expected future cash flows should be the best
estimate based on reasonable and supportable projections. All available evidence should be considered in
developing estimates of expected future cash flows. The
weight given to the evidence should be commensurate
with the extent to which the evidence can be objectively
verified. If a range is estimated for either the amount
or the timing of possible cash flows, the likelihood of
possible outcomes should be considered in determining
the best estimate of future cash flows.
The accounting for changes in the fair value (that is,
gains and losses) of a derivative depends on whether it
has been designated and qualifies as part of a hedging
relationship and, if so, on the reason for holding it. Either
all or a proportion of a derivative may be designated as a
hedging instrument. The proportion must be expressed as
a percentage of the entire derivative. Gains and losses on
derivative instruments are accounted for as follows:
(1) No hedging designation—The gain or loss on a
derivative instrument not designated as a hedging
instrument, including all derivatives held for trading
GL-18

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

value or cash flows of the hedged item attributable to
changes in the benchmark interest rate,2 (3) the risk of
changes in the fair value or cash flows of the hedged item
attributable to changes in foreign exchange rates; or
(4) the risk of changes in the fair value or cash flows of
the hedged item attributable to changes in the obligor’s
creditworthiness. For held-to-maturity securities, only
credit risk, foreign exchange risk, or both may be hedged.

liabilities are aggregated and hedged as a portfolio, the
individual assets or individual liabilities must share the
risk exposure for which they are designated as being
hedged. The change in fair value attributable to the
hedged risk for each individual item in a hedged portfolio
must be expected to respond in a generally proportionate
manner to the overall change in fair value of the aggregate portfolio attributable to the hedged risk.

Designated hedging instruments and hedged items qualify for fair value or cash flow hedge accounting if all of
the criteria specified in Statement No. 133 are met. These
criteria include:

In a cash flow hedge, the individual cash flows related to
a recognized asset or liability and the cash flows related
to a forecasted transaction are both referred to as a
forecasted transaction. Thus, a forecasted transaction
is eligible for designation as a hedged transaction if the
forecasted transaction is specifically identified as a single
transaction or a group of individual transactions, the
occurrence of the forecasted transaction is probable, and
certain other criteria specified in Statement No. 133 are
met. If the hedged transaction is a group of individual
transactions, those individual transactions must share the
same risk exposure for which they are designated as
being hedged.

(1) At inception of the hedge, there is formal documentation of the hedging relationship and the institution’s
risk management objective and strategy for undertaking the hedge, including identification of the hedging
instrument, the hedged item or transaction, the nature
of the risk being hedged, and how the hedging
instrument’s effectiveness will be assessed. There
must be a reasonable basis for how the institution
plans to assess the hedging instrument’s effectiveness.
(2) Both at inception of the hedge and on an ongoing
basis, the hedging relationship is expected to be
highly effective in achieving offsetting changes in
fair value or offsetting cash flows attributable to the
hedged risk during the period that the hedge is designated or the term of the hedge. An assessment of
effectiveness is required whenever financial statements or earnings are reported, and at least every
three months. All assessments of effectiveness shall
be consistent with the risk management strategy
documented for that particular hedging relationship.
In a fair value hedge, an asset or liability is eligible for
designation as a hedged item if the hedged item is
specifically identified as either all or a specific portion of
a recognized asset or liability or of an unrecognized firm
commitment, the hedged item is a single asset or liability
(or a specific portion thereof) or is a portfolio of similar
assets or a portfolio of similar liabilities (or a specific
portion thereof), and certain other criteria specified in
Statement No. 133 are met. If similar assets or similar
2. The benchmark interest rate is a widely recognized and quoted rate in
an active financial market that is broadly indicative of the overall level of
interest rates attributable to high-credit-quality obligors in that market. In
theory, this should be a risk-free rate. In the U.S., interest rates on U.S.
Treasury securities and the LIBOR swap rate are considered benchmark
interest rates.
FFIEC 002
Glossary September 2008

An institution should discontinue prospectively its use of
fair value or cash flow hedge accounting for an existing
hedge if any of the qualifying criteria for hedge accounting is no longer met; the derivative expires or is sold,
terminated, or exercised; or the institution removes the
designation of the hedge.
For a fair value hedge, in general, if a periodic assessment of hedge effectiveness indicates noncompliance
with the highly effective criterion that must be met in
order to qualify for hedge accounting, an institution
should not recognize adjustment of the carrying amount
of the hedged item for the change in the item’s fair value
attributable to the hedged risk after the last date on
which compliance with the effectiveness criterion was
established.
With certain limited exceptions, a nonderivative instrument, such as a U.S. Treasury security, may not be designated as a hedging instrument.
Reporting Derivative Contracts
When an institution enters into a derivative contract, it
should classify the derivative as either held for trading
or held for purposes other than trading (end-user derivatives) based on the reasons for entering into the contract.
All derivatives must be reported at fair value on Schedule
RAL.
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Glossary

Netting of derivative assets and liabilities is prohibited on Schedule RAL except as permitted under
FASB Interpretation No. 39. See the Glossary entry for
‘‘offsetting.’’

in Schedule M, Part V, items 10 and 11. Branches and
agencies must report the gross fair values of their derivatives, both positive and negative, by risk exposure and
purpose of contract in Schedule M, Part V, item 12.

Derivatives with Counterparties other than Related
Depository Institutions—Trading derivatives with positive values should be reported as trading assets in Schedule RAL, item 1(f). Trading derivatives with negative fair
values should be reported as trading liabilities in Schedule RAL, item 4(e).

Discounts: See ‘‘premiums and discounts.’’

Derivatives held for purposes other than trading that have
positive fair values should be included in Schedule RAL, item 1(h), ‘‘Other’’ assets. Derivatives held for
purposes other than trading that have negative fair values
should be included in Schedule RAL, item 4(f), ‘‘Other’’
liabilities.

Domicile: Domicile is used to determine the foreign
(non-U.S. addressee) or domestic (U.S. addressee) status
of a customer of the reporting branch or agency, for
purposes of this report. Domicile is determined by the
principal residence address of an individual or the principal business address of a corporation, partnership, or sole
proprietorship. If other addresses are used for correspondence or other purposes, only the principal address,
insofar as it is known to the reporting institution, should
be used in determining whether a customer should be
regarded as a U.S. or non-U.S. addressee.

Changes in the fair value (that is, gains and losses) of
trading derivatives and net gains (losses) on derivatives
held for purposes other than trading that are not designated as hedging instruments should be recognized as
part of the unremitted profit/loss reported on Schedule M,
Due from/Due to Related Institutions in the U.S. and in
Foreign Countries, Part I, item 2(a), ‘‘Gross due to/due
from head office of parent bank.’’

For purposes of defining customers of the reporting
branch or agency, U.S. addressees include residents of the
50 states of the United States, the District of Columbia,
Puerto Rico, and U.S. territories and possessions. NonU.S. addressees includes residents of any foreign country.
The term non-U.S. addressee generally includes foreignbased subsidiaries of other U.S. banks.

Branches and agencies must report the notional amounts
of their derivative contracts by risk exposure in Schedule L, first by type of contract in Schedule L, item 9,
and then by purpose of contract (i.e., trading, other than
trading) in Schedule L, items 10 and 11. Branches and
agencies must report the gross fair values of their derivatives, both positive and negative, by risk exposure and
purpose of contract in Schedule L, item 12.
Derivatives with Related Depository Institutions—The
fair value of all derivatives with related depository
institutions, whether held for trading of for other purposes, should be included on Schedule RAL in item 2,
‘‘Net due from related depository institutions,’’ or item 5,
‘‘Net due to related depository institutions,’’ as appropriate. Changes in the fair value (that is, gains and losses)
of these derivative contracts should also be included in
these net due from/due to accounts.
Branches and agencies must report the notional amounts
of their derivative contracts with related depository institutions by risk exposure in Schedule M, Part V, first by
type of contract in Schedule M, Part V, item 9, and then
by purpose of contract (i.e., trading, other than trading),
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For customer identification purposes, the IBFs of other
U.S. depository institutions are U.S. addressees
Due Bills: A due bill is an obligation that results when a
branch or agency sells an asset and receives payment, but
does not deliver the security or other asset. A due bill can
also result from a promise to deliver an asset in exchange
for value received. In both cases, the receipt of the
payment creates an obligation regardless of whether the
due bill is issued in written form.
Outstanding due bill obligations shall be reported as
borrowings in Schedule RAL, item 4(c), ‘‘Other borrowed money,’’ by the issuing branch or agency. Conversely, when the reporting branch or agency is the
holder of a due bill, the outstanding due bill obligation of
the seller shall be reported as a loan to that party.
Edge and Agreement Corporation: An Edge corporation is a federally-chartered corporation organized under
Section 25(a) of the Federal Reserve Act and subject
to Federal Reserve Regulation K. Edge corporations are
allowed to engage only in international banking or other
financial transactions related to international business.
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An Agreement corporation is a state-chartered corporation that has agreed to operate as if it were organized
under Section 25 of the Federal Reserve Act and has
agreed to be subject to Federal Reserve Regulation K.
Agreement corporations are restricted, in general, to
international banking operations. Banks must apply to
the Federal Reserve for permission to acquire stock in an
Agreement corporation.
Extinguishments of Liabilities: The accounting and
reporting standards for extinguishments of liabilities are
set forth in FASB Statement No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Under Statement No. 140, a
branch or agency should remove a previously recognized
liability from its balance sheet if and only if the liability
has been extinguished. A liability has been extinguished
if either of the following conditions is met:
(1) The branch or agency pays the creditor and is
relieved of its obligation for the liability. Paying the
creditor includes delivering cash, other financial
assets, goods, or services or the branch’s or agency’s
reacquiring its outstanding debt.
(2) The branch or agency is legally released from being
the primary obligor under the liability, either judicially or by the creditor.
Fails: When a branch or agency has sold an asset and, on
settlement date, does not deliver the security or other
asset and does not receive payment, a sales fail exists.
When a branch or agency has purchased a security or
other asset and, on settlement date, does not receive the
asset and does not pay for it, a purchase fail exists. Fails
do not affect the way securities are reported in this report.

ment date. The transaction is assumed to occur based on
an exit price notion versus an entry price.
FAS 157 establishes a three level fair value hierarchy that
prioritizes inputs used to measure
fair value. The highest priority is given to Level 1 and the
lowest priority to Level 3.
Level 1 fair value measurement inputs are quoted prices
(unadjusted) in active markets for identical assets or
liabilities that a bank has the ability to access at the
measurement date. An active market for the asset or
liability is a market in which transactions for the asset or
liability occur with sufficient frequency and volume to
provide pricing information on an ongoing basis.
Level 2 fair value measurement inputs are inputs other
than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or
indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for
substantially the full term of the asset or liability.
Depending on the specific factors related to an asset or a
liability, certain adjustments to Level 2 inputs may be
necessary to determine the fair value of the asset or
liability. If those adjustments are significant to the asset
or liability’s fair value in its entirety, the adjustments
may render the fair value hierarchy classification to a
Level 3 fair value measurement rather than a Level 2 fair
value measurement.

