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

Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks; Report of Assets and Liabilities of a Non-U.S. Branch That Is Managed or Controlled by a U.S. Branch or Agency of a For

FFIEC002_202003_i

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

OMB: 7100-0032

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Federal Financial Institutions Examination Council

Instructions for the Preparation of

Report of Assets and Liabilities
of U.S. Branches and Agencies
of Foreign Banks
Reporting Form FFIEC 002
Effective March 2020

Contents

General Instructions for Preparation of Report of Assets and Liabilities of U.S.
Branches and Agencies

.............................................................................................................................. GEN-1
Where and When to Submit the Report ............................................................................................... GEN-1
Submission Date ................................................................................................................................ GEN-1
Scope of the Report ........................................................................................................................... GEN-2
Signatures and Attestation ................................................................................................................. GEN-2
Public Release of Individual Branch and Agency Reports ..................................................................... GEN-3
Amended Reports .............................................................................................................................. GEN-3
Organization of Instruction Book ....................................................................................................... GEN-3
Preparation of Information to be Reported ......................................................................................... GEN-3
Accounting Basis ............................................................................................................................... GEN-4
Completion of the Report Form ......................................................................................................... GEN-4
Who Must Report

CONTENTS-1
FFIEC 002

June 2012

Contents

Line Item Instructions for Report of Assets and Liabilities of U.S. Branches and
Agencies of Foreign Banks

................................................................................................. RAL-1
Schedule A—Cash and Balances Due From Depository Institutions .......................................................... A-1
Schedule C—Loans ................................................................................................................................. C-1
Schedule E—Deposit Liabilities and Credit Balances ................................................................................. E-1
Schedule K—Quarterly Averages ............................................................................................................. K-1
Schedule L—Derivatives and Off-Balance Sheet Items ............................................................................... L-1
Schedule M—Due from/Due to Related Institutions in the U.S. and in Foreign Countries ........................... M-1
Schedule N—Past Due, Nonaccrual, and Restructured Loans .................................................................... N-1
Schedule O—Other Data for Deposits Insurance Assessments ................................................................... O-1
Schedule P—Other Borrowed Money ........................................................................................................ P-1
Schedule Q—Financial Assets and Liabilities Measured at Fair Value ......................................................... Q-1
Schedule S—Servicing, Securitization and ................................................................................................. S-1
Schedule T—Fiduciary and Related Services ............................................................................................. T-1
Appendix—List of the Address and Telephone Number for Each Federal Reserve Bank ........................... AP-1
Schedule RAL—Assets and Liabilities

CONTENTS-2
June 2012

FFIEC 002

Contents

Glossary

......................................................................................................... GL-1
Accounting Principles, Changes in ......................................................................................................... GL-1
Accretion of Discount on Securities ....................................................................................................... GL-1
Accrual of Loss Contingencies .............................................................................................................. GL-1
Agreement Corporation ........................................................................................................................ GL-1
Allowance for Loan Losses: ................................................................................................................... GL-1
Amortization of Premiums on Securities ................................................................................................ GL-2
Bankers Acceptances ............................................................................................................................ GL-2
Banks, U.S. and Foreign ........................................................................................................................ GL-6
Banks in Foreign Countries ................................................................................................................... GL-7
Bill-of-Lading Draft ............................................................................................................................. GL-7
Brokered Deposits ................................................................................................................................ GL-8
Broker’s Security Draft ......................................................................................................................... GL-8
Call Option .......................................................................................................................................... GL-8
Certiﬁcate of Deposit ............................................................................................................................ GL-8
Commercial Banks in the U.S. ............................................................................................................... GL-8
Commercial Letter of Credit ................................................................................................................. GL-8
Commercial Paper ................................................................................................................................ GL-8
Commodity or Bill-of-Lading Draft ....................................................................................................... GL-8
Credit Balances .................................................................................................................................... GL-9
Custody Account .................................................................................................................................. GL-9
Demand Deposits ................................................................................................................................. GL-9
Depository Institutions in the U.S. ......................................................................................................... GL-9
Deposits ............................................................................................................................................... GL-9
Derivative Contracts ........................................................................................................................... GL-16
Discounts ........................................................................................................................................... GL-22
Domicile ............................................................................................................................................ GL-22
Accounting Errors, Corrections of

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FFIEC 002

June 2012

Contents
............................................................................................................................................ GL-22
Edge and Agreement Corporation ....................................................................................................... GL-23
Excess Balance Account ...................................................................................................................... GL-23
Extinguishments of Liabilities ............................................................................................................. GL-23
Fails ................................................................................................................................................... GL-23
Fair Value ........................................................................................................................................... GL-24
Federal Funds Transactions ................................................................................................................. GL-24
Federally-Sponsored Lending Agency .................................................................................................. GL-25
Foreign Banks .................................................................................................................................... GL-25
Foreign Currency Transactions ............................................................................................................ GL-25
Foreign Governments and Official Institutions ...................................................................................... GL-25
Forward Contracts .............................................................................................................................. GL-25
Futures Contracts ............................................................................................................................... GL-25
Hypothecated Deposit ........................................................................................................................ GL-25
Internal-Use Computer Software ......................................................................................................... GL-26
International Banking Facility (IBF) .................................................................................................... GL-27
Lease Accounting ............................................................................................................................... GL-27
Letter of Credit .................................................................................................................................. GL-29
Loan .................................................................................................................................................. GL-29
Loan Fees .......................................................................................................................................... GL-30
Loans Secured by Real Estate .............................................................................................................. GL-32
Money Market Deposit Account (MMDA) .......................................................................................... GL-32
NOW Account ................................................................................................................................... GL-32
Nonaccrual Status ............................................................................................................................... GL-32
Offsetting ........................................................................................................................................... GL-33
One-Day Transaction .......................................................................................................................... GL-34
Option ............................................................................................................................................... GL-34
Other Depository Institutions in the U.S. ............................................................................................. GL-34
Overdraft ........................................................................................................................................... GL-34
Participations ..................................................................................................................................... GL-34
Participations in Acceptances .............................................................................................................. GL-34
Pass-through Reserve Balances ............................................................................................................ GL-34
Due Bills

CONTENTS-4
June 2012

FFIEC 002

Contents
......................................................................................................................................... GL-35
Pools of Securities, Participation in ...................................................................................................... GL-35
Preauthorized Transfer Account .......................................................................................................... GL-36
Premiums and Discounts ..................................................................................................................... GL-36
Put Option ......................................................................................................................................... GL-36
Real Estate, Loans Secured By ............................................................................................................. GL-36
Reciprocal Balances ............................................................................................................................ GL-36
Related Institutions ............................................................................................................................. GL-36
Repurchase/Resale Agreements ............................................................................................................ GL-37
Reserve Balances, Pass-through ............................................................................................................ GL-39
Securities Activities ............................................................................................................................. GL-39
Securities Borrowing/Lending Transactions .......................................................................................... GL-40
Securities, Participations in Pools of ..................................................................................................... GL-41
Servicing Assets and Liabilities ............................................................................................................ GL-41
Settlement Date Accounting ................................................................................................................ GL-42
Shell Branches .................................................................................................................................... GL-42
Short Position ..................................................................................................................................... GL-42
Standby Contract ............................................................................................................................... GL-42
Standby Letter of Credit ..................................................................................................................... GL-42
Suspense Accounts .............................................................................................................................. GL-42
Syndications ....................................................................................................................................... GL-42
Telephone Transfer Account ................................................................................................................ GL-43
Term Federal Funds ............................................................................................................................ GL-43
Time Deposits .................................................................................................................................... GL-43
Trade Date and Settlement Date Accounting ........................................................................................ GL-43
Trading Account ................................................................................................................................. GL-43
Transaction Account ........................................................................................................................... GL-44
Transactions with Related Institutions .................................................................................................. GL-44
Transfers of Financial Assets ............................................................................................................... GL-45
Traveler’s Letter of Credit ................................................................................................................... GL-50
U.S. Banks ......................................................................................................................................... GL-50
U.S. Income Taxes .............................................................................................................................. GL-50
Placements

CONTENTS-5
FFIEC 002

June 2012

Contents
........................................................................................................... GL-50
Valuation Allowance ........................................................................................................................... GL-50
When-Issued Securities Transactions .................................................................................................... GL-50
U.S. Territories and Possessions

CONTENTS-6
June 2012

FFIEC 002

INSTRUCTIONS FOR PREPARATION OF

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

General 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 statechartered 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. Reporting institutions are required to submit the report quarterly as of the last calendar day each
quarter. For institutions that do not wish to submit the
report electronically, 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. Institutions that wish
to submit the report electronically should contact their
district Reserve Bank or go to http://www.frbservices.org/
centralbank/index.html for procedures for electronic
submission. This website also includes a link that
reporters may use to contact the Federal Reserve Bank
of New York for technical assistance.

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
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FFIEC 002

June 2018

General Instructions

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

Scope of the Report
The report asks for data on the entire operation of the
branch or agency including its International Banking
Facility (“IBF”) if it has one, and also asks for separate
data on the IBF only.
In general, each U.S. branch or agency of a given foreign bank is required to ﬁle a separate report. No consolidation of statements for multiple branches and
agencies of a given foreign bank is permitted, except
that a foreign bank may submit to the appropriate Federal Reserve Bank a request to consolidate reports for
two or more offices, provided that (1) the offices are
located in the same city or metropolitan area and are in
the same state and Federal Reserve district, and (2) the
consolidated report does not combine agencies with
branches or insured branches with uninsured branches.
For purposes of this report, assets administered by the
reporting branch or agency’s trust department are not
to be consolidated into the reporting branch or agency’s assets. However, information concerning the
branch or agency’s trust activities must be reported in
Schedule T, “Fiduciary and Related Services,” beginning December 31, 2001. Assets held in or administered by the branch or agency’s trust department are

excluded from all of the other schedules of this report
except when trust funds are deposited by the trust
department of the reporting institution. When such
trust funds are deposited in the reporting institution,
they are to be reported as deposit liabilities in Schedule E in the deposit category appropriate to the
beneﬁciary. Interest paid on such deposits are to be
reported as part of the reporting institution’s unremitted proﬁts reported on Schedule M.
However, there are two exceptions: (1) uninvested trust
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

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September 2014

FFIEC 002

General Instructions

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.

Public Release of Individual Branch and
Agency Reports
This report and all its schedules submitted by each
reporting branch or agency will be made available to
the public upon request, except for Schedule M, “Due
from/Due to Related Institutions in the U.S. and in
Foreign 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.
A reporting institution may request conﬁdential treatment for some or all of the portions of the
FFIEC 002 that will be made publicly available if the
institution is of the opinion that disclosure of speciﬁc
commercial or ﬁnancial information in the report
would likely cause substantial harm to its competitive
position. In certain limited circumstances, the reporting institution’s primary federal supervisor may
approve conﬁdential treatment of some or all of the
items for which such treatment has been requested if
the institution has clearly provided a compelling
justiﬁcation for the request. A request for conﬁdential
treatment must be submitted in writing prior to the
submission of the report. The written request must
identify the speciﬁc items for which conﬁdential treatment is requested, provide justiﬁcation for the
conﬁdential treatment requested for the identiﬁed
items, and demonstrate the speciﬁc nature of the harm
that would result from public release of the information. Merely stating that competitive harm would
result is not sufficient. Information for which
conﬁdential treatment is requested may subsequently
be released by the reporting institution’s primary federal supervisor in accordance with the terms of
12 CFR 4.16 (OCC), 12 CFR 261.16 (Board), 12 CFR
309.6 (FDIC), or as otherwise provided by law.

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

Preparation of Information to be Reported
U.S. branches and agencies of foreign banks are
required to prepare and ﬁle the report in accordance
with these instructions. Questions on, and requests for
interpretations of, matters appearing in any part of
these instructions should be addressed to the Federal
Reserve Bank to which the reports are submitted.
The ﬁnancial records of the reporting branch or
agency shall be maintained in such a manner and scope
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FFIEC 002

June 2018

General Instructions

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 U.S. 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 U.S. 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 U.S. GAAP standards, branches and
agencies are encouraged to discuss the event or transaction with their primary federal supervisory authority
or with the Federal Reserve Bank to which their
reports are submitted.
Regardless of whether a branch or agency discusses a
reporting issue with its supervisory authority or the
appropriate Federal Reserve Bank, when the supervisory authority’s or the Federal Reserve Bank’s interpretation of how U.S. 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 U.S.
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 U.S. GAAP may be
issued. For example, the Glossary entry for “Nonaccrual Status” includes speciﬁc reporting guidance that
is within the range of U.S. 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 FASB Accounting Standards Codiﬁcation. For purposes of these
instructions, the FASB Accounting Standards
Codiﬁcation is referred to as “ASC.” Selected sections
of the ASC are referenced in the instructions where
appropriate. The accounting entries in the Glossary are
intended to serve as an aid in speciﬁc reporting situations rather than as a comprehensive statement on
branch and agency accounting.

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

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June 2019

FFIEC 002

General Instructions

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

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FFIEC 002

September 2014

INSTRUCTIONS FOR THE PREPARATION OF

Assets and Liabilities
Schedule RAL

General Instructions
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.
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.”

Items 1(b) and 1(c) Securities.
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 value in items 1(b) and 1(c). Equity
securities with readily determinable fair values are to
be reported at fair value in item 1(c).
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 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:

(1) Purchases of securities under agreements to
resell and sales of securities under agreements to
repurchase: These transactions are not to be
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treated as purchases or sales of securities but as
lending or borrowing (i.e., ﬁnancing) transactions collateralized by these securities if the
agreements meet the criteria for a borrowing set
forth in 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 by FASB Statement No. 156,
“Accounting for Servicing of Financial Assets,”
FASB Statement No. 166, “Accounting for
Transfers of Financial Assets,” and certain other
standards). Institutions must follow ASC Topic
860 for purposes of this report. 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.”

(4) Securities borrowed and lent: Securities borrowed and lent shall be reported as an asset of
either the borrowing or lending institution in
accordance with ASC Topic 860. For further
information, see the Glossary entries for “transfers of ﬁnancial assets” and “securities
borrowing/lending transactions.”

(2) 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 ASC Topic 860. 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).

(6) 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.

(3) 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 ASC Topic 860.

(5) 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 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.

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.

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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.

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

Include, among others, debt securities (but not
mortgage-backed securities) of the following U.S. government agencies:

(9) Student Loan Marketing Association (SLMA or
Sallie Mae)

(7) Financing Corporation (FICO)
(8) Resolution Funding Corporation (REFCORP)

(10) Tennessee Valley Authority (TVA)

(1) Export-Import Bank (Ex-Im Bank)

(11) U.S. Postal Service

(2) Federal Housing Administration (FHA)

Exclude from U.S. government agency obligations:

(3) Government National Mortgage Association
(GNMA or Ginnie Mae)

(1) Loans to the Export-Import Bank and to
federally-sponsored lending agencies (report in
Schedule C, part 1, item 8, “All other loans”).
Refer to the Glossary entry for “federallysponsored lending agency” for the deﬁnition of
this term.

(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 ExportImport 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
mortgage-backed securities) of the following
government-sponsored agencies:
(1) Federal Agricultural Mortgage Corporation
(Farmer Mac)
(2) Federal Farm Credit Banks
(3) Federal Home Loan Banks (FHLBs)
(4) Federal Home Loan Mortgage Corporation
(FHLMC or Freddie Mac)
(5) Federal Land Banks (FLBs)

(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
mortgage-backed 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, part 1, 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.
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
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information, refer to the Glossary entry for “foreign
governments and official institutions.”

(3) Participation certiﬁcates issued by the Export–
Import Bank and the General Services Administration (report in Schedule RAL, item 1(b)(2)).

Item 1(c)(2) Mortgage-backed securities.
Mortgage-backed securities include mortgage passthrough securities, collateralized mortgage obligations
(CMOs), real estate mortgage investment conduits
(REMICs), CMO and REMIC residuals, and stripped
mortgage-backed securities (such as interest-only strips
(IOs), principal-only strips (POs), and similar
instruments).

(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)”).

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.
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).

Item 1(c)(2)a. Mortgage-backed securities: Issued or
guaranteed by U.S. Government agencies
Report the appropriate value of all mortgage-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 appropriate value of all mortgage-backed
securities issued by non-U.S.-government issuers (e.g.,
other depository institutions, insurance companies,
and state and local housing authorities in the U.S.).
Item 1(c)(3) Other asset-backed securities.
Report the appropriate value of all asset-backed securities (other than mortgage-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,
sport-utility 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, singlepayment or installment), and all other asset-backed
securities collateralized by non-mortgage loans.

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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,
(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, part 1,
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, part 1, 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 non-U.S. addressees. In addition, any
securities reported in column A that were acquired by
the IBF as the result of defaulted loans should be
included in this item.
Item 1(d)(1) Federal funds sold.
Federal funds sold are immediately available funds lent
under agreements or contracts that mature in one business day or roll over under a continuing contract,
excluding such funds lent in the form of securities purchased under agreements to resell (which should be
reported in Schedule RAL, item 1(d)(2)) and overnight
lending for commercial and industrial purposes (which
generally should be reported in Schedule RAL,

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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 ASC Subtopic 210-20, Balance
Sheet – Offsetting (formerly FASB Interpretation
No. 39, “Offsetting of Amounts Related to Certain
Contracts”).
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.”

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;
(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
(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.

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

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 ASC Subtopic 210-20, Balance
Sheet—Offsetting (formerly FASB Interpretation
No. 41, “Offsetting of Amounts Related to Certain
Repurchase and Reverse Repurchase Agreements”).

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

Exclude from items 1(d)(2)a and 1(d)(2)b the
following:

(2) persons domiciled in foreign countries.

(1) Resale agreements involving assets other than
securities (report in Schedule RAL, item 1(d)(1),
“Federal funds sold,” or item 1(e), “Loans and
leases held for investment and held for sale” as
appropriate, depending on the maturity and
office location of the transaction).

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.

Item 1.d.(1)c. 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 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.

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

U.S. banks), and any other nonrelated institution or
organization located in the U.S. or abroad.

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

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

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

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

(2) the U.S. branches and agencies of foreign official
banking institutions including central banks,
nationalized banks, and other banking institutions owned by foreign governments; and
(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.
NOTE: In the IBF column, report securities purchased
under agreements to resell with:
(1) persons or other nonbank entities domiciled in
the U.S.; and
(2) persons domiciled in foreign countries.
Item 1.d.(2)c. Securities purchased under agreements
to resell with others.
In column A, report securities purchased under agreements to resell (as deﬁned above) with nonrelated institutions not covered in item 1.d.(2)a, 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

(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) Loans and leases held for investment and held
for sale.
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) 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 shortterm price movements; or (c) acquire or take positions
in such items as an accommodation to customers or for
other trading purposes shall report in items
1(f)(1) through 1(f)(5) the fair 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

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contained in ASC Subtopic 210-20, Balance Sheet—
Offsetting (formerly FASB Interpretation No. 39,
“Offsetting of Amounts Related to Certain Contracts”) (e.g., those contracts subject to a qualifying
master netting agreement) may be reported on a net
basis using this item and Schedule RAL, item 4(e),
“Trading liabilities,” as appropriate. For further information, see the Glossary entry for “offsetting.”
Do not include in this item the carrying value of any
securities that are available for sale or any loans or
leases that are held for sale. Available-for-sale securities
should be reported in Schedule RAL, item 1(b) or 1(c),
and in Schedule RAL, Memorandum items 3 and 4.
Loans and leases that are held for sale should be
reported in Schedule RAL, item 1(e), and in Schedule C.
Securities that the institution has elected to report at
fair value under the fair value option are reported as
trading securities pursuant to ASC Subtopic 825-10,
Financial Instruments—Overall (formerly FASB Statement No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities”), even though management did not acquire the securities principally for
the purpose of trading.
Item 1(f)(1) U.S. Treasury and Agency securities.
Report the fair value of all U.S. Treasury securities and
Government agency and corporation obligations held
for trading by the reporting branch or agency. Exclude
mortgage-backed securities.
Item 1(f)(2) Mortgage-backed securities.
Item 1(f)(2)(a) Issued or guaranteed by U.S.
Government agencies.
Report the fair value of all mortgage-backed securities
(as deﬁned in item 1.c.(2) above) 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) held for trading by the reporting
branch or agency. Also include REMICs issued by the
U.S. Department of Veterans Affairs (VA) held for
trading by the reporting branch or agency.

government issuers (e.g., other depository institutions,
insurance companies, and state and local housing
authorities in the U.S.) held for trading by the reporting branch or agency.
Item 1(f)(3) Other asset-backed securities.
Report the fair value of all other asset-backed securities (as deﬁned in item 1.c.(3) above), including assetbacked commercial paper, held for trading by the
reporting branch or agency. 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, sport utility
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.
Items 1(f)(4) Other securities.
Report the fair value of all other securities held for
trading by the reporting branch or agency. Include
securities issued by states and political subdivisions in
the U.S., securities of foreign governments and official
institutions, and all other bonds, notes and debentures
not reported in items 1.f.(1) through 1.f.(3) above, held
for trading by the reporting branch or agency.
Item 1(f)(5) 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:
(1) certiﬁcates of deposit;
(2) commercial paper;

Item 1(f)(2)(b) Other.
Report the fair value of all mortgage-backed securities
(as deﬁned in item 1.c.(2) above) issued by non-U.S.

(3) bankers acceptances;
(4) loans; and
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(5) derivatives with a positive fair value.
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.
Institutions that have adopted ASU 2016-13 should
exclude accrued interest receivable on interest-bearing
assets that is reported elsewhere on Schedule RAL.
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.
(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 ASC Subtopic 985-20, Software—
Costs of Software to Be Sold, Leased or Marketed (formerly FASB Statement No. 86,
“Accounting for the Cost of Computer Software
to Be Sold, Leased, or Otherwise Marketed”).
(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.
(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. For institutions that have
adopted ASU 2016-01 (see the General
Instructions for Schedule RAL, Memorandum items 1 through 4), report such stocks
and investments at (i) fair value or (ii) if
chosen by the reporting institution for an
equity investment that does not have a readily determinable fair value, at cost minus
impairment, if any, plus or minus changes
resulting from observable price changes in

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orderly transactions for the identical or similar investment of the same issuer.
(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).)

(16) Equity investments without readily determinable
fair values that are not reportable in other items
on Schedule RAL. An equity security does not
have a readily determinable fair value if sales
prices or bid-and-asked quotations are not currently available on a securities exchange registered
with the U.S. Securities and Exchange Commission (SEC) or are not publicly reported by the
National Association of Securities Dealers Automated Quotations systems or by OTC Markets
Group, Inc. The fair value of an equity security
traded only in a foreign market is not readily
determinable if that foreign market is not of a
breadth and scope comparable to one of the U.S.
markets referenced to above.
Equity investments that do not have readily determinable fair values may have been purchased by
the reporting institution or acquired for debts
previously contracted.
For institutions that have not adopted FASB
Accounting Standards Update No. 2016-01 (ASU
2016-01), which includes provisions governing the
accounting for investments in equity securities
(see the General Instructions for Schedule RAL,
Memorandum items 1 through 4), report equity
securities and other equity investments without
readily determinable fair values at historical cost.
These securities are outside the scope of ASC
Topic 320, Investments-Debt and Equity Securities (formerly FASB Statement No. 115,
“Accounting for Certain Investments in Debt and
Equity Securities”).
For institutions that have adopted ASU 2016-01,
report equity securities and other equity investments without readily determinable fair values at
(i) fair value or (ii) if chosen by the reporting
institution for an individual equity investment
that does not have a readily determinable fair
value, at cost minus impairment, if any, plus or
minus changes resulting from observable prices
changes in orderly transactions for the identical
or a similar investment of the same issuer. These
equity securities are within the scope of ASC
Topic 321, Investments-Equity Securities, or ASC
Topic 323, Investments-Equity Method and Joint
Ventures.

