(MA)-Reports of Condition and Income (Interagency Call Report)

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FFIEC 051

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Draft Instructions for
Schedule SU–Supplemental Information
in the Proposed New FFIEC 051 Call Report
for Banks with Domestic Offices Only and
Total Assets Less than $1 Billion
Proposed to Take Effect March 31, 2017

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These draft instructions are for proposed
Schedule SU–Supplemental Information, which is described in the
federal banking agencies’ initial Paperwork Reduction Act Federal Register notice
for the proposed new FFIEC 051 Call Report that was published on August 15,
2016. The Federal Register notice for this proposal is available on the
FFIEC’s web page for the FFIEC 051 Call Report. The prototype of the
new FFIEC 051 reporting form for eligible small institutions also is
available on the FFIEC’s web page for the FFIEC 051 Call Report.

Draft as of August 15, 2016

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FFIEC 051

SU – SUPPLEMENTAL

Instructions for Preparation of
Consolidated Reports of Condition and Income
FFIEC 051 – Supplemental Information
SCHEDULE SU – SUPPLEMENTAL INFORMATION
General Instructions

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Schedule SU should be completed on a fully consolidated basis.
Item Instructions
Derivatives
Item No.
1

Caption and Instructions

Does the institution have any derivative contracts?

If your institution has derivative contracts, place an “X” in the box marked “Yes” and complete
items 1.a through 1.d, below.
If your institution has no derivative contracts, place an “X” in the box marked “No,” skip
items 1.a through 1.d, and go to item 2.

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For purposes of this item and items 1.a through 1.d, derivative contracts include all contracts
that meet the definition of a derivative and must be accounted for in accordance with ASC
Topic 815, Derivatives and Hedging (formerly FASB Statement No. 133, “Accounting for
Derivative Instruments and Hedging Activities,” as amended). Include both freestanding
derivative contracts and those embedded derivatives that have been bifurcated from their
host contracts and are accounted for separately under ASC Topic 815. For further
information, see the Glossary entry for “Derivative Contracts.”

Exclude spot foreign exchange contracts, which are agreements for the immediate delivery,
usually within two business days or less (depending on market convention), of a foreign
currency at the prevailing cash market rate. Report spot foreign exchange contracts as
“Other off-balance sheet liabilities” in Schedule RC-L, item 9, subject to the existing reporting
threshold for this item.

D

In items 1.a through 1.d, an institution should report the notional amount (stated in U.S.
dollars) of each derivative contract according to both its underlying risk exposure – either as
“interest rate,” as defined below, or as “other” – and its designation as held for trading or for
purposes other than trading, also defined below. A contract with multiple risk characteristics
should be classified based upon its predominant risk characteristic at the origination of the
derivative.
For purposes of reporting in items 1.a through 1.d, the gross notional amount of derivative
contracts in items 1.a through 1.d:

(1) For futures and forward contracts, report the aggregate par value of the contracts that
have been entered into by the reporting institutions and are outstanding (i.e., open
contracts) as of the report date. Do not report the par value of financial instruments

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(cont.)

SU – SUPPLEMENTAL

Caption and Instructions
intended to be delivered under such contracts if this par value differs from the par value
of the contracts themselves.

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Contracts are outstanding (i.e., open) until they have been cancelled by acquisition or
delivery of the underlying financial instruments, offset (for futures contracts), or settled in
cash (for forward contracts). 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. Forward contracts can only be terminated,
other than by receipt of the underlying asset, by agreement of both buyer and seller.

(2) For written and purchased option contracts, report the aggregate par value of the
financial instruments or commodities that the option seller (writer) has, for compensation
(such as a fee or premium), obligated itself to either purchase from or sell to the option
buyer (purchaser) under option contracts that are outstanding as of the report date.
Report the aggregate notional amount for written and purchased caps, floors, and
swaptions. For collars and corridors, report the aggregate notional amount for the
purchased portion of the contract plus the aggregate notional amount for the written
portion of the contract.
(3) For swaps, the notional amount is the underlying principal amount upon which the
exchange of interest, foreign exchange, or other income or expense is based. In those
cases where the reporting institution is acting as an intermediary, both sides of the
transaction are to be reported.

In reporting items 1.a through 1.d, the notional amount or par value to be reported for a
derivative contract with a multiplier component is the contract's effective notional amount or
par value. For example, a swap contract with a stated notional amount of $1,000,000 whose
terms called for quarterly settlement of the difference between 5% and LIBOR multiplied by
10 has an effective notional amount of $10,000,000.

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All transactions within the consolidated institution should be reported on a net basis, i.e.,
intrabank transactions should not be reported in this item. No other netting of contracts is
permitted for purposes of these derivatives items. Therefore, do not net:
(1) Obligations of the reporting institution to purchase from third parties against the
institution's obligations to sell to third parties;
(2) Written options against purchased options; or
(3) Contracts subject to bilateral netting agreements.

D

Definitions

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 that act as the
counterparty to each contract.
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

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Item No.

Caption and Instructions

1
(cont.)

specified price or yield. Forward contracts are not traded on organized exchanges and their
contractual terms are not standardized.