Fair Value: The accounting standard for fair value
measurements that should be applied in accounting pronouncements that require or permit fair value measurements is FASB Statement No. 157, “Fair Value Measurements” (FAS 157). For further information, refer to
FASB Statement No. 157.

Level 3 fair value measurement inputs are unobservable
inputs for the asset or liability. Although these inputs
may not be readily observable in the market, the fair
value measurement objective is, nonetheless, to obtain an
exit price for the asset or liability from the perspective of
a market participant. Therefore, Level 3 fair value measurement inputs should reflect the institution’s own
assumptions about the assumptions that a market participant would use in pricing an asset or liability and should
be based on the best information available in the circumstances.

FAS 157 defines fair value and establishes a framework
for measuring fair value. The definition of fair value for
an asset or liability is the price that would be received to
sell the asset or paid to transfer the liability in an orderly
transaction between market participants (not a forced
liquidation or distressed sale) in the asset’s or liability’s
principal (or most advantageous) market at the measure-

FAS 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. Earlier application is permitted, provided that the institution has not yet
issued financial statements for that fiscal year, including
financial statements or Report of Assets and Liabilities
for an interim period within that fiscal

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Glossary

year. For purposes of these reports, institutions must
adopt FAS 157 upon the statement’s effective date based
on their fiscal year, with earlier application permitted
consistent with the statement.
Federal Funds Transactions For purposes of this report,
federal funds transactions involve the reporting branch or
agency’s lending (federal funds sold) or borrowing (federal funds purchased) immediately available funds under
agreements or contracts that have an original maturity of
one business day or roll over under a continuing contract.
However, funds lent or borrowed in the form of securities
resale or repurchase agreements, due bills, borrowings
from the Discount and Credit Department of a Federal
Reserve Bank, deposits with and advances from a Federal Home Loan Bank, and overnight loans for commercial and industrial purposes are excluded from federal
funds. Transactions that are to be reported as federal
funds transactions may be secured or unsecured or may
involve an agreement to resell loans or other instruments
that are not securities.
Immediately available funds are funds that the purchasing institution can either use or dispose of on the same
business day that the transaction giving rise to the receipt
or disposal of the funds is executed.
The borrowing and lending of immediately available
funds has an original maturity of one business day if the
funds borrowed on one business day are to be repaid or
the transaction reversed on the next business day, that is,
if immediately available funds borrowed today are to be
repaid tomorrow (in tomorrow’s immediately available
funds). Such transactions include those made on a Friday
to mature or be reversed the following Monday and those
made on the last business day prior to a holiday (for
either or both of the parties to the transaction) to mature
or be reversed on the first business day following the
holiday.
A continuing contract is a contract or agreement that
remains in effect for more than one business day, but has
no specified maturity and does not require advance notice
of either party to terminate. Such contracts may also be
known as rollovers or as open-ended agreements.
Federal funds may take the form of the following two
types of transactions provided that the transactions meet
the above criteria (i.e., immediately available funds with
an original maturity of one business day or under a
continuing contract):
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(1) Unsecured loans (federal funds sold) or borrowings
(federal funds purchased). (In some market usage,
the term ‘ ed funds’’ or ‘‘pure fed funds’’ is confined
to unsecured loans of immediately available balances.)
(2) Purchases (sales) of financial assets (other than securities) under agreements to resell (repurchase) that
have original maturities of one business day (or are
under continuing contracts) and are in immediately
available funds.
Any borrowing or lending of immediately available
funds that has an original maturity of more than one
business day, other than securities repurchase or resale
agreements, is to be treated as a borrowing or as a loan,
not as federal funds. Such transactions are sometimes
referred to as ‘‘term federal funds.’’
Federally-Sponsored Lending Agency: A federallysponsored lending agency is an agency or corporation
that has been chartered, authorized, or organized as a
result of federal legislation for the purpose of providing
credit services to a designated sector of the economy.
These agencies include Banks for Cooperatives, Federal
Home Loan Banks, the Federal Home Loan Mortgage
Corporation, Federal Intermediate Credit Banks, Federal
Land Banks, the Federal National Mortgage Association,
and the Student Loan Marketing Association.
Foreign Banks: See ‘‘banks, U.S. and foreign.’’
Foreign Currency Transactions: Foreign currency transactions are transactions occurring in the ordinary course
of business (e.g., purchases, sales, borrowings, lendings,
forward exchange contracts) denominated in currencies
other than the branch or agency’s functional currency (as
described below).
A functional currency is the currency of the primary
economic environment in which an office operates. For
the U.S. branches or agencies of foreign banks, the
functional currency will be the U.S. dollar.
Foreign Governments and Official Institutions: Foreign governments and official institutions are central,
state, provincial, and local governments in foreign countries and their ministries, departments, and agencies.
These include treasuries, ministries of finance, central
banks, development banks, exchange control offices,
stabilization funds, diplomatic establishments, fiscal
agents, and nationalized banks and other banking institutions that are owned by central governments and that
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have as an important part of their function activities
similar to those of a treasury, central bank, exchange
control office, or stabilization fund. For purposes of this
report, other government-owned enterprises are not
included.
Also included as foreign official institutions are international, regional, and treaty organizations, such as the
International Monetary Fund, the International Bank for
Reconstruction and Development (World Bank), the
Bank for International Settlements, the Inter-American
Development Bank, and the United Nations.
Forward Contracts: See ‘‘derivative contracts.’’
Futures Contracts: See ‘‘derivative contracts.’’
Hypothecated Deposit: A hypothecated deposit is the
aggregation of periodic payments on an installment
contract received by a reporting institution in a state in
which, under law, such payments are not immediately
used to reduce the unpaid balance of the installment note,
but are accumulated until the sum of the payments equals
the entire amount of principal and interest on the contract, at which time the loan is considered paid in full. For
purposes of this report, hypothecated deposits are to be
netted against the related loans.
Deposits which simply serve as collateral for loans are
not considered hypothecated deposits for purposes of this
report.
Internal-Use Computer Software: Guidance on the
accounting and reporting for the costs of internal-use
computer software is set forth in AICPA Statement of
Position 98-1, Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use. A
summary of this accounting guidance follows. For further information, see AICPA Statement of Position 98-1.

post-implementation/operation stage. The processes that
occur during the preliminary project stage of software
development are the conceptual formulation of alternatives, the evaluation of the alternatives, the determination
of the existence of needed technology, and the final
selection of alternatives. The application development
stage involves the design of the chosen path (including
software configuration and software interfaces), coding,
installation of software to hardware, and testing (including the parallel processing phase). Generally, training and
application maintenance occur during the postimplementation/operation stage. Upgrades of and
enhancements to existing internal-use software, i.e.,
modifications to software that result in additional functionality, also go through the three aforementioned stages
of development.
Computer software costs that are incurred in the preliminary project stage should be expensed as incurred (i.e.,
should not be capitalized).
Internal and external costs incurred to develop internaluse software during the application development stage
should be capitalized. Capitalization of these costs should
begin once (a) the preliminary project stage is completed
and (b) management, with the relevant authority, implicitly or explicitly authorizes and commits to funding a
computer software project and it is probable that the
project will be completed and the software will be used to
perform the function intended. Capitalization should
cease no later than when a computer software project is
substantially complete and ready for its intended use, i.e.,
after all substantial testing is completed. Capitalized
internal-use computer software costs generally should be
amortized on a straight-line basis over the estimated
useful life of the software.

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

Only the following application development stage costs
should be capitalized:

(1) The software is acquired, internally developed, or
modified solely to meet the institution’s internal
needs; and

(1) External direct costs of materials and services consumed in developing or obtaining internal-use
software;

(2) During the software’s development or modification,
no substantive plan exists or is being developed to
market the software externally.

(2) Payroll and payroll-related costs for employees who
are directly associated with and who devote time to
the internal-use computer software project (to the
extent of the time spent directly on the project); and

Statement of Position 98-1 identifies three stages of
development for internal-use software: the preliminary
project stage, the application development stage, and the
FFIEC 002
Glossary September 2008

(3) Interest costs incurred when developing internal-use
software.
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Glossary

Costs to develop or obtain software that allows for access
or conversion of old data by new systems also should be
capitalized. Otherwise, data conversion costs should be
expensed as incurred (i.e., should not be capitalized).
General and administrative costs and overhead costs
should not be capitalized as internal-use software costs.
During the post-implementation/operation stage, internal
and external training costs and maintenance costs should
be expensed as incurred (i.e., should not be capitalized).
Impairment of capitalized internal-use computer software costs should be recognized and measured in accordance with FASB Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of.
The costs of internally developed computer software to
be sold, leased, or otherwise marketed as a separate
product or process should be reported in accordance with
FASB Statement No. 86, Accounting for the Costs of
Computer Software to Be Sold, Leased, or Otherwise
Marketed. If, after the development of internal-use software is completed, an institution decides to market the
software, proceeds received from the license of the
software, net of direct incremental marketing costs,
should be applied against the carrying amount of the
software.
International Banking Facility (IBF): General
definition—An International Banking Facility (IBF) is a
set of asset and liability accounts, segregated on the
books and records of the establishing entity, which reflect
international transactions. An IBF is established in accordance with the terms of Federal Reserve Regulation D
and after appropriate notification to the Federal Reserve.
The establishing entity may be a U.S. depository institution, a U.S. office of an Edge or Agreement corporation,
or a U.S. branch or agency of a foreign bank pursuant to
Federal Reserve Regulations D and Q. An IBF is permitted to hold only certain assets and liabilities. In general,
IBF accounts are limited, as specified in the paragraphs
below, to non-U.S. residents of foreign countries, residents of Puerto Rico and U.S. territories and possessions,
other IBFs, and U.S. and non-U.S. offices of the establishing entity.
Permissible IBF assets include extensions of credit to the
following:
(1) non-U.S. residents (including foreign branches of
other U.S. banks);
GL-24