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Although Federal Reserve Bank stock and Federal Home Loan Bank stock do not have readily
determinable fair values, they are outside the
scope of ASC Topics 321 and 323. In accordance
with ASC Subtopic 942-325, Financial ServicesDepository and Lending—Investments-Other,
Federal Reserve Bank stock and Federal Home
Loan Bank stock are carried at cost and evaluated
for impairment.
(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-à-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”).
(4) Institutions that have adopted ASU 2016-13,
which governs the accounting for credit losses,
should exclude any accrued interest receivables on
financial assets that are reported elsewhere on
Schedule RAL.

Item 1(i) Total claims on nonrelated parties.
Report in this item the sum of items 1(a) through 1(h).
Item 2 Net due from related depository institutions.
All balances and positions due from and due to the
head office and related depository institutions should
be reported as a single net amount. If that single net
amount is a net due from, it should be entered in this
item; if the single net amount is a net due to, it should
be entered in Liability item 5. (Thus, there should be a
positive amount reported in either item 2 or item 5, but
not in both items, and neither item should show negative amounts.) The positions reported in item 2 or 5
should reﬂect all balances due from and due to the
head office and related depository institutions wherever located including unremitted proﬁts, any statutory
or regulatory capital requirement, and any reserve
accounts, and any allowance accounts. This includes
any allowance for loan losses, or, for institutions that
have adopted ASU 2016-13, any allowance for credit
losses.
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) For the IBF of the reporting branch or
agency.
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.”

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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-à-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
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 contracts 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 may be secured or unsecured or may involve
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 ASC Subtopic 210-20, Bal-

ance Sheet—Offsetting (formerly FASB Interpretation
No. 39, “Offsetting of Amounts Related to Certain
Contracts”).
Exclude from items 4(b)(1)a and 4(b)(1)b:
(1) Purchases of so-called “term federal funds” (as
deﬁned in the Glossary entry for “federal funds
transactions”) (report in Schedule RAL
item 4.c.).
(2) Security repurchase agreements that have an
original maturity 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.
(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;
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(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
purchased from:
(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) Federal Funds purchased with others.
In column A, report federal funds purchased (as
deﬁned above) from nonrelated institutions not covered in item 4.b.(1)a, such as other 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) Securities sold under agreements to
repurchase.
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.
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 ASC Subtopic 210-20, Balance
Sheet—Offsetting (formerly FASB Interpretation
No. 41, “Offsetting of Amounts Related to Certain
Repurchase and Reverse Repurchase Agreements”).
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 Sched-

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ule 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;

(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:

(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, 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 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.
Report the amount from Schedule P, item 4. For
detailed deﬁnitions, see the instructions to Schedule P.
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Item 4(d) Not applicable.
Item 4(e) Trading liabilities.
Report the amount of liabilities from the reporting
branch or agency’s trading activities. Include liabilities
resulting from sales of assets that the reporting branch
or agency does not own (see the Glossary entry for
“short position”) and revaluation losses from the
“marking to market” of derivative contracts into
which the reporting branch or agency has entered for
trading and similar purposes.
Revaluation gains and losses (i.e., assets and liabilities)
from the “marking to market” of the reporting institution’s derivative contracts executed with the same
counterparty that meet the criteria for a valid right of
setoff contained in ASC Subtopic 210-20, Balance
Sheet—Offsetting (formerly FASB Interpretation
No. 39, “Offsetting of Amounts Related to Certain
Contracts”) (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.

(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.

Some of the liabilities to be reported by the branch or
agency in this item include:

(2) Withheld taxes, social security taxes, sales taxes,
and similar items.

(1) Expenses accrued and unpaid.

(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.

(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.

(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.

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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-à-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 proﬁts, any statutory or regulatory capital requirement, and any reserve accounts,
and any allowance accounts. This includes any allowance for loan losses, or, for institutions that have
adopted ASU 2016-13, any allowance for credit losses.

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) For the IBF of the reporting branch or
agency.
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-à-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.a, 3.b, and 4:
Memorandum items 1 through 4 are for additional
information on the reporting branch or agency's securities reported in Schedule RAL, items 1(b) and 1(c),
which are securities not held for trading. MemoranRAL-17

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dum items 1 and 2 are for held-to-maturity securities
and Memorandum items 3.a and 3.b are for availablefor-sale securities.
Memorandum item 4 is for equity securities with readily determinable fair values not held for trading and is
to be completed only by institutions that have adopted
FASB Accounting Standards Update No. 2016-01
(ASU 2016-01), which includes provisions governing
the accounting for investments in equity securities,
including investments in mutual funds, and eliminates
the concept of available-for-sale equity securities. ASU
2016-01 requires holdings of equity securities (except
those accounted for under the equity method or that
result in consolidation), including other ownership
interests (such as interests in partnerships, unincorporated joint ventures, and limited liability companies),
to be measured at fair value with changes in fair value
recognized through net income. However, an institution may choose to measure equity securities and other
equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus
or minus changes resulting from observable price
changes in orderly transactions for the identical or a
similar investment of the same issuer.
Institutions that have not adopted ASU 2016-01
should leave Memorandum item 4 blank and report
the fair value and historical cost (not amortized cost)
of their holdings of equity securities with readily determinable fair values not held for trading as available-forsale equity securities in Schedule RAL, Memorandum
items 3.a and 3.b, respectively.
For institutions that are public business entities, as
defined in U.S. GAAP, ASU 2016-01 is effective for
fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For
example, an institution with a calendar year fiscal year
that is a public business entity must begin to apply
ASU 2016-01 in its FFIEC 002 for March 31, 2018.
For all other institutions, ASU 2016-01 is effective for
fiscal years beginning after December 15, 2018, and
interim periods within fiscal years beginning after
December 15, 2019. For example, an institution with a
calendar year fiscal year that is not a public business
entity must begin to apply ASU 2016-01 in its
FFIEC 002 for December 31, 2019. Early application
of ASU 2016-01 is permitted for all institutions that
are not public business entities as of fiscal years begin-

ning after December 15, 2017, including interim periods within those fiscal years.
For institutions that have not adopted ASU 2016-01,
the sum of Memorandum items 2 and 3.a must equal
the sum of items 1(b)(1), 1(b)(2), 1(c)(1), 1(c)(2),
1(c)(3), and 1(c)(4) of Schedule RAL. For institutions
that have adopted ASU 2016-01, the sum of Memorandum items 2, 3.a, and 4 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 on
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).
See the Glossary entry for “fair value” for further
information on this subject.

Memoranda Item Instructions
Item M1 Fair value of held-to-maturity securities.
Report the fair 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 Available-for-sale securities.
Item M3.a Fair value of available-for-sale securities.
For institutions that have adopted FASB Accounting
Standards Update No. 2016-01 (ASU 2016-01), report
the fair value of available-for-sale debt securities.
Exclude the fair value of equity securities with readily
determinable fair values not held for trading, which
should be reported in Schedule RAL, Memorandum
item 4.

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For institutions that have not adopted ASU 2016-01,
report the fair value of available-for-sale debt securities
and equity securities with readily determinable fair
values not held for trading (i.e., available-for-sale
equity securities).
Item M3.b Amortized cost of available-for-sale
securities.
For institutions that have adopted FASB Accounting
Standards Update No. 2016-01 (ASU 2016-01), report
the amortized cost of available-for-sale debt securities.
For institutions that have not adopted ASU 2016-01,
report the amortized cost of available-for-sale debt
securities and the historical cost of equity securities
with readily determinable fair values not held for trading (i.e., available-for-sale equity securities).
Item M4 Fair value of equity securities with readily
determinable fair values not held for trading.
Report the fair value of all investments in mutual funds
and other equity securities (as defined in ASC Topic
321, Investments-Equity Securities) with readily determinable fair values that are not held for trading. Such
securities include, but are not limited to, money market
mutual funds, mutual funds that invest solely in U.S.
Government securities, common stock, and perpetual
preferred stock. Perpetual preferred stock does not
have a stated maturity date and cannot be redeemed at
the option of the investor, although it may be redeemable at the option of the issuer.
According to ASC Topic 321, the fair value of an
equity security is readily determinable if sales prices or
bid-and-asked quotations are currently available on a
securities exchange registered with the U.S. Securities
and Exchange Commission (SEC) or in the over-thecounter 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 OTC
Markets Group Inc. (“Restricted stock” meets that
definition if the restriction terminates within one year.)
The fair value of an equity security traded only in 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. The fair value of an
investment in a mutual fund (or in a structure similar
to a mutual fund, i.e., a limited partnership or a venture capital entity) is readily determinable if the fair

value per share (unit) is determined and published and
is the basis for current transactions.
Investments in mutual funds and other equity securities with readily determinable fair values may have
been purchased by the reporting institution or
acquired for debts previously contracted.
Include in this item common stock and perpetual preferred stock of the Federal National Mortgage Association (Fannie Mae), common stock and perpetual
preferred stock of the Federal Home Loan Mortgage
Corporation (Freddie Mac), Class A voting and Class
C non-voting common stock of the Federal Agricultural Mortgage Corporation (Farmer Mac), and common and preferred stock of SLM Corporation (the
private-sector successor to the Student Loan Marketing Association).
Exclude from equity securities with readily determinable fair values not held for trading:
(1) Paid-in stock of a Federal Reserve Bank (report
as an equity investment without a readily determinable fair value in Schedule RAL, item 1(h)).
(2) Stock of a Federal Home Loan Bank (report as
an equity investment without a readily determinable fair value in Schedule RAL, item 1(h)).
(3) Common and preferred stocks that do not have
readily determinable fair values, such as stock of
bankers' banks and Class B voting common stock
of the Federal Agricultural Mortgage Corporation (Farmer Mac) (report in Schedule RAL,
item 1.(h)).
(4) Preferred stock that by its terms either must be
redeemed by the issuing enterprise or is redeemable at the option of the investor (i.e., redeemable
or limited-life preferred stock), including trust
preferred securities subject to mandatory redemption (report such preferred stock as an other debt
security in Schedule RAL, item 1(c)(4)).
(5) “Restricted stock,” i.e., equity securities for which
sale is restricted by governmental or contractual
requirement (other than in connection with being
pledged as collateral), except if that requirement
terminates within one year or if the holder has
the power by contract or otherwise to cause the
requirement to be met within one year (if the
restriction does not terminate within one year,
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report "restricted stock" as an equity investment
without a readily determinable fair value in
Schedule RAL, item 1(h)).
(6) Participation certificates issued by a Federal
Intermediate Credit Bank, which represent nonvoting stock in the bank (report as an equity
investment without a readily determinable fair
value in Schedule RAL, item 1(h)).
(7) Minority interests held by the reporting institution in any companies not meeting the definition
of associated company (report as equity investments without readily determinable fair values in
Schedule RAL, item 1(h)), and minority holdings
that indirectly represent bank premises or other
real estate owned (report in Schedule RAL,
item 1(h)), provided that the fair value of any
capital stock representing the minority interest is
not readily determinable.
(8) Equity holdings in those corporate joint ventures
over which the reporting institution does not
exercise significant influence (report as equity
investments without readily determinable fair
value in Schedule RAL, item 1(h)), and equity
holdings that indirectly represent bank premises
or other real estate owned (report in Schedule RAL, item 1(h)).
(9) Holdings of capital stock of and investments in
unconsolidated subsidiaries, associated companies, and those corporate joint ventures over
which the reporting bank exercises significant
influence (report in Schedule RAL, item 1(h)).
Item M5 Loans held for trading.
Item M5.a 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) Loans secured by 1–4 family residential
properties.
Report the total fair value of all open-end and closedend loans secured by 1–4 family residential properties

(as defined for Schedule C, part I, item 1.c) held for
trading.
Include:
(1) 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.
(2) Closed-end loans secured by first and junior liens
on 1–4 family residential properties (as defined
for Schedule C, part I, item 1.c.(2)) held for
trading.
Item M5.a.(2) All other loans secured by real estate
Report the total fair value of all other loans secured by
real estate held for trading.
Include:
(1) Construction, land development, and other land
loans (as defined for Schedule C, part I, item 1.a)
held for trading.
(2) Loans secured by farmland (as defined for Schedule C, part I, item 1.b) held for trading.
(3) Loans secured by multifamily (5 or more) residential properties (as defined for Schedule C, part I,
item 1.d) held for trading.
(4) 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 Memorandum 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).

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Item M6 Unpaid principal balance of loans held for
trading.

pal balance of loans measured at fair value that are
secured by real estate reported in Schedule RAL,
Memorandum item 5.

Item M6.a Loans secured by real estate.
In column A, report in the appropriate subitem the
unpaid principal balance of loans measured at fair
value that are secured by real estate reported in Schedule RAL, Memorandum item 5. In column B, IBFs are
to report in the appropriate subitem the unpaid princi-

Item M6.a.(1) Loans secured by 1–4 family residential
properties.
Report the total unpaid principal balance outstanding
for all loans secured by 1–4 family residential properties held for trading reported in Schedule RAL, Memorandum item 5.a.(1).

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Include:

(1) 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.
(2) Closed-end loans secured by first and junior
liens on 1–4 family residential properties (as
defined for Schedule C, part I, item 1.c.(2)) held
for trading.
Item M6.a.(2) All other loans secured by real estate.
Report the total unpaid principal balance outstanding
for all other loans secured by real estate held for trading
reported in Schedule RAL, Memorandum item 5.a.(2).
Include:

(1) Construction, land development, and other land
loans (as defined for Schedule C, part I,
item 1.a) held for trading.
(2) Loans secured by farmland (as defined for
Schedule C, part I, item 1.b) held for trading.
(3) Loans secured by multifamily (5 or more) residential properties (as defined for Schedule C,
part I, item 1.d) held for trading.
(4) Loans secured by nonfarm nonresidential properties (as defined for Schedule C, part I,
item 1.e) held for trading.
Item M6.b Commercial and industrial loans.
Report the unpaid principal balance of loans of commercial and industrial loans reported in memorandum
item 5.b.
Item M6.c Other loans.
Report the unpaid principal 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.

Items M7 and M8 Structured notes.
Report in Memorandum items 7 and 8 all structured
notes included in the held-to-maturity and availablefor-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 asset-backed securities
(other than mortgage-backed securities) which possess
the aforementioned characteristics. Exclude from
structured notes all “inﬂation indexed” securities
issued by the U.S. Treasury.
Structured notes include, but are not limited to, the
following common structures:

(1) Floating rate debt securities whose payment of
interest is based upon a single index of a Constant Maturity Treasury (CMT) rate or a Cost
of Funds Index (COFI).
(2) Step-up Bonds. Step-up securities initially pay
the investor an above-market yield for a short
noncall period and then, if not called, “step up”
to a higher coupon rate (which will be below
current market rates). The investor initially
receives a higher yield because of having implicitly sold one or more call options. A step-up
bond may continue to contain call options even
after the bond has stepped up to the higher coupon rate. A multistep bond has a series of ﬁxed
and successively higher coupons over its life. At
each call date, if the bond is not called, the coupon rate increases.
(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

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Schedule RAL

rate and LIBOR. These bonds often have a ﬁxed
coupon rate for a brief period, followed by a
longer period of variable rates, e.g., 8 percent
ﬁxed for two years, then the 10-year CMT rate
plus 300 basis points minus three-month
LIBOR.

(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.
(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 con
tain 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. Examples of such callable securities
that should not be reported as structured notes include:

(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).
(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 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
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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 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
ASC Subtopic 210-20, Balance Sheet—Offsetting (formerly FASB Interpretation No. 39, “Offsetting of
Amounts Related to Certain Contracts”) (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 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
ASC Subtopic 210-20, Balance Sheet—Offsetting (formerly FASB Interpretation No. 39, “Offsetting of
Amounts Related to Certain Contracts”) (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).

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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).

Exclude from “auditing work performed” any tax or
consulting work regardless of whether it was performed by an independent certiﬁed public accounting
ﬁrm or others.

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

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.

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 independent external auditors 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.

Statutory or Regulatory Requirement
As appropriate for the reporting institution.

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.) FDICinsured 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
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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.
Item S3(a) Average liabilities for the preceding
calendar quarter.
Report the average book value of the liabilities of the
branch for the calendar quarter preceding the quarterending on the report date, calculated in accordance
with Section 347.210 of the FDIC’s Rules and Regulations. The average book value for a quarter is exclusive

of liabilities due to the parent bank’s head office, other
branches, agencies, offices, or wholly owned subsidiaries and shall be, at the branch or agency’s option, either
an average of the balances as of the close of business
for each day for the quarter or an average of the balances as of the close of business on each Wednesday
during the quarter. For days on which the branch is
closed, the amount outstanding from the previous
business day is to be used.
Item S3(b) Eligible assets as of the report date.
Report the total amount of assets in the respondent’s
portfolio as of the report date that is eligible to satisfy
the FDIC asset maintenance requirement. The exclusions from eligibility are speciﬁed in Section 347.210(b)
of the FDIC’s Rules and Regulations.

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INSTRUCTIONS FOR THE PREPARATION OF

Cash and Balances Due From
Depository Institutions
Schedule A

General Instructions

Exclude from this schedule:

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

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

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

(2) Loans to depository institutions (report in Schedule C, part I, 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 institutions that have already been forwarded for collection but for which the reporting
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June 2018

Schedule A

institution has not yet been given credit (“cash
letters”), and checks or drafts on hand that will
be presented for payment or forwarded for collection on the following business day. However, if
the reporting institution has been given immediate credit for checks or drafts deposited with its
correspondent, report the amount of such checks
or drafts in item 3, “Balances due from depository institutions in the U.S.,” or item 4, “Balances
due from banks in foreign countries and foreign
central banks,” as appropriate.
(2) Government checks drawn on the Treasurer of
the United States or any other government
agency that are payable immediately upon presentation and that are in process of collection.
(3) Such other items in process of collection, payable
immediately upon presentation in the United
States, as are customarily cleared or collected by
depository institutions as cash items, including:
(a) Amounts associated with automated payment arrangements in connection with payroll deposits, federal recurring payments,
and other items that are credited to a depositor’s account prior to the payment date to
ensure that the funds are available on the
payment date.
(b) Federal Reserve deferred account balances
until credit has been received in accordance
with the appropriate time schedules established by the Federal Reserve Banks. At that
time, such balances should be reported in
item 5, “Balances due from Federal Reserve
Banks.”
(c) Brokers’ security drafts and commodity or
bill-of-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
immediately charged against the deposits of the
drawer. Such items may be regarded as drawn on the
reporting institution and reported as unposted debits
when they have been paid or credited but have not yet
been charged against deposit liabilities at the close of
business on a given date.
Exclude from cash items in process of collection:
(1) Cash items for which the reporting institution has
already received credit (report in item 3, 4, or 5
below, as appropriate).
(2) Items handled as noncash collection items (to be
reported in Schedule RAL, item 1(h), “Other
assets including other claims on nonrelated
parties”).
(3) Such cash items in process of collection which are
included in item 3 of this schedule, “Balances due
from depository institutions in the U.S.”
(4) Commodity or bill-of-lading drafts (including
arrival drafts) not yet payable (because the merchandise against which the draft was drawn has
not yet arrived), whether or not deposit credit has
been given. (If deposit credit has been given,
report as loans in the appropriate item of Schedule C; if the drafts were received on a collection
basis, they should be excluded entirely from
Schedule RAL until the funds have actually been
collected.)
(5) Credit or debit card sales slips in process of collection (report as noncash items in Schedule
RAL, item 1(h), “Other assets including other
claims on nonrelated parties”). However, when
the reporting institution has been notiﬁed that it
has been given credit, the amount of such sales
slips should be reported in item 3, “Balances due
from depository institutions in the U.S.,” or
item 4, “Balances due from banks in foreign
countries and foreign central banks,” as
appropriate.
Item 2 Currency and coin (U.S. and foreign).
Report all currency and coin (both U.S. and foreign)
owned and held in the reporting institution’s vaults;
currency and coin in transit to a Federal Reserve Bank,

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Schedule A

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 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).
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.”)
Exclude from item 3:
(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, part I, 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
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Schedule A

(3) nonrelated U.S. and foreign banks domiciled in
Puerto Rico and in U.S. territories and
possessions.

central banks should include all balances with such
entities, including reserve, operating, and investment
balances.

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

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.

Item 4 Balances due from banks in foreign countries
and foreign central banks.
For the reporting branch or agency including its IBF,
report balances due from banks in foreign countries
and foreign central banks.

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

Banks in foreign countries include:
(1) foreign-domiciled branches of U.S. banks; and
(2) foreign-domiciled branches of other foreign
banks.
See the Glossary entry for “banks, U.S. and foreign”
for a description of banks in foreign countries.
For purposes of this item, foreign central banks cover:
(1) central banks in foreign countries;
(2) departments of foreign central governments that
have, as an important part of their functions,
activities similar to those of a central bank;
(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
noninterest-bearing 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

Exclude from item 4:

(2) loans to foreign central banks (report in Schedule C, part I, item 6);
(3) loans to banks in foreign countries (report in
Schedule C, part I, 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 5 Balances due from Federal Reserve Banks.
Report the total balances due from Federal Reserve
Banks as shown by the reporting institution’s books.
This amount includes required reserve, excess, and
clearing 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. If the reporting
institution is an agent for an excess balance account at
a Federal Reserve Bank, the balances in the excess balance account should not be reﬂected as an asset or a
liability on the reporting institution’s balance sheet and
should not be reported in this item. (See the Glossary
entries for “excess balance account” and “passthrough reserve balances.”)
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.

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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. For institutions that have adopted ASU 201613, the allowance for loan losses is the allowance for
credit losses on loans and leases. 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 (hypoth-

ecated 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 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.
If the bank has elected to apply the fair value option to
any loans held for investment or held for sale, it must
also report the fair value and unpaid principal balance
of these loans in the appropriate subitems of Schedule Q, Memorandum items 3 and 4, respectively.
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 parC-1

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March 2019

Schedule C

tial 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 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.
(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

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Schedule C

change in circumstances, it must rebook any of
these mortgages because one or more of the conditions for sale accounting in 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 by FASB Statement No. 156, “Accounting for Transfers of
Financial Assets,” FASB Statement No. 166,
“Accounting for Transfers of Financial Assets,”
and certain other standards), 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.
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 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
closed-end 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 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.
(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).
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
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Schedule C

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.
(2) 5 or more unit housekeeping dwellings with commercial units combined where use is primarily
residential.
(3) Cooperative-type apartment buildings containing
5 or more dwelling units.
Exclude loans for multifamily residential property construction and land development purposes and loans
secured by vacant lots in established multifamily residential sections or in areas set aside primarily for multifamily residential properties (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).
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 and
loans secured by vacant lots in established nonfarm
nonresidential sections or in areas set aside primarily
for nonfarm nonresidential properties (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.”
Include as loans to depository institutions and acceptances of other banks:
(1) Loans to depository institutions for the purpose
of purchasing or carrying securities.
(2) Loans to depository institutions for which the
collateral is a mortgage instrument and not the
underlying real property. Report loans to depository institutions where the collateral is the real
estate itself, as evidenced by mortgages or similar
liens, in item 1.
(3) Purchases of mortgages and other loans under
agreements to resell that do not involve the lending of immediately available funds or that mature
in more than one business day, if acquired from
depository institutions.
(4) Certain participations in pools of loans (other
than residential mortgages), if issued by depository institutions. (See the Glossary entry for
“transfers 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.

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(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).

reported in item 4, “Commercial and industrial
loans”).
(12) Acceptances accepted by the reporting branch or
agency, discounted, and held in its portfolio,
when the account party is not another depository
institution. Such acceptances are reported in
other items of Schedule C according to the
account party.
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

(5) Loans to finance companies and insurance companies (report as all other loans in item 3).

(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).

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

Refer to the Glossary entry for “banks, U.S. and foreign” and “international banking facility (IBF)” for
further discussion of these terms.