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Forward contracts include contracts for the purchase and sale of when-issued securities that
are not excluded from the requirements of ASC Topic 815. Report contracts for the purchase
of when-issued securities that are excluded from the requirements of ASC Topic 815 and
accounted for on a settlement-date basis as "Other off-balance sheet liabilities" in
Schedule RC-L, item 9, and contracts for the sale of when-issued securities that are excluded
from the requirements of ASC Topic 815 and accounted for on a settlement-date basis as
"Other off-balance sheet assets" in Schedule RC-L, item 10, subject to the existing reporting
thresholds for these two items.

Option contracts. Option contracts convey either the right or the obligation, depending upon
whether the reporting institution 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 and are known as exchange-traded options.
Other options are written to meet the specialized needs of the counterparties to the
transaction. These customized option contracts are known as over-the- counter (OTC)
options. Thus, OTC options include all option contracts not traded on an organized
exchange.

The buyer (purchaser) 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
(writer) of the option 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.

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Option contracts also include swaptions, i.e., options to enter into a swap contract, and
contracts known as caps, floors, collars, and corridors. In addition, a reporting institution’s
commitments to lend that meet the definition of a derivative and must be accounted for in
accordance with ASC Topic 815, Derivatives and Hedging, are considered written options
and should be reported in Schedule SU, items 1.a through 1.d. All other commitments to
lend should be reported in Schedule RC-L, item 1.

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Swaps. Swaps, including forward-starting swap contracts, are transactions in which two
parties agree to exchange payment streams based on a specified notional amount for a
specified period. For purposes of these reports, a swap that has an embedded early
termination option that may be exercised either at a specified date or dates before the
maturity date of the swap or during a specified period, which may be until the maturity date of
the swap, should be reported as a swap and not as an option contract.
Interest Rate Derivative Contracts. Interest rate derivative contracts are contracts whose
predominant risk characteristic is interest rate risk and are 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 institution's interest rate exposure or, if
the institution is an intermediary, the interest rate exposure of others. Interest rate derivative
contracts include interest rate futures, single currency interest rate swaps, basis swaps,

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Item No.

Caption and Instructions

1
(cont.)

interest rate forwards, forward rate agreements, and interest rate options, including caps,
floors, collars, and corridors.
Interest rate derivative contracts also include:

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(1) A reporting institution’s commitments (i.e., commitments that have a specific interest rate
or price, 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 ASC Topic 815.
(2) A reporting institution’s commitments to lend that meet the definition of a derivative and
must be accounted for in accordance with ASC Topic 815 are considered written options
for purposes of Schedule SU, items 1.a through 1.d. All other commitments to lend
should be reported in Schedule RC-L, item 1.

Interest rate derivative contracts 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.

Examples of interest rate derivative contracts to be reported in Schedule SU, items 1.a and
1.c, include Chicago Board Options Exchange options on the 13-week Treasury bill rate and
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.

Other Derivative Contracts. Other derivative contracts include foreign exchange contracts,
equity derivative contracts, commodity contracts, credit derivative contracts, and any other
derivative contracts not reportable as interest rate derivative contracts.
The following types of derivative contracts are to be included in Schedule SU, items 1.b
and 1.d:

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(1) 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, whose predominant risk
characteristic is foreign exchange risk. 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. All amounts are to be reported in U.S. dollar equivalent values.

D

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 institution enters into a futures contract which obligates the institution to
purchase U.S. dollar exchange against which it sells Japanese yen, then the institution
would report (in U.S. dollar equivalent values) the amount of Japanese yen sold. In
cross-currency 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).
Examples of foreign exchange contracts to be reported in Schedule SU, items 1.b and
1.d, include exchange-traded options on major currencies such as the Euro, Japanese
Yen, and British Pound Sterling, options on futures contracts of major currencies, and
cross-currency interest rate swaps. A cross-currency interest rate swap is a transaction
in which two parties agree to exchange principal amounts of different currencies, usually
at the prevailing spot rate, at the inception of an agreement that lasts for a certain

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Item No.
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(cont.)

SU – SUPPLEMENTAL

Caption and Instructions
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.

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(2) 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. Examples of equity derivative contracts to be reported in Schedule SU,
items 1.b and 1.d, include futures contracts committing the reporting institution to
purchase or sell equity securities or instruments based on equity indexes such as the
Standard and Poor's 500 or the Nikkei.
The amount to be reported as the notional amount 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.

(3) Commodity 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. Examples of commodity contracts to be reported in
Schedule SU, items 1.b and 1.d, include futures and forward contracts committing the
reporting institution 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).
The amount to be reported as the notional amount for commodity 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.

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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.

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(4) Credit Derivative Contracts. In general, credit derivatives are arrangements that allow
one party (the “protection purchaser” or "beneficiary") to transfer the credit risk of a
"reference asset" or “reference entity” to another party (the “protection seller” or
"guarantor"). Report credit derivatives for which the reporting institution is the protection
seller as well as those for which the institution is the protection purchaser. Do not net the
notional amounts of credit derivatives with third parties on which the reporting institution
is the protection purchaser against credit derivatives with third parties on which the
reporting institution is the protection seller.
Credit linked notes are cash securities and should not be reported as credit derivatives in
Schedule SU, items 1.b and 1.d.
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 institution’s credit derivative cash flows are based.