(2) other IBFs; and
(3) U.S. and non-U.S. offices of the establishing entity.
Credit may be extended to non-U.S. nonbank residents
only if the funds are used in their operations outside the
United States. IBFs may extend credit in the form of a
loan, deposit, placement, advance, security, or other
similar asset.
Permissible IBF liabilities include (as specified in Federal Reserve Regulations D and Q) liabilities to non-U.S.
nonbank residents only if such liabilities have a minimum maturity or notice period of at least two business
days. IBF liabilities also may include overnight liabilities
to:
(1) non-U.S. offices of other depository institutions and
of Edge or Agreement corporations;
(2) non-U.S. offices of foreign banks;
(3) foreign governments and official institutions;
(4) other IBFs; and
(5) the establishing entity.
IBF liabilities may be issued in the form of deposits,
borrowings, placements, and other similar instruments.
However, IBFs are prohibited from issuing negotiable
certificates of deposit, bankers acceptances, or other
negotiable or bearer instruments.
Treatment of transactions with IBFs of other depository
institutions—Transactions between the reporting branch
or agency and IBFs outside the scope of the reporting
branch or agency’s report are to be reported as transactions with depository institutions in the U.S., as appropriate. (Note, however, that only the reporting branch or
agency’s IBF is permitted to have transactions with other
IBFs.)
Lease Accounting: A lease is an agreement that transfers
the right to use land, buildings, or equipment for a
specified period of time. This financing device is essentially an extension of credit evidenced by an obligation
between a lessee and a lessor.
Standards for lease accounting are set forth in FASB
Statement No. 13, Accounting for Leases, as amended
and interpreted.
Accounting with branch or agency as lessee—Any lease
entered into by a lessee branch or agency that meets
certain criteria (defined in the following paragraph) shall
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be accounted for as a property acquisition financed with a
debt obligation. The property shall be amortized according
to the reporter’s normal depreciation policy. In this
report, the property is to be reported in Schedule RAL, item 1(h), and the liability for capitalized leases
in Schedule RAL, item 4(c).
If any one of the following criteria is met, a lease must be
accounted for as a capital lease:
(1) ownership of the property is transferred to the lessee
at the end of the lease term, or
(2) the lease contains a bargain purchase option, or
(3) the lease term represents at least 75 percent of the
estimated economic life of the leased property, or
(4) the present value of the minimum lease payments at
the beginning of the lease term is 90 percent or more
of the fair value of the leased property to the lessor at
the inception of the lease less any related investment
tax credit retained by and expected to be realized by
the lessor.
If none of the above criteria is met, the lease should be
accounted for as an operating lease. Rental payments
should be charged to expense over the term of the
operating lease as they become payable.
NOTE: If a lease involves land only, the lease must be
capitalized if either of the first two criteria above is met.
Where a lease that involves land and building meets
either of these two criteria, the land and building must be
separately capitalized by the lessee. The accounting for a
lease involving land and building that meets neither of
the first two criteria should conform to the standards
prescribed by FASB Statement No. 13.
Accounting for sales with leasebacks—Sale-leaseback
transactions involve the sale of property by the owner
and a lease of the property back to the seller. If a branch
or agency sells premises or fixed assets and leases back
the property, the lease shall be treated as a capital lease if
it meets any one of the four criteria above for capitalization. Otherwise, the lease shall be accounted for as an
operating lease.
As a general rule, the branch or agency shall defer any
gain resulting from the sale. The unamortized deferred
gain is to be reported in Schedule RAL, item 4(f), ‘‘Other
liabilities to nonrelated parties.’’ For further information,
see FASB Statement No. 28, Accounting for Sales with
Leasebacks.
FFIEC 002
Glossary September 2008

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

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

(1) represents an obligation on the part of the issuing
branch or agency to a designated third party (the
beneficiary) contingent upon the failure of the issuing
branch or agency’s customer (the account party) to
perform under the terms of the underlying contract
with the beneficiary, or
(2) obligates the branch or agency to guarantee or stand
as surety for the benefit of a third party to the extent
permitted by law or regulation.
The underlying contract may entail either financial or
nonfinancial undertakings of the account party with the
beneficiary. The underlying contract may involve such
things as the customer’s payment of commercial paper,
delivery of merchandise, completion of a construction
contract, release of maritime liens, or repayment of the
account party’s obligations to the beneficiary. Under the
terms of a standby letter, as a general rule, drafts will be
drawn only when the underlying event fails to occur as
intended.
Loan: For purposes of this report, a loan is generally an
extension of credit resulting from direct negotiations
between a lender and a borrower. The reporting branch or
agency may originate a loan by directly negotiating with
a borrower or it may purchase a loan or a portion of a
loan originated by another lender that directly negotiated
with a borrower. The reporting branch or agency may
also sell a loan or a portion of a loan, regardless of the
method by which it acquired the loan.
Loans may take the form of promissory notes, acknowledgments of advance, due bills, invoices, overdrafts,
acceptances, and similar written or oral obligations.
Among the extensions of credit reportable as loans in
Schedule C, which covers both loans held for sale and
loans that the reporting branch or agency has the intent
and ability to hold for the foreseeable future or until
maturity or payoff, are:
(1) acceptances of other banks purchased in the open
market, not held for trading;
(2) acceptances executed by or for the account of the
reporting branch or agency and subsequently acquired
by it through purchase or discount;
(3) customers’ liability to the reporting branch or agency
on drafts paid under letters of credit for which the
branch or agency has not been reimbursed;
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(4) ‘‘advances’’ and commodity or bill-of-lading drafts
payable upon arrival of goods against which drawn,
for which the reporting branch or agency has given
deposit credit to customers;
(5) paper pledged by the branch or agency whether for
collateral to secure bills payable (e.g., margin collateral to secure bills rediscounted) or for any other
purpose;
(6) sales of so-called ‘‘term federal funds’’ (i.e., sales of
immediately available funds with a maturity of more
than one business day), other than those involving
security resale agreements;
(7) factored accounts receivable;
(8) loans arising out of the purchase of assets (other than
securities) under resale agreements with a maturity of
more than one business day if the agreement requires
the branch or agency to resell the identical asset
purchased; and
(9) participations (acquired or held) in a single loan or in
a pool of loans or receivables (see discussion in the
Glossary entry for ‘‘transfers of financial assets’’).
See also ‘‘loans secured by real estate,’’ ‘‘overdraft,’’ and
‘‘transfers of financial assets.’’
Loan Fees: The accounting standards for nonrefundable
fees and costs associated with lending, committing to
lend, and purchasing a loan or group of loans are set forth
in FASB Statement No. 91, ‘‘Accounting for Nonrefundable Fees and Costs Associated with Originating
or Acquiring Loans and Initial Direct Costs of Leases,’’ a
summary of which follows. The statement applies to all
types of loans as well as to debt securities (but not to
loans or debt securities carried at market value if the
changes in market value are included in earnings) and to
all types of lenders. For further information, see FASB
Statement No. 91. A branch or agency may acquire a loan
by originating the loan (lending) or by acquiring a loan
from a party other than the borrower (purchasing). Lending, committing to lend, refinancing or restructuring
loans, arranging standby letters of credit, syndicating
loans, and leasing activities are all considered ‘‘lending
activities.’’ Nonrefundable loan fees paid by the borrower
to the lender may have many different names, such as
origination fees, points, placement fees, commitment
fees, application fees, management fees, restructuring
fees, and syndication fees, but in this Glossary entry, they
FFIEC 002
Glossary September 2008

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

Glossary

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

Direct loan origination costs of a completed loan are
defined to include only (a) incremental direct costs of
loan origination incurred in transactions with independent third parties for that particular loan and (b) certain
costs directly related to specified activities performed by
the lender for that particular loan. Incremental direct
costs are costs to originate a loan that (a) result directly
from and are essential to the lending transaction and
(b) would not have been incurred by the lender had that
lending transaction not occurred. The specified activities
performed by the lender are evaluating the prospective
borrower’s financial condition; evaluating and recording guarantees, collateral, and other security arrangements; negotiating loan terms; preparing and processing
loan documents; and closing the transaction. The costs
directly related to those activities include only that
portion of the employees’ total compensation and payrollrelated fringe benefits directly related to time spent
performing those activities for that particular loan and
other costs related to those activities that would not have
been incurred but for that particular loan.
All other lending-related costs, whether or not incremental, should be charged to expense as incurred, including
costs related to activities performed by the lender for
advertising, identifying potential borrowers, soliciting
potential borrowers, servicing existing loans, and other
ancillary activities related to establishing and monitoring
credit policies, supervision, and administration. Employees’ compensation and fringe benefits related to these
activities, unsuccessful loan origination efforts, and idle
time should be charged to expense as incurred. Adminstrative costs, rent, depreciation, and all other occupancy
and equipment costs are considered indirect costs and
should be charged to expense as incurred.
Net unamortized loan fees represent an adjustment of the
loan yield, and shall be reported in the same manner as
unearned income on loans, i.e., deducted from the related
loan balances (to the extent possible) or deducted from
total loans in ‘‘Any unearned income on loans reflected in
items 1–8 above’’ in Schedule C. Net unamortized direct
loan origination costs shall be added to the related loan
balances in Schedule C. Amounts of loan origination,
commitment and other fees and costs recognized as an
adjustment of yield should be included in interest income
which is recognized as part of unremitted profit and loss.
Other fees, such as (a) commitment fees that are recognized during the commitment period or included in
Glossary

FFIEC 002
September 2008

Glossary

income when the commitment expires (i.e., fees retrospectively determined and fees for commitments where
exercise is remote) and (b) syndication fees that are not
deferred, should be included in noninterest income which
is recognized as part of unremitted profit and loss.
Loans Secured by Real Estate: For purposes of this
report, loans secured by real estate are loans predicated
upon a security interest in real property. A loan predicated upon a security interest in real property is a loan
secured wholly or substantially by a lien on real property
for which the lien is central to the extension of the
credit—that is, the borrower would not have been
extended credit in the same amount or on terms as
favorable without the lien on real property. All loans
satisfying the criteria above are to be reported as loans
secured by real estate (Schedule C, item 1), regardless of
whether secured by first or junior liens, regardless of the
department within the branch or agency that made the
loans, regardless of how the loans are categorized in the
branch or agency’s records, and regardless of the purpose
of the financing. Only in transactions where a lien on real
property has been taken as collateral solely through an
abundance of caution and where the terms as a consequence have not been made more favorable than they
would have been in the absence of the lien, would the
loans not be considered to be secured by real estate and
not be classifiable as loans secured by real estate in this
report.
Market Value of Securities: The market value of securities should be determined, to the extent possible, by
timely reference to the best available source of current
market quotations or other data on relative current values. For example, securities traded on national, regional,
or foreign exchanges or in organized over-the-counter
markets should be valued at the most recently available
quotation in the most active market. Rated securities for
which no organized market exists should be valued on
the basis of yield curve estimate. Quotations from brokers or others making markets in securities that are
neither widely nor actively traded are acceptable if
prudently used. Unrated debt securities for which no
reliable market price data are available may be valued at
cost adjusted for amortization of premium or accretion of
discount unless credit problems of the obligor or upward
movements in the level of interest rates warrant a lower
estimate of current value. Securities that are not marketable such as equity securities in closely held businesses
should be valued at book or par value, as appropriate.
FFIEC 002
Glossary September 2008

Money Market Deposit Account (MMDA): See ‘‘deposits.’’
NOW Account: See ‘‘deposits.’’
Nonaccrual Status: Branches or agencies shall not
accrue interest or discount on (1) any asset which is
maintained on a cash basis because of deterioration in the
financial condition of the borrower, (2) any asset for
which payment in full of interest or principal is not
expected, or (3) any asset upon which principal or
interest has been in default for a period of 90 days or
more unless it is both well secured and in the process of
collection. A nonaccrual asset may be restored to an
accrual status when none of its principal and interest is
due and unpaid or when it otherwise becomes well
secured and in the process of collection.
For purposes of applying the third test for the nonaccrual
of interest listed above, the date on which an asset
reaches nonaccrual status is determined by its contractual
terms. If the principal or interest on an asset becomes due
and unpaid for 90 days or more on a date that falls
between report dates, the asset should be placed in
nonaccrual status as of the date it becomes 90 days past
due and it should remain in nonaccrual status until it
meets the criteria for restoration to accrual status described
above.
An asset is ‘‘well secured’’ if it is secured (1) by
collateral in the form of liens on or pledges of real or
personal property, including securities, that have a realizable value sufficient to discharge the debt (including
accrued interest) in full, or (2) by the guarantee of a
financially responsible party. A debt is ‘‘in the process of
collection’’ if collection of the debt is proceeding in due
course either through legal action, including judgment
enforcement procedures, or, in appropriate circumstances,
through collection efforts not involving legal action
which are reasonably expected to result in repayment of
the debt or in its restoration to a current status in the near
future.
Consumer loans and loans secured by 1-to-4 family
residential properties on which principal and interest is
due and unpaid for 90 days or more are not required to be
placed in nonaccrual status. Nevertheless, such loans
should be subject to other alternative methods of evaluation to assure that the branch or agency’s income is not
materially overstated.
Any state statute, regulation, or rule that imposes more
GL-29