(7) Loans to Small Business Investment Companies
(report as all other loans in item 8).
(8) Loans to lenders other than brokers, dealers, and
banks whose principal business is to extend credit
for the purpose of purchasing or carrying securities (as described in Federal Reserve Regulation U) and loans to “plan lenders” (as defined in
Federal Reserve Regulation G) (report as loans
for purchasing or carrying securities in item 7).
(9) Loans to federally-sponsored lending agencies
(report as all other loans in item 8). Refer to the
Glossary entry for “federally-sponsored lending
agency” for the definition of this term.
(10) Loans to any related depository institutions
(report in Schedule M).
(11) Loans secured by production payments (e.g.,
shares in future oil or mining production) (to be

Loans to and acceptances of commercial banks in the
U.S. include all loans and all other instruments evidencing loans to operating commercial banks and their
branches in the U.S., including their IBFs. Loans to
and acceptances of U.S.-chartered banks that are
owned by foreign banks or by foreign official banking
institutions should be included in item 2(a)(2), “Loans
to other commercial banks in the U.S.”
Exclude from items 2(a)(1) and 2(a)(2) loans to other
depository institutions such as mutual savings banks,
savings and loan associations, and credit unions
(report in item 2(b) below).
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
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Columbia, Puerto Rico, and U.S. territories and
possessions.

Exclude from loans to other depository institutions in
the U.S.:

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

(1) All transactions reportable in Schedule RAL,
item 1(d), “Federal funds sold and securities purchased under agreements to resell.”

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

(2) Loans to and acceptances of commercial banks
(including IBFs) in the U.S. (report in
item 2(a) above).

(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.

(3) Loans to brokers and dealers in securities and
loans to investment trusts of the mutual fund or
the closed-end types that hold stock for investment purposes (to be reported in item 7, “Loans
for purchasing or carrying securities”).

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) To other commercial banks in the U.S.
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) To other depository institutions in the U.S.
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.:

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.

(3) savings or building and loan associations;

Loans to banks in foreign countries include all loans
(including overdrafts) and all other instruments that
represent loans to operating banks and their branches
domiciled outside the 50 states of the United States,
the District of Columbia, Puerto Rico, and U.S. territories and possessions.

(4) cooperative banks;

Exclude from items 2(c)(1) and 2(c)(2):

(1) credit unions;
(2) mutual or stock savings banks;

(5) industrial banks; and
(6) other similar depository institutions.

(1) Loans to U.S. branches and agencies of foreign
banks (report in item 2(a) above).

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(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.
(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 col-

lateral 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 closed-end types that hold stock for investment purposes. These should be reported against
item 7, “Loans for purchasing or carrying
securities.”
(3) Loans to financial corporations whose sole function is to borrow money and relend it to its affiliated companies or a corporate joint venture in
which an affiliated company is a joint venturer.
Item 4 Commercial and industrial loans.
For the reporting branch or agency, report in the
appropriate subitem loans for commercial and industrial purposes to sole proprietorships, partnerships,
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corporations, and other business enterprises, whether
secured (other than by real estate) or unsecured, singlepayment 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.

(6) Loans made to finance construction that are not
secured by real estate.
(7) Loans to merchants or dealers on their own
promissory notes secured by the pledge of their
own installment paper.
(8) Loans extended under credit cards and related
plans that are readily identifiable as being issued
in the name of a commercial or industrial
enterprise.
(9) Dealer flooring or floor-plan loans.
(10) Loans collateralized by production payments
(e.g., oil or mining production payments). Treat
as a loan 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 min-

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ing production payments serve as collateral which
are to be reported in this item.
(7) Holdings of acceptances accepted by other banks
(report in item 2).
(8) Holdings of own acceptances when the account
party is another bank (report in item 2) or a foreign government or official institution (report in
item 6).
(9) Equipment trust certificates (report in Schedule RAL, item 1(c)(4)).
(10) Any commercial and industrial loans held for
trading purposes (report on Schedule RAL,
item 1(f), “Trading assets”).
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 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).
(2) Loans to U.S. branches and agencies of foreign
official banking institutions (report as a loan to a
commercial bank in the U.S. in item 2(a)(1)).
(3) Loans to foreign-government-owned nonbank
corporations and enterprises (report in item 3, 4,
or 8 as appropriate).
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.
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(d) Loans to investment companies and mutual
funds, but excluding loans to Small Business
Investment Companies (reported in item 8).
(e) Loans to “plan lenders” as defined in Section 221.4(a) of Federal Reserve Regulation U.
(f) Loans to lenders other than brokers, dealers,
and banks whose principal business is to
extend credit for the purpose of purchasing
or carrying securities.
but excluding loans to finance an acquirer’s purchase of the stock of another entity in a merger
or acquisition that meets the definition of a business combination under U.S. generally accepted
accounting principles (and which may include
funds to cover acquisition-related costs incurred
to effect the business combination).
For purposes of the FFIEC 002, the purpose of
a loan collateralized by “stock” is determined as
follows:
• For loans that are collateralized in whole or in
part by “margin stock,” as defined by Federal
Reserve Regulation U, the purpose of the loan
is determined by the latest Statement of Purpose (Form FR U-1) on file.
• For loans that are collateralized by “stock”
other than “margin stock,” the bank may
determine the purpose of the loan according
to the most current information available.

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).

Exclude from loans for purchasing or carrying
securities:

(5) Loans and advances made to the reporting institution’s own trust department.

(1) Loans to nonrelated banks in foreign countries
that act as brokers and dealers in securities
(report in item 2(c)).

(6) Loans to Small Business Investment Companies.

(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) 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).

(7) Obligations (other than securities and leases) of
states and political subdivisions in the U.S.
Report here obligations of states and political
subdivisions in the United States (including
planned and unplanned overdrafts and obligations secured by real estate), other than those
obligations reported 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.

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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 ASC Topic 320, Investments-Debt
and Equity Securities (formerly FASB Statement
No. 115, “Accounting for Certain Investments in
Debt and Equity Securities”), must be measured
in accordance with ASC Topic 320.
Treatment of other obligations of states and
political subdivisions in the U.S. In addition to
those IDBs that are reported in this item in
accordance with the preceding paragraph,
include as obligations (other than securities and
leases) of states and political subdivisions in the
U.S., all other obligations except those that meet
any of the following criteria:
(a) Industrial development bonds (IDBs) that
are reported as securities in accordance with
the reporting treatment described above
(report as securities in Schedule RAL,
item 1(c)(4)).
(b) Notes, bonds, and debentures (including tax
warrants and tax-anticipation notes) that
are rated by a nationally-recognized rating

service (report as securities in Schedule RAL, item 1(c)(4)).
(c) Mortgage-backed securities issued by state
and local housing authorities (report as
securities in Schedule RAL, item 1(c)(2)).
(d) Obligations of state and local governments
that are guaranteed by the U.S. government
(report as securities in Schedule RAL,
item 1(c)(4)).
(e) Nonrated obligations of states and political
subdivisions in the U.S. that the reporting
institution considers securities for other
financial reporting purposes (report as securities in Schedule RAL, item 1(c)(4)).
(f) Lease financing receivables of states and
political subdivisions in the U.S. (report as
leases in item 9 below).
(g) Obligations of states and political subdivisions in the U.S. held in trading accounts
(report in Schedule RAL, item 1(f)).
(8) Loans to federally-sponsored lending agencies.
Refer to the Glossary entry for “federallysponsored 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 nonU.S. addressees (item 9(b)). Include all outstanding
receivable balances relating to direct financing and leveraged leases on property acquired by the branch or
agency for leasing purposes. These balances should
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include the estimated residual value of leased property
and must be net of unearned income. For further discussion of leases where the branch or agency is the lessor, refer to the Glossary entry for “lease accounting.”
Include all lease financing receivables of states and
political subdivisions in the U.S.

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

Item 9(b) Of non-U.S. addressees (domicile)
Report all outstanding receivable balances relating to
direct financing and leveraged leases on property
acquired by the branch or agency for leasing to nonU.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 held for investment and
held for sale.
Report the sum of items 1 through 9 less the amount
reported in item 10. The amounts in columns A and B
must equal Schedule RAL, item 1(e), columns A and
B, respectively.

Memoranda
Item M1 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.

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Item M4 Commercial and industrial loans with
remaining maturity of more than one year (excluding
those in nonaccrual status).
Report in the proper subitems below the amount outstanding on the report date of commercial and industrial loans (the sum of items 4(a) and 4(b) of this
schedule, column A) which have a remaining maturity
(from the report date until the final contractual maturity
date) of more than one year. Exclude demand loans,
loans with no stated repayment schedule and no stated
maturity, and overdrafts, which should be reported in
Memorandum item 3 above. Exclude those loans and
leases that are reported as nonaccrual in Schedule N,
column C.
Item M4(a) With predetermined interest rates.
Report in this item those commercial and industrial
loans with remaining maturity of more than one year
with fixed or predetermined interest rates. The definition of this type of rate is found in Memorandum
item 3(a) above.
Item M4(b) With floating interest rates.
Report in this item those commercial and industrial
loans with a remaining maturity of more than one year
with floating interest rates. The definition of this type
of rate is found in Memorandum item 3(b) above.

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

(2) Loans (excluding those held in the branch’s IBF)
with original amounts of $1 million or less that
have been reported in Schedule C, part I,
item 4(a), column A, “Commercial and industrial
loans to U.S. addressees.”
For purposes of this schedule, “loans to small farms”
consist of the following:
(1) Loans secured by farmland (including farm residential and other improvements) (excluding those
held in the branch’s IBF) with original amounts
of $500,000 or less that have been reported in
Schedule C, part I, item 1, column A, “Loans
secured by real estate,” and
(2) Loans to finance agricultural production and
other loans to farmers (excluding those held in
the branch’s IBF) with original amounts of
$500,000 or less that have been reported in Schedule C, part I, item 8, column A, “All other loans.”
The following guidelines should be used to determine
the “original amount” of a loan:
(1) For loans drawn down under lines of credit or
loan commitments, the “original amount” of the
loan is the 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 curC-13

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rently outstanding for a category of loans in this part
II, multiple loans to one borrower should be combined
and reported on an aggregate basis rather than as separate individual loans to the extent that the loan systems
in which the branch’s business and/or farm loan data
are maintained can provide aggregate individual borrower data without undue cost to the reporting institution. However, if the burden of such aggregation
would be excessive, the institution may report multiple
loans to one borrower as separate individual loans.
A branch that offers “corporate” or “business” credit
card programs under which credit cards are issued to
one or more of a company’s employees for businessrelated 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 totaled 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 Not applicable.
Item 2 Number and amount currently outstanding of
“Loans secured by nonfarm nonresidential properties”
(excluding those held in the branch’s IBF) reported in
Schedule C, part I, item 1, column A, “Loans secured
by real estate.”
See the General Instructions to this part II for the
guidelines for determining the “original amount” of a
loan. Multiple loans to one borrower should be combined and reported on an aggregate basis rather than
as separate individual loans to the extent that the loan
systems in which the branch’s business and/or farm
loan data are maintained can provide aggregate individual borrower data without undue cost to the reporting institution. However, if the burden of such aggregation would be excessive, the institution may report
multiple loans to one borrower as separate individual
loans.
The sum of the amounts currently outstanding
reported in items 2(a) through 2(c), column B, must be
less than or equal to Schedule C, part I, item 1, column
A minus column B.
Item 2(a) With original amounts of $100,000 or less.
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.

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

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 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 be less than or equal to Schedule C, part I, item 1, column A minus column B.
Item 4(a) With original amounts of $100,000 or less.
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) 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.

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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 equal to Schedule C, part I, item 8, column
A minus column B.
Item M5(a) With original amounts of $100,000 or
less.
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 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.
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Schedule C

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 this loan to the borrower in the
original amount of $250,000, so it would be considered a “loan to a small business” and would be
reported in Schedule C, part II. Because the original amount of the loan is exactly $250,000 which

is the upper end of the more than $100,000
through $250,000 range, the branch would report
the $200,000 amount currently outstanding in
part II, item 3(b), column B.
(4) The branch has a second “Commercial and industrial loan to a U.S. addressee” (not held in its
IBF) which has a carrying value on the June 30
report date of $90,000 and this amount is
included in Schedule C, part I, item 4(a), column
A. The branch made this loan to the borrower in
the original amount of $500,000 and sold loan
participations for $400,000 while retaining
$100,000. Nevertheless, based on the entire
amount of the credit that was originated by the
branch, the loan would be considered a “loan to a
small business” and would be reported in Schedule C, part II. Because the original amount of the
entire loan is $500,000 which falls within the more
than $250,000 through $1,000,000 range, the
branch would report the $90,000 amount currently outstanding in part II, item 3(c), column B.
(5) The branch has a third “Commercial and industrial loan to a U.S. addressee” (not held in its
IBF) which has a carrying value on the June 30
report date of $55,000 and this amount is
included in Schedule C, part I, item 4(a), column
A. This loan represents a participation purchased
by the branch from another lender. The original
amount of the entire credit is $750,000 and the
branch’s original share of this credit was $75,000.
Based on the entire amount of the credit that was
originated by the other lender, the loan would be
considered a “loan to a small business” and
would be reported in Schedule C, part II. Because
the original amount of the entire credit is
$750,000 which falls within the more than
$250,000 through $1,000,000 range, the branch
would report the $55,000 amount currently outstanding in part II, item 3(c), column B.
(6) The branch has another “Commercial and industrial loan to a U.S. addressee” (not held in its
IBF) and it has a carrying value on the June 30
report date of $120,000. This amount is included
in Schedule C, part I, item 4(a), column A. This
loan represents a participation purchased by the
branch from another lender. The original amount
of the entire credit is $1,250,000 and the branch’s

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original share of this credit was $250,000.
Because the original amount of the entire credit
exceeds $1,000,000, the loan would not be considered a “loan to a small business” and would not
be reported in Schedule C, part II.
(7) The branch has a “Loan secured by nonfarm
nonresidential property” (not held in its IBF) and
a “Commercial and industrial loan to a U.S.
addressee” (not held in its IBF) to the same borrower. The first loan has a carrying value on the
June 30 report date of $375,000 and this amount
is included in Schedule C, part I, item 1, column
A. This “Loan secured by nonfarm nonresidential
property” was made in the original amount of
$400,000. The second loan has a carrying value
on the June 30 report date of $650,000 and this
amount is included in Schedule C, part I,
item 4(a), column A. This “Commercial and
industrial loan to a U.S. addressee” was made in
the original amount of $750,000.
Case I: The branch’s loan system can provide
aggregate individual borrower data without
undue cost to the reporting institution. The loan
system indicates that this borrower’s two loans
have a combined original amount of $1,150,000
and therefore the loans would not be considered
“loans to a small business” and would not be
reported in Schedule C, part II.
Case II: The branch’s loan system cannot provide
aggregate individual borrower data without
undue cost to the reporting institution. Therefore,
the borrower’s two loans would be treated as
separate loans for purposes of Schedule C, part
II. Based on its $400,000 original amount, the
“Loan secured by nonfarm nonresidential property” would be considered a “loan to a small business” and would be reported in Schedule C, part
II. Because the original amount of the loan falls
within the more than $250,000 through
$1,000,000 range, the branch would report the
$375,000 amount currently outstanding in part II,
item 2(c), column B, and count this loan as one
loan for purposes of part II, item 2(c), column A.
Since the “Commercial and industrial loan to a
U.S. addressee” is being handled separately and
its original amount is $750,000, it would also be
considered a “loan to a small business” and

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

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

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Schedule C

rower 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.

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

Definitions
The term “deposits” is defined in the Glossary and
generally follows the definitions of deposits used in the
Federal Deposit Insurance Act and in Federal Reserve
Regulation D.
Reciprocal balances between the reporting branch or
agency and other depository institutions may be
reported on a net basis when a right of setoff exists. See
the Glossary entry for “offsetting” for the conditions
that must be met for a right of setoff to exist. For further information, see the “Glossary” entry for “reciprocal balances.”
For the appropriate treatment of deposits of depository institutions for which the reporting branch or
agency is serving as a pass-through agent for federal
required reserves, see the Glossary entry for “passthrough 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.
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Schedule E

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

branches must be reported as unposted credits in
Schedule O, item 2.
(4) Payments collected by the branch or agency on
loans secured by real estate and other loans serviced for others that have not yet been remitted to
the owners of the loans.
(5) Funds received from customers and held for the
eventual application to the reduction of outstanding acceptances or where the receipt thereof
does not immediately reduce or extinguish the
indebtedness.
(6) Credit balances, as defined in the Glossary, are
those liabilities held by U.S. agencies of foreign
banks that are defined as such by state law or federal regulation. For purposes of this report, they
are included as part of transaction accounts.
(7) Funds received or held in connection with checks
or drafts drawn by the reporting branch or agency
and drawn on, or payable at or through, another
depository institution either on a zero-balance
account or on an account that is not routinely
maintained with sufficient balances to cover
checks drawn in the normal course of business
(including accounts where funds are remitted by
the reporting branch or agency only when it has
been advised that the checks or drafts have been
presented).
(8) Funds received or held in connection with traveler’s checks and money orders sold (but not
drawn) by the reporting branch or agency, until
the proceeds of the sale are remitted to another
party, and funds received or held in connection
with such other checks used (but not drawn) by
the reporting branch or agency, until the amount
of the checks is remitted to another party.
(9) Checks drawn by the reporting branch or agency
on, or payable at or through, a Federal Reserve
Bank or a Federal Home Loan Bank.
(10) Refundable loan commitment fees received or
held by the reporting branch or agency prior to
loan closing.
In addition, the gross amount of debit items (“throwouts,” “bookkeepers’ cutbacks,” or “rejects”) that cannot be posted to the individual deposit accounts without creating overdrafts or for some other reason (e.g.,

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Schedule E

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

Summary of Transaction Account
Classifications
(See the Glossary entry for “deposits” for detailed definitions and further information.)
Always regarded as transaction accounts:
(1) Demand deposits.
(2) NOW accounts.
(3) ATS accounts.
(4) Accounts (other than savings deposits) from
which payments may be made to third parties by
means of an automated teller machine (ATM), a
remote service unit (RSU), or another electronic
device, including by debit card.
(5) Accounts (other than savings deposits) that permit third party payments through use of checks,
drafts, negotiable instruments, or other similar
instruments.
Deposits or accounts that are regarded as transaction
accounts if the following specified conditions exist:
(1) Accounts that otherwise meet the definition of
savings deposits but that authorize or permit the
depositor to exceed the transfer and withdrawal
rules for a savings deposit.

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

Column Instructions
Deposits as summarized above are divided into two
general categories, “Transaction Accounts” (columns
A and B) and “Nontransaction Accounts” (column C).
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Schedule E

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
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,
both interest-bearing and noninterest-bearing. Also
include 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 noninterest-bearing 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, regardless of whether they
are transaction or nontransaction accounts.
NOTE: Balances due from IBFs of related depository
institutions are excluded from this schedule and
reported in Schedule M. Amounts in this column
should exclude federal funds purchased and securities
sold under agreements to repurchase (which are
reported in Schedule RAL, item 4(b), as appropriate).
Other borrowed money from non-related institutions
should be reported in Schedule P.

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 as deposits of “Individuals, partnerships, and corporations,” “Foreign governments
and official institutions,” or “Commercial banks in the
U.S.” based on the beneficial owners of the funds that
the broker has placed in the institution. However, if
this information is not readily available to the issuing
institution for certain brokered deposits because current deposit insurance rules do not require the deposit
broker to provide information routinely on the beneficial owners of the deposits and their account ownership capacity to the institution issuing the deposits,
these brokered deposits may be rebuttably presumed to
be deposits of “Individuals, partnerships, and corporations” and reported in Schedule E, item 1, below. 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 indi-

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Schedule E

viduals 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:
(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:
(d) Banks for Cooperatives,
(e) Export–Import Bank of the U.S.,
(f) Federal Deposit Insurance Corporation,
(g) Federal Financing Bank,
(h) Federal Home Loan Banks,
(i) Federal Home Loan Mortgage Corporation,
(j) Federal Intermediate Credit Banks,
(k) Federal Land Banks,
(l) Federal National Mortgage Association,
(m) National Credit Union Administration Central Liquidity Facility,
(n) National Credit Union Share Insurance
Fund.
(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.
(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:
(o) Unpaid depositors’ checks that have been
certified.
(p) 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.
(q) 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).
(r) 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.
(s) Checks drawn by the reporting branch or
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Schedule E

eral Reserve Bank or a Federal Home Loan
Bank.
(t) 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.
(u) 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.
(v) 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).

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 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 facility (IBF)” for further discussion of these terms.

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.”)

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.

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.

For the appropriate treatment of deposits of depository institutions for which the reporting institution is
serving as a pass-through correspondent for federal
required reserves, see the Glossary entry for “pass-

(5) The head office or other related depository institutions (report in Schedule M).

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through reserve balances.” For the appropriate treatment of deposits of depository institutions for which
the reporting institution is acting as an agent for an
excess balance account at a Federal Reserve Bank, see
the Glossary entry for “excess balance account.”
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). Exclude deposits of U.S.chartered banks owned by foreign banks or by foreign
official banking institutions (to be reported in
item 2(b) below).
Item 2(b) Other commercial banks in the U.S.
Report in the appropriate column (as described above
under “Column Instructions”) deposits of U.S.domiciled offices of other commercial banks. Exclude
deposits of any of these institutions that are related to
the reporting institution (report in Schedule M).
For purposes of this item, “banks” include national
banks, state-chartered commercial banks, trust companies performing a commercial banking business, industrial banks, IBFs of commercial banks other than U.S.
branches and agencies of foreign banks, private banks
(including regulated-certificated banks) performing a
commercial banking business, and Edge and Agreement corporations that are domiciled in the 50 states of
the United States, District of Columbia, Puerto Rico,

or U.S. territories and possessions. Include all U.S.chartered banks owned by foreign banks or by foreign
official banking institutions (but not their U.S.domiciled branches and agencies, which are included in
item 2(a) above). Reciprocal demand balances of these
other commercial banks should be reported net.
Item 3 Deposits of banks in foreign countries.
Report in the appropriate column all deposits of nonrelated banks located in foreign countries. For purposes of this item, nonrelated banks in foreign countries include:
(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.
Item 3(a) Foreign branches of U.S. banks.
Report in the appropriate column all deposits of foreign (non-U.S.) branches of nonrelated (1) U.S. banks
and (2) Edge and Agreement corporations. Exclude
deposits of foreign-domiciled banking subsidiaries of
nonrelated U.S. banks and Edge and Agreement corporations (report in item 3(b) below).
Item 3(b) Other banks in foreign countries.
Report in the appropriate column all deposits of nonrelated foreign-domiciled commercial banks, savings
banks, discount houses, and other similar foreigndomiciled institutions that accept deposits. Include
deposits of foreign-domiciled banking subsidiaries
(but not branches which are reported in
item 3(a) above) of both nonrelated U.S. banks and
nonrelated Edge and Agreement corporations.
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Item 4 Deposits of foreign governments and official
institutions.
Report in the appropriate column all deposits of foreign governments and official institutions (including
foreign central banks). (See the Glossary entry for “foreign governments and official institutions” for the definition of this term.)
Exclude from this item deposits and credit balances of:
(1) U.S. branches and agencies of foreign official
banking institutions (report in item 2(a) above).
(2) 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:
(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 open-ended 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
quasi-governmental 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.
(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;

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Schedule E

(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 “pass-through 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, both interest-bearing and
noninterest-bearing. 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 Memorandum items
M1(a) through M1(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 outstanding balances of $100,000 or
more, regardless of negotiability or transferability.

Include in this item time certificates of deposit and
open-account time deposits with balances of $100,000
or more. Exclude from this item all time deposits issued
to deposit brokers in the form of large ($100,000 or
more) certificates of deposit that have been participated out by the broker in shares of less than $100,000.
(See the Glossary entry for “deposits” for the definition of time deposits.)
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.
Exclude deposits in “Section 457” deferred compensation plans and self-directed defined contribution plans,
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 deposits of $100,000 or more with
remaining maturity of more than 12 months included in
Memorandum item 1(a), “Total time deposits of
$100,000 or more,” above.
Enter the dollar amount outstanding of all time deposits included in item 7, column C, and in Memorandum
item 1(a), above, regardless of negotiability or transferability, with outstanding balances of $100,000 or more
and with a 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.