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Item No.
1
(cont.)

SU – SUPPLEMENTAL

Caption and Instructions
Credit derivative contracts to be reported in Schedule SU, items 1.b and 1.d, include:

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(a) Credit default swaps, which are contracts in which a protection seller or guarantor
(risk taker), for a fee, agrees to reimburse a protection purchaser or 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 protection seller makes no payments to the protection purchaser
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.

(b) Total return swaps, which are contracts that transfer the total economic performance
of a reference asset, which includes all associated cash flows, as well as capital
appreciation or depreciation. The protection purchaser (beneficiary) 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
protection seller receives cash flows on the reference asset, plus any appreciation,
and it pays any depreciation to the protection purchaser, plus a floating interest rate.
A total return swap may terminate upon a default of the reference asset.

(c) Credit options, which are 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 (protection seller or guarantor) assumes the obligation to purchase
or sell the reference asset at a specified “strike” spread level. The option purchaser
(protection purchaser or beneficiary) buys the right to sell the reference asset to, or
purchase it from, the option writer at the strike spread level.

(d) Any other credit derivatives not considered credit default swaps, total return swaps,
or credit options.

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Designation as Held for Trading. As noted above, report each derivative contract
according to its designation as held for trading or held for purposes other than trading in
items 1.a through 1.d. Derivative contracts held for trading purposes include those used in
dealing and other trading activities. Derivative contracts used to hedge trading activities
should also be reported as held for trading.

D

Derivative trading activities include (a) regularly dealing in interest rate contracts, foreign
exchange contracts, equity derivative contracts, commodity contracts, credit derivative
contracts, and any other contract meeting the definition of a derivative and accounted for in
accordance with ASC Topic 815; (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; and (c) acquiring or taking positions in such
items as an accommodation to customers.
The reporting institution's trading department may have entered into a derivative contract with
another department or business unit within the consolidated institution. If the trading
department has also entered into a matching contract with a counterparty outside the
consolidated institution, the contract with the outside counterparty should be designated as
held for trading or as held for purposes other than trading consistent with the contract's
designation for other financial reporting purposes.

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Item No.

SU – SUPPLEMENTAL

Caption and Instructions
Total gross notional amount of interest rate derivatives held for trading. Report the
total notional amount or par value of those interest rate derivative contracts that are held for
trading purposes.

1.b

Total gross notional amount of all other derivatives held for trading. Report the total
notional amount or par value of all other derivative contracts that are held for trading
purposes.

1.c

Total gross notional amount of interest rate derivatives not held for trading. Report the
total notional amount or par value of those interest rate derivative contracts held for purposes
other than trading.

1.d

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1.a

Total gross notional amount of all other derivatives not held for trading. Report the
total notional amount or par value of all other derivative contracts held for purposes other
than trading.

1-4 Family Residential Mortgage Banking Activities
2

For the two calendar quarters preceding the current calendar quarter, have either
the institution’s sales of 1-4 family residential mortgage loans during the quarter or
its 1-4 family residential mortgage loans held for sale or trading as of quarter-end
exceeded $10 million?

For the two calendar quarters preceding the current calendar quarter, if your institution had
either sales of 1-4 family residential mortgage loans during the quarter or 1-4 family
residential mortgage loans held for sale or trading as of quarter-end that exceeded
$10 million, place an “X” in the box marked “Yes” and complete items 2.a and 2.b, below.

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For the two calendar quarters preceding the current calendar quarter, if your institution did
not have either sales of 1-4 family residential mortgage loans during the quarter or 1-4 family
residential mortgage loans held for sale or trading as of quarter-end that exceeded
$10 million, place an “X” in the box marked “No,” skip items 2.a and 2.b, and go to item 3.

D

For purposes of measuring and reporting on 1-4 family residential mortgage banking
activities, 1-4 family residential mortgage loans are loans that meet the definition of loans
“Secured by 1-4 family residential properties” in Schedule RC-C, Part I, item 1.c. Institutions
should include those 1-4 family residential mortgage loans that would be reportable as held
for sale in Schedule RC, item 4.a, “Loans and leases held for sale,” as well as those that
would be reportable as held for trading in Schedule RC, item 5, “Trading assets.” Open-end
1-4 family residential mortgage banking activities should be measured using the “total
commitment under the lines of credit,” which is the total amount of the lines of credit granted
to customers at the time the open-end credits were originated, not the “principal amount
funded under the lines of credit,” which is the principal balance outstanding of loans extended
under lines of credit at the sale date for loans sold during the quarter or at quarter-end for
loans held for sale or trading.
An institution must complete items 2.a and 2.b beginning with the quarter-end report date
after the second quarter in which the $10 million threshold is exceeded. For example, if the
institution’s sales of closed-end and open-end first and junior lien 1-4 family residential
mortgage loans exceeded $10 million during the quarter ended June 30, 2016, and the
institution’s closed-end and open-end first and junior lien 1-4 family residential mortgage

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Item No.