Glossary

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

indicates that there is reasonable assurance that the
right of setoff would be upheld in bankruptcy (or
receivership). According to Interpretation No. 39, for
forward, interest rate swap, currency swap, option,
and other conditional and exchange contracts, a
master netting arrangement exists if the reporting
branch or agency has multiple contracts, whether for
the same type of conditional or exchange contract or
for different types of contracts, with a single counterparty that are subject to a contractual agreement that
provides for the net settlement of all contracts
through a single payment in a single currency in the
event of default or termination of any one contract.Offsetting the assets and liabilities recognized for
conditional or exchange contracts outstanding with
a single counterparty results in the net position
between the two counterparties being reported as an
asset or a liability in the Report of Assets and
Liabilities of U.S. Branches and Agencies of Foreign
Banks. The reporting entity’s choice to offset or not
to offset assets and liabilities recognized for conditional or exchange contracts must be applied
consistently. Offsetting of assets and liabilities is also
permitted by other accounting pronouncements identified in Interpretation No. 39. These pronouncements apply to such items as leveraged leases, pension plan and other postretirement benefit plan assets
and liabilities, and deferred tax assets and liabilities.
In addition, FASB Interpretation No. 41, Offsetting of
Amounts Related to Certain Repurchase and Reverse
Repurchase Agreements, describes the circumstances
in which amounts recognized as payables under
repurchase agreements may be offset against amounts
recognized as receivables under reverse repurchase
agreements and reported as a net amount in the
balance sheet. The reporting entity’s choice to offset
or not to offset payables and receivables under
Interpretation No. 41 must be applied consistently.
See also ‘‘reciprocal balances.’’
One-Day Transaction: See ‘‘federal funds transactions.’’
Option: See ‘‘derivative contracts.’’
Other Depository Institutions in the U.S.: See ‘‘depository institutions in the U.S.’’
Overdraft: An overdraft can be either planned or
unplanned. An unplanned overdraft occurs when a depository institution honors a check or draft drawn against a
Glossary

FFIEC 002
September 2008

Glossary

deposit account when insufficient funds are on deposit
and there is no advance contractual agreement to honor
the check or draft. When a contractual agreement has
been made in advance to allow such credit extensions,
overdrafts are referred to as planned or prearranged. Any
overdraft, whether planned or unplanned, is an extension
of credit and is to be treated and reported as a ‘‘loan’’
rather than being treated as a negative deposit balance.
Planned overdrafts are to be classified in Schedule C by
type of loan according to the nature of the overdrawn
depositor. For example, a planned overdraft by a commercial customer is to be classified as a ‘‘commercial and
industrial loan.’’
Unplanned overdrafts in depositors’ accounts are to be
classified in Schedule C as ‘‘All other loans,’’ unless the
depositor is a depository institution, in which case it
would be reported in Schedule C as ‘‘Loans to depository
institutions and acceptances of other banks.’’ In addition,
an unplanned overdraft in the deposit account of a
foreign government or official institution would not be
reported in ‘‘All other loans,’’ but would be reported in
‘‘Loans to foreign governments and official institutions.’’
The reporting branch or agency’s overdrafts on deposit
accounts it holds with other banks (i.e., its ‘‘due from’’
accounts) are to be reported as borrowings in Schedule RAL, item 4(c).
For purposes of treatment of overdrafts, separate transaction accounts of a single depositor that are established
under a bona fide cash management arrangement are
regarded as a single account rather than multiple or
separate accounts. In such a situation, an overdraft in one
of the accounts of a single customer is netted against
the related transaction accounts of the customer and an
extension of credit is regarded as arising only if, and to
the extent, the combined accounts of the customer are
overdrawn.
Participations: See ‘‘transfers of financial assets.’’
Participations
acceptances.’’

in

Acceptances:

See

‘‘bankers

Pass-through Reserve Balances: Under the Monetary
Control Act of 1980, and as reflected in Federal Reserve
Regulation D, depository institutions that are members of
the Federal Reserve System must maintain their required
reserves (in excess of vault cash) directly with a Federal
Reserve Bank. However, nonmember depository institutions may maintain their required reserves (in excess of
FFIEC 002
Glossary September 2008

vault cash) in one of two ways: either (1) directly with a
Federal Reserve Bank or (2) indirectly in an account with
another institution (referred to here as a ‘‘correspondent’’), which, in turn, is required to pass the reserves
through to a Federal Reserve Bank. This second type of
account is called a ‘‘pass-through account,’’ and a depository institution passing its reserves to the Federal Reserve
through a correspondent is referred to here as a ‘‘respondent.’’
This pass-through reserve relationship is legally and for
supervisory purposes considered to constitute an asset/
debt relationship between the respondent and the correspondent, and an asset/debt relationship between the
correspondent and the Federal Reserve. The required
reporting of the ‘‘pass-through reserve balances’’ reflects
this structure of asset/debt relationship.
In the balance sheet of the respondent branch or agency,
the pass-through reserve balances are to be treated as a
claim on the correspondent (not as a claim on the Federal
Reserve) and, as such, are to be reflected in the balance
sheet of this report, Schedule RAL, item 1(a), (‘‘Cash and
balances due from depository institutions’’). (The footings for the respondent are not affected by this required
classification of the claim.) For the respondent branch or
agency, the pass-through reserve balances would also be
reflected in Schedule A, item 3, ‘‘Balances due from
depository institutions in the U.S.’’
In the balance sheet of the correspondent branch or
agency, the pass-through reserve balances are to be
treated as balances due to respondents and, to the extent
that the balances have actually been passed through to the
Federal Reserve, as balances due from the Federal
Reserve. The balances due to respondents are to be
reflected in Schedule RAL, item 4(a), ‘‘Total deposits
and credit balances,’’ and in Schedule E, Deposit Liabilities and Credit Balances, item 7. The balances due from
the Federal Reserve are to be reflected in Schedule RAL,
item 1(a), and in Schedule A, item 5. (Under this required
treatment, the footings for the correspondent are higher,
by the amount of reserves actually passed through to the
Federal Reserve, than they would be under treatment as
an agent relationship.)
For branches or agencies that are correspondents for
related institutions, the pass-through reserve balances are
to be treated as due to U.S. domiciled offices of related
depository institutions and, to the extent that the balances
have actually been passed through to the Federal Reserve,
GL-31

Glossary

as balances due from the Federal Reserve. The balances
due to respondents are to be reflected in Schedule M, Due
from/Due to Related Institutions in the U.S. and Foreign
Countries, item 1, ‘‘U.S. domiciled offices of related
depository institutions (including their IBFs).’’ The balances due from the Federal Reserve are to be reflected in
Schedule RAL, item 1(a), and in Schedule A, item 5.
Since the respondent will not know from its own books
the amount that the correspondent has actually passed
through to the Federal Reserve for the respondent’s
account, the respondent must obtain a statement of this
amount from its correspondent.
Placements: The reporting institution may on occasion
transfer (place) funds to a bank or other institution.
Reporting of such placements in this report depends on
the characteristics of the underlying instrument to the
transaction. As a result, the transaction might be reported
in ‘‘Cash and balances due from depository institutions’’
(if the transaction is a deposit); ‘‘Federal funds sold and
securities purchased under agreements to resell’’ (if the
transaction meets the federal funds criteria of one day, or
continuing contracts, maturity in immediately available
funds); or ‘‘Loans, net of unearned income’’ (if the
transaction is a loan). To determine the reporting treatment of these transactions, the reporting institution must
review the contract or wire confirmation to determine the
type of transaction.
Pools of Securities, Participations in: See ‘‘repurchase/
resale agreements.’’
Preauthorized Transfer Account: See ‘‘deposits’’
Premiums and Discounts: A premium arises when a
bank (including a branch or agency) purchases a security,
loan, or other asset at a price in excess of its par or face
value, typically because the current level of interest rates
for such assets is less than its contract or stated rate of
interest. The difference between the purchase price and
par or face value represents the premium which all banks
are required to amortize.
A discount arises when a bank (including a branch or
agency) purchases a security, loan, or other asset at a
price below its par or face value, typically because the
current level of interest rates for such assets is greater
than its contract or stated rate of interest. A discount is
also present on instruments which do not have a stated
rate of interest such as U.S. Treasury bills and commercial paper. The difference between par or face value and
GL-32

the purchase price represents the discount which all
banks are required to accrete.
Premiums and discounts are accounted for as adjustments
to the yield on an asset over the life of the asset. A
premium must be amortized and a discount must be
accreted from date of purchase to maturity, not to call or
put date. The preferable method for amortizing premiums
and accreting discounts involves the use of the interest
method for accruing income on the asset. The objective
of the interest method is to produce a constant yield or
rate of return on the carrying value of the asset (par or
face value plus unamortized premium or less unaccreted
discount) at the beginning of each amortization period
over the asset’s remaining life. The difference between
the periodic interest income that is accrued on the asset
and interest at the stated rate is the periodic amortization
or accretion. However, a straight-line method of amortization or accretion is acceptable if the results are not
materially different from the interest method.
A premium or discount may also arise when the reporting
branch or agency, acting either as a lender or a borrower,
is involved in an exchange of a note for assets other than
cash and the interest rate is either below the market rate
or not stated, or the face amount of the note is materially
different from the fair value of the noncash assets
exchanged. The noncash assets and the related note shall
be recorded at either the fair value of the noncash assets
or the market value of the note, whichever is more clearly
determinable.
Put Option: See ‘‘derivative contracts.’’
Real Estate, Loans Secured By: See ‘‘loans secured by
real estate.’’
Reciprocal Balances: Reciprocal balances arise when
two depository institutions maintain deposit accounts
with each other; that is, when a reporting branch or
agency has both a due to and a due from balance with
another depository institution.
For purposes of Schedule RAL, reciprocal balances
between the reporting branch or agency and other depository institutions (including U.S. branches and agencies of
other foreign banks) may be reported on a net basis when
a right of setoff exists. See the Glossary entry for
‘‘offsetting’’ for the conditions that must be met for a
right of setoff to exist.
Related Institutions: For purposes of this report, ‘‘related
institutions’’ of a reporting U.S. branch or agency of a
Glossary