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September 2011

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 oneday 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.

Assets
Item 1 Interest-bearing balances due from depository
institutions.
This item corresponds in definition to the interestbearing 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, 4, and
5, column A, of Schedule A, i.e., “Balances due from
depository institutions in the U.S.,” “Balances due
from banks in foreign countries and foreign central

banks,” and “Balances due from Federal Reserve
Banks,” minus all noninterest-bearing balances due
from these entities.
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 Total loans and leases held for investment and
held for sale.
This item corresponds directly to item 1(e) of Schedule RAL, “Loans and leases held for investment and
held for sale.”
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,
part I.
Item 5 Total claims on nonrelated parties.
Report the quarterly average for total claims on nonrelated parties. For institutions that have not adopted
ASU 2016-01, 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. For institutions that have
adopted ASU 2016-01, this item corresponds to
item 1(i) of Schedule RAL, except that this quarterly
average should reflect all debt securities not held for
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Schedule K

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.)
Item 7 Interest-bearing deposits and credit balances.
This item corresponds to the interest-bearing component of Schedule RAL, item 4(a), “Total deposits and
credit balances.” See the Glossary entry for “deposits”
for the definition of “interest-bearing deposit
accounts.”

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

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.

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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 ASC Topic 815,
Derivatives and Hedging (formerly FASB Statement
No. 133, “Accounting for Derivative Instruments and
Hedging Activities,” as amended), 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.
Include commitments to issue a commitment at some
point in the future, where the bank has extended terms,
the borrower has accepted the offered terms, and the
extension and acceptance of the terms:

(1) Are in writing, regardless of whether they are
legally binding on the bank and the borrower, or
(2) If not in writing, are legally binding on the bank
and the borrower1,
even though the related loan agreement has not yet
been signed and even if the commitment to issue a
commitment is revocable, provided any revocation has
not yet taken effect as of the report date.
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.

1. For example, either the extension or the acceptance of the terms
or both are verbal, but they are nonetheless legally binding on both parties under applicable law.

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Schedule L

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 (nonU.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 cross-currency 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 (and all legally binding commitments to issue
standby letters of credit) issued by the reporting
branch or agency, including its IBF, or acquired from
others. Include those standby letters of credit that are
collateralized by cash on deposit and those in which
participations have been conveyed to others where
(a) the originating branch or agency, including its IBF,
is 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.)
Include standby letters of credit issued by the reporting
branch or agency that insure the timely payment of
principal and interest on debt issuances, including debt
issued by the foreign parent bank.
Originating branches or agencies, including their IBFs,
also must report the amount of standby letters of
credit conveyed to others through participations in
item 3(b). Branches or agencies, including their IBFs,

participating in such arrangements must report in
item 3(a) the full amount of their contingent liabilities
to participate in such standby letters of credit without
deducting any amounts that they may have reparticipated to others. Participating branches or agencies,
including their IBFs, also must report the amount of
participation interests in such transactions they have
reparticipated to others, if any, in item 3(b).
For syndicated standby letters of credit where each
institution or branch or agency has a direct obligation
to the beneficiary, each financial institution must
report only its share in the syndication. Similarly, if
several financial institutions participate in the issuance
of a standby letter of credit under a bona fide binding
agreement which provides that (a) regardless of any
event, each participant shall be liable only up to a certain percentage or to a certain amount and (b) the beneficiary is advised and has agreed that each participant
is only liable for a certain portion of the entire amount,
each bank or branch or agency shall report only its
proportional share of the total standby letter of credit.
For a standby letter of credit that is in turn backed by a
standby letter of credit issued by another financial
institution, each branch or agency, including its IBF,
must report the entire amount of the standby letter of
credit it has issued in item 3(a) The amount of the
branch or agency’s standby letter of credit must be
included in item 3(b) since the backing of a standby
letter of credit 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.”

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Schedule L

Item 3(a)(2) To non-U.S. addressees (domicile).
Report the amount of standby letters of credit (as
defined in item 3) to foreign (non-U.S.) addressees. The
distinction between U.S. addressees and non-U.S.
addressees is determined by the domicile of the
account party, not the domicile of the beneficiary. See
the Glossary entry for “domicile.”
Item 3(b) Amount of total standby letters of credit in
item 3(a) conveyed to others through participations.
Report that portion of the branch or agency’s (including its IBF’s) total contingent liability for standby letters of credit reported in items 3(a)(1) and 3(a)(2) that
the branch or agency has conveyed to others. Participations and backings may be for any part or all of a given
obligation. Also, include that portion of the branch or
agency’s standby letters of credit reported in items
3(a)(1) and 3(a)(2) that are backed by other banks’
standby letters of credit.
Item 4 Commercial and similar letters of credit.
Report the amount outstanding and unused as of the
report date of issued or confirmed commercial letters
of credit, travelers’ letters of credit not issued for
money or its equivalent, and all similar letters of credit,
but excluding standby letters of credit (which are to be
reported in item 3 above). Legally binding commitments to issue commercial letters of credit are also to
be reported in this item. (See the Glossary entry for
“letter of credit.”)
Travelers’ letters of credit or other letters of credit
issued for money or its equivalent by the reporting
branch or agency or its agents should be reported as
demand deposit liabilities in Schedule E.
Item 5 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.
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,
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Schedule L

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. 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
ASC Topic 820, Fair Value Measurements and Disclosures (formerly FASB Statement No. 157, “Fair Value
Measurements”), 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 ½ 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. 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:”

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Schedule L

(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 ASC
Topic 815, Derivatives and Hedging (formerly
FASB Statement No. 133, “Accounting for
Derivative Instruments and Hedging Activities,”
as amended) (and therefore not reported as forward contracts in Schedule L, item 9(b) below).
(6) Risk participations that the reporting branch or
agency has acquired in acceptances of other
(accepting) banking institutions.
(7) Financial guarantees issued by the reporting
branch or agency that insure the timely payment
of principal and interest on debt issuances,
including debt issued by the foreign parent bank.
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 ASC Topic 815, 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.
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
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Schedule L

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 ASC Topic 815, Derivatives and
Hedging (formerly FASB Statement No. 133,
“Accounting for Derivative Instruments and Hedging
Activities,” as amended) (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 ASC Topic 815,
Derivatives and Hedging (formerly FASB Statement
No. 133, “Accounting for Derivative Instruments and
Hedging Activities,” as amended). Report each contract according to its underlying risk exposure: interest
rate, foreign exchange, equity, and commodity and
other. Contracts with multiple risk characteristics
should be classified based upon the predominant risk
characteristics at the origination of the derivative.
However, exclude all credit derivatives, which should be
reported in Schedule L, Memorandum item 1 or 2.
The notional amount to be reported for a derivative
contract with a multiplier component is the contract’s
effective notional amount or par value. For example, a
swap contract with a stated notional amount of
$1,000,000 whose terms called for quarterly settlement
of 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
Column A, Interest Rate Contracts: Interest rate contracts are contracts related to an interest-bearing financial instrument or whose cash flows are determined by
referencing interest rates or another interest rate contract (e.g., an option on a futures contract to purchase
a Treasury bill). These contracts are generally used to
adjust the branch or agency’s interest rate exposure or,
if the branch or agency is an intermediary, the interest
rate exposure of others. Interest rate contracts include
interest rate futures, single currency interest rate swaps,
basis swaps, forward rate agreements, and interest rate
options, including caps, floors, collars, and corridors.
Exclude contracts involving the exchange of one or
more foreign currencies (e.g., cross-currency swaps and
currency options) and other contracts whose predominant risk characteristic is foreign exchange risk, which
are to be reported in column B as foreign exchange
contracts.
Unsettled securities transactions that exceed the regular way settlement time limit that is customary in each
relevant market must be reported as forward contracts
in Schedule L, item 9(b).
Column B, Foreign Exchange Contracts: Foreign
exchange contracts are contracts to purchase foreign
(non-U.S.) currencies and U.S. dollar exchange in the
forward market, i.e., on an organized exchange or in an
over-the-counter market. A purchase of U.S. dollar
exchange is equivalent to a sale of foreign currency.
Foreign exchange contracts include cross-currency
interest rate swaps where there is an exchange of principal, forward foreign exchange contracts (usually settling three or more business days from trade date), and
currency futures and currency options. Exclude spot
foreign exchange contracts which are to be reported in
Schedule L, item 2.

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

Item 9(a) Futures contracts.
Futures contracts represent agreements for delayed
delivery of financial instruments or commodities in
which the buyer agrees to purchase and the seller
agrees to deliver, at a specified future date, a specified
instrument at a specified price or yield. Futures contracts are standardized and are traded on organized
exchanges.
Report, in the appropriate column, the aggregate par
value of futures contracts that have been entered into
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.
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Schedule L

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 commodities such as agricultural products (e.g., wheat,
coffee), precious metals (e.g., gold, platinum), and nonferrous metals (e.g., copper, zinc). Include any other
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 ASC Topic 815, Derivatives and Hedging (formerly
FASB Statement No. 133, “Accounting for Derivative
Instruments and Hedging Activities,” as amended), as
a regular security trade Report commitments to purchase when-issued securities that are excluded from the
requirements of ASC Topic 815 as “All other offbalance sheet contingent liabilities” in Schedule L,
item 7, and commitments to sell when-issued securities

that are excluded from the requirements of ASC Topic
815 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 properties that meet the definition of a
derivative contract under ASC Topic 815.
Column B, Foreign Exchange Forwards: Report the
gross amount (stated in U.S. dollars) of all forward
contracts committing the reporting branch or agency
to purchase foreign (non-U.S.) currencies and U.S. dollar exchange and whose predominant risk characteristic is foreign exchange risk.
A forward foreign exchange contract is an agreement
for delayed delivery of a foreign (non-U.S.) currency or
U.S. dollar exchange in which the buyer agrees to purchase and the seller agrees to deliver, at a specified
future date, a specified amount at a specified exchange
rate.
Column C, Equity Derivative Forwards: Report forward
contracts committing the reporting branch or agency
to purchase or sell equity instruments.
Column D, Commodity and Other Forwards: Report the
contract amount for all forward contracts committing
the reporting branch or agency to purchase or sell commodities such as agricultural products (e.g., wheat,
coffee), precious metals (e.g., gold, platinum), and nonferrous metals (e.g., copper, zinc). Include any other
forward contract that is not reportable as an interest
rate, foreign exchange, or equity derivative contract in
column A, B, or C.
Item 9(c) Exchange-traded option contracts.
Option contracts convey either the right or the obligation, depending upon whether the reporting branch or
agency is the purchaser or the writer, respectively, to
buy or sell a financial instrument or commodity at a
specified price by a specified future date. Some options
are traded on organized exchanges.

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

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 a specified future date. Options can
be written to meet the specialized needs of the counterparties to the transaction. These customized option
contracts are known as over-the-counter (OTC)
options. Thus, 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 compensa-

tion (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 ASC Topic 815, Derivatives and Hedging (formerly FASB Statement No. 133, “Accounting for
Derivative Instruments and Hedging Activities,” as
amended), are considered options for 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
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 sells. For interest rate collars and corridors, report a notional amount for the

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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.
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 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
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Schedule L

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.
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 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 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 ASC Topic 820, Fair Value Measurements and Disclosures (formerly FASB Statement
No. 157, “Fair Value Measurements”), fair value is the
amount at which an asset (liability) could be bought
(incurred) or sold (settled) in a current transaction
between willing parties, that is, other than in a forced
or liquidation sale. Quoted market prices in active markets are the best evidence of fair value and should be
used as the basis for the measurement, if available. If a
quoted market price is available, the fair value is the
product of the number of trading units times that market price. If a quoted market price is not available, the
estimate of fair value should be based on the best information available in the circumstances. The estimate of
fair value should consider prices for similar assets or
similar liabilities and the results of valuation techniques to the extent available in the circumstances. For
purposes of item 12, the reporting branch or agency
should determine the fair value of its derivative contracts in the same manner that it determines the fair
value of these contracts for other financial reporting
purposes.
Item 12(a) Contracts held for trading.
Report in the appropriate column and subitem the
gross positive and gross negative fair values of those

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Schedule L

contracts held for trading reported in Schedule L,
item 10 above.
Item 12(a)(1) Gross positive fair value.
Report in the appropriate column the total fair value of
those contracts in Schedule L, item 10 above with positive fair values.
Item 12(a)(2) Gross negative fair value.
Report in the appropriate column the total fair value of
those contracts in Schedule L, item 10 above with
negative fair values. Report the total fair value as an
absolute value, do not enclose the total fair value in
parentheses or use a minus (−) sign.
Item 12(b) Contracts held for purposes other than
trading.
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.

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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, or, for institutions that have
adopted ASU 2016-13, which governs the accounting
for credit losses, the allowances for credit losses on
financial assets, as applicable, 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.
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
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Schedule M

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;
(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 or, for institutions that have adopted
ASU 2016-13, allowances for credit 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 ASC Topic 815, Derivatives and Hedging (formerly FASB Statement
No. 133, “Accounting for Derivative Instruments
and Hedging Activities,” as amended), 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 ASC Topic 815.
(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 off-balance sheet items) resulting in
claims between the reporting branch or agency
(including its IBF) and its head office and other
related depository institutions.

The coverage and reporting of the gross due from items
and the gross due to items must be such that their net
amount as calculated and reported on item 4 of Part I
equals the entry for net due from or for net due to, as
appropriate, as calculated from Schedule RAL and
reported on item 2(a), column A, or item 5(a), column
A, of Schedule RAL.

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
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” (non-U.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—

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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 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”).
Institutions that have adopted ASU 2016-13, which
governs the accounting for credit losses, report the

allowances for credit losses, as applicable, in column B.
If an institution chooses to establish them, the allowances for credit losses reportable in this item could
apply to loans, leases, other financial assets measured
at amortized cost and off-balance sheet credit exposures (but not available-for-sale securities, which are
reported at fair value on Schedule RAL).
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 sub-divided
into two geographic components—
Item 2(b)(1) Offices of the parent bank in the
Caribbean.
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) Other non-U.S. offices of the parent bank.
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.
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 simiM-3

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Schedule M

larly 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-à-vis its head office and
other related depository institutions as given by the
difference reported on item 4 must equal the net due
from or net due to position given in Schedule RAL,
item 2(a) or item 5(a), as appropriate. If these Schedule RAL and Schedule M net amounts are not the
same, the coverage and reporting of transactions with
related depository institutions on items 1 and 2 of
Schedule M has not been consistent with the reporting
of items in Column A of Schedule RAL and must be
corrected to make them consistent.

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 cur-

rency 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) Related depository offices domiciled in the
U.S.
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 Trading assets and liabilities, related parties.
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 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 ASC
Subtopic 210-20, Balance Sheet—Offsetting (formerly
FASB Interpretation No. 39, “Offsetting of Amounts
Related to Certain Contracts”), (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

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Schedule M

agency) and, in item 2, for the net due from position of
the reporting institution’s IBF vis-à-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.
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 (−) 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 (−)
must be entered preceding the amount. (This net position between the reporting branch or agency and its
own IBF is not included in Part I above.)
Item 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 (−) must be entered
preceding the amount. The net due from or net due to
position of the reporting institution’s IBF vis-à-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
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Schedule M

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:

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
wholly-owned, 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,1 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.
Institutions that have adopted ASU 2016-13, which
governs the accounting for credit losses, report the
allowance for credit losses on loans and leases, as applicable, in item 1.
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.
(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
1. Institutions that have adopted ASU 2016-13 should report the
allowance for credit losses on loans and leases.

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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 assetby-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 ASC Subtopic
360-20, Property, Plant, and Equipment – Real
Estate Sales (formerly 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, reduced profit, or percentage-of-completion method of accounting under
ASC Subtopic 360-20 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 ASC
Subtopic 360-20.
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 non-related 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 ASC Topic 815,
Derivatives and Hedging (formerly FASB Statement
No. 133, “Accounting for Derivative Instruments and
Hedging Activities,” as amended), 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
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Schedule M

commitment. Such commitments are to be reported
regardless of whether they contain “material adverse
change” clauses or other provisions that are intended
to relieve the issuer of its funding obligations under
certain conditions and regardless of whether they are
unconditionally cancellable at any time. In the case of
commitments for syndicated loans or participated
loans, report only the branch or agency’s (or IBF’s)
proportional share of the commitment.
Include loan proceeds that the branch or agency,
including its IBF, is obligated to advance to related
depository institutions.
Item 2 Spot foreign exchange contracts.
Report the gross amount (stated in U.S. dollars) of all
spot contracts with related depository institutions
committing the reporting branch or agency to purchase foreign (non-U.S.) currencies and U.S. dollar
exchange that are outstanding as of the report date.
A spot contract is an agreement for the immediate
delivery, usually within two business days, of a foreign
currency at the prevailing cash market rate. Spot contracts are considered outstanding (i.e., open) until they
have been cancelled by acquisition or delivery of the
underlying currencies.
Only one side of a spot foreign exchange contract is to
be reported. In those transactions where foreign (nonU.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 cross-currency 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 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.)
Include standby letters of credit issued by the reporting
branch or agency to related depository institutions that
insure the timely payment of principal and interest on
debt issuances.
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

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clearing of negotiable instruments or securities in the
normal course of business.

fair value of credit derivatives should not be included
in Schedule M, item 12.

Item 4 Commercial and similar letters of credit.
Report the amount outstanding and unused as of the
report date of issued or confirmed commercial letters
of credit, travelers’ letters of credit not issued for
money or its equivalent, and all similar letters of credit
issued to related depository institutions, but excluding
standby letters of credit issued to related depository
institutions (which are to be reported in item 3 above).
(See the Glossary entry for “letter of credit.”)

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.

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 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 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

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
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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. 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
ASC Topic 820, Fair Value Measurements and Disclosures (formerly FASB Statement No. 157, “Fair Value
Measurements”), 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.
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
under-writing 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 shortterm 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.

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(2) Letters of indemnity, other than those issued in
connection with the replacement of lost or stolen
official checks, where the party being indemnified
is a related depository institution.
(3) Shipside or dockside guarantees or similar guarantees relating to missing bills-of-lading or title
documents and other document guarantees that
facilitate the replacement of lost or destroyed
documents and negotiable instruments where the
party being guaranteed is a related depository
institution.
(4) Securities borrowed against collateral (other than
cash), or on an uncollateralized basis, from
related depository institutions. For borrowed
securities that are fully collateralized by similar
securities of equivalent value, report the market
value of the borrowed securities at the time they
were borrowed. For other borrowed securities,
report their market value as of the report date.
(5) Commitments to purchase when-issued securities
from related depository institutions that are
excluded from the requirements of ASC Topic
815, Derivatives and Hedging (formerly FASB
Statement No. 133, “Accounting for Derivative
Instruments and Hedging Activities,” as
amended) (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 acquired in acceptances of related
(accepting) depository institutions.
(7) Financial guarantees issued by the reporting
branch or agency to related depository institutions that insure the timely payment of principal
and interest on debt issuances.
Exclude from “other off-balance sheet contingent
liabilities” to related depository institutions:
(1) All liabilities to related depository institutions
which are required to be reported in Schedule RAL as part of the reporting institution net
due from/due to relationship with related depository institutions, such as repurchase agreements
with related depository institutions.
(2) Commitments to related depository institutions
to purchase property being acquired for lease to
others (report in Schedule L, item 1, above).

(3) Contingent liabilities arising in connection with
litigation in which the reporting branch or
agency, including its IBF, is involved.
(4) Any unused portion of retail credit cards, check
credit, and related plans.
(5) Signature or endorsement guarantees of the type
associated with the regular clearing of negotiable
instruments or securities in the normal course of
business.
(6) Commitments to sell foreign currencies and U.S.
dollar exchange (spot and forward) to related
depository institutions.
Item 8 All other off-balance sheet contingent claims
(assets) on related depository institutions greater than
or equal to 1⁄2 percent of total claims on related
depository institutions as reported on Schedule M,
Part I, item 3, column A.
Report to the extent feasible and practicable all significant types of off-balance sheet contingent claims
(assets) on related depository institutions not covered
in other items in Part V of this schedule. Exclude all
items which are required to be reported as claims on
related depository institutions in Schedule RAL as
part of the reporting institution net due from/due to
relationship with related depository institutions, such
as resale agreements with related depository institutions, and assets held in or administered by the reporting branch or agency’s trust department.
Report only the aggregate amount of those types of
“other off-balance sheet contingent claims” on related
depository institutions that individually equal or
exceed one half percent of the reporting institution’s
total claims on related depository institutions (Schedule M, Part I, item 3, column A). If the branch or
agency has no types of “other off-balance sheet contingent claims” on related depository institutions that
individually equal or exceed one half percent of total
claims on related depository institutions, report a zero
or the word “none.”
In addition, itemize with clear but concise captions
those types of “other off-balance sheet contingent
claims” on related depository institutions reportable in
this item that individually equal or exceed one percent
of the institution’s total claims on related depository
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institutions (Schedule M, Part I, item 3, column A).
Enter such items in the inset boxes provided.

ent bank, may qualify for hedge accounting if it meets
the criteria outlined in the guidance.

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 ASC
Topic 815, Derivatives and Hedging (formerly FASB
Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended) (and
therefore not reported as forward contracts in Schedule M, Part V, item 9(b) below).

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.

Item 9 Gross amounts (e.g., notional amounts) of
derivatives.
Report in the appropriate column and subitem the
gross par value (stated in U.S. dollars) (e.g., for futures,
forwards, and option contracts) or the notional
amount (stated in U.S. dollars) (e.g., for forward rate
agreements and swaps), as appropriate, of all contracts
between the reporting branch or agency and related
depository institutions that meet the definition of a
derivative and must be accounted for in accordance
with ASC Topic 815, Derivatives and Hedging (formerly FASB Statement No. 133, “Accounting for
Derivative Instruments and Hedging Activities,” as
amended). 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 ASC Topic 815, intercompany derivatives between a U.S. branch or agency and a related
party, including the reporting branch or agency’s par-

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

Column Instructions
Column A, Interest Rate Contracts: Interest rate contracts are contracts related to an interest-bearing financial instrument or whose cash flows are determined by
referencing interest rates or another interest rate contract (e.g., an option on a futures contract to purchase
a Treasury bill). These contracts are generally used to
adjust the branch or agency’s interest rate exposure or,
if the branch or agency is an intermediary, the interest
rate exposure of others. Interest rate contracts include
interest rate futures, single currency interest rate swaps,
basis swaps, forward rate agreements, and interest rate
options, including caps, floors, collars, and corridors.
Exclude contracts involving the exchange of one or
more foreign currencies (e.g., cross-currency swaps and
currency options) and other contracts whose predominant risk characteristic is foreign exchange risk, which
are to be reported in column B as foreign exchange
contracts.
Unsettled securities transactions that exceed the regular way settlement time limit that is customary in each
relevant market must be reported as forward contracts
in Schedule 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

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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 (nonU.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.
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 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.
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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 nonferrous 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 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 ASC Topic 815, Derivatives and Hedging (formerly
FASB Statement No. 133, “Accounting for Derivative
Instruments and Hedging Activities,” as amended), as
a regular-way security trade. Report commitments to
purchase when-issued securities that are excluded from
the requirements of ASC Topic 815 as “All other offbalance sheet contingent liabilities” in Schedule M,
Part V, item 7, and commitments to sell when-issued
securities that are excluded from the requirements of

ASC Topic 815 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 ASC Topic 815.
Column B, Foreign Exchange Forwards: Report the
gross amount (stated in U.S. dollars) of all forward
contracts committing the reporting branch or agency
to purchase foreign (non-U.S.) currencies and U.S. dollar exchange and whose predominant risk characteristic is foreign exchange risk.
A forward foreign exchange contract is an agreement
for delayed delivery of a foreign (non-U.S.) currency or
U.S. dollar exchange in which the buyer agrees to purchase and the seller agrees to deliver, at a specified
future date, a specified amount at a specified exchange
rate.
Column C, Equity Derivative Forwards: Report forward
contracts committing the reporting branch or agency
to purchase or sell equity instruments.
Column D, Commodity and Other Forwards Report the
contract amount for all forward contracts committing
the reporting branch or agency to purchase or sell commodities such as agricultural products (e.g., wheat,
coffee), precious metals (e.g., gold, platinum), and nonferrous metals (e.g., copper, zinc). Include any other
forward contract that is not reportable as an interest
rate, foreign exchange, or equity derivative contract in
column A, B, or C.
Item 9(c) Exchange-traded option contracts.
Option contracts convey either the right or the obligation, depending upon whether the reporting branch or
agency is the purchaser or the writer, respectively, to
buy or sell a financial instrument or commodity at a
specified price by a specified future date. Some options
are traded on organized exchanges.
The buyer of an option contract has, for compensation
(such as a fee or premium), acquired the right (or

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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 exchangetraded options that are traded on organized exchanges
that act as the counter-party 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 (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 con tracts
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
exchange-traded option contracts where the reporting
branch or agency has obligated itself, for compensa-

tion, 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, exchangetraded 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 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.
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Column D, Purchased Exchange-Traded Commodity
and Other Exchange-Traded Options: Report the contract amount for those exchange-traded option contracts where the reporting branch or agency has, for a
fee or premium, purchased the right to purchase or sell
a commodity or product. Include any other purchased,
exchange-traded option that is not reportable as an
interest rate, foreign exchange, or equity derivative contract in column A, B, or C.
Item 9(d) Over-the-counter option contracts.
Option contracts convey either the right or the obligation, depending upon whether the reporting branch or
agency is the purchaser or the writer, respectively, to
buy or sell a financial instrument or commodity at a
specified price by a specified future date. Options can
be written to meet the specialized needs of the counterparties to the transaction. These customized option
contracts are known as over-the-counter (OTC)
options. Thus, 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) 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. 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 ASC Topic 815,
Derivatives and Hedging (formerly FASB Statement
No. 133, “Accounting for Derivative Instruments and
Hedging Activities,” as amended), 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
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 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.