Caption and Instructions

2
(cont.)

loans held for sale or trading exceeded $10 million as of September 30, 2016, the institution
would be required to complete items 2.a and 2.b in its December 31, 2016, Call Report.

2.a

1-4 family residential mortgage loans sold during the quarter. Report 1-4 family
residential mortgage loans sold during the calendar quarter ending on the report date. For
closed-end first and junior lien mortgage loans, report the principal amount of the 1-4 family
residential mortgage loans sold during the quarter. For open-end lines of credit secured by
1-4 family residential properties, report the total amount of open-end commitments under the
lines of credit sold during the calendar quarter.

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Include transfers of 1-4 family residential mortgage loans originated or purchased for resale
from retail or wholesale sources that have been accounted for as sales in accordance with
ASC Topic 860, Transfers and Servicing (formerly FASB Statement No. 140, “Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” as amended),
i.e., those transfers where the loans are no longer included in the institution’s consolidated
total assets.
Also include all sales during the quarter of 1-4 family residential mortgage loans directly from
the institution’s loan portfolio. For further information, see the Glossary entry for “transfers of
financial assets.”

2.b

Quarter-end amount of 1-4 family residential mortgage loans held for sale or trading.
Report 1-4 family residential mortgages held for sale or trading as of the quarter-end report
date and included in Schedule RC, item 4.a, “Loans and leases held for sale,” and in
Schedule RC, item 5, “Trading assets.” Loans held for sale should be reported (a) at the
lower of cost or fair value or (b) if a fair value option has been elected, at fair value,
consistent with their presentation in Schedule RC, item 4.a. Loans held for trading should be
reported at fair value consistent with their presentation in Schedule RC, item 5. 1-4 family
residential mortgage loans held for sale or trading at quarter-end include any mortgage loans
transferred at any time from the institution’s loan portfolio to a held-for-sale account or a
trading account that have not been sold by quarter-end.

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Fair Value Option Assets and Liabilities
3

Does the institution use a fair value option to measure any of its assets or liabilities?

If your institution has elected to report any financial instruments or servicing assets and
liabilities at fair value under a fair value option with changes in fair value recognized in
earnings, place an “X” in the box marked “Yes” and complete items 3.a through 3.d, below.

D

If your institution has no financial instruments or servicing assets and liabilities that it has
elected to report at fair value under a fair value option with changes in fair value recognized
in earnings, place an “X” in the box marked “No,” skip items 3.a through 3.d below, and go to
item 4. Your institution should answer “No” if the only financial instruments that your
institution measures at fair value in the financial statements on a recurring basis are
available-for-sale securities, trading assets, trading liabilities, and derivative contracts
because applicable accounting standards and these instructions require these financial
instruments to be measured at fair value in the balance sheet at the end of each reporting
period.

3.a

FFIEC 051

Aggregate amount of fair value option assets. Report the total fair value, as defined by
ASC Topic 820, Fair Value Measurement (formerly FASB Statement No. 157, “Fair Value
Measurements”), of those financial and servicing assets your institution has elected to report

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Item No.

Caption and Instructions

3.a
(cont.)

on Schedule RC, Balance Sheet, at fair value under a fair value option with changes in fair
value recognized in earnings.
Aggregate amount of fair value option liabilities. Report the total fair value, as defined by
ASC Topic 820, Fair Value Measurement (formerly FASB Statement No. 157, “Fair Value
Measurements”), of those financial and servicing liabilities your institution has elected to
report on Schedule RC, Balance Sheet, at fair value under a fair value option with changes in
fair value recognized in earnings.

3.c

Year-to-date net gains (losses) recognized in earnings on fair value option assets.
Report the total amount of pretax gains (losses) from fair value changes included in earnings
during the calendar year to date for all assets your institution has elected to account for at fair
value under a fair value option. If the amount to be reported is a net loss, report it with a
minus (-) sign. Disclosure of such gains (losses) is also required by ASC Subtopic 825-10,
Financial Instruments – Overall (formerly FASB Statement No. 159, “Fair Value Option for
Financial Assets and Financial Liabilities”) and ASC Subtopic 860-50, Transfers and
Servicing – Servicing Assets and Liabilities (formerly FASB Statement No. 156, “Accounting
for Servicing of Financial Assets”).

3.d

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3.b

Year-to-date net gains (losses) recognized in earnings on fair value option liabilities.
Report the total amount of pretax gains (losses) from fair value changes included in earnings
during the calendar year to date for all liabilities accounted for at fair value under a fair value
option. If the amount to be reported is a net loss, report it with a minus (-) sign. Disclosure of
such gains (losses) is also required by ASC Subtopic 825-10, Financial Instruments – Overall
(formerly FASB Statement No. 159, “Fair Value Option for Financial Assets and Financial
Liabilities”) and ASC Subtopic 860-50, Transfers and Servicing – Servicing Assets and
Liabilities (formerly FASB Statement No. 156, “Accounting for Servicing of Financial Assets”).