FFIEC 002
September 2008

Glossary

foreign bank include the following depository institutions
and their majority-owned subsidiaries, whether they are
located in the U.S., in Puerto Rico or U.S. territories and
possessions, or elsewhere outside of the U.S.:
(1) Head office of the foreign bank and its other branches
and agencies, hereafter referred to as the foreign
bank parent.
(2) Holding company of the foreign bank parent, hereafter referred to as the parent bank holding company.
(3) Other depository institutions (including their branches
and agencies and IBFs) majority-owned by (1) or
(2) above, or by their majority-owned subsidiaries.
(4) Edge and Agreement corporations (including their
branches, agencies, IBFs, and majority-owned subsidiaries) majority-owned by (1), (2), or (3) above, or
(6) below.
(5) New York State (Article XII) investment companies
(including branches of such companies) majorityowned by (1), (2), (3), or (4), above.
(6) Any other majority-owned subsidiaries (depository
or nondepository) of (1), (2), (3), and (4).
Please note that related nondepository institutions are
treated (reported) as third parties on this report.
The following definitions concern ‘‘related institutions:’’
(1) Foreign bank parent: any company (a) that has a
branch or agency required to submit this report;
(b) that is organized under the laws of a foreign
country, a territory or possession of the United States,
Puerto Rico, Guam, American Samoa, or the Virgin
Islands; and (c) that engages in the business of
banking.
(2) Parent bank holding company: any company that
owns more than 50 percent of the outstanding voting
common stock of the foreign bank parent as defined
in (1) above.
(3) Nondepository subsidiary a majority-owned subsidiary that does not engage in the business of banking.
(4) New York State (Article XII) investment company:
any company that is subject to Article XII of the
New York State banking law.
Repurchase/Resale Agreements: A repurchase agreement is a transaction involving the ‘‘sale’’ of financial
FFIEC 002
Glossary September 2008

assets by one party to another, subject to an agreement by
the ‘‘seller’’ to repurchase the assets at a specified date or
in specified circumstances. A resale agreement (also
known as a reverse repurchase agreement) is a transaction involving the ‘‘purchase’’ of financial assets by
one party from another, subject to an agreement by
the‘‘purchaser’’ to resell the assets at a specified date or
in specified circumstances.
As stated in the AICPA’s Audit and Accounting Guide
for Banks and Savings Institutions, dollar repurchase
agreements (also called dollar rolls) are agreements to
sell and repurchase similar but not identical securities.
The dollar roll market consists primarily of agreements
that involve mortgage-backed securities (MBS). Dollar
rolls differ from regular repurchase agreements in that the
securities sold and repurchased, which are usually of the
same issuer, are represented by different certificates, are
collateralized by different but similar mortgage pools (for
example, single-family residential mortgages), and generally have different principal amounts.
General rule—Consistent with FASB Statement No. 140,
Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities, repurchase and
resale agreements involving financial assets (e.g., securities and loans), including dollar repurchase agreements,
are either reported as (a) secured borrowings and loans or
(b) sales and forward repurchase commitments based on
whether the transferring (‘‘selling’’) institution maintains
control over the transferred assets. (See the Glossary
entry for ‘‘transfers of financial assets’’ for further discussion of control criteria).
If a repurchase agreement both entitles and obligates the
‘‘selling’’ institution to repurchase or redeem the transferred assets from the transferee (‘‘purchaser’’), the ‘‘selling’’ institution should report the transaction as a secured
borrowing if and only if the following conditions have
been met:
(1) The assets to be repurchased or redeemed are the
same or ‘‘substantially the same’’ as those transferred, as defined by FASB Statement No. 140.
(2) The ‘‘selling’’ institution has the ability to repurchase
or redeem the transferred assets on substantially the
agreed terms, even in the event of default by the
transferee (‘‘purchaser’’). This ability is presumed to
exist if the ‘‘selling’’ institution has obtained cash or
GL-33

Glossary

other collateral sufficient to fund substantially all of
the cost of purchasing replacement assets from others.
(3) The agreement is to repurchase or redeem the transferred assets before maturity, at a fixed or determinable price.
(4) The agreement is entered into concurrently with the
transfer.
Participations in pools of securities are to be reported
in the same manner as security repurchase/resale
transactions.
Repurchase agreements reported as secured
borrowings—If a repurchase agreement qualifies as a
secured borrowing, the ‘‘selling’’ institution should report
the transaction as indicated below based on whether the
agreement involves a security or some other financial
asset.
(1) Securities ‘‘sold’’ under agreements to repurchase are
reported in Schedule RAL, item 4(b)2, ‘‘Securities
sold under agreements to repurchase. ’’
(2) Financial assets (other than securities) ‘‘sold’’ under
agreements to repurchase are reported as follows:
(a) If the repurchase agreement matures in one business day (or is under a continuing contract) and is
in immediately available funds, it should be
reported in Schedule RAL, item 4(b)1, ‘‘Federal
funds purchase.’’
(b) If the repurchase agreement matures in more than
one business day or is not in immediately available funds, it should be reported in Schedule
RAL, item 4.c.’’
In addition, the ‘‘selling’’ institution may need to record
further entries depending on the terms of the agreement.
If the ‘‘purchaser’’ has the right to sell or repledge
noncash assets, the ‘‘selling’’ institution should recategorize the transferred financial assets as ‘‘assets receivable’’ and report them in Schedule RAL, item 1(h),
‘‘Other assets including claims on nonrelated parties.’’
Otherwise, the financial assets should continue to be
reported in the same asset category as before the transfer (e.g., securities should continue to be reported in
Schedule RAL, item 1(b), ‘‘U.S. Government Securities,’’ item 1(c), ‘‘Other bonds, notes, debentures, and
GL-34

corporate stock,’’ or item 1(f), ‘‘Trading assets,’’ as
appropriate).
Resale agreements reported as secured borrowings—
Similarly, if a resale agreement qualifies as a secured
borrowing, the ‘‘purchasing’’ institution should report the
transaction as indicated below based on whether the
agreement involves a security or some other financial
asset.
(1) Securities ‘‘purchased’’ under agreements to resell
are reported in Schedule RAL, item 1(d)2, ‘‘ Securities purchased under agreements to resell.’’
(2) Financial assets (other than securities) ‘‘purchased’’
under agreements to resell are reported as follows:
(a) If the resale agreement matures in one business
day (or is under a continuing contract) and is
in immediately available funds, it should be
reported in Schedule RAL, item 1(d)1, ‘‘Federal
funds sold.’’
(b) If the resale agreement matures in more than one
business day or is not in immediately available
funds, it should be reported in Schedule RAL,
item 1(e), ‘‘Loans and leases, net of unearned
income.’’
In addition, the ‘‘purchasing’’ institution may need to
record further entries depending on the terms of the
agreement. If the ‘‘purchasing’’ institution has the right
to sell the noncash assets it has ‘‘purchased’’ and sells
these assets, it should recognize the proceeds from the
sale and report its obligation to return the assets in
Schedule RAL, item 4(f), ‘‘Other liabilities to nonrelated parties.’’ If the ‘‘selling institution defaults under
the terms of the repurchase agreement and is no longer
entitled to redeem the noncash assets, the ‘‘purchasing’’
institution should report these assets on Schedule RAL in
the appropriate asset category (e.g., securities should be
reported in Schedule RAL, item 1(b), ‘‘U.S. Government
Securities,’’ item 1(c), ‘‘Other bonds, notes, debentures,
and corporate stock,’’ or item 1(f), ‘‘Trading assets,’’ as
appropriate) and initially measure them at fair value.
However, if the ‘‘purchasing’’ institution has already sold
the assets it has ‘‘purchased,’’ it should derecognize its
obligation to return the assets. Otherwise, the ‘‘purchasing’’ institution should not report the transferred financial
assets (i.e., the financial assets ‘‘purchased’’ under the
resale agreement) on Schedule RAL.
Glossary

FFIEC 002
September 2008

Glossary

Repurchase/resale agreements reported as sales—If a
repurchase agreement does not qualify as a secured
borrowing under FASB Statement No. 140, the selling
institution should account for the transaction as a sale of
financial assets and a forward repurchase commitment.
The selling institution should remove the transferred
assets from Schedule RAL and record the proceeds from
the sale of the transferred assets (including the forward
repurchase commitment). Similarly, if a resale agreement
does not qualify as a borrowing under FASB Statement
No. 140, the purchasing institution should account for the
transaction as a purchase of financial assets and a forward
resale commitment. The purchasing institution should
record the transferred assets on Schedule RAL, initially
measure them at fair value, and record the payment for
the purchased assets (including the forward resale commitment).
Reserve Balances, Pass-through: See ‘‘pass-through
reserve balances.’’
Securities Activities: Institutions should categorize each
security as trading, available-for-sale, or held-to-maturity
consistent with FASB Statement No. 115, Accounting for
Certain Investments in Debt and Equity Securities, as
amended. Management should periodically reassess its
security categorization decisions to ensure that they
remain appropriate.
Securities that are intended to be held principally for the
purpose of selling them in the near term should be
classified as trading assets. Trading activity includes
active and frequent buying and selling of securities for
the purpose of generating profits on short-term fluctuations in price. Securities held for trading purposes must
be reported at fair value, with unrealized gains and losses
recognized in the institutions unremitted profit (loss) and
reported in Schedule RAL, item 2, ‘‘Net due from related
depository institutions,’’ or item 5, ‘‘Net due to related
depository institutions.’’
Held-to-maturity securities are debt securities that an
institution has the positive intent and ability to hold to
maturity. Held-to-maturity securities are generally
reported at amortized cost. Securities not categorized as
trading or held-to-maturity must be reported as availablefor-sale. An institution must report its available-for-sale
securities at fair value on Schedule RAL and report any
unrealized gains or losses from these securities as part
of its unremitted profit (loss), which is reported in
Schedule RAL, item 2, ‘‘Net due from related depository
FFIEC 002
Glossary September 2008

institutions,’’ or item 5, ‘‘Net due to related depository
institutions.’’
If a decline in fair value of a held-to-maturity or
available-for-sale security is judged to be other than
temporary, the cost basis of the individual security shall
be written down to fair value as a new cost basis. For
example, if it is probable that an institution will be unable
to collect all amounts due according to the contractual
terms of a debt security not impaired at acquisition, an
other-than-temporary impairment has occurred.
The proper categorization of securities is important to
ensure that trading gains and losses are promptly recognized in the institution’s earnings and trading activities
can be properly evaluated for safety and soundness
purposes. This will not occur when securities intended to
be held for trading purposes are categorized as held-tomaturity or available-for-sale. The following practices
are considered trading activities:
(1) Gains Trading—Gains trading is characterized by the
purchase of a security and the subsequent sale of the
same security at a profit after a short holding period,
while securities acquired for this purpose that cannot
be sold at a profit are typically retained in the available-for-sale or held-to-maturity portfolio. Gains
trading may be intended to defer recognition of
losses, as unrealized losses on available-for-sale and
held-to-maturity debt securities generally are not
reported in income until the security is sold.
(2) When-Issued Securities Trading—When-issued
securities trading is the buying and selling of securities in the period between the announcement of an
offering and the issuance and payment date of the
securities. A purchaser of a ‘‘when-issued’’ security
acquires the risks and rewards of owning a security
and may sell the when-issued security at a profit
before having to take delivery and pay for it. Because
such transactions are intended to generate profits
from short-term price movements, they should be
categorized as trading.
(3) Pair-offs—Pair-offs are security purchase transactions that are closed-out or sold at, or prior to,
settlement date. In a pair-off, an institution commits
to purchase a security. Then, prior to the predetermined settlement date, the institution will pair-off the
purchase with a sale of the same security. Pair-offs
are settled net when one party to the transaction
GL-35