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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 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
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
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Schedule M

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 (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 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 ASC Topic 820, Fair Value Measurements and Disclosures (formerly FASB Statement
No. 157, “Fair Value Measurements”), 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 tech-

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Schedule M

niques to the extent available in the circumstances. For
purposes of item 12, the reporting branch or agency
should determine the fair value of its derivative contracts in the same manner that it determines the fair
value of these contracts for other financial reporting
purposes.
Item 12(a) Contracts held for trading.
Report in the appropriate column and subitem the
gross positive and gross negative fair values of those
contracts held for trading reported in Schedule M,
Part V, item 10 above.
Item 12(a)(1) Gross positive fair value.
Report in the appropriate column the total fair value of
those contracts in Schedule M, Part V, item 10 above
with positive fair values.
Item 12(a)(2) Gross negative fair value.
Report in the appropriate column the total fair value of
those contracts in Schedule M, Part V, item 10 above
with negative fair values. Report the total fair value as

an absolute value, do not enclose the total fair value in
parentheses or use a minus (−) sign.
Item 12(b) Contracts held for purposes other than
trading.
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 M, Part V, 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 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, donotenclose the total fair value in
parentheses or use a minus (–) sign.

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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. Institutions that
have adopted ASU 2016-13, which governs the
accounting for credit losses, should report financial
assets without any deductions for any applicable allowance for credit losses. 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.
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
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 90 percent or more of the contractual
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Schedule N

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 accrual of income under the interest method specified in ASC Subtopic 310-30,
Receivables—Loans and Debt Securities
Acquired with Deteriorated Credit Quality (formerly AICPA Statement of Position 03-3,
“Accounting for Certain Loans or Debt Securities Acquired in a Transfer”), are met for a purchased impaired loan or debt security accounted
for in accordance with that Subtopic, regardless
of whether the loan or debt security had been
maintained in nonaccrual status by its seller.
For institutions that have adopted ASU 2016-13,
any outstanding purchased credit-impaired loans
and debt securities as of the adoption date should
prospectively be accounted for as purchased
credit-deteriorated loans and debt securities. Any
remaining noncredit discount on such loans and
debt securities should be accreted into interest
income at the effective interest rate on the adoption date of ASU 2016-13 if a loan or debt security is not required to be placed in nonaccrual status. For purchased credit-deteriorated loans
acquired after the adoption date, ASU 2016-13
refers to ASC Subtopic 310-10 for guidance on
recognition of interest income. For purchased
credit-deteriorated loans with common risk characteristics that are aggregated and accounted for
as a pool for allowance measurement purposes
under ASU 2016-13, the determination of nonaccrual or accrual status should be made at the individual loan level, not at the pool level.
(2) The criteria for amortization (i.e., accretion of
discount) specified in AICPA Practice Bulletin
No. 6 are met with respect to a loan or other debt
instrument acquired at a discount (because there
is uncertainty as to the amounts or timing of
future cash flows) from an unaffiliated third party
(such as another institution or the receiver of a
failed institution), including those that the seller
had maintained in nonaccrual status.
(3) 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 evaluation to assure
that the reporting institution’s net income is not
materially affected. To the extent that the report-

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Schedule N

ing 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 restructured in a troubled
debt restructuring and qualifies for accrual status,
(2) the asset is a purchased credit-impaired loan, pool
of loans, or debt security accounted for in accordance
with ASC 310-30 and it meets the criteria for accrual of
income under the interest method specified in that
Subtopic, 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.
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 “restruc-

tured 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 ASC Subtopic 310-40, Receivables—Troubled
Debt Restructurings by Creditors (formerly FASB
Statement No. 15, “Accounting by Debtors and Creditors for Troubled Debt Restructurings”).
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
Institutions that have adopted ASU 2016-13 should
report in columns A and B asset amounts without any
deduction for allowances for credit losses.
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 financing receivables, and open-end
credit in arrears two or three monthly payments;
other multipayment obligations, with payments
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Schedule N

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 counter-party 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, includ-

ing any lease financing receivable, should be reported
in no more than one of these four columns. Information reported for any derivative contract should be
reported in only column A or column B.

Item Instructions
The loan categories specified in this schedule (except
for Memorandum item 1) correspond to the loan category definitions for Schedule C, Part I, including the
treatment of leases.
Item 1 Total loans to U.S. addressees (domicile).
See the Glossary entry for “domicile” for further
information.
Item 1(a) Commercial and industrial loans.
Corresponds to Schedule C, Part I, item 4(a), column A.
Item 1(b) Loans secured by real estate.
Corresponds to Schedule C, Part I, item 1, column A,
consisting of loans to U.S. addressees.
Item 1(c) All other loans.
Corresponds to Schedule C, Part I, items 2(a)(1),
2(a)(2), 2(b), 9(a), column A, and to that portion of
Schedule C, Part I, items 3, 7, and 8, column A, consisting of loans to U.S. addressees.
Item 2 Total loans to non-U.S. addressees (domicile).
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.
Item 3 Total.
Report the sum of items 1(a), 1(b), 1(c), and 2.

Memoranda
Item M1 Book value of loans sold or otherwise
transferred to head office or to related institutions and
still serviced by the reporting branch or agency.
Report in this item in the appropriate column the book
value of any past due, nonaccrual, or renegotiated
asset of a type reportable in Schedule C that was originated or otherwise acquired by the reporting branch or
agency (and its IBF) and was subsequently sold or

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Schedule N

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.

modity 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.

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 com-

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June 2012

INSTRUCTIONS FOR THE PREPARATION OF

Other Data for Deposits Insurance
Assessments
Schedule O

General Instructions
This schedule is to be completed only by branches
whose deposits are insured by the FDIC. Each FDICinsured branch must complete items 1 and 2, 4 through
6, Memorandum items 1 and 5, and, if applicable,
item 3 and Memorandum items 2 and 3 each quarter.

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 the gross total deposit liabilities as of the calendar quarter-end report date that meet the statutory
definition of deposits in Section 3(l) of the Federal
Deposit Insurance Act before deducting allowable
exclusions from total deposits. An institution’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 3(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.
If unposted debits and unposted credits are included in
the gross total deposit liabilities reported in this item,
they may be excluded in Schedule O, item 2 below.
Item 2 Total allowable exclusions, including interest
accrued and unpaid on allowable exclusions (including
foreign deposits).
Report 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
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Schedule O

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 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.
(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 benefit
responsive 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 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 the total amount of International Banking
Facility deposits (reported in Schedule RAL, item 4.a,
column B) including interest accrued and unpaid
thereon (reported in Schedule RAL, item 4.f, column
B) as of the calendar quarter-end report date included
in Schedule O, item 2, above.
Item 4 Average consolidated total assets.
Report average consolidated total assets1 for the calendar quarter.
Averaging methods—An institution that reported
$1 billion or more in quarter-end consolidated total
assets in Schedule RAL, item 3, “Total assets,” for
March 31, 2012, must report average consolidated total
assets in this item on a daily average basis. An institution that reported less than $1 billion in quarter-end
consolidated total assets in Schedule RAL, item 3,
1. The scope of the FFIEC 002 report is for data on the entire operation of the branch or agency including any International Banking
Facilities (“IBFs”). 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.

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Schedule O

“Total assets,” for March 31, 2012, may report average
consolidated total assets in this item on a weekly average basis, or it may at any time opt permanently to
report average consolidated total assets on a daily average basis. Once an institution that reports average consolidated total assets using a weekly average reports
average consolidated total assets of $1 billion or more
in this item for two consecutive quarters, it must permanently report average consolidated total assets using
daily averaging beginning the next quarter.
Daily average consolidated total assets should be calculated by adding the institution’s consolidated total
assets as of the close of business for each day of the
calendar quarter and dividing by the number of days in
the calendar quarter (the number of days in a quarter
ranges from 90 days to 92 days). For days that an institution is closed (e.g., Saturdays, Sundays, or holidays),
the amount from the previous business day would be
used. An institution is considered closed if there are no
transactions posted to the general ledger as of that
date.
Weekly average consolidated total assets should be
calculated by adding the institution’s consolidated
total assets as of the close of business on each Wednesday during the calendar quarter and dividing by the
number of Wednesdays in the quarter.
Measuring consolidated total assets—For purposes of
calculating the quarterly average to be reported in this
item, consolidated total assets should be measured as
defined for “Total assets” on Schedule RAL, item 3,
column A, except that:
(1) For institutions that have not adopted FASB
Accounting Standards Update No. 2016-01
(ASU 2016-01), which includes provisions governing the accounting for investments in equity
securities, including investments in mutual funds,
and eliminates the concept of available-for-sale
equity securities (see the General Instructions for
Schedule RAL, Memorandum items 1 through
4), this quarterly average should reflect all debt
securities (not held for trading) at amortized cost
and available-for-sale equity securities with readily determinable fair values at the lower of cost or
fair value, and equity securities without readily
determinable fair values at historical cost.

(2) For institutions that have adopted ASU 2016-01,
this quarterly average should reflect all debt securities (not held for trading) at amortized cost.
In addition, to the extent that net deferred tax assets
included in the institution's total assets, if any, include
the deferred tax effects of any unrealized holding gains
and losses on available-for-sale debt securities, these
deferred tax effects may be excluded from the determination of the quarterly average for total assets. If these
deferred tax effects are excluded, this treatment must
be followed consistently over time.
Item 4(a) Averaging method used.
Indicate the averaging method that the reporting institution used to report its average consolidated total
assets in Schedule O, item 4, above. For daily averaging, enter the number “1”; for weekly averaging, enter
the number “2.”
Item 5 Average tangible equity.
Report average tangible equity for the calendar quarter. For purposes of this item, tangible equity is defined
as eligible assets (determined in accordance with Section 347.210 of the FDIC’s regulations and as reported
in Schedule RAL, section “Statutory or Regulatory
Requirement,” item 3.b), less the book value of liabilities (exclusive of liabilities due to the foreign bank’s
head office, other branches, agencies, offices, or wholly
owned subsidiaries).
Averaging methods—An institution that reported
$1 billion or more in quarter-end consolidated total
assets in Schedule RAL, item 3, “Total assets,” for
March 31, 2012, must report average tangible equity on
a monthly average basis. An institution that reported
less than $1 billion in quarter-end consolidated total
assets in Schedule RAL, item 3, “Total assets,” for
March 31, 2012, may report its quarter-end tangible
equity rather than an average amount, or it may at any
time opt permanently to report average tangible equity
on a monthly average basis. Once an institution that
reports average consolidated total assets using a weekly
average reports average consolidated total assets of
$1 billion or more in Schedule O, item 4, for two consecutive quarters, it must permanently report average
tangible equity using monthly averaging beginning the
next quarter.
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June 2018

Schedule O

Monthly average tangible equity should be calculated
by adding tangible equity (as defined above) as of each
month-end date during the calendar quarter and dividing by three. For example, monthly average tangible
equity for June 30, 2011, would be the sum of tangible
equity as of April 30, May 31, and June 30, 2011,
divided by three.
Item 6 Holdings of long-term unsecured debt issued by
other FDIC-insured depository institutions.
Report the balance sheet amount of the reporting institution’s holdings of long-term unsecured debt issued
by other FDIC-insured depository institutions. Longterm unsecured debt includes senior unsecured debt,
subordinated debt, and limited-life preferred stock
with a remaining maturity of at least one year that has
been issued by another depository institution. Any
debt for which the reporting institution has the option
to redeem the debt within the next 12 months is not
considered long-term and may be excluded from this
item.
Depending on the form of the debt and the intent for
which it is held, holdings of long-term unsecured debt
issued by other insured depository institutions are
included in Schedule RAL, item 1.c.(4), “All other
bonds, notes, debentures, and corporate stock,” Schedule RAL, item 1.f.(4), “Other trading assets,” and
Schedule C, part I, item 2, “Loans to depository institutions and acceptances of other banks.”
Exclude holdings of long-term unsecured debt issued
by bank and thrift holding companies. Also exclude
holdings of debt issued by other insured depository
institutions that are guaranteed by the FDIC under the
Debt Guarantee Program component of the FDIC’s
Temporary Liquidity Guarantee Program.

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 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 total deposit liabilities less allowable exclusions, 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 on a deposit account (that
is not an allowable exclusion) should be reported
together with the related account in Memorandum
items M1(a)(1), M1(b)(1), M1(c)(1), and M1(d)(1), as
appropriate.
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.
“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:
• Individual Retirement Accounts (IRAs), including
traditional and Roth IRAs;
• Simplified Employee Pension (SEP) plans;
• “Section 457” deferred compensation plans;
• Self-directed Keogh (HR 10) plans; and

Memoranda

• Self-directed defined contribution plans, which are
primarily 401(k) plan accounts.

Item M1 Total deposit liabilities of the branch
(including related interest accrued and unpaid) less
allowable exclusions (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.

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.

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FFIEC 002

Schedule O

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.
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.
Item M1(a)(2) Number of deposit accounts (excluding
retirement accounts) of $250,000 or less.
(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
each certificate, passbook, account, and other evidence
of deposit that has a balance of $250,000 or less.
Item M1(b) Deposit accounts (excluding retirement
accounts) of more than $250,000.
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.
Item M1(c)(2) Number of retirement deposit accounts
of $250,000 or less.
(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.
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
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FFIEC 002

June 2011

Schedule O

accounts (as defined in Schedule O, Memorandum
item M1) with a balance of more than $250,000 as of
the report date.

ule 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:

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.

• Interest accrued and unpaid on deposits and credit
balances;

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 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 should reflect 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 noninterestbearing 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 Sched-

• 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 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 “passthrough” 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

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March 2013

FFIEC 002

Schedule O

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 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 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
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FFIEC 002

March 2014

Schedule O

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 Not applicable.

Item M5 Not applicable.

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March 2014

FFIEC 002

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
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)).
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FFIEC 002

September 2008

Schedule P

Item 1(a) Owed to U.S. offices of nonrelated U.S.
banks.
Report the amount owed to (borrowed from) U.S.
offices of nonrelated U.S. banks, including their IBFs.
Item 1(b) Owed to U.S. branches and agencies of
nonrelated foreign banks.
Report the amount owed to (borrowed from) U.S.
branches and agencies of nonrelated foreign banks,
including their IBFs. For purposes of this schedule, the
term “U.S. branches and agencies of foreign banks”
covers:
(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 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)).
Item 2(a) Owed to foreign branches of nonrelated U.S.
banks.
Report the amounts owed to (borrowed from) foreign
branches of nonrelated U.S. banks.
Item 2(b) Owed to foreign offices of nonrelated
foreign banks.
Report the amounts owed to (borrowed from) foreign
offices of nonrelated foreign banks.
Item 3 Owed to others.
Report all other liabilities for borrowed money owed to
any lender other than a bank that cannot properly be
reported in items 1 and 2, above.
Item 4 Total.
Report the sum of items 1 through 3.

Memorandum
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.”

P-2
September 2008

FFIEC 002

INSTRUCTIONS FOR THE PREPARATION OF

Financial Assets and Liabilities
Measured at Fair Value
Schedule Q

General Instructions
Schedule Q is required to be completed only by
branches and agencies that:
(1) Have elected to report financial instruments or
servicing assets and liabilities at fair value under a
fair value option with changes in fair value recognized in earnings, or
(2) Reported total trading assets of $10 million or
more in any of the four preceding calendar
quarters.
Your institution is not required to complete Schedule
Q if the only financial instruments that your
institution measures at fair value in the financial
statements on a recurring basis are:
(3) Available-for-sale securities (reported in
Schedule RAL, items 1(b) and 1(c)), and
(4) For institutions that have adopted FASB
Accounting Standards Update No. 2016-01
(ASU 2016-01), which includes provisions governing the accounting for investments in equity
securities,
(a) Equity securities with readily determinable
fair values not held for trading (reported in
Schedule RAL, item 1(c)(4), and
Schedule RAL, Memorandum item 4), and
(b) Equity securities and other equity investments that do not have readily determinable
fair values that your institution measures at
fair value (i.e., equity securities and other
equity investments that do not have readily
determinable values that your institution has
not elected to measure at cost minus impairment, if any, plus or minus changes resulting
from observable price changes in orderly

transactions for the identical or a similar
investment of the same issuer) (reported in
Schedule RAL, item 1(h), as appropriate).
An institution that is required to complete Schedule Q
should report all assets and liabilities that are measured
at fair value in the financial statements on a recurring
basis (i.e., annually or more frequently). Exclude from
Schedule Q those assets and liabilities that are measured at fair value on a nonrecurring basis. Recurring
fair value measurements of assets or liabilities are
those fair value measurements that applicable accounting standards and these instructions require or permit
in the balance sheet at the end of each reporting
period. In contrast, nonrecurring fair value measurements of assets or liabilities are those fair value measurements that applicable accounting standards and
these instructions require or permit in the balance sheet
in particular circumstances (for example, when an
institution subsequently measures foreclosed real
estate at the lower of cost or fair value less estimated
costs to sell).

Column Instructions
Column A, Total Fair Value Reported on
Schedule RAL
Report in Column A the total fair value, as defined by
ASC Topic 820, Fair Value Measurement (formerly
FASB Statement No. 157, “Fair Value Measurements”), of those assets and liabilities reported in Column A on Schedule RAL, Assets and Liabilities, that
the institution reports at fair value on a recurring basis.
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
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Schedule Q

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 ASC Topic 820. For assets and liabilities
that the institution has netted under legally enforceable
master netting agreements in accordance with ASC
Subtopic 210-20, Balance Sheet – Offsetting (formerly
FASB Interpretation No. 39, “Offsetting of Amounts
Related to Certain Contracts,” and FASB Interpretation No. 41, “Offsetting of Amounts Related to Certain Repurchase and 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.”

Item Instructions
For each item in Schedule Q, the sum of columns C, D,
and E less column B must equal column A.
Item 1 Available-for-sale debt securities and equity
securities with readily determinable fair values not held
for trading purposes.
For institutions that have adopted FASB Accounting
Standards Update No. 2016-01 (ASU 2016-01), which
includes provisions governing the accounting for
investments in equity securities, including investment
in mutual funds, and eliminates the concept of
available-for-sale equity securities (see the General
Instructions for Schedule RAL, Memorandum items 1
through 4), report in column A the sum of Schedule RAL, Memorandum items 3.a. and 4.
For institutions that have not adopted ASU 2016-01,
report in column A the amount reported in Schedule RAL, Memorandum item 3.a.
Report in columns B through E, as appropriate, the
fair values of the debt and equity securities reported in
column A determined using Level 1, Level 2, and
Level 3 measurement inputs and any netting
adjustments.

Item 2 Federal funds sold and securities purchased
under agreements to resell.
Report in the appropriate column the total fair value of
those federal funds sold and securities purchased under
agreements to resell reported in Schedule RAL, items
1.d.(1) and 1.d.(2), that the institution 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.
Item 3 Loans and leases held for sale.
Report in the appropriate column the total fair value of
those loans held for sale reported in Schedule C, part I,
that the institution 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 sale that the institution has elected to report under the fair value option
are included in Schedule C, part I, and Schedule RAL,
item 1.e. Exclude loans held for sale that are reported at
the lower of cost or fair value in Schedule RAL,
item 1.e, and loans that have been reported as trading
assets in Schedule RAL, item 1.f. Leases are generally
not eligible for the fair value option.
Item 4 Loans and leases held for investment.
Report in the appropriate column the total fair value of
those loans held for investment reported in Schedule C,
part I, that the institution 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 institution has elected to report under the fair
value option are included in Schedule C, part I, and
Schedule RAL, item 1.e. Leases are generally not eligible for the fair value option.
Item 5 Trading assets
Item 5(a) Derivative assets.
Report in the appropriate column the total fair value of
derivative assets held for trading purposes as reported
in Schedule RAL, item 1(f)(4); the fair values determined using Level 1, Level 2, and Level 3 measurement
inputs; and any netting adjustments.
Item 5(b) Other trading assets.
Report in the appropriate column the total fair value of
all trading assets, except for derivatives, as reported in

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Schedule Q

Schedule RAL, item 1(f); the fair values determined
using Level 1, Level 2, and Level 3 measurement
inputs, including the fair values of loans that have been
reported as trading assets; and any netting
adjustments.
Item 5(b)(1) 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 institution has elected to report
under the fair value option that is included in Schedule Q, item 5(b) above; the fair values determined using
Level 1, Level 2, and Level 3 measurement inputs; and
any netting adjustments. Securities that the institution
has elected to report at fair value under the fair value
option are reported as trading securities pursuant to
ASC Subtopic 825-10, Financial Instruments—Overall
(formerly FASB Statement No. 159, “The Fair Value
Option for Financial Assets and Financial Liabilities”), even though management did not acquire the
securities principally for the purpose of trading.
Item 6 All other assets.
Report in the appropriate column the total fair value of
all other assets that are required to be measured at fair
value on a recurring basis or that the institution 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 through 5 above;
the fair values determined using Level 1, Level 2, and
Level 3 measurement inputs; and any netting adjustments. Include derivative assets held for purposes other
than trading, interest-only strips receivable (not in the
form of a security) held for purposes other than trading, and other categories of assets required to be measured at fair value on the balance sheet on a recurring
basis under applicable accounting standards.
Item 7 Total assets measured at fair value on a
recurring basis.
Report the sum of items 1 through 5(b) plus item 6.
Item 8 Deposits.
Report in the appropriate column the total fair value of
those deposits and credit balances reported in Schedule RAL, item 4(a), that the institution 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. Deposits withdrawable on demand (e.g., demand and savings deposits) are generally not eligible for the fair value option.
Item 9 Federal funds purchased and securities sold
under agreements to repurchase.
Report in the appropriate column the total fair value of
those federal funds purchased and securities sold under
agreements to repurchase reported in Schedule RAL,
items 4(b)(1) and 4(b)(2), that the institution 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.
Item 10 Trading liabilities:
Item 10(a) Derivative liabilities.
Report in the appropriate column the total fair value of
derivative liabilities held for trading purposes 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 10(b) Other trading liabilities.
Report in the appropriate column the total fair value of
trading liabilities, except for derivatives, 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 11 Other borrowed money.
Report in the appropriate column the total fair value of
those other borrowings reported in Schedule RAL,
item 4(c), that the institution 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.
Item 12 Subordinated notes and debentures.
Report in the appropriate column the total fair value of
those subordinated notes and debentures (including
mandatory convertible debt) reported in Schedule RAL, item 4(f), that the institution 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.
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Schedule Q

Item 13 All other liabilities.
Report in the appropriate column the total fair value of
all other liabilities that are required to be measured at
fair value on a recurring basis or that the institution
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 8 through 12
above; the fair values determined using Level 1,
Level 2, and Level 3 measurement inputs; and any netting adjustments. Include derivative liabilities held for
purposes other than trading and other categories of
liabilities required to be measured at fair value on the
balance sheet on a recurring basis under applicable
accounting standards.
Item 14 Total liabilities measured at fair value on a
recurring basis.
Report the sum of items 8 through 13.

reported in Schedule Q, item 13, column A. For each
component of all other liabilities that exceeds this disclosure threshold for which a preprinted caption has
not been provided in Memorandum items M2(a) and
M2(b), describe the component with a clear but concise caption in Memorandum items M2(c) through
M2(f). These descriptions should not exceed 50 characters in length (including spacing between words).
Preprinted captions have been provided for the following categories of all other liabilities:
• Memorandum item M2(a), “Loan commitments
(not accounted for as derivatives),” and
• Memorandum item M2(b), “Nontrading derivative
liabilities.”
Memorandum items 3 and 4 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.