Servicing, Securitization, and Asset Sale Activities
4 and 5

General Instructions

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For purposes of items 4 and 5 in this schedule, the following definition is applicable.

D

Recourse or other seller-provided credit enhancement means an arrangement in which
the reporting institution 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 institution
when it transfers an asset, or assumed by the institution when it services a transferred asset,
that obligates the institution to absorb credit losses on the transferred asset. Such an
arrangement typically exists when an institution transfers assets and agrees to protect
purchasers or some other party, e.g., investors in securitized assets, from losses due to
default by or nonperformance of the obligor on the transferred assets or some other party.
The institution provides this protection by retaining:
(1) an interest in the transferred assets, e.g., credit-enhancing interest-only strips, “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

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Item No.

Caption and Instructions

4 and 5
(cont.)

interests and subordinated securities retained by an institution when it securitizes assets
expose the institution to more than its pro rata share of loss and thus are considered a form
of credit enhancement to the securitization structure.

4

Does the institution have any assets it has sold and securitized with servicing retained
or with recourse or other seller-provided credit enhancements?

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If your institution has any assets currently outstanding that it has sold and securitized with
servicing retained or with recourse or other seller-provided credit enhancements, place an “X”
in the box marked “Yes” and complete item 4.a, below.
If your institution has no assets currently outstanding that it has sold and securitized with
servicing retained or with recourse or other seller-provided credit enhancements, place an “X”
in the box marked “No,” skip item 4.a, and go to item 5.

4.a

Total 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 the total principal balance outstanding as of the report date of loans,
leases, and other assets which the reporting institution 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 sellerprovided credit enhancements to the securitization structure.

Include the amount outstanding of any credit card fees and finance charges that the reporting
institution has securitized and sold in connection with its securitization and sale of credit card
receivable balances.

R

Include the principal balance outstanding of loans the reporting institution has (1) pooled into
securities that have been guaranteed by the Government National Mortgage Association
(Ginnie Mae) and (2) sold with servicing rights retained.

Also include the principal balance outstanding of securitizations of small business obligations
transferred with recourse under Section 208 of the Riegle Community Development and
Regulatory Improvement Act of 1994.

D

Exclude the principal balance of loans underlying seller's interests owned by the reporting
institution. Seller’s interest means the reporting institution’s ownership interest in loans that
have been securitized, except an interest that is a form of recourse or other seller-provided
credit enhancement.

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 seller-provided credit enhancements in Schedule SU, item 5.a. If servicing
has been retained on closed-end 1-4 family residential mortgages sold to Fannie Mae or
Freddie Mac, report the outstanding principal balance of the mortgages in Schedule SU,
item 6.a.

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Item No.

Caption and Instructions

4.a
(cont.)

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, leases, and other assets should
continue to be carried as assets on the reporting institution's balance sheet.

5

Does the institution have any assets it has sold with recourse or other seller-provided
credit enhancements but has not securitized?

AF
T

If your institution has any assets currently outstanding that it has sold with recourse or other
seller-provided credit enhancements but has not securitized, place an “X” in the box marked
“Yes” and complete item 5.a, below.

If your institution has no assets currently outstanding that it has sold and securitized with
recourse or other seller-provided credit enhancements, place an “X” in the box marked “No,”
skip item 5.a, and go to item 6.

5.a

Total outstanding principal balance of assets sold by the reporting institution with
recourse or other seller-provided credit enhancements, but not securitized by the
reporting institution. Report the unpaid principal balance as of the report date of loans,
leases, and other assets, which the reporting institution has sold with recourse or other sellerprovided credit enhancements, but which were not securitized by the reporting institution.
Include loans, leases, and other assets that the reporting institution 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 reporting 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.

R

Include the unpaid principal balance of small business obligations the reporting institution
has transferred with recourse under Section 208 of the Riegle Community Development
and Regulatory Improvement Act of 1994, but which were not securitized by the reporting
institution.

6

Does the institution service any closed-end 1-4 family residential mortgage loans for
others or does it service more than $10 million of other financial assets for others?

If your institution either (1) services any closed-end 1-4 family residential mortgage loans for
others or (2) services more than $10 million of other financial assets for others, place an “X”
in the box marked “Yes” and complete item 6.a, below.

D

If your institution (1) does not service any closed-end 1-4 family residential mortgage loans
for others and (2) does not service more than $10 million of other financial assets for others,
place an “X” in the box marked “No,” skip item 6.a, and go to item 7.

6.a

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Total outstanding principal balance of closed-end 1-4 family residential mortgage
loans serviced for others plus the total outstanding principal balance of other financial
assets serviced for others if more than $10 million. Report the sum of (1) the outstanding
principal balance of closed-end 1-to-4 family residential mortgage loans the reporting
institution services for others, regardless of amount, plus (2) the outstanding principal
balance of all other financial assets the reporting institution services for others, provided this
balance is more than $10 million. For purposes of reporting the outstanding principal balance
of loans serviced for others in accordance with the preceding sentence, include the servicing

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Item No.