Glossary

remits the difference between the purchase and sale
price to the counterparty. Pair-offs may also involve
the same sequence of events using swaps, options on
swaps, forward commitments, options on forward
commitments, or other off-balance sheet derivative
contracts.
(4) Extended Settlements—In the U.S., regular-way
settlement for federal government and federal agency
securities (except mortgage-backed securities and
derivative contracts) is one business day after the
trade date. Regular-way settlement for corporate and
municipal securities is three business days after the
trade date. For mortgage-backed securities, it can be
up to 60 days or more after the trade date. The use of
extended settlements may be offered by securities
dealers in order to facilitate speculation on the part of
the purchaser, often in connection with pair-off transactions. Securities acquired through the use of a
settlement period in excess of the regular-way settlement periods in order to facilitate speculation should
be reported as trading assets.
(5) Repositioning Repurchase Agreements—A repositioning repurchase agreement is a funding technique
offered by a dealer in an attempt to enable an
institution to avoid recognition of a loss. Specifically,
an institution that enters into a ‘‘when-issued’’ trade
or a ‘‘pair-off’’ (which may include an extended
settlement) that cannot be closed out at a profit on the
payment or settlement date will be provided dealer
financing in an effort to fund its speculative position
until the security can be sold at a gain. The institution
purchasing the security typically pays the dealer a
small margin that approximates the actual loss in the
security. The dealer then agrees to fund the purchase
of the security, typically by buying it back from the
purchaser under a resale agreement. Any securities
acquired through a dealer financing technique such as
a repositioning repurchase agreement that is used to
fund the speculative purchase of securities should be
reported as trading assets.
(6) Short Sales—A short sale is the sale of a security that
is not owned. The purpose of a short sale generally is
to speculate on a fall in the price of the security. (For
further information, see the Glossary entry for ‘‘short
position.’’)
One other practice, referred to as ‘‘adjusted trading,’’ is
not acceptable under any circumstances. Adjusted tradGL-36

ing involves the sale of a security to a broker or dealer at
a price above the prevailing market value and the contemporaneous purchase and booking of a different security,
frequently a lower-rated or lower quality issue or one
with a longer maturity, at a price above its market value.
Thus, the dealer is reimbursed for losses on the purchase
from the institution and ensured a profit. Such transactions inappropriately defer the recognition of losses on
the security sold and establish an excessive cost basis for
the newly acquired security. Consequently, such transactions are prohibited and may be in violation of 18 U.S.C.
Sections 1001—False Statements or Entries and 1005—
False Entries.
Securities Borrowing/Lending Transactions: Securities borrowing/lending transactions are typically initiated
by broker–dealers and other financial institutions that
need specific securities to cover a short sale or a customer’s failure to deliver securities sold. A transferee (‘‘borrower’’) of securities generally is required to provide
‘‘collateral’’ to the transferor (‘‘lender’’) of securities,
commonly cash but sometimes other securities or standby
letters of credit, with a value slightly higher than that of
the securities ‘‘borrowed.’’
Most securities borrowing/lending transactions do not
qualify as sales under FASB Statement No. 140 because
the agreement entitles and obligates the securities lender
to repurchase or redeem the transferred assets before
their maturity. (See the Glossary entry for ‘‘transfers of
financial assets’’ for further discussion of sale criteria.)
When such transactions do not qualify as sales, securities
lenders and borrowers should account for the transactions
as secured borrowings in which cash (or securities that
the holder is permitted by contract or custom to sell or
repledge) received as ‘‘collateral’’ by the securities lender
is considered the amount borrowed and the securities
‘‘loaned’’ are considered pledged against the amount
borrowed, and the ‘‘loaned’’ securities are recategorized
on the securities lender’s balance sheet as ‘‘assets receivable’’ and reported in Schedule RAL, item 1(h), ‘‘Other
assets including other claims on nonrelated parties.’’
If the securities borrowing/lending transaction meets the
criteria for a sale under FASB Statement No. 140, the
lender of the securities should remove the securities from
Schedule RAL and record the proceeds from the sale of
the securities (including the forward repurchase commitment). The borrower of the securities should record the
securities on Schedule RAL at fair value and record the
Glossary

FFIEC 002
September 2008

Glossary

payment for the purchased assets (including the forward
resale commitment).
Securities, Participations in Pools of: See ‘‘repurchase/
resale agreements.’’
Servicing Assets and Liabilities: The accounting and
reporting standards for servicing assets and liabilities are
set forth in FASB Statement No. 140, ‘‘Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities’’ and FASB Statement No. 65,
‘‘Accounting for Certain Mortgage Banking Activities,’’
as amended by Statement No. 140. A summary of the
relevant sections of these accounting standards follows.
For further information, see FASB Statements No. 140
and No. 65 and the Glossary entry for ‘‘transfers of
financial assets.’’
Servicing of mortgage loans, credit card receivables, or
other financial assets includes, but is not limited to,
collecting principal, interest, and escrow payments from
borrowers; paying taxes and insurance from escrowed
funds; monitoring delinquencies; executing foreclosure if
necessary; temporarily investing funds pending distribution; remitting fees to guarantors, trustees, and others
providing services; and accounting for and remitting
principal and interest payments to the holders of beneficial interests in the financial assets. Servicers typically
receive certain benefits from the servicing contract and
incur the costs of servicing the assets.
Servicing is inherent in all financial assets; it becomes a
distinct asset or liability only when contractually separated from the underlying financial assets by sale or
securitization of the assets with servicing retained or by a
separate purchase or assumption of the servicing. When a
branch or agency undertakes an obligation to service
financial assets, it must recognize a servicing asset or
liability for that servicing contract unless it securitizes
the assets, retains all of the resulting securities, and
classifies the securities as held-to-maturity debt securities. Servicing assets result from contracts to service
financial assets for which the benefits of servicing
(revenues from contractually specified servicing fees,
late charges, and other ancillary sources) are expected to
more than adequately compensate the servicer for performing the servicing. Servicing liabilities result from
contracts to service financial assets for which the benefits
of servicing are not expected to adequately compensate
the servicer for performing the servicing. Contractually
specified servicing fees are all amounts that, per contract,
FFIEC 002
Glossary September 2008

are due to the servicer in exchange for servicing the
financial asset and would no longer be received by a
servicer if the beneficial owners of the serviced assets or
their trustees or agents were to exercise their actual or
potential authority under the contract to shift the servicing to another servicer. Adequate compensation is the
amount of benefits of servicing that would fairly compensate a substitute servicer should one be required including the profit that would be demanded by a substitute
servicer in the marketplace.
When a branch or agency sells or securitizes financial
assets and retains the servicing asset, the branch or
agency shall allocate the cost of the financial assets to the
servicing assets and the financial assets (without the
servicing) based on their relative fair values. If it is not
practicable to estimate the fair values of the servicing
assets and the financial assets (without the servicing),
the entire cost shall be allocated to the financial assets
(without the servicing) and no cost shall be allocated
to the servicing assets. If a branch or agency incurs a
servicing liability in a sale or securitization, the servicing
liability should initially be measured at fair value. If a
branch or agency securitizes assets, retains all of the
resulting securities, and classifies the securities as heldto-maturity debt securities, no separate servicing asset
or liability shall be recorded. If a branch or agency
purchases servicing assets or assumes servicing liabilities
in a transaction other than a sale or securitization of the
financial assets being serviced, the asset or liability shall
be recorded at fair value. For purchased servicing assets,
the fair value is presumptively the price paid to acquire
the servicing.
All servicing assets and liabilities carried on the books
of reporting branches and agencies shall be amortized in
proportion to, and over the period of, estimated net
servicing income (servicing revenue in excess of servicing costs) or net servicing loss (servicing costs in excess
of servicing revenue). The book value of servicing assets
and liabilities should be reviewed at least quarterly. The
servicing assets shall be stratified into groups based on
one or more of the predominant risk characteristics of the
underlying financial assets for purposes of determining
fair value. If the book value of a stratum of a servicing
asset exceeds its fair value, the servicing asset is considered to be impaired and the book value shall be reduced
to fair value through a valuation allowance for that
stratum. If the fair value of a servicing liability increases
above the book value, the increased obligation shall be
GL-37

Glossary

recognized as a loss in current earnings. The fair value
of servicing assets (liabilities) is the amount at which the
assets (liabilities) could be bought (incurred) or sold
(settled) in a bona fide transaction between willing
parties.
Settlement Date Accounting: See ‘‘trade date and settlement date accounting.’’
Shell Branches: Shell branches are limited service
branches that do not conduct transactions with residents,
other than with other shell branches, in the country in
which they are located. Transactions at shell branches are
usually initiated and effected by their head office or by
other related branches outside the country in which the
shell branches are located, with records and supporting
documents maintained at the initiating offices. Examples
of such locations are the Bahamas and the Cayman
Islands.
Short Position: When a branch or agency sells an asset
that it does not own, it has established a short position. If
on the report date a branch or agency is in a short
position, it shall report its liability to purchase the asset in
Schedule RAL, item 4(e), ‘‘Trading liabilities.’’ In this
situation, the right to receive payment shall be reported in
Schedule RAL, item 1(h), ‘‘Other assets (including other
claims on nonrelated parties).’’ Short positions shall be
reported gross. Short trading positions shall be revalued
consistent with the method used by the reporting branch
or agency for the valuation of its trading account assets.
Standby Contract: See ‘‘derivative contracts.’’
Standby Letter of Credit: See ‘‘letter of credit.’’
Suspense Accounts: Suspense accounts are temporary
holding accounts in which items are carried until they can
be identified and their disposition to the proper account
can be made. Such accounts may also be known as
interoffice or clearing accounts. The balances of suspense
accounts as of the report date should not automatically be
reported as other assets or other liabilities in Schedule
RAL, item 1(h) or 4(f). Rather, the items included in
these accounts should be reviewed and material amounts
should be reported in the appropriate accounts of this
report.
Syndications: A syndication is a participation, usually
involving shares in a single loan, in which several
participants agree to enter into an extension of credit
under a bona fide binding agreement that provides that,
regardless of any event, each participant shall fund and
GL-38

be at risk only up to a specified percentage of the total
extension of credit or up to a specified dollar amount. In a
syndication, the participants agree to the terms of the
participation prior to the execution of the final agreement
and the contract is executed by the obligor and by all the
participants, although there is usually a lead institution
organizing or managing the credit. Large commercial and
industrial loans, large loans to finance companies, and
large foreign loans may be handled through such syndicated participations.
Each participant in the syndicate, including the lead
participant, records its own share of the participated loan
and the total amount of the loan is not entered on the
books of one institution to be shared through transfers of
loans. This type of participation thus does not give rise in
its initial operation and distribution to the type of transfer
to which the general rule in the Glossary entry for ‘‘sales
of assets’’ is addressed. However, any subsequent transfers of shares, or parts of shares, in the syndicated loan
would be subject to that general rule for determining
whether the transfer is to be treated as a sale of assets or
as a borrowing.
Telephone Transfer Account: See ‘‘deposits.’’
Term Federal Funds: See ‘‘federal funds transactions.’’
Time Deposits: See ‘‘deposits.’’
Trade Date and Settlement Date Accounting: For
purposes of this report, the preferred method for reporting transactions in investment portfolio securities and
trading account assets (including money market instruments) other than futures, forwards, and options (see the
Glossary entry for ‘‘derivative contracts’’) is on the basis
of trade date accounting. However, if the reported
amounts under settlement date accounting would not be
materially different from those under trade date accounting, settlement date accounting is acceptable. Whichever
method a branch or agency elects should be used consistently, unless the branch or agency has elected settlement
date accounting and subsequently decides to change to
the preferred trade date method.
Under trade date accounting, assets purchased shall be
recorded in the appropriate asset category on the trade
date and the branch or agency’s obligation to pay for
those assets shall be reported in Schedule RAL, item 4(f).
Conversely, when an asset is sold, it shall be removed on
the trade date from the asset category in which it was
recorded, and the proceeds receivable resulting from the
Glossary