Memoranda
Item M3 Loans measured at fair value.
Item M1 All other assets.
Disclose in Memorandum items M1(a) through
M1(f) each component of all other assets, and the dollar amount of such component, that is greater than
$100,000 and exceeds 25 percent of the amount
reported in Schedule Q, item 6, column A. For each
component of all other assets that exceeds this disclosure threshold for which a pre-printed caption has not
been provided in Memorandum items M1(a) and
M1(b), describe the component with a clear but concise caption in Memorandum items M1(c) through
M1(f). These descriptions should not exceed 50 characters in length (including spacing between words).
Preprinted captions have been provided for the following categories of all other assets:
• Memorandum item M1(a), “Mortgage servicing
assets,” and
• Memorandum item M1(b), “Nontrading derivative
assets.”
Item M2 All other liabilities.
Disclose in Memorandum items M2(a) through
M2(f) each component of all other liabilities, and the
dollar amount of such component, that is greater than
$100,000 and exceeds 25 percent of the amount

Item M3.a 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 M3.a.(1) Loans secured by 1–4 family residential
properties.
Report the total fair value of all open-end and closedend loans secured by 1–4 family residential properties
included in Schedule C, part I, item 1.c, and measured
at fair value under a fair value option.
Include:
(1) Revolving, open-end loans secured by 1–4 family
residential properties and extended under lines of
credit included in Schedule C, part I, item 1.c.(1),
and measured at fair value under a fair value
option.
(2) Closed-end loans secured by first and junior liens
on 1-4 family residential properties included in
Schedule C, part I, item 1.c.(2), and measured at
fair value under a fair value option.

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Item M3.a.(2) All other loans secured by real estate.
Report the total fair value of all other loans secured by
real estate measured at fair value under a fair value
option.

appropriate subitem the unpaid principal balance of
loans measured at fair value that are secured by real
estate reported in memorandum item 3.

Include:

Item M4.a.(1) Loans secured by 1–4 family residential
properties
Report the total unpaid principal balance outstanding
for all loans secured by 1–4 family residential properties measured at fair value under a fair value option
reported in memorandum item 3.a.(1).

Include:

(3) Loans secured by multifamily (5 or more) residential properties included in Schedule C, part I,
item 1.d, and measured at fair value under a fair
value option.

(1) Revolving, open-end loans secured by 1–4 family residential properties and extended under
lines of credit included in Schedule C, part I,
item 1.c.(1), and measured at fair value under a
fair value option.

(4) Loans secured by nonfarm nonresidential properties included in Schedule C, part I, item 1.e,
and measured at fair value under a fair value
option.

(2) Closed-end loans secured by first and junior
liens on 1–4 family residential properties
included in Schedule C, part I, item 1.c.(2), and
measured at fair value under a fair value option.

Item M3.b Commercial and industrial loans.
Report the total fair value of commercial and industrial loans included in Schedule C, part I, item 4, and
measured at fair value under a fair value option.
Item M3.c Other loans.
Report the total fair value of all other loans measured
at fair value under a fair value option that cannot properly be reported in one of the preceding subitems of
Memorandum item 3. 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 M4 Unpaid principal balance of loans measured
at fair value.
Item M4.a Loans secured by real estate.
In column A, report in the appropriate subitem the
unpaid principal balance of loans measured at fair
value that are secured by real estate reported in memorandum item 3. In column B, IBFs are to report in the

Item M4.a.(2) All other loans secured by real estate.
Report the total unpaid principal balance outstanding
for all other loans secured by real estate measured at
fair value under a fair value option reported in memorandum item 3.a.(2).
Include:

(1) Construction, land development, and other land
loans included in Schedule C, part I, item 1.a,
and measured at fair value under a fair value
option.
(2) Loans secured by farmland included in Schedule C, part I, item 1.b, and measured at fair
value under a fair value option.
(3) Loans secured by multifamily (5 or more) residential properties included in Schedule C, part I,
item 1.d, and measured at fair value under a fair
value option.
(4) Loans secured by nonfarm nonresidential properties included in Schedule C, part I, item 1.e,
and measured at fair value under a fair value
option.
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Item M4.b Commercial and industrial loans.
Report the unpaid principal balance of loans of commercial and industrial loans reported in memorandum
item 3.b.
Item M4.c Other loans.
Report the unpaid principal balance of all other loans
that cannot properly be reported in one of the preceding subitems of this Memorandum item 4. 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 3.c.

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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 of this schedule), subordinated securities and
other enhancements (which are reported in items 2 and
9 and, if applicable, Memorandum items 1(a)(1) and
(2)), and seller’s interests (which are reported in
item 6).

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

Column F, Commercial and Industrial Loans: Commercial and industrial loans are loans for commercial and
industrial purposes to sole proprietorships, partnerships, corporations, and other business enterprises,
whether secured (other than by real estate) or unsecured, single-payment or installment.
Column G, All Other Loans, All Leases, and All Other
Assets: For items 1 through 4, 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. For
items 9 and 10, all other loans are loans that cannot be
reported in Columns A and D through F of this schedule as defined for Schedule C, part I, items 1.a, 1.b,
1.c.(1), 1.d, 1.e, 2, 3, and 6 through 8. For items 11 and
12, all other loans are all loans except 1–4 family residential loans as defined for Schedule C, part I,
item 1.c.(2). 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 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.
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Schedule S

Recourse or other seller-provided credit enhancement
means an arrangement in which the reporting branch
or agency retains, in form or in substance, any risk of
credit loss directly or indirectly associated with a transferred (sold) asset that exceeds its pro rata claim on the
asset. It also includes a representation or warranty
extended by the reporting branch or agency when it
transfers an asset, or assumed by the branch or agency
when it services a transferred asset, that obligates the
branch or agency to absorb credit losses on the transferred asset. Such an arrangement typically exists when
the branch or agency transfers assets and agrees to protect purchasers or some other party, e.g., investors in
securitized assets, from losses due to default by or nonperformance of the obligor on the transferred assets or
some other party. The branch or agency provides this
protection by retaining:
(1) an interest in the transferred assets, e.g., creditenhancing interest-only strips receivable,
“spread” accounts, subordinated interests or
securities, collateral invested amounts, and cash
collateral accounts, that absorbs losses, or
(2) an obligation to repurchase the transferred assets
in the event of a default of principal or interest on the
transferred assets or any other deficiency in the performance of the underlying obligor or some other party.
Subordinated interests and subordinated securities
retained by a branch or agency when it securitizes
assets expose the branch or agency to more than its pro
rata share of loss and thus are considered a form of
credit enhancement to the securitization structure.
Credit-enhancing interest-only strip, (i) represents the
contractual right to receive some or all of the interest
due on transferred assets; and (ii) exposes the institution to credit risk directly or indirectly associated with
the transferred assets that exceeds a pro rata share of
the institution’s claim on the assets, whether through
subordination provisions or other credit enhancement
techniques. Credit-enhancing interest-only strips
include other similar “spread” assets and can be either
retained or purchased.
Liquidity facility means any arrangement, including
servicer cash advances, in which the reporting branch
or agency is obligated to provide funding to a securitization structure to ensure investors of timely payments
on issued securities, e.g., by smoothing timing differ-

ences in the receipt of interest and principal payments
on the underlying securitized assets, or to ensure investors of payments in the event of market disruptions.
Advances under such a facility are typically reimbursed
from subsequent collections by the securitization structure and are not subordinated to other claims on the
cash flows from the underlying assets and, therefore,
should generally not be construed to be a form of
credit enhancement. However, if the advances under
such a facility are subordinated to other claims on the
cash flows, the facility should be treated as a credit
enhancement for purposes of this schedule.
Seller’s interest means the reporting branch or agency’s
ownership interest in loans that have been securitized,
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
NOTE: After the effective date of the amendments to
ASC Topic 860, Transfers and Servicing, and ASC
Subtopic 810-10, Consolidation – Overall, resulting
from Accounting Standards Update (ASU)
No. 2009-16 (formerly FASB Statement No. 166,
“Accounting for Transfers of Financial Assets”) and
ASU No. 2009-17 (formerly FASB Statement No. 167,
“Amendments to FASB Interpretation No. 46(R)”),
respectively, a branch or agency should report information in Schedule S, items 1 through 7(b), only for those
securitizations for which the transferred assets qualify
for sale accounting or are otherwise not carried as
assets on the reporting branch or agency’s consolidated balance sheet. Thus, if a securitization transaction that qualified for sale accounting prior to the
effective date of the amendments to ASC Topic 860
and ASC Subtopic 810-10 must be brought back onto
the reporting branch or agency’s consolidated balance
sheet upon adoption of these accounting standards,
the branch or agency would no longer report informa-

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Schedule S

tion about the securitization in Schedule RC-S, items 1
through 8.

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
branch or agency 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 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 column 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. Credit enhancements provided or retained by the reporting branch or agency in
connection with the securitization structures reported
in Schedule S, item 1, include the carrying value of
credit-enhancing interest-only strips included as securities, other assets, or trading assets in Schedule RAL;
the carrying value of subordinated securities and other
residual interests carried as on-balance sheet assets; 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. 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 3 Reporting institution’s unused commitments to
provide liquidity to structures reported in item 1.
Item 3 is to be reported by branches and agencies with
$100 billion or more in total assets.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
1. The asset size tests are based on the total assets reported in the
preceding calendar year's June 30 FFIEC 002.

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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.
Item 5 Not applicable.
Item 6 Amount of ownership (or seller’s) interests
carried as securities or loans.
Item 6 is to be reported by branches and agencies with
$10 billion or more in total assets.2
Report in the appropriate column 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. Such interests
may be in the form of securities or loans.
Item 7 Not applicable.
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
2. The asset size tests are based on the total assets reported in the
preceding calendar year's June 30 FFIEC 002.

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.
Item 10 is to be reported by branches and agencies with
$10 billion or more in total assets.3
Report in the appropriate column the unused portions
of commitments provided by the reporting branch or
agency that function as liquidity facilities to securitization structures sponsored by or otherwise established
by other institutions or entities, i.e., securitizations not
reported in Schedule S, item 1, above.
Exclude the amount of unused commitments to provide liquidity to asset-backed commercial paper con3. The asset size tests are based on the total assets reported in the
preceding calendar year's June 30 FFIEC 002.

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Schedule S

duits (report this amount in Schedule S, Memorandum
item 1(b)).

rather than net of any tax effects, e.g., any associated
deferred tax liability.

Asset Sales

Memoranda

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 sellerprovided 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 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

Item M1 Asset-backed commercial paper conduits:
Memorandum item 1 is to be reported by branches and
agencies with $10 billion or more in total assets.4
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 spon4. The asset size tests are based on the total assets reported in the
preceding calendar year's June 30 FFIEC 002.

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Schedule S

sored by the reporting branch or agency or a related
institution.

flow on the purchased assets or from the sale of the
purchased pool of assets.

Item M1(b) Unused commitments to provide liquidity
to conduit structures.
Report in the appropriate subitem the unused portions
of commitments provided by the reporting branch or
agency that function as liquidity facilities to assetbacked commercial paper conduit structures. Typically,
these facilities take the form of a Backstop Line (Loan
Agreement) or an AssetPurchaseAgreement. 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

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 M1(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.

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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 Does the institution have fiduciary
powers?
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.

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 governed by
applicable law (including the terms of the prevailing
fiduciary agreement), the institution may use any reaT-1

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Schedule T

sonable method to establish 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 ASC Topic 820, Fair
Value Measurements and Disclosures (formerly FASB
Statement No. 157, “Fair Value Measurements”),
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

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). 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 “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

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Schedule T

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 nonmanaged. 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 range of alternatives does
not create a managed fiduciary account for the purposes of this schedule.

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.

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

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 non-fiduciary 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.

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 profit-sharing 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 Retirement related trust and agency
accounts:
Line Item 5(a) Employee benefit-defined contribution.
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 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 Investment management agency accounts.
Report the market value and number of accounts for
all individual and institutional investment management
agency accounts that are administered within the fiduT-3

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Schedule T

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

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

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Schedule T

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 investment contracts) which are insured by the
FDIC, and certificates of deposit. Report interestbearing 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) State, county, and municipal
obligations.
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
short-term collective investment funds.
Line Item M1(f) Other short-term obligations.
Report all short-tem obligations (i.e., original maturities of less than 1 year, or 13 months in the case of the
time portion of master notes). In addition to shortterm notes, this would include such money market
instruments as master note arrangements, commercial
paper, bankers acceptances, securities repurchase
agreements, and other short-term liquidity investments. Exclude state, county, and municipal
obligations.
Line Item M1(g) Other notes and bonds.
Report all other bonds, notes (except personal notes),
and debentures. Include corporate debt, insurance
annuity contracts, “GICs” (guaranteed investment
contracts), “BICs” (bank investment contracts) which
are not insured by the FDIC, and obligations of foreign governments. Also include certificates or other
obligations, however named, representing passthrough participations in pools of real estate loans
when the participation instruments are issued by financial institutions and guaranteed in whole or in part by
private guarantors. Collateralized mortgage obligations (CMOs) and real estate mortgage investment
conduits (REMICs) which are not issued by the Federal National Mortgage Association (FNMA) (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (FHLMC) (“Freddie Mac”) should be
reported here, even if the collateral consists of GNMA
(“Ginnie Mae”) or FNMA pass-throughs or FHLMC
participation certificates. Exclude short-term obligations which should be reported in Schedule T, Memorandum item 1(f), above.
Line Item M1(h) Common and preferred stocks.
Report all holdings of domestic and foreign common
and preferred equities, including warrants and options.
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Schedule T

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) Real estate mortgages.
Report real estate mortgages, real estate contracts, land
trust certificates, and ground rents. These assets may be
reported at unpaid balance if that figure is a fair
approximation of market value.
Line Item M1(j) Real estate.
Report real estate, mineral interests, royalty interests,
leaseholds, and other similar assets. Land and buildings associated with farm management accounts
should be reported in this item. Investments in limited
partnerships that are solely or primarily invested in real
estate should also be reported here.
Line Item M1(k) Miscellaneous assets.
Report personal notes, tangible personal property, and
other miscellaneous assets that cannot properly be
reported in Schedule T, Memorandum items
1(a) through 1(j), above. Crops, equipment and livestock associated with farm management accounts
should be reported in this item.
Line Item M1(l) Total managed assets held in
personal trust and agency accounts.
Report the sum of Memorandum items 1(a) through
1(k). This item must equal Schedule T, item 4, column A.
Line Item M2 Corporate trust and agency accounts:
Line Item M2(a) Corporate and municipal
trusteeships.
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
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.

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Schedule T

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.”
Line Item M3(b) International/Global equity.
Report funds investing exclusively in equities of issuers
located outside the U.S. and those funds representing a
combination of U.S. and foreign issuers. Include funds
that specialize in a particular country, region, or
emerging market.
Line Item M3(c) Stock/Bond blend.
Report funds investing in a combination of equity and
bond instruments. Include funds with a fixed allocation along with those having the flexibility to shift
assets between stocks, bonds, and cash.
Line Item M3(d) Taxable bond.
Report funds investing in taxable debt securities.
Include funds that specialize in U.S. Treasury and U.S.

Government agency debt, investment grade corporate
bonds, high-yield debt securities, mortgage-related
securities, and global, international, and emerging
market debt funds. Exclude funds that invest in municipal bonds, which should be reported in Schedule T,
Memorandum item 3(e), and funds that qualify as
short-term investments, which should be reported in
Schedule T, Memorandum item 3(f).
Line Item M3(e) Municipal bond.
Report funds investing in debt securities issued by
states and political subdivisions in the U.S. Such securities may be taxable or tax-exempt. Include funds that
invest in municipal debt issues from a single state.
Exclude funds that qualify as short-term investments,
which should be reported in Schedule T, Memorandum item 3(f).
Line Item M3(f) Short term investments/Money
market.
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).

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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;

tions. The discount on securities should be accreted
from date of purchase to maturity, not to call or put
date.

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

Agreement Corporation
See “Edge and Agreement corporation.”

(2) a mistake in applying accounting principles; or
(3) the improper use of information that existed
when the reports for prior periods were prepared.
When a material error of one of these types is discovered in a report, the branch or agency may be directed
to ﬁle amended report data.

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

Accretion of Discount on Securities
Accretion of discount on securities purchased below
par or face value is required of all reporting institu-

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.
For the purposes of this report, specific reserves established in lieu of taking charge-offs on specific loans
and leases represent amounts that are uncollectible
and, therefore, are confirmed losses. Loans and leases
for which specific reserves have been established should
be reported net of the specific reserves in this report.
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Management must maintain reasonable records in support of their evaluations and entries.

The following description covers the treatment in this
report of:

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.

(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;

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

Bankers Acceptances
A bankers acceptance, for purposes of this report, is a
draft or bill of exchange that has been drawn on and
accepted by a banking institution (the “accepting
bank”), or its agent, for payment by the institution at a
future date that is speciﬁed in the instrument. Drafts
accepted by a banking institution are referred to as
“acceptances executed’” by that institution. The customer named in the draft as responsible for payment to
the accepting banking institution is referred to as the
“account party.” Funds are advanced to the drawer of
the acceptance by the discounting of the accepted draft
either by the accepting banking institution or by others. The accepted draft is negotiable and may be sold
and resold subsequent to its original discounting. At
the maturity date speciﬁed, the holder or owner of the
acceptance at that date presents the acceptance to the
accepting banking institution for payment.
The accepting banking institution has an unconditional obligation to pay the holder of the acceptance
the fare amount of the draft or presentation on the
speciﬁed maturity date. The account party (customer)
has an unconditional obligation to put the accepting
banking institution in funds at or before the maturity
date speciﬁed in the instrument.

(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.
(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

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Glossary

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 Schedule C, part I, 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, part I, 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 or agency with related banking institutions. In such instances, the reporting
treatment speciﬁed below is consistent with
the general reporting requirements for transactions with related depository institutions.
When the account party is the reporting
branch or agency’s head office or another
related banking institution, the reporting
institutions’s claim on the account party in
connection with an acceptance executed by
it should be reported as an item due from a
related party and be reﬂected in Schedule RAL either in item 2 (“Net due from
related depository institutions”) or in item 5
(“Net due to related depository institutions”); it would not be reported in
item 1(g) (“Customers’ liability to this
branch or agency on acceptances outstanding”). However, as in the case of other
acceptances executed by the reporting institution, the reporting institution’s liability for
such an acceptance would be reported in
item 4(d) (“Branch or agency liability on
acceptances executed and outstanding”).
(2) In all situations other than those exceptions discussed above, the accepting branch or agency
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Glossary

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, in the risk of loss in the event of
default on the part of the account party.1 The
existence of any such sharing arrangement or participation agreement does not reduce the accepting branch or agency’s obligation to pay to the
holder of the acceptance the full amount of the
acceptance at maturity and does not change the
requirement for the accepting branch or agency to
report the full amount of the acceptance in the
liability and asset items described above; the
amount of the participation is not to be deducted
from either the acceptance liability or the acceptance asset. This is the case in any such sharing
arrangement or participation agreement, regardless of the form of the participation agreement or
its contract provisions, regardless of the terminology (e.g., “funded,” “risk,” “unconditional,” or
“contingent”) used to describe it and the relationships under it, regardless of whether it is
described as a participation in the risk of default
by the account party, in the customer’s liability or
in the accepting branch or agency’s obligation,
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.”

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, OffBalance 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.
(d) 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 non-related banking institutions are to be reported in Schedule RAL,
item 1(f), “Trading assets.”
(e) Acceptances held by the reporting branch or
agency that were executed by it and for
which the account party is not a related
banking institution are to be reported in
Schedule RAL, item 1(e), “Loans,” and in
Schedule C, part I, Loans, according to the
account party of the draft. Thus, holdings of
own acceptances are to be reported in Schedule C in “Commercial and industrial loans”
(item 4) if the account parties are commercial or industrial enterprises; in the appropriate subitem of “Loans to depository institutions and acceptances of other banks”

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Glossary

(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).
(f) 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.
(g) 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, part I.
The difference in treatment in Schedule C
between holdings of own acceptances
(according to account party) as set forth in
subparagraph (a) above and holdings of
nonrelated banks’ acceptances (according to
the accepting institution) as set forth in this
subparagraph reﬂects the fact that, for other
banks’ acceptances, the holding branch or
agency’s immediate claim is on the accepting
bank, regardless of the account party or of
the purpose of the loan. On the other hand,
for its holdings of its own acceptances, the
branch or agency’s immediate claim is on

the account party named in the accepted
draft.
(h) 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-à-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:
(i) 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
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tance will report as it would any other
acceptance executed by it (as described in
previous paragraphs) with no reference to
the original underlying acceptance.
(j) 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-à-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.
(k) 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 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.)

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

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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.

commercial banks in the U.S. are branches located in
foreign countries of U.S. banks.

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.

Similarly, the term “foreign banks” covers all branches
of banks chartered and headquartered in foreign countries (including foreign banks owned by U.S. nationals
and institutions), including their U.S.-domiciled
branches and agencies, but excluding the foreign
branches of U.S. banks. In contrast, the term “banks in
foreign countries” covers foreign-domiciled branches of
banks, including the foreign branches of U.S. banks,
but excluding the U.S. branches and agencies of foreign
banks.
The following table summarizes these contrasting categories of banks considered as customers as used in
this report. (“X” indicates inclusion; no entry indicates
exclusion.)

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:

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

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
foreign-domiciled banking subsidiaries of
U.S. banks and Edge and Agreement
corporations);
(b) foreign savings banks or discount houses;

(b) state-chartered commercial banks;

(d) other similar foreign institutions that accept
short-term deposits; and

(a) national banks;

(d) industrial banks;
(e) private or unincorporated banks;

(2) the foreign-domiciled branches of U.S. banks. See
also “International Banking Facility (IBF).”

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

Banks in Foreign Countries

(g) Edge and Agreement corporations; and

See “banks, U.S. and foreign.”

(2) the U.S.-domiciled branches and agencies of foreign banks (as deﬁned below).
This coverage includes the U.S. institutions listed
above that are owned by foreigners. Excluded from

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

Broker’s Security Draft
A broker’s security draft is a draft with securities or
title to securities attached that is drawn to obtain payment for the securities. This draft is sent to a bank for
collection with instructions to release the securities
only on payment of the draft.

Call Option
See “derivative contracts.”

Certiﬁcate of Deposit
See “deposits.”

Commercial Banks in the U.S.
See “banks, U.S. and foreign.”

Commercial Letter of Credit
See “letter of credit.”

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

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-of-lading 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.

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Glossary

Credit Balances

(h) mutual or stock savings banks,

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.

(i) savings or building and loan associations,

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.