Caption and Instructions

6.a
(cont.)

of whole loans and other financial assets or only portions thereof, as is typically the case with
loan participations.

AF
T

Include (1) the principal balance of loans and other financial assets owned by others for
which the reporting institution has purchased the servicing (i.e., purchased servicing) and
(2) the principal balance of loans and other financial assets that the reporting institution has
either originated or purchased and subsequently sold, whether or not securitized, but for
which it has retained the servicing duties and responsibilities (i.e., retained servicing). If the
institution services a portion of a loan or other financial asset for one or more other parties
and owns the remaining portion of the loan or other financial asset, report only the principal
balance of the portion of the asset serviced for others.

Include the outstanding principal balance of all closed-end 1-to-4 family residential
mortgage loans (as defined for Schedule RC-C, part I, item 1.c.(2)) that the reporting
institution services for others regardless of whether the reporting institution provides
recourse or other service-provided credit enhancements. For example, the reporting
institution should include closed-end 1-to-4 family residential mortgages serviced under
regular option contracts (i.e., with recourse) with the Federal National Mortgage
Association, serviced with recourse for the Federal Home Loan Mortgage Corporation,
and serviced with recourse under other servicing contracts.

Other serviced financial assets may include, but are not limited to, home equity lines, credit
cards, automobile loans, and loans guaranteed by the Small Business Administration.

Variable Interest Entities
7

Does the institution have any consolidated variable interest entities?

If your institution has any consolidated variable interest entities, place an “X” in the box
marked “Yes” and complete items 7.a and 7.b, below.

R

If your institution does not have any consolidated variable interest entities, place an “X” in the
box marked “No,” skip item items 7.a and 7.b, and go to item 8.
General Instructions

D

A variable interest entity (VIE), as described in ASC Topic 810, Consolidation (formerly FASB
Interpretation No.46 (revised December 2003), “Consolidation of Variable Interest Entities,”
as amended by FASB Statement No. 167, "Amendments to FASB Interpretation No. 46(R)”),
is an entity in which equity investors do not have sufficient equity at risk for that entity to
finance its activities without additional subordinated financial support or, as a group, the
holders of the equity investment at risk lack one or more of the following three characteristics:
(a) the power, through voting rights or similar rights, to direct the activities of an entity that
most significantly impact the entity’s economic performance, (b) the obligation to absorb the
expected losses of the entity, or (c) the right to receive the expected residual returns of the
entity.

Variable interests in a VIE are contractual, ownership, or other pecuniary interests in an entity
that change with changes in the fair value of the entity’s net assets exclusive of variable
interests. When an institution or other company has a variable interest or interests in a VIE,
ASC Topic 810 provides guidance for determining whether the institution or other company
must consolidate the VIE. If an institution or other company has a controlling financial
interest in a VIE, it is deemed to be the primary beneficiary of the VIE and, therefore, must

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Item No.

Caption and Instructions

7
(cont.)

consolidate the VIE. For further information, see the Glossary entry for “variable interest
entity.”
VIEs include, but are not limited to, securitization vehicles that have been created to pool and
repackage mortgages, other assets, or other credit exposures into securities that can be
transferred to investors and asset-backed commercial paper conduits that primarily issue
externally rated commercial paper backed by assets or other exposures.

7.a

7.b

AF
T

Schedule SU, items 7.a and 7.b, collect aggregate information on VIEs that have been
consolidated by the reporting institution for purposes of the Consolidated Reports of
Condition and Income because the institution (or a consolidated subsidiary of the institution)
is the primary beneficiary of the VIE. Schedule SU, items 7.a and 7.b, should be completed
on a fully consolidated basis, i.e., after eliminating intercompany transactions. The asset and
liability amounts included in the total assets and total liabilities reported in Schedule SU,
items 7.a and 7.b, respectively, should be the same amounts at which these assets and
liabilities are reported on Schedule RC, Balance Sheet, e.g., held-to-maturity securities
should be reported at amortized cost and available-for-sale securities should be reported at
fair value.

Total assets of consolidated variable interest entities. Report the total amount of assets
of consolidated variable interest entities reported in Schedule RC, items 1 through 11. Loans
and leases held for investment that are included in this item should be reported net of any
allowance for loan and lease losses allocated to these loans and leases.

Total liabilities of consolidated variable interest entities. Report the total amount of
liabilities of consolidated variable interest entities reported in Schedule RC, items 14
through 20.

Credit Card Lending Specialized Items

Does the institution, together with affiliated institutions, have outstanding credit card
receivables that exceed $500 million as of the report date or is the institution a credit
card specialty institution as defined for Uniform Institution Performance Report
purposes?

R

8

If your institution, together with affiliated institutions, has outstanding credit card receivables
that exceed $500 million as of the report date or if it is a credit card specialty institution as
defined for Uniform Institution Performance Report purposes, place an “X” in the box marked
“Yes” and complete items 8.a through 8.e, below.

D

If your institution, together with affiliated institutions, does not have outstanding credit card
receivables that exceed $500 million as of the report date and it is not a credit card specialty
institution as defined for Uniform Institution Performance Report purposes, place an “X” in the
box marked “No,” skip item items 8.a through 8.e, and go to item 9.