FFIEC 002
September 2008

Glossary

sale
shall
be
reported
in
Schedule RAL, item 1(h). Any gain or loss resulting from
such transaction shall also be recognized on the trade
date. On the settlement date, disbursement of the payment or receipt of the proceeds will eliminate the respective other liability or other asset entry resulting from the
transaction.
Under settlement date accounting, assets purchased are
not recorded until settlement date. On the trade date, no
entries are made. Upon receipt of the assets on the
settlement date, the asset is reported in the proper asset
category and payment is disbursed. The selling branch or
agency, on the trade date, would make no entries. On
settlement date, the selling branch or agency would
reduce the appropriate asset category and reflect the
receipt of the payment. Any gain or loss resulting from
such transaction would be recognized on the settlement
date.
Trading Account: Branches and agencies that (a) regularly underwrite or deal in securities, interest rate contracts, foreign exchange rate contracts, other off-balance
sheet commodity and equity contracts, other financial
instruments, and other assets for resale, (b) acquire or
take positions in such items principally for the purpose of
selling in the near term or otherwise with the intent to
resell in order to profit from short-term price movements,
or (c) acquire or take positions in such items as an
accommodation to customers or for other trading purposes shall report such assets or positions as trading
assets or liabilities.
All trading assets should be segregated from the other
assets of a branch or agency and reported in Schedule RAL, item 1(f), ‘‘Trading assets.’’ The failure of a
branch or agency to establish a separate account for
assets that are used for trading purposes does not prevent
such assets from being designated as trading for purposes
of these reports. For further information, see the FFIEC
Supervisory Policy Statement on Securities Activities
and FASB Statement No. 115, Accounting for Certain
Investments in Debt and Equity Securities.
All trading account assets should be reported at their
fair value with unrealized gains and losses recognized
as part of unremitted profit/loss included in net due
from/due to accounts. When a security or other asset is
acquired, a branch or agency should determine whether
it intends to hold the asset for trading or for investment (e.g., for securities, available-for-sale or held-toFFIEC 002
Glossary September 2008

maturity). A branch or agency should not record a newly
acquired asset in a suspense account and later determine
whether it was acquired for trading or investment purposes. Regardless of how a branch or agency categorizes
a newly acquired asset, management should document its
decision.
All trading liabilities should be segregated from other
transactions and reported in Schedule RAL, item 4(e),
‘‘Trading liabilities.’’ The trading liability account
includes the fair value of off-balance sheet derivative
contracts held for trading that are in loss positions and
short sales of securities and other assets. Trading account
liabilities should be reported at fair value with unrealized
gains and losses recognized in current income in a
manner similar to trading account assets.
Given the nature of the trading account, transfers into or
from the trading category should be rare. Transfers
between a trading account and any other account of the
branch or agency must be recorded at fair value at the
time of the transfer. For a security transferred from the
trading category, the unrealized holding gain or loss at
the date of the transfer will already have been recognized
in earnings and should not be reversed. For a security
transferred into the trading category, the unrealized holding gain or loss at the date of the transfer should be
recognized in earnings.
For purposes of these reports, short sales of securities or
other assets are treated as trading transactions because
such sales are entered into with the intent to profit from
short-term price movements. Nonetheless, the obligation
incurred in a short sale should not be netted against
trading assets, but should be recorded as a liability in
Schedule RAL, item 4(e), ‘‘Trading liabilities.’’ (See the
Glossary entry for ‘‘short position.’’)
Transaction Account: See ‘‘deposits.’’
Transactions with Related Institutions: Transactions
with related depository institutions (as defined in the
Glossary entry for ‘‘related institutions’’) are treated
differently from transactions with unrelated depository institutions. Moreover, transactions with related
depository institutions are treated differently from transactions with related nondepository institutions (i.e., transactions with related nondepository institutions are treated
in the same manner as transactions with nonrelated
depository or nondepository institutions) if certain criteria, which are explained below, are met. The following
describes the treatment of each type of transaction:
GL-39

Glossary

(1) Transactions with nonrelated institutions—
Transactions with nonrelated institutions are to be
reflected, as appropriate, in each item of Schedule
RAL and supporting schedules other than (a) the
items on net due from and due to related depository
institutions (Schedule RAL, Asset item 2 and Liability item 5), and (b) Schedule M.
(2) Transactions with related depository institutions—
Transactions with related depository institutions (and
with those related nondepository institutions that are
consolidated in the Report of Condition of a related
U.S. bank) are to be reflected only in the item for net
due from and due to related depository institutions
(Schedule RAL, Asset item 2 and Liability item 5)
and in Schedule M.
(3) Transactions
with
related
nondepository
institutions—Transactions with related nondepository institutions (other than those that are consolidated in the Report of Condition of a related U.S.
bank) are to be reported similarly to the reporting of
transactions with nonrelated institutions, i.e., they
are to be reflected, as appropriate, in each item of
Schedule RAL and the supporting schedules, other
than (a) the items on net due from and due to related
depository institutions (Schedule RAL, Asset item 2
and Liability item 5) and (b) Schedule M.
Transactions with majority-owned depository subsidiaries of related nondepository institutions are to be
treated the same as transactions with related depository
institutions and are reflected in the net due from and net
due to related depository institutions items of Schedule RAL (and in Schedule M) as appropriate and notin the
other items of Schedule RAL or in the other schedules.
Transfers of Financial Assets: The accounting and
reporting standards for transfers of financial assets are set
forth in FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. These standards are based on consistent application of a financial components approach that
focuses on control. Under the financial components
approach, after the reporting branch or agency transfers
financial assets, it recognizes the financial and servicing
assets it controls and the liabilities it has incurred,
removes financial assets from the balance sheet when
control has been surrendered, and removes liabilities
from the balance sheet when extinguished. A summary of these accounting and reporting standards folGL-40

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

Glossary

FFIEC 002
September 2008

Glossary

exchange. According to FASB Statement No. 140, a
transferor (i.e., the entity that transfers all or a portion of
one or more financial assets) has surrendered control over
transferred assets, and therefore has sold the assets, if and
only if all three of the following conditions are met:
(1) The transferred assets have been isolated from the
transferor, i.e., put presumptively beyond the reach of
the transferor and its creditors, even in bankruptcy or
other receivership.
(2) Each transferee (i.e., the entity that receives all or a
portion of one or more financial assets from the
transferor), or each holder of the beneficial interests
in a qualifying special purpose entity that is a transferee, has the right to pledge or exchange the assets it
received, and no condition both constrains the transferee from taking advantage of that right and provides more than a trivial benefit to the transferor.
(3) The transferor does not maintain effective control
over the transferred assets through (a) an agreement
that both entitles and obligates it to repurchase or
redeem the transferred assets before their maturity or
(b) the ability to unilaterally cause the holder to
return specific assets, other than through a cleanup
call option.
If a transfer of financial assets in exchange for cash or
other consideration (other than beneficial interests in the
transferred assets) does not satisfy the criteria for sale
treatment, the transfer should be accounted for as a
secured borrowing with pledge of collateral.
Accounting for a Transfer That Qualifies as a Sale—
Upon the completion of a transfer of financial assets that
satisfies all three of the conditions to be accounted for as
a sale, the purchaser(s) must recognize on the balance
sheet all assets obtained and any liabilities incurred and
initially measure them at fair value. The aggregate fair
value is presumed to be the price paid by the purchaser(s). As for the selling branch or agency, it must:
(1) Remove all assets sold from the balance sheet while
continuing to carry on its balance sheet any retained
interest in the transferred assets, including, if applicable, servicing assets, retained undivided interests,
and beneficial interests in assets transferred to a
qualifying special-purpose entity in a securitization.
The selling branch or agency must allocate the
amount at which the transferred assets were carried
on the balance sheet at the date of the transfer
FFIEC 002
Glossary September 2008

between the assets sold and the retained interests, if
any, based on their relative fair values at that date.
(2) Recognize on the balance sheet all cash, derivative
financial instruments, and other assets obtained and
all servicing liabilities and other liabilities incurred in
consideration as proceeds of the sale. Derivatives
include put or call options held or written (e.g.,
guarantee or recourse obligations), forward commitments (e.g., commitments to deliver additional
receivables in some securitizations), and swaps (e.g.,
provisions that convert interest rates from fixed to
variable).
(3) Initially measure the assets obtained and liabilities
incurred in a sale at fair value. However, if it is not
practicable to estimate the fair value of an asset
obtained, the selling branch or agency must record
the asset at zero. If it is not practicable to estimate the
fair value of a liability incurred, the selling bank
must not recognize any gain on the sale. The liability
should be recorded on the branch’s or agency’s
financial statements at the greater of:
(a) The amount, if any, by which the fair values of
the assets obtained in the sale less the fair values
of the liabilities incurred in the sale exceeds the
sum of the carrying values of the assets transferred, or
(b) The amount of loss that is probable of occurring
in accordance with FASB Statement No. 5,
Accounting for Contingencies, as interpreted by
FASB Interpretation No. 14, Reasonable Estimation of the Amount of a Loss. Under that interpretation, when the reasonable estimate of the loss is
a range and some amount within the range
appears at the time to be a better estimate than
any other amount within the range, that amount
should be considered probable. When no amount
within the range is a better estimate than any
other amount, the minimum amount in the range
should be considered probable.
(4) Recognize in income any gain or loss on the sale
in income (as reflected in net due from/due to
accounts).
Branches and agencies should refer to FASB Statement
No. 140 for implementation guidance for accounting for
transfers of partial interests, transfers of certain lease
receivables, securities lending transactions, repurchase
GL-41