(j) cooperative banks,
(k) credit unions,
(l) homestead associations,
(m) other similar depository institutions in the
U.S., and
(n) 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

(a) national banks,

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:

(b) state-chartered commercial banks,

I. FDI Act deﬁnition of deposits.

II. Transaction–nontransaction deposit distinction.

Demand Deposits
See “deposits.”

Depository Institutions in the U.S.
(1) U.S. branches and agencies of foreign banks;
(2) U.S.-domiciled head offices and branches of U.S.
banks, i.e.,

(d) industrial banks,
(e) private or unincorporated banks,
(f) Edge and Agreement corporations, and
(g) International Banking Facilities (IBFs) of
U.S. banking institutions;
(3) U.S.-domiciled head offices and branches of
other depository institutions in the U.S., i.e.,

III. Interest-bearing–noninterest-bearing deposit
distinction.

I. FDI Act deﬁnition of deposits:
Section 3(1) states that the term “deposit” means—
(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 conGL-9

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Glossary

ditionally or unconditionally, to a commercial,
checking, savings, time, or thrift account, or
which is evidenced by its certiﬁcate of deposit,
thrift certiﬁcate, investment certiﬁcate, certiﬁcate
of indebtedness, or other similar name, or a check
or draft drawn against a deposit account and
certiﬁed by the bank or savings association, or a
letter of credit or a traveler’s check on which the
bank or savings association is primarily liable:
Provided, That, without limiting the generality of
the term “money or its equivalent,” any such
account or instrument must be regarded as evidencing the receipt of the equivalent of money
when credited or issued in exchange for checks or
drafts or for a promissory note upon which the
person obtaining any such credit or instrument is
primarily or secondarily liable, or for a charge
against a deposit account, or in settlement of
checks, drafts, or other instruments forwarded to
such bank for collection,

(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

(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, without being limited to
those issued in payment for services, dividends, or
purchases, and

(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

(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,

(5) such other obligations of a bank or savings association as the Board of Directors (of the Federal
Deposit Insurance Corporation), after consultation with the Comptroller of the Currency 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—

(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

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Glossary

of Depository Institutions,” establish, for purposes of
federal reserve requirements on deposit liabilities, a
category of deposits designated as “transaction
accounts.” All deposits that are not transaction
accounts are “nontransaction accounts.”
(1) Transaction accounts—With the exceptions noted
below, a “transaction account,” as deﬁned in
Regulation D and in these instructions, is a
deposit or account from which the depositor or
account holder is permitted to make transfers or
withdrawals by negotiable or transferable instruments, payment orders of withdrawal, telephone
transfers, or other similar devices for the purpose
of making payments or transfers to third persons
or others or from which the depositor may make
third party payments at an automated teller
machine (ATM), a remote service unit (RSU), or
another electronic device, including by debit card.
Excluded from transaction accounts are savings
deposits (both money market deposit accounts
(MMDAs) and other savings deposits) as deﬁned
below in the nontransaction account category,
even though such deposits permit some thirdparty 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.
Transaction accounts consist of the following
types of deposits: (a) demand deposits; (b) NOW
accounts (including accounts previously designated as “Super NOWs”); (c) ATS accounts; and
(d) telephone and preauthorized transfer
accounts, all as deﬁned below. Interest that is paid
by the crediting of transaction accounts is also
included in transaction accounts.

(a) Demand deposits are 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. Effective July 21, 2011, demand
deposits may be interest-bearing or
noninterest-bearing. 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 non-proﬁt recreational
clubs; or
(iii) Governmental units including the federal government and its agencies and
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Glossary

instrumentalities; state governments;
county and municipal governments
and their political subdivisions; the
District of Columbia; the Commonwealth of Puerto Rico, American
Samoa, Guam, and any territory or
possession of the United States and
their political subdivisions.
Also included are the balances of all NOW
accounts of certain other nonproﬁt organizations that may not fall within the above
description but that had established NOW
accounts with the reporting institution prior
to September 1, 1981.
NOTE: There are no regulatory requirements with respect to minimum balances to
be maintained in a NOW account or to the
amount of interest that may be paid on a
NOW account.
(c) ATS accounts are deposits or accounts of
individuals or sole proprietorships on which
the depository institution has reserved the
right to require at least seven days’ written
notice prior to withdrawal or transfer of any
funds in the account and from which, pursuant to written agreement arranged in
advance between the reporting institution
and the depositor, withdrawals may be made
automatically through payment to the
depository institution itself or through
transfer of credit to a demand deposit or
other account in order to cover checks or
drafts drawn upon the institution or to
maintain a speciﬁed balance in, or to make
periodic transfers to, such other accounts.
Some institutions may have entered into
agreements with their customers providing
that in the event the customer should overdraw a demand deposit (checking) or NOW
account, the institution will transfer from
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
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

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Glossary

be used for the purpose of making payments or transfers to third parties or
others, or to another deposit account
of the depositor.
(ii) The balance of deposits or accounts
that otherwise meet the deﬁnition of
time deposits, but from which payments may be made to third parties by
means of a debit card, an automated
teller machine, remote service unit or
other electronic device, regardless of
the number of payments made.
However, an account is not a transaction
account merely by virtue of arrangements
that permit the following types of transfer
or withdrawals, regardless of the number:
(i) Transfers for the purpose of repaying
loans and associated expenses at the
same depository institution (as originator or servicer).
(ii) Transfers of funds from this account
to another account of the same depositor at the same depository institution
when made by mail, messenger, automated teller machine, or in person.
(iii) Withdrawals for payment directly to
the depositor when made by mail, messenger, automated teller machine, in
person, or by telephone (via check
mailed to the depositor).
(2) Nontransaction accounts—All deposits that are
not 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.
(a) Savings deposits are deposits with respect to
which the depositor is not required by the
deposit contract but may at any time be
required by the depository institution to give
written notice of an intended withdrawal
not less than seven days before withdrawal is
made, and that is not payable on a speciﬁed
date or at the expiration of a speciﬁed time
after the date of deposit. The term savings
deposit also means a deposit or account,
such as an account commonly known as a
passbook savings account, a statement savings account, or a money market deposit
account (MMDA), that otherwise meets the
requirements of the preceding paragraph
and from which, under the terms of the
deposit contract or by practice of the
depository institution, the depositor is permitted or authorized to make no more than
six transfers and withdrawals, or a combination of such transfers and withdrawals, per
calendar month or statement cycle (or similar period) of at least four weeks, to another
account (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; or 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).
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Glossary

(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 is required by regulation,
there is no regulatory limitation on the
amount of interest that may be paid, and no
minimum maturity is required (although
depository institutions must reserve the
right to require at least seven days’ written
notice prior to withdrawal as stipulated
above for a savings deposit).
Any depository institution may place
restrictions and requirements on savings
deposits in addition to those stipulated
above. In the case of such further restrictions, the account would still be reported as
a savings deposit. On the other hand, an
account that otherwise meets the deﬁnition
of a savings deposit but that authorizes or
permits the depositor to exceed the sixtransfer/withdrawal 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 pre-authorized 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) six allowable transfers to
be made by check, draft, debit card or
similar order made by the depositor
and payable to third parties.
(ii) Other savings deposits are deposits or
accounts that meet the above deﬁnition
of a savings deposit but that permit no
transfers by check, draft, debit card, or
similar order made by the depositor
and payable to third parties. Other savings deposits are commonly known as
passbook savings or statement savings
accounts.
Examples illustrating distinctions between
MMDAs and other savings deposits for purposes of this report are provided at the end
of this Glossary entry.
(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

GL-14
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Glossary

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.
(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.

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 special-purpose money market
deposit account (MMDA)), which is not subject to
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Glossary

reserve requirements. Depending upon the balances in
the two subaccounts on a particular day, the branch or
agency will shift funds from the transaction subaccount to the MMDA subaccount or vice versa. On
some days, the balance in the MMDA subaccount may
be zero. (For purposes of the Federal Reserve’s Regulation D, there is no distinction between an MMDA and
any other form of savings account in terms of legally
required restrictions on transfers.) For purposes of this
report, the transaction subaccount and MMDA subaccount must be treated separately when a branch or
agency reports its quarter-end deposit information in
Schedules RAL, E, and O.

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.”

Examples Illustrating Distinctions Between
MONEY MARKET DEPOSIT ACCOUNTS
(MMDAs) and OTHER SAVINGS DEPOSITS
Example 1

(III) Interest-bearing-noninterest-bearing deposit
distinction
(1) Interest-bearing deposit accounts consist of
deposit accounts on which the issuing depository
institution makes any payment to or for the
account of any depositor as compensation for the
use of funds constituting a deposit. Such compensation may be in the form of cash, merchandise, or property or as a credit to an account. An
institution’s absorption of expenses incident to
providing a normal banking function or its forbearance from charging a fee in connection with
such a service is not considered a payment of
interest.
Deposits with a zero percent interest rate that are
issued on a discount basis are to be treated as
interest-bearing. Deposit accounts on which the
interest rate is periodically adjusted in response to
changes in market interest rates and other factors
should be reported as interest-bearing even if the
rate has been reduced to zero, provided the interest rate on these accounts can be increased as
market conditions change.
(2) Noninterest-bearing deposit accounts consist of
deposit accounts on which the issuing depository
institution makes no payment to or for the
account of any depositor as compensation for the
use of funds constituting a deposit. An institution’s absorption of expenses incident to providing a normal banking function or its forbearance
from charging a fee in connection with such a service is not considered a payment of interest.

A savings deposit account permits no transfers of any
type to other accounts or to third parties.
Report this account as an other savings deposit.
Example 2
A savings deposit permits up to six, but no more than
six, “preauthorized, automatic, or telephonic” transfers to other accounts or to third parties. None of the
third-party payments may be made by check, draft, or
similar order (including debit card).
Report this account as an other savings deposit.
Example 3
A savings deposit permits no more than six “preauthorized, automatic, or telephonic” transfers to other
accounts or to third parties any or all of which may be
made 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 ASC Topic 815, Derivatives and Hedging (formerly

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Glossary

FASB Statement No. 133, “Accounting for Derivative
Instruments and Hedging Activities,” as amended),
which branches and agencies must follow for purposes
of this report. ASC Topic 815 requires all derivatives to
be recognized on the balance sheet as either assets or
liabilities at their fair value. A summary of the principal provisions of ASC Topic 815 follows. For further
information, see ASC Topic 815 which includes the
implementation guidance issued by the FASB’s
Derivatives Implementation Group.

Definition of a Derivative
ASC Topic 815 deﬁnes a “derivative instrument” as a
ﬁnancial instrument or other contract with all three of
the following characteristics:
(1) It has one or more underlyings (i.e., speciﬁed
interest rate, security price, commodity price, foreign exchange rate, index of prices or rates, or
other variable) and one or more notional
amounts (i.e., number of currency units, shares,
bushels, pounds, or other units speciﬁed in the
contract) or payment provisions or both. These
terms determine the amount of the settlement or
settlements, and in some cases, whether or not a
settlement is required;
(2) It requires no initial net investment or an initial
net investment that is smaller than would be
required for other types of contracts that would
be expected to have similar response to changes in
market factors; and
(3) Its terms require or permit net settlement, it can
be readily settled net by a means outside the contract, or it provides for delivery of an asset that
puts the recipient in a position not substantially
different from net settlement.
Certain contracts that may meet the deﬁnition of a
derivative are speciﬁcally excluded from the scope of
ASC Topic 815, 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;
• 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 ASC Topic
815’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 Treasury securities or mortgagebacked 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
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interest rate (one to be paid and one to be received), an
assumed principal 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 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)

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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 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 ASC Topic
815, 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.
Under ASC Subtopic 815-15, Derivatives and
Hedging—Embedded Derivatives (formerly FASB
Statement No. 155, “Accounting for Certain Hybrid
Financial Instruments”), a branch or agency with a
hybrid instrument for which bifurcation would otherwise be required is permitted to irrevocably elect to
initially and subsequently measure the hybrid instrument in its entirety at fair value with changes in fair
value recognized in earnings. In addition, ASC Subtopic 815-15 subjects all but the simplest forms of
interest-only and principal-only strips and all forms of
beneﬁcial interests in securitized ﬁnancial assets to the
requirements of ASC Topic 815. Thus, a branch or
agency must evaluate such instruments to identify
those that are freestanding derivatives or that are
hybrid ﬁnancial instruments that contain an embedded
derivative requiring bifurcation. However, a beneﬁcial
interest that contains a concentration of credit risk in
the form of subordination to another ﬁnancial instrument and certain securitized interests in prepayable
ﬁnancial assets are not considered to contain embedded derivatives that must be accounted for separately
from the host contract. For further information, see

ASC Subtopic 815-15, Derivatives and Hedging—
Embedded Derivatives (formerly Derivatives Implementation Group Issue No. B40, “Application of
Paragraph 13(b) to Securitized Interests in Prepayable
Financial Assets”).
Except in limited circumstances, interest-only and
principal-only strips and beneﬁcial interests in securitized assets that were recognized prior to the effective
date (or early adoption date) of ASC Subtopic 815-15
are not subject to evaluation for embedded derivatives
under ASC Topic 815.

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 ASC Topic 815,
Derivatives and Hedging (formerly FASB Statement
No. 133, “Accounting for Derivative Instruments and
Hedging Activities,” as amended), fair value is the
amount at which an asset (liability) could be bought
(incurred) or sold (settled) in a current transaction
between willing parties, that is, other than in a forced
or liquidation sale.
Quoted market prices in active markets are the best
evidence of fair value and should be used as the basis
for the measurement, if available. If a quoted market
price is available, the fair value is the product of the
number of trading units times that market price. If a
quoted market price is not available, the estimate of
fair value should be based on the best information
available in the circumstances. The estimate of fair
value should consider prices for similar assets or similar liabilities and the results of valuation techniques to
the extent available in the circumstances.
Examples of valuation techniques include the present
value of expected future cash ﬂows using discount rates
commensurate with the risk involved, option-pricing
models, matrix pricing, option-adjusted spread analysis, and fundamental analysis. Valuation techniques for
measuring assets and liabilities should be consistent
with the objective of measuring fair value. Those techniques should incorporate assumptions that market
participants would use in their estimates of values,
future revenues, and future expenses, including
assumptions about interest rates, default, prepayment,
and volatility.
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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 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 compo-

nent 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 availablefor-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 foreign-currency 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
value or cash ﬂows of the hedged item attributable to
changes in the benchmark interest rate2 (3) the risk of
changes in the fair value or cash ﬂows of the hedged
item attributable to changes in foreign exchange rates;
or (4) the risk of changes in the fair value or cash ﬂows
of the hedged item attributable to changes in the obligor’s creditworthiness. For held-to-maturity securities,
only credit risk, foreign exchange risk, or both may be
hedged
Designated hedging instruments and hedged items
qualify for fair value or cash ﬂow hedge accounting if
all of the criteria speciﬁed in ASC Topic 815 are met.
These criteria include:

2. The benchmark interest rate is a widely recognized and quoted
rate in an active ﬁnancial market that is broadly indicative of the overall
level of interest rates attributable to high-credit-quality obligors in that
market. In theory, this should be a risk-free rate. In the U.S., interest
rates on U.S. Treasury securities and the LIBOR swap rate are considered benchmark interest rates.

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(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 ASC Topic 815 are met. If similar assets or
similar liabilities are aggregated and hedged as a portfolio, the individual assets or individual liabilities must
share the risk exposure for which they are designated as
being hedged. The change in fair value attributable to
the hedged risk for each individual item in a hedged
portfolio must be expected to respond in a generally
proportionate manner to the overall change in fair
value of the aggregate portfolio attributable to the
hedged risk.
In a cash ﬂow hedge, the individual cash ﬂows related
to a recognized asset or liability and the cash ﬂows
related to a forecasted transaction are both referred to
as a forecasted transaction. Thus, a forecasted transaction is eligible for designation as a hedged transaction
if the forecasted transaction is speciﬁcally identiﬁed as
a single transaction or a group of individual transac-

tions, the occurrence of the forecasted transaction is
probable, and certain other criteria speciﬁed in Statement No. 133 are met. If the hedged transaction is a
group of individual transactions, those individual
transactions must share the same risk exposure for
which they are designated as being hedged.
An institution should discontinue prospectively its use
of fair value or cash ﬂow hedge accounting for an existing hedge if any of the qualifying criteria for hedge
accounting is no longer met; the derivative expires or is
sold, terminated, or exercised; or the institution
removes the designation of the hedge.
For a fair value hedge, in general, if a periodic assessment of hedge effectiveness indicates noncompliance
with the highly effective criterion that must be met in
order to qualify for hedge accounting, an institution
should not recognize adjustment of the carrying
amount of the hedged item for the change in the item’s
fair value attributable to the hedged risk after the last
date on which compliance with the effectiveness criterion was established.
With certain limited exceptions, a nonderivative instrument, such as a U.S. Treasury security, may not be designated as a hedging instrument.

Reporting Derivative Contracts
When an institution enters into a derivative contract, it
should classify the derivative as either held for trading
or held for purposes other than trading (end-user
derivatives) based on the reasons for entering into the
contract. All derivatives must be reported at fair value
on Schedule RAL.
Netting of derivative assets and liabilities is prohibited
on Schedule RAL except as permitted under ASC Subtopic 210-20, Balance Sheet—Offsetting (formerly
FASB Interpretation No. 39, “Offsetting of Amounts
Related to Certain Contracts”). See the Glossary entry
for “offsetting.”

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

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.

See “premiums and discounts.”

Changes in the fair value (that is, gains and losses) of
trading derivatives and net gains (losses) on derivatives
held for purposes other than trading that are not designated as hedging instruments should be recognized as
part of the unremitted proﬁt/loss reported on Schedule M, Due from/Due to Related Institutions in the
U.S. and in Foreign Countries, Part I, item 2(a), “Gross
due to/due from head office of parent bank.”
Branches and agencies must report the notional
amounts of their derivative contracts by risk exposure
in Schedule L, ﬁrst by type of contract in Schedule L,
item 9, and then by purpose of contract (i.e., trading,
other than trading) in Schedule L, items 10 and 11.
Branches and agencies must report the gross fair values
of their derivatives, both positive and negative, by risk
exposure and purpose of contract in Schedule L,
item 12.

Derivatives with Related Depository Institutions
The fair value of all derivatives with related depository
institutions, whether held for trading of for other purposes, should be included on Schedule RAL in item 2,
“Net due from related depository institutions,” or
item 5, “Net due to related depository institutions,” as
appropriate. Changes in the fair value (that is, gains
and losses) of these derivative contracts should also be
included in these net due from/due to accounts.
Branches and agencies must report the notional
amounts of their derivative contracts with related
depository institutions by risk exposure in Schedule M,
Part V, ﬁrst by type of contract in Schedule M, Part V,
item 9, and then by purpose of contract (i.e., trading,
other than trading), in Schedule M, Part V, items 10
and 11. Branches and agencies must report the gross
fair values of their derivatives, both positive and negative, by risk exposure and purpose of contract in
Schedule M, Part V, item 12.

Domicile
Domicile is used to determine the foreign (non-U.S.
addressee) or domestic (U.S. addressee) status of a customer of the reporting branch or agency, for purposes
of this report. Domicile is determined by the principal
residence address of an individual or the principal business address of a corporation, partnership, or sole proprietorship. If other addresses are used for correspondence or other purposes, only the principal address,
insofar as it is known to the reporting institution,
should be used in determining whether a customer
should be regarded as a U.S. or non-U.S. addressee.
For purposes of deﬁning customers of the reporting
branch or agency, U.S. addressees include residents of
the 50 states of the United States, the District of
Columbia, Puerto Rico, and U.S. territories and possessions. Non-U.S. addressees includes residents of any
foreign country. The term non-U.S. addressee generally
includes foreign-based subsidiaries of other U.S.
banks.
For customer identiﬁcation purposes, the IBFs of
other U.S. depository institutions are U.S. addressees.

Due Bills
A due bill is an obligation that results when a branch or
agency sells an asset and receives payment, but does not
deliver the security or other asset. A due bill can also
result from a promise to deliver an asset in exchange for
value received. In both cases, the receipt of the payment creates an obligation regardless of whether the
due bill is issued in written form.
Outstanding due bill obligations shall be reported as
borrowings in Schedule RAL, item 4(c), “Other borrowed money,” by the issuing branch or agency. Conversely, when the reporting branch or agency is the
holder of a due bill, the outstanding due bill obligation
of the seller shall be reported as a loan to that party.

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Edge and Agreement Corporation
An Edge corporation is a federally-chartered corporation organized under Section 25(a) of the Federal
Reserve Act and subject to Federal Reserve Regulation K. Edge corporations are allowed to engage only
in international banking or other ﬁnancial transactions
related to international business.
An Agreement corporation is a state-chartered corporation that has agreed to operate as if it were organized
under Section 25 of the Federal Reserve Act and has
agreed to be subject to Federal Reserve Regulation K.
Agreement corporations are restricted, in general, to
international banking operations. Banks must apply to
the Federal Reserve for permission to acquire stock in
an Agreement corporation.

Excess Balance Account
An excess balance account (EBA) is a limited-purpose
account at a Federal Reserve Bank established for
maintaining the excess balances of one or more depository institutions (participants) that are eligible to earn
interest on balances held at the Federal Reserve Banks.
An EBA is managed by another depository institution
that has its own account at a Federal Reserve Bank
(such as a participant’s pass-through correspondent)
and acts as an agent on behalf of the participants. Balances in an EBA represent a liability of a Federal
Reserve Bank directly to the EBA participants and not
to the agent. The Federal Reserve Banks pay interest
on the average balance in the EBA over a 7-day maintenance period and the agent disburses that interest to
each participant in accordance with the instructions of
the participant. Only a participant’s excess balances
may be placed in an EBA; the account balance cannot
be used to satisfy the participant’s reserve balance
requirements or contractual clearing agreements.
The reporting of an EBA by participants and agents
differs from the required reporting of a pass-through
reserve relationship, which is described in the Glossary
entry for “pass-through reserve balances.”
A participant’s balance in an EBA is to be treated as a
claim on a Federal Reserve Bank (not as a claim on the
agent) and, as such, should be reported on the balance
sheet in Schedule RAL, item 1(a), “Cash and balances
due from depository institutions.” A participant

should not include its balance in an EBA in Schedule RAL, item 1(d)(1), “Federal Funds sold.”
The balances in an EBA should not be reﬂected as an
asset or a liability on the balance sheet of the depository institution that acts as the agent for the EBA.
Thus, the agent should not include the balances in the
EBA in Schedule RAL, item 1(a), “Cash and balances
due from depository institutions”; Schedule RAL,
item 4(a), “Total deposits and credit balances”; or
Schedule A, item 5, “Balances due from Federal
Reserve Banks.”

Extinguishments of Liabilities
The accounting and reporting standards for extinguishments of liabilities are set forth in ASC Subtopic
405-20, Liabilities—Extinguishments of Liabilities
(formerly FASB Statement No. 140, “Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”). Under ASC Subtopic 40520, 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.
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Fair Value
The accounting standard for fair value measurements
that should be applied in accounting pronouncements
that require or permit fair value measurements is ASC
Topic 820, Fair Value Measurements and Disclosures
(formerly FASB Statement No. 157, “Fair Value Measurements”). For further information, refer to ASC
Topic 820.
ASC Topic 820 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 measurement date. The transaction is
assumed to occur based on an exit price notion versus
an entry price.
ASC Topic 820 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.

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.

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.

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Glossary

A continuing contract is a contract or agreement that
remains in effect for more than one business day, but
has no speciﬁed maturity and does not require advance
notice of either party to terminate. Such contracts may
also be known as rollovers or as open-ended
agreements.
Federal funds may take the form of the following two
types of transactions provided that the transactions
meet the above criteria (i.e., immediately available
funds with an original maturity of one business day or
under a continuing contract):
(1) Unsecured loans (federal funds sold) or borrowings (federal funds purchased). (In some market
usage, the term ‘ ed funds” or “pure fed funds” is
conﬁned to unsecured loans of immediately available balances.)
(2) Purchases (sales) of ﬁnancial assets (other than
securities) under agreements to resell (repurchase)
that have original maturities of one business day
(or are 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 federally-sponsored 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 Currency Transactions
Foreign currency transactions are transactions occurring in the ordinary course of business (e.g., purchases,
sales, borrowings, lendings, forward exchange contracts) denominated in currencies other than the
branch or agency’s functional currency (as described
below).
A functional currency is the currency of the primary
economic environment in which an office operates. For
the U.S. branches or agencies of foreign banks, the
functional currency will be the U.S. dollar.