Note: To answer item 8 with a “Yes,” an institution must meet the following criteria:
(1) Either individually or on a combined basis with its affiliated depository institutions, the
institution reports outstanding credit card receivables that exceed, in the aggregate,
$500 million as of the report date. Outstanding credit card receivables are the sum of:
(a) Schedule RC-C, Part I, item 6.a;

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Caption and Instructions

8
(cont.)

(b) Credit card receivables sold and securitized by the reporting institution with servicing
retained or with recourse or other seller-provided credit enhancements included in
Schedule SU, item 4.a; and
(c) The reporting institution’s seller’s interests in credit card receivables included as
assets in Schedule RC if not reported in Schedule RC-C, Part I, item 6.a.
(Include comparable data on credit card receivables for any affiliated depository
institutions.)
OR
(2) The institution is a credit card specialty institution as defined for purposes of the Uniform
Bank Performance Report (UBPR). According to the UBPR Users Guide, credit card
specialty institutions are currently defined as those institutions that exceed 50 percent for
the following two criteria:
(a) Credit Cards plus Securitized and Sold Credit Cards divided by Total Loans plus
Securitized and Sold Credit Cards.
(b) Total Loans plus Securitized and Sold Credit Cards divided by Total Assets plus
Securitized and Sold Credit Cards.

8.a

8.b

Outstanding credit card fees and finance charges included in credit cards to
individuals for household, family, and other personal expenditures (retail credit cards).
Report the amount of fees and finance charges included in the amount of credit card
receivables reported in Schedule RC-C, Part I, item 6.a.
Separate valuation allowance for uncollectible retail credit card fees and finance
charges. Report the amount of any valuation allowance or contra-asset account that the
institution maintains separate from the allowance for loan and lease losses to account for
uncollectible fees and finance charges on credit cards (as defined for Schedule RC-C, Part I,
item 6.a). This item is only applicable to those institutions that maintain an allowance or
contra-asset account separate from the allowance for loan and lease losses. Do not include
in this item the amount of any valuation allowance established for impairment in retained
interests in accrued interest receivable related to securitized credit cards.

Amount of allowance for loan and lease losses attributable to retail credit card fees
and finance charges. Report in this item the amount of the allowance for loan and lease
losses that is attributable to outstanding fees and finance charges on credit cards (as defined
for Schedule RC-C, Part I, item 6.a). This amount is a component of the amount reported in
Schedule RC, item 4.c, and Schedule RI-B, Part II, item 7. Do not include in this item the
amount of any valuation allowance established for impairment in retained interests in accrued
interest receivable related to securitized credit cards.

R

8.c

AF
T

Item No.

Uncollectible retail credit card fees and finance charges reversed against year-to-date
income. Report the amount of fees and finance charges on credit cards (as defined for
Schedule RC-C, Part I, item 6.a) that the institution reversed against either interest and fee
income or a separate contra-asset account during the calendar year-to-date. Report the
amount of fees and finance charges that have been reversed on a gross basis, i.e., do not
reduce the amount of reversed fees and finance charges by recoveries of these reversed
fees and finance charges. Exclude from this item credit card fees and finance charges
reported as charge-offs against the allowance for loan and lease losses in Schedule RI-B,
Part I, item 5.a, column A.

D

8.d

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Item No.
8.e

SU – SUPPLEMENTAL

Caption and Instructions
Outstanding credit card fees and finance charges included in retail credit card
receivables sold and securitized with servicing retained or with recourse or other
seller-provided credit enhancements. Report the amount outstanding of credit card fees
and finance charges that the institution has securitized and sold in connection with its
securitization and sale of the credit card receivables reported in Schedule SU, item 4.a.

FDIC Loss-Sharing Agreements
9

Does the institution have assets covered by FDIC loss-sharing agreements?

AF
T

If your institution has any assets covered by FDIC loss-sharing agreements, place an “X” in
the box marked “Yes” and complete items 9.a through 9.e, below.

If your institution does not have any assets covered by FDIC loss-sharing agreements, place
an “X” in the box marked “No” and skip item items 9.a through 9.e.

Note: Under a loss-sharing agreement, the FDIC agrees to absorb a portion of the losses on
a specified pool of a failed insured depository institution’s assets in order to maximize asset
recoveries and minimize the FDIC’s losses. In general, for transactions that occurred before
April 2010, the FDIC reimburses 80 percent of losses incurred by an acquiring institution on
covered assets over a specified period of time up to a stated threshold amount, with the
acquirer absorbing 20 percent of the losses on these assets. Any losses above the stated
threshold amount are reimbursed by the FDIC at 95 percent of the losses recognized by the
acquirer. For transactions that occurred after March 2010, the FDIC generally reimburses 80
percent of the losses incurred by the acquirer on covered assets, with the acquiring institution
absorbing 20 percent.
Loans and leases covered by FDIC loss-sharing agreements. Report the balance sheet
amount of loans and leases held for sale and loans and leases held for investment included
in Schedule RC-C, part I, items 1 through 10, acquired from failed insured depository
institutions or otherwise purchased from the FDIC that are covered by loss-sharing
agreements with the FDIC.