Glossary

agreements including ‘‘dollar rolls,’’ ‘‘wash sales,’’ loan
syndications, loan participations (discussed below), risk
participations in bankers acceptances, factoring arrangements, and transfers of receivables with recourse. However, this accounting standard does not provide guidance
on the accounting for most assets and liabilities recorded
on the balance sheet following a transfer accounted for as
a sale. As a result, after their initial measurement or
carrying amount allocation, these assets and liabilities
should be accounted for in accordance with the existing
generally accepted accounting principles applicable to
them.
Loan Participations—Statement No. 140 applies to loan
participations occurring after March 31, 2001, including
transfers by the originating lender to a participating
institution that take place after that date under loan
participation agreements that originated before April 1,
2001. However, for transfers by an FDIC-insured institution, the isolation test in Statement No. 140 (described
above under ‘‘Determining Whether a Transfer Should
be Accounted for as a Sale or a Secured Borrowing’’)
applies to transfers occurring after December 31, 2001. If
a loan participation agreement gives a participating institution the right to pledge or exchange the participation,
the isolation test has been met, and the originating lender
does not maintain effective control over the participation,
then the conditions for the surrender of control have been
met and the originating lender should account for transfers to the participating institution as sales of financial
assets.
An originating lender’s right of first refusal on a bona
fide offer to the participating institution from a third
party, a requirement for a participating institution to
obtain the originating lender’s permission that shall not
be unreasonably withheld, or a prohibition on the participating institution’s sale of the participation to the
originating lender’s competitor (if other potential willing
buyers exist) is a limitation on the participating institution’s rights, but is presumed not to constrain a participant from exercising its right to pledge or exchange the
participation. However, if the participation agreement
constrains the participating institution from pledging or
exchanging its participation, the originating lender presumptively receives more than a trivial benefit, has not
relinquished control over the loan, and should account
for the transfer as a secured borrowing.
A loan participation agreement may give the originating
lender the contractual right to repurchase a loan parGL-42

ticipation at any time. In this situation, the right to
repurchase is effectively a call option on a specific loan
participation, i.e., a participation that is not readily
obtainable in the marketplace. Regardless of whether this
option is freestanding or attached, it either constrains the
participating institution from pledging or exchanging its
participation or results in the originating lender maintaining effective control over the participation. As a consequence, the contractual right to repurchase precludes sale
accounting and the transfer should be accounted for as a
secured borrowing.
In addition, under a loan participation agreement, the
originating lender may give the participating institution
the right to resell the participation, but reserves the right
to call the loan participation at any time from whomever
holds it and can enforce that right by discontinuing the
flow of interest to the holder of the participation at the
call date. In this situation, the originating lender has
maintained effective control over the participation and
the transfer should be accounted for as a secured borrowing, not as a sale.
If an originating FDIC-insured lender transfers a loan
participation to a participating institution with recourse
prior to January 1, 2002, the existence of the recourse
obligation in and of itself does not preclude sale accounting for the transfer under FASB Statement No. 140. If a
loan participation transferred with recourse prior to January 1, 2002, meets the three conditions identified above
in order for the transferor to have surrendered control
over the transferred assets, the transfer should be
accounted for as a sale for financial reporting purposes.
If an originating FDIC-insured lender transfers a loan
participation with recourse after December 31, 2001, the
participation generally will not be considered isolated
from the transferor, i.e., the originating lender, in the
event of an FDIC receivership. Section 360.6 of the
FDIC’s regulations limits the FDIC’s ability to reclaim
loan participations transferred ‘‘without recourse,’’ as
defined in the regulations, but does not limit the FDIC’s
ability to reclaim loan participations transferred with
recourse. Under Section 360.6, a participation that is
subject to an agreement that requires the originating
lender to repurchase the participation or to otherwise
compensate the participating institution due to a default
on the underlying loan is considered a participation
‘‘with recourse.’’ As a result, a loan participation transferred ‘‘with recourse’’ after December 31, 2001, generally should be accounted for as a secured borrowing and
Glossary

FFIEC 002
September 2008

Glossary

not as a sale for financial reporting purposes. This means
that the originating lender should not remove the participation from its loan assets on the balance sheet, but
should report the secured borrowing in Schedule RAL,
item 4(c), ‘‘Other borrowed money.’’

(C) Branch or agency pays taxes on a cash basis by
charging parent’s demand deposit account:

Financial Assets Subject to Prepayment—Financial assets
such as interest-only strips receivable and certain loans,
debt securities, other receivables, and retained interests in
securitizations can be contractually prepaid or otherwise
settled in such a way that the holder of the financial asset
would not recover substantially all of its recorded investment. After their initial recording on the
balance sheet, financial assets of this type must be
subsequently measured at fair value like available-forsale securities or trading securities.

U.S. Territories and Possessions: United States territories and possessions include American Samoa, Guam, the
Northern Mariana Islands, the U.S. Virgin Islands, and
the U.S. trust territories.

Traveler’s Letter of Credit: See ‘‘letter of credit.’’
U.S. Banks: See ‘‘banks, U.S. and foreign.’’
U.S. Income Taxes
Under U.S. tax law, U.S. branches and agencies are not
taxed as separate entities. Therefore, under FAS 109,
″Accounting for Income Taxes,‘‘ branches and agencies
typically do not report any tax assets or liabilities on
Schedule RAL of their FFIEC 002. However, if a branch
or agency acts as agent of the parent bank for the
payment of current U.S. income taxes on the U.S. taxable
income generated by the branch or agency, the effects of
the tax payment should be reported using one of the
methods below.
(A) Branch or agency accrues a provision for income
taxes on behalf of the parent and then pays the taxes
on behalf of the parent:
The amount of the provision accrued by the branch or
agency should be reported on Schedule M, Due from/
Due to Related Depository Institutions in the U.S. and
Foreign Countries, Part I, ‘‘Head office of parent bank’’
(item 2.a) as a component of unremitted profits and
losses. The corresponding income taxes payable should
be reported on Schedule RAL, item 4.f, column A,
‘‘Other liabilities to nonrelated parties’’ or Schedule M,
Part I, item 2.a, column B, ‘‘Gross due to.’’
(B) Branch or agency pays taxes on a cash basis on
behalf of the parent:
The amount due from head office should be reported on
Schedule M, Part I, item 2.a, column A, ‘‘Gross due
from.’’
FFIEC 002
Glossary September 2008

The amount due from head office should be reported on
Schedule M, Part I, item 2.a, column A, ‘‘Gross due
from.’’

Valuation Allowance: In general, a valuation allowance
is an account established for a specific asset or asset
category or to recognize a specific liability, with the
intent of absorbing some element of estimated loss. Such
allowances are created by charges to expense accounts
reported as part of an institution’s net unremitted profits.
Allowances established for an asset or asset category are
netted from the asset reported on Schedule RAL.
U.S. branches and agencies are not required to maintain
allowances for loan losses on an office level. The outstanding balance of a loan or lease should only be written
down for regulatory reporting purposes when management has identified a specific loss amount. The amount of
loans and leases to be reported on Schedules RAL and C
is the outstanding balances less any specified loss amounts.
When-Issued Securities Transactions: Transactions
involving securities described as ‘‘when-issued’’ or
‘‘when-as-and-if-issued’’ are, for purposes of this report,
to be treated as conditional transactions in a security
authorized for issuance but not yet actually issued.
Purchases and sales of when-issued securities for which
settlement date has not occurred as of the report date are
not to be reflected on Schedule RAL until settlement
date. Branches and agencies should report as forward
contracts in Schedule L, item 9(b), and Schedule M,
Part V, item 9(b), commitments to purchase and sell
when-issued securities that are not excluded from the
requirements of FASB Statement No. 133 as a regularway security trade. Such contracts should be reported on
a gross basis, except that branches and agencies may net
purchases and sales of the identical security with the
same party. Branches and agencies should report commitments to sell when-issued securities that are excluded
from the requirements of Statement No. 133 as ‘‘All other
off-balance sheet contingent claims (assets)’’ in Schedule L, item 8, and Schedule M, Part V, item 8, and
commitments to purchase when-issued securities that are
excluded from the requirements of Statement No. 133 as
GL-43

Glossary

‘‘All other off-balance sheet contingent liabilities’’ in
Schedule L, item 7, and Schedule M, Part V, item 7,
subject to the existing reporting thresholds for these two
items.
Trading in when-issued securities normally begins when
the U.S. Treasury or some other issuer of securities
announces a forthcoming issue. (In some cases, trading
may begin in anticipation of such an announcement and
should also be reported as described herein.) Such transactions are contingent upon the actual issuance of the

GL-44

security. Since the exact price and terms of the security
are unknown before the auction date, trading prior to that
date is on a ‘‘yield’’ basis. On the auction date the exact
terms and price of the security become known and
when-issued trading continues until settlement date, when
the securities are delivered and the issuer paid. On
settlement date, the securities purchased by the branch or
agency shall be reported in the appropriate securities
category on Schedule RAL or as trading assets in Schedule RAL, item 1(f).

Glossary

FFIEC 002
September 2008

APPENDIX

List of the Address
and Telephone Number
for Each Federal Reserve Bank

District

Address and Telephone Number

District

Address and Telephone Number

01 Boston

Statistical Section
Research Department
Federal Reserve Bank of Boston
600 Atlantic Avenue
Boston, Massachusetts 02106
(617) 973-3315

06 Atlanta

Federal Reserve Bank of Atlanta
Attn: Statistical Reports Department
2301 DeFoor Hills Road
Atlanta, Georgia 30318
(404) 498-8826

07 Chicago
02 New York

Regulatory Reports Division
Financial Reports Department
Federal Reserve Bank of New York
33 Liberty Street
New York, New York 10045
(212) 720-6393

Research Department
Statistics Division
Federal Reserve Bank of Chicago
P.O. Box 834
Chicago, Illinois 60690-0834
(312) 322-5774

08 St. Louis
03 Philadelphia

Financial and Regulatory Reporting
Financial Statistics Department
Federal Reserve Bank of Philadelphia
10 Independence Mall
Philadelphia, Pennsylvania 19106-1574
(215) 574-6605

Banking Supervision and Regulation
Division
Federal Reserve Bank of St. Louis
P.O. Box 442
St. Louis, Missouri 63166
(314) 444-8512

09 Minneapolis
04 Cleveland

Department of Data Services
Federal Reserve Bank of Cleveland
P.O. Box 6387
Cleveland, Ohio 44101
(216) 579-2074

Federal Reserve Bank of Minneapolis
Risk Management Division
Statistical and Structure Reporting
P.O. Box 291
Minneapolis, Minnesota 55480-0291
(612) 204-6445

05 Richmond

Statistics Division
Research Department
Federal Reserve Bank of Richmond
P.O. Box 27622
Richmond, Virginia 23261
(804) 697-8000

10 Kansas City

Federal Reserve Bank of Kansas City
Statistical Services Department
925 Grand Blvd
Kansas City, Missouri 64198
(816) 881-2390

FFIEC 002
APPENDIX

September 2008

AP-1

APPENDIX

District

Address and Telephone Number

District

Address and Telephone Number

11 Dallas

Federal Reserve Bank of Dallas
Statistics Department
Regulatory Reports Division
P.O. Box 655906
Dallas, Texas 75265-5906
(214) 922-5401

12 San Francisco

International Reports Section
Statistics Department
Federal Reserve Bank of San Francisco
101 Market Street
San Francisco, California 94105
(415) 974-3133

AP-2

FFIEC 002
APPENDIX September 2008