R

9.a

Do not report the “book value” of the covered loans and leases on the failed institution’s
books, which may be the amount upon which payments from the FDIC to the reporting
institution are to be based in accordance with the loss-sharing agreement.

Past due and nonaccrual loans and leases covered by FDIC loss-sharing agreements.
Report in the appropriate subitem the aggregate amount of all loans and leases covered by
loss-sharing agreements with the FDIC and reported in Schedule SU, item 9.a, that have
been included in Schedule RC-N, items 1 through 8, because they are past due 30 days or
more or are in nonaccrual status as of the report date.

D

9.b

9.b.(1)

Past due 30 through 89 days and still accruing. Report the amount of covered loans
and leases reported in Schedule SU, item 9.a, that are included in Schedule RC-N,
items 1 through 8, column A, because they are past due 30 days through 89 days and still
accruing as of the report date.

9.b.(2)

Past due 90 days or more and still accruing. Report the amount of covered loans
and leases reported in Schedule SU, item 9.a, that are included in Schedule RC-N,
items 1 through 8, column B, because they are past due 90 days or more and still accruing as
of the report date.

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Caption and Instructions

9.b.(3)

Nonaccrual. Report the amount of covered loans and leases reported in Schedule SU,
item 9.a, that are included in Schedule RC-N, items 1 through 8, column C, because they are
in nonaccrual status.

9.c

Portion of past due and nonaccrual covered loans and leases that is protected by FDIC
loss-sharing agreements. Report in the appropriate subitem the maximum amount
recoverable from the FDIC under loss-sharing agreements covering the past due and
nonaccrual loans and leases reported in Schedule SU, items 9.b.(1) through 9.b.(3), above,
beyond the amount that has already been reflected in the measurement of the reporting
institution’s indemnification asset, which represents the right to receive payments from the
FDIC under the loss-sharing agreement.

AF
T

Item No.

In general, the maximum amount recoverable from the FDIC on covered past due and
nonaccrual loans and leases is the amount of these loans and leases, as reported in
Schedule SU, items 9.b.(1) through 9.b.(3), multiplied by the currently applicable loss
coverage rate (e.g., 80 percent or 95 percent). This product will normally be the maximum
amount recoverable because reimbursements from the FDIC for covered losses related to
the amount by which the “book value” of a covered asset on the failed institution’s books
(which is the amount upon which payments under an FDIC loss-sharing agreement are
based) exceeds the amount at which the reporting institution reports the covered asset on
Schedule RC, Balance Sheet, should already have been taken into account in measuring the
carrying amount of the reporting institution’s loss-sharing indemnification asset, which is
reported in Schedule RC-F, item 6, “All other assets.”

9.c.(1)

Past due 90 days or more and still accruing. Report the maximum amount recoverable
from the FDIC under loss-sharing agreements covering the loans and leases reported in
Schedule SU, item 9.b.(2), because they are past due 90 days or more and still accruing as
of the report date.

R

9.c.(2)

Past due 30 through 89 days and still accruing. Report the maximum amount recoverable
from the FDIC under loss-sharing agreements covering the loans and leases reported in
Schedule SU, item 9.b.(1), because they are past due 30 days through 89 days and still
accruing as of the report date.

Nonaccrual. Report the maximum amount recoverable from the FDIC under loss-sharing
agreements covering loans and leases reported in Schedule SU, item 9.b.(3), because they
are in nonaccrual status.

9.d

Other real estate owned covered by FDIC loss-sharing agreements. Report the carrying
amount of other real estate owned (included in Schedule RC, item 7) acquired from failed
insured depository institutions or otherwise purchased from the FDIC that are covered by
loss-sharing agreements with the FDIC.

D

9.c.(3)

9.e

Portion of covered other real estate owned that is protected by FDIC loss-sharing
agreements. Report the maximum amount recoverable from the FDIC under loss-sharing
agreements covering the other real estate owned reported in Schedule SU, item 9.d, beyond
the amount that has already been reflected in the measurement of the reporting institution’s
indemnification asset, which represents the right to receive payments from the FDIC under
the loss-sharing agreement.
In general, the maximum amount recoverable from the FDIC on covered other real estate
owned is the carrying amount of the other real estate, as reported in Schedule SU, item 9.d,
multiplied by the currently applicable loss coverage rate (e.g., 80 percent or 95 percent). This

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Caption and Instructions

9.e
(cont.)

product will normally be the maximum amount recoverable because reimbursements from the
FDIC for covered losses related to the amount by which the “book value” of a covered asset
on the failed institution’s books (which is the amount upon which payments under an FDIC
loss-sharing agreement are based) exceeds the amount at which the reporting institution
reports the covered asset on Schedule RC, Balance Sheet, should already have been taken
into account in measuring the carrying amount of the reporting institution’s loss-sharing
indemnification asset, which is reported in Schedule RC-F, item 6, “All other assets.”

D

R

AF
T

Item No.

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