Foreign Governments and Official Institutions
Foreign governments and official institutions are central, state, provincial, and local governments in foreign
countries and their ministries, departments, and agencies. These include treasuries, ministries of ﬁnance,
central banks, development banks, exchange control
offices, stabilization funds, diplomatic establishments,
ﬁscal agents, and nationalized banks and other banking institutions that are owned by central governments
and that have as an important part of their function
activities similar to those of a treasury, central bank,
exchange control office, or stabilization fund. For purposes of this report, other government-owned enterprises are not included.
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 InterAmerican Development Bank, and the United
Nations.

Forward Contracts
See “derivative contracts.”

Futures Contracts
See “derivative contracts.”

Hypothecated Deposit
Foreign Banks
See “banks, U.S. and foreign.”

A hypothecated deposit is the aggregation of periodic
payments on an installment contract received by a
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Glossary

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.

tion 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).

Guidance on the accounting and reporting for the
costs of internal-use computer software is set forth in
ASC Subtopic 350-40, Intangibles-Goodwill and
Other—Internal-Use Software (formerly 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 ASC Subtopic 350-40.

Internal and external costs incurred to develop
internal-use 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;

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

Internal-Use Computer Software

(2) During the software’s development or
modiﬁcation, no substantive plan exists or is
being developed to market the software externally.
ASC Subtopic 350-40 identiﬁes three stages of development for internal-use software: the preliminary project stage, the application development stage, and the
post-implementation/operation stage. The processes
that occur during the preliminary project stage of software 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 post-implementation/ opera-

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

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Glossary

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 ASC Topic 360, Property, Plant, and
Equipment (formerly FASB Statement No. 144,
“Accounting for the Impairment or Disposal of LongLived Assets”).
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 ASC Subtopic 985-20, Software—Costs of Software to Be Sold, Leased or Marketed (formerly 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);

(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 nonU.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.
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Glossary

Standards for lease accounting are set forth in ASC
Topic 840, Leases (formerly 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 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 capitallease:
(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.

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 ASC Subtopic 840-40, Leases—SaleLeaseback Transactions (formerly FASB Statement
No. 28, “Accounting for Sales with Leasebacks”).

Accounting with branch or agency as lessor
Unless a long-term creditor is also involved in the
transaction, a lease entered into by a lessor branch or
agency that meets one of the four criteria above for a
capital lease plus two additional criteria (as deﬁned
below) shall be treated as a direct ﬁnancing lease. The
unearned income (minimum lease payments plus estimated residual value plus initial direct costs less the
cost of the leased property) shall be amortized to
income over the lease term in a manner which produces
a constant rate of return on the net investment.
The following two additional criteria must be met for a
lease to be classiﬁed as a direct ﬁnancing lease:
(1) Collectability of the minimum lease payments is
reasonably predictable.

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.

(2) No important uncertainties surround the amount
of unreimbursable costs yet to be incurred by the
lessor under the lease.

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 ASC Topic 840.

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.

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

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.

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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;
(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:
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:
(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.
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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;
(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

ASC Subtopic 310-20, Receivables—Nonrefundable
Fees and Other Costs (formerly 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 ASC Subtopic
310-20. 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 are referred to as loan origination
fees, commitment fees, or syndication fees. ASC Subtopic 310-20 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 ASC Subtopic 310-20 or if the result does
not differ materially from the amount that would have
been recognized on an individual loan-by-loan 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 ASC Subtopic 310-20,
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.

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(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 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
effectiveyield necessary to apply the interest
method. Once a branch or agency adopts ASC
Subtopic 310-20, 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.
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 andwould 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 payrollGL-31

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related 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. Administrative 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,
part I. 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 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, part I, 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.

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.

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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
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 ASC Subtopic 210-20, Balance
Sheet—Offsettting (formerly 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, indicates that there is reasonable
assurance that the right of setoff would be upheld
in bankruptcy (or receivership). According to
ASC Subtopic 210-20, 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
counter-party 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
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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 ASC Subtopic 210-20. 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, ASC Subtopic
210-20, Balance Sheet—Offsetting (formerly
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.”

“loan” rather than being treated as a negative deposit
balance.
Planned overdrafts are to be classiﬁed in Schedule C
bytype 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, part I as “All other loans,”
unless the depositor is a depository institution, in
which case it would be reported in Schedule C, part I 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.

Other Depository Institutions in the U.S.
See “depository institutions in the U.S.”

Participations
See “transfers of ﬁnancial assets.”

Overdraft
An overdraft can be either planned or unplanned. An
unplanned overdraft occurs when a depository institution honors a check or draft drawn against a deposit
account when insufficient funds are on deposit and
there is no advance contractual agreement to honor the
check or draft. When a contractual agreement has been
made in advance to allow such credit extensions, overdrafts are referred to as planned or prearranged. Any
overdraft, whether planned or unplanned, is an extension of credit and is to be treated and reported as a

Participations in Acceptances
See “bankers acceptances.”

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.

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

For branches or agencies that are correspondents for
related institutions, the pass-through reserve balances
are to be treated as due to U.S. domiciled offices of
related depository institutions and, to the extent that
the balances have actually been passed through to the
Federal Reserve, as balances due from the Federal
Reserve. The balances due to respondents are to be
reﬂected in Schedule M, Due from/Due to Related
Institutions in the U.S. and Foreign Countries, item 1,
“U.S. domiciled offices of related depository institutions (including their IBFs).” The balances due from
the Federal Reserve are to be reﬂected in Schedule RAL, item 1(a), and in Schedule A, item 5.
Since the respondent will not know from its own books
the amount that the correspondent has actually passed
through to the Federal Reserve for the respondent’s
account, the respondent must obtain a statement of
this amount from its correspondent.
The reporting of pass-through reserve balances by correspondent and respondent banks differs from the
required reporting of excess balance accounts by participants and agents, which is described in the Glossary
entry for “excess balance accounts.”

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 and leases held for investment and held for sale” (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, Participation in
See “repurchase/resale agreements.”
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Preauthorized Transfer Account
See “deposits”

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.

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

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 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.

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(4) Edge and Agreement corporations (including
their branches, agencies, IBFs, and majorityowned 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)
majority-owned 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.

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 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) 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).

(4) New York State (Article XII) investment company: any company that is subject to Article XII
of the New York State banking law.

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:

Repurchase/Resale Agreements

(1) The assets to be repurchased or redeemed are the
same or “substantially the same” as those transferred, as deﬁned by ASC Topic 860.

A repurchase agreement is a transaction involving the
“sale” of ﬁnancial assets by one party to another, subject to an agreement by the “seller” to repurchase the
assets at a speciﬁed date or in speciﬁed circumstances.
A resale agreement (also known as a reverse repurchase
agreement) is a transaction involving the “purchase” of
ﬁnancial assets by one party from another, subject to
an agreement by the“purchaser” to resell the assets at a
speciﬁed date or in speciﬁed circumstances.
As stated in the AICPA’s Audit and Accounting Guide
for Banks and Savings Institutions, dollar repurchase

(2) The “selling” institution has the ability to repurchase or redeem the transferred assets on substantially the agreed terms, even in the event of
default by the transferee (“purchaser”). This ability is presumed to exist if the “selling” institution
has obtained cash or other collateral sufficient to
fund substantially all of the cost of purchasing
replacement assets from others.
(3) The agreement is to repurchase or redeem the
transferred assets before maturity, at a ﬁxed or
determinable price.
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(4) The agreement is entered into concurrently with
the transfer.

the agreement involves a security or some other
ﬁnancial asset.

Participations in pools of securities are to be reported
in the same manner as security repurchase/resale
transactions.

(1) Securities “purchased” under agreements to resell
are reported in Schedule RAL, item 1(d)2, “
Securities purchased under agreements to resell.”

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.

(2) Financial assets (other than securities) “purchased” under agreements to resell are reported
as follows:

(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 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

(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,
held for investment and held for sale.
In addition, the purchasing institution may need to
record further entries depending on the terms of the
agreement. If the “purchasing” institution has the
right to sell the noncash assets it has “purchased” and
sells these assets, it should recognize the proceeds from
the sale and report its obligation to return the assets in
Schedule RAL, item 4(f), “Other liabilities to nonrelated parties.” If the “selling institution defaults
under the terms of the repurchase agreement and is no
longer entitled to redeem the noncash assets, the “purchasing” institution should report these assets on
Schedule RAL in the appropriate asset category (e.g.,
securities should be reported in Schedule RAL,
item 1(b), “U.S. Government Securities,” item 1(c),
“Other bonds, notes, debentures, and corporate stock,”
or item 1(f), “Trading assets,” as appropriate) and initially measure them at fair value. However, if the “purchasing” institution has already sold the assets it has
“purchased,” it should derecognize its obligation to
return the assets. Otherwise, the “purchasing” institution should not report the transferred ﬁnancial assets
(i.e., the ﬁnancial assets “purchased” under the resale
agreement) on Schedule RAL.
Repurchase/resale agreements reported as sales—If a
repurchase agreement does not qualify as a secured
borrowing under ASC Topic 860, the selling institution
should account for the transaction as a sale of ﬁnancial
assets and a forward repurchase commitment. The

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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 ASC Topic
860, 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
ASC Topic 320, Investments-Debt and Equity Securities (formerly 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
available-for-sale. An institution must report its
available-for-sale securities at fair value on Schedule RAL and report any unrealized gains or losses from
these securities as part of its unremitted proﬁt (loss),
which is reported in Schedule RAL, item 2, “Net due

from related depository institutions,” or item 5, “Net
due to related depository institutions.”
If a decline in fair value of a held-to-maturity or
available-for-sale security is judged to be other than
temporary, the cost basis of the individual security
shall be written down to fair value as a new cost basis.
For example, if it is probable that an institution will be
unable to collect all amounts due according to the contractual terms of a debt security not impaired at acquisition, an other-than-temporary impairment has
occurred.
The proper categorization of securities is important to
ensure that trading gains and losses are promptly recognized in the institution’s earnings and trading activities can be properly evaluated for safety and soundness
purposes. This will not occur when securities intended
to be held for trading purposes are categorized as heldto-maturity 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-tomaturity portfolio. Gains trading may be
intended to defer recognition of losses, as unrealized losses on available-for-sale and held-tomaturity 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 shortterm 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 preGL-39

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determined 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 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 mortgagebacked 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 regularway 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
trading involves the sale of a security to a broker or
dealer at a price above the prevailing market value and
the contemporaneous purchase and booking of a different security, frequently a lower-rated or lower quality issue or one with a longer maturity, at a price above
its market value. Thus, the dealer is reimbursed for
losses on the purchase from the institution and ensured
a proﬁt. Such transactions inappropriately defer the
recognition of losses on the security sold and establish
an excessive cost basis for the newly acquired security.
Consequently, such transactions are prohibited and
may be in violation of 18 U.S.C. Sections 1001—False
Statements or Entries and 1005— False Entries.

Securities Borrowing/Lending Transactions
Securities borrowing/lending transactions are typically
initiated by broker–dealers and other ﬁnancial institutions that need speciﬁc securities to cover a short sale
or a customer’s failure to deliver securities sold. A
transferee (“borrower”) of securities generally is
required to provide “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 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), 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

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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 ASC Topic 860, the lender
of the securities should remove the securities from
Schedule RAL and record the proceeds from the sale of
the securities (including the forward repurchase commitment). The borrower of the securities should record
the securities on Schedule RAL at fair value and record
the payment for the purchased assets (including the
forward resale commitment).

Securities, Participations in Pools of
See “repurchase/ resale agreements.”

Servicing Assets and Liabilities
The accounting and reporting standards for servicing
assets and liabilities are set forth in ASC Subtopic 86050, Transfers and Servicing—Servicing Assets and Liabilites (formerly FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilites,” as amended by FASB
Statement No. 156, “Accounting for Servicing of
Financial Assets, ” and FASB Statement No. 166,
“Accounting for Transfers of Financial Assets”), and
ASC Topic 948, Financial Services-Mortgage Banking
(formerly 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 ASC Subtopic 860-50, ASC
Topic 948, 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, 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 heldGL-41

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to-maturity debt securities, no separate servicing asset
or liability shall be recorded. If a branch or agency purchases servicing assets or assumes servicing liabilities
in a transaction other than a sale or securitization of
the ﬁnancial assets being serviced, the asset or liability
shall be recorded at fair value. For purchased servicing
assets, the fair value is presumptively the price paid to
acquire the servicing.
All servicing assets and liabilities carried on the books
of reporting branches and agencies shall be amortized
in proportion to, and over the period of, estimated net
servicing income (servicing revenue in excess of servicing costs) or net servicing loss (servicing costs in excess
of servicing revenue). The book value of servicing
assets and liabilities should be reviewed at least quarterly. The servicing assets shall be stratiﬁed into groups
based on one or more of the predominant risk characteristics of the underlying ﬁnancial assets for purposes
of determining fair value. If the book value of a stratum of a servicing asset exceeds its fair value, the servicing asset is considered to be impaired and the book
value shall be reduced to fair value through a valuation
allowance for that stratum. If the fair value of a servicing liability increases above the book value, the
increased obligation shall be recognized as a loss in
current earnings. The fair value of servicing assets
(liabilities) is the amount at which the assets (liabilities)
could be bought (incurred) or sold (settled) in a bona
ﬁde transaction between willing parties.

Settlement Date Accounting
See “trade date and settlement date accounting.”

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.

Shell Branches

Syndications

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.

A syndication is a participation, usually involving
shares in a single loan, in which several participants
agree to enter into an extension of credit under a bona
ﬁde binding agreement that provides that, regardless of
any event, each participant shall fund and be at risk
only up to a speciﬁed percentage of the total extension
of credit or up to a speciﬁed dollar amount. In a syndication, the participants agree to the terms of the participation prior to the execution of the ﬁnal agreement
and the contract is executed by the obligor and by all

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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

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

See “federal funds transactions.”

Trading Account
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

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 Sched ule
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 this report. For further information, see
ASC Topic 320, Investments–Debt and Equity Securities (formerly FASB Statement No. 115, “Accounting
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for Certain Investments in Debt and Equity
Securities”).
All trading account assets should be reported at their
fair value as defined in ASC Topic 820, Fair Value
Measurement (formerly FASB Statement No. 157,
“Fair Value Measurements”), 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-to-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 as
defined in ASC Topic 820 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
deposi tory institutions. Moreover, transactions with
related depository institutions are treated differently
from transactions with related nondepository institutions (i.e., transactions with related nondepository
institutions are treated in the same manner as transactions with nonrelated depository or nondepository
institutions) if certain criteria, which are explained
below, are met. The following describes the treatment
of each type of transaction:
(1) Transactions with nonrelated institutions — Transactions with nonrelated institutions are to be
reﬂected, as appropriate, in each item of Schedule RAL and supporting schedules other than
(a) the items on net due from and due to related
depository 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, Part I or Part II.
(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 generally 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, Part I or Part II.

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Note that transactions with related nondepository
institutions are reported in Schedule M, Part III.
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
Sched ule RAL (and in Schedule M, Part I or Part II)
as appropriate and not in 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 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 by FASB Statement No. 156, “Accounting
for Servicing of Financial Assets,” FASB Statement
No. 166, “Accounting for Transfers of Financial
Assets,” and certain other standards). Institutions
must follow ASC Topic 860 for purposes of this report.
ASC Topic 860 limits the circumstances in which a
ﬁnancial asset, or a portion of a ﬁnancial asset, should
be derecognized when the transferor has not transferred the entire original ﬁnancial asset or when the
transferor has continuing involvement with the transferred ﬁnancial asset. ASC Topic 860 also deﬁnes a
“participating interest” (which is discussed more fully
below) and establishes the accounting and reporting
standards for loan participations, syndications, and
other transfers of portions of ﬁnancial assets. A summary of these accounting and reporting standards follows. For further information, see ASC Topic 860.
A ﬁnancial asset is cash, evidence of an ownership
interest in another entity, or a contract that conveys to
the institution 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 an institution’s balance sheet 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.
A transferor is an entity that transfers a ﬁnancial asset,
an interest in a ﬁnancial asset, or a group of ﬁnancial
assets that it controls to another entity. A transferee is
an entity that receives a ﬁnancial asset, an interest in a
ﬁnancial asset, or a group of ﬁnancial assets from a
transferor.
In determining whether an institution has surrendered
control over transferred ﬁnancial assets, the institution
must ﬁrst consider whether the entity to which the
ﬁnancial assets were transferred would be required to
be consolidated by the institution. If it is determined
that consolidation would be required by the institution, then the transferred ﬁnancial assets would not be
treated as having been sold in the institution’s
FFIEC 002 report even if all of the other provisions
listed below are met.4

Determining Whether a Transfer Should be
Accounted for as a Sale or a Secured Borrowing
A transfer of an entire ﬁnancial asset, a group of entire
ﬁnancial assets, or a participating interest in an entire
ﬁnancial asset in which the transferor surrenders control over those ﬁnancial assets shall be accounted for as
a sale if and only if all of the following conditions
are met:
(1) The transferred ﬁnancial 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.
Transferred ﬁnancial assets are isolated in bankruptcy or other receivership only if the transferred ﬁnancial assets would be beyond the reach
3. ASC Topic 860 deﬁnes 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.
4. The requirements in ASC Subtopic 810-10, Consolidation—
Overall (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)”),
should be applied to determine when a variable interest entity should be
consolidated.

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of the powers of a bankruptcy trustee or other
receiver for the transferor or any of its consolidated affiliates included in the ﬁnancial statements being presented. For multiple step transfers, an entity that is designed to make remote the
possibility that it would enter bankruptcy or
other receivership (bankruptcy-remote entity) is
not considered a consolidated affiliate for purposes of performing the isolation analysis. Notwithstanding the isolation analysis, each entity
involved in the transfer is subject to the applicable
guidance on whether it must be consolidated.
(2) Each transferee (or, if the transferee is an entity
whose sole purpose is to engage in securitization
or asset-backed ﬁnancing activities and that
entity is constrained from pledging or exchanging
the assets it receives, each third-party holder of its
beneﬁcial interest) has the right to pledge or
exchange the assets (or beneﬁcial interests) it
received, and no condition both constrains the
transferee (or third-party holder of its beneﬁcial
interests) from taking advantage of its right to
pledge or exchange and provides more than a
trivial beneﬁt to the transferor.
(3) The transferor, its consolidated affiliates included
in the ﬁnancial statements being presented, or its
agents do not maintain effective control over the
transferred ﬁnancial assets or third-party
beneﬁcial interests related to those transferred
assets. Examples of a transferor’s effective control
over the transferred ﬁnancial assets include, but
are not limited to (a) an agreement that both
entitles and obligates the transferor to repurchase
or redeem the transferred ﬁnancial assets before
their maturity, (b) an agreement that provides the
transferor with both the unilateral ability to cause
the holder to return speciﬁc ﬁnancial assets and a
more-than-trivial beneﬁt attributable to that ability, other than through a cleanup call, or (c) an
agreement that permits the transferee to require
the transferor to repurchase the transferred
ﬁnancial assets at a price that is so favorable to
the transferee that it is probable that the transferee will require the transferor to repurchase
them.
If a transfer of an entire ﬁnancial asset, a group of
entire ﬁnancial assets, or a participating interest in an

entire ﬁnancial asset does not meet the conditions for
sale treatment, or if a transfer of a portion of an entire
ﬁnancial asset does not meet the deﬁnition of a participating interest (discussed below), the transferor and
the transferee shall account for the transfer as a secured
borrowing with pledge of collateral. The transferor
shall continue to report the transferred ﬁnancial assets
in its ﬁnancial statements with no change in their measurement (i.e., the original basis of accounting for the
transferred ﬁnancial assets is retained).

Accounting for a Transfer of an Entire Financial
Asset or a Group of Entire Financial Assets That
Qualiﬁes as a Sale
Upon the completion of a transfer of an entire
ﬁnancial asset or a group of entire ﬁnancial assets that
satisﬁes all three of the conditions to be accounted for
as a sale, the transferee(s) (i.e., purchaser(s)) must recognize all assets obtained and any liabilities incurred
and initially measure them at fair value. The transferor
(seller) should:5
(1) Derecognize or remove the transferred ﬁnancial
assets from the balance sheet.
(2) Recognize and initially measure at fair value servicing assets, servicing liabilities, and any other
assets obtained (including a transferor’s beneﬁcial
interest in the transferred ﬁnancial assets) and
liabilities incurred in the sale.
(3) Recognize in earnings any gain or loss on the sale
(as reﬂected in net due from/due to accounts).
If, as a result of a change in circumstances, an institution transferor regains control of a transferred
ﬁnancial asset after a transfer that was previously
accounted for as a sale because one or more of the conditions for sale accounting in ASC Topic 860 are no
longer met or a transferred portion of an entire
ﬁnancial asset no longer meets the deﬁnition of a participating interest, such a change generally should be
accounted for in the same manner as a purchase of the
transferred ﬁnancial asset from the former transferee
(purchaser) in exchange for a liability assumed. The
transferor should recognize (rebook) the ﬁnancial asset
5. The guidance in this section of this Glossary entry does not apply
to a transfer of a participating interest in an entire ﬁnancial asset that
qualiﬁes as a sale. The accounting for such a transfer is discussed in a
separate section later in this Glossary entry.

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on its balance sheet together with a liability to the former transferee, measuring the asset and liability at fair
value on the date of the change in circumstances. If the
rebooked ﬁnancial asset is a loan, it must be reported
as a loan in Schedule C, part I, either as a loan held for
sale or a loan held for investment, based on facts and
circumstances, in accordance with generally accepted
accounting principles. The liability to the former transferee should be reported as a secured borrowing in the
appropriate item in Schedule P, Other Borrowed
Money. This accounting and reporting treatment
applies, for example, to U.S. Government-guaranteed
or -insured residential mortgage loans backing Government National Mortgage Association (GNMA)
mortgage-backed securities that an institution services
after it has securitized the loans in a transfer accounted
for as a sale. If and when individual loans later meet
delinquency criteria speciﬁed by GNMA, they are eligible for repurchase (buy-back) and the institution is
deemed to have regained effective control over these
loans. The delinquent loans must be brought back onto
the institution’s books and recorded as loans, regardless of whether the institution intends to exercise the
buy-back option.
Institutions should refer to ASC Topic 860 for implementation guidance for accounting for transfers of
certain lease receivables, securities lending transactions, repurchase 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 provideguidance 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.

Participating Interests
Before considering whether the conditions to be
accounted for as a sale have been met (as discussed
above), the transfer of a portion of an entire ﬁnancial
asset must ﬁrst meet the deﬁnition of a participating
interest. If the transferred portion of the entire
ﬁnancial asset is a qualifying participating interest (as
deﬁned below), then it should be determined whether

the transfer of the participating interest meets the sales
conditions discussed above.
A participating interest in an entire ﬁnancial asset, as
deﬁned by ASC Topic 860, has all of the following
characteristics:
(1) From the date of the transfer, it must represent a
proportionate (pro rata) ownership interest in an
entire ﬁnancial asset;
(2) From the date of the transfer, all cash ﬂows
received from the entire ﬁnancial asset, except any
cash ﬂows allocated as compensation for servicing
or other services performed (which must not be
subordinated and must not signiﬁcantly exceed an
amount that would fairly compensate a substitute
service provider should one be required), must be
divided proportionately among the participating
interest holders in an amount equal to their share
of ownership;
(3) The rights of each participating interest holder
(including the lead lender) must have the same
priority, no interest is subordinated to another
interest, and no participating interest holder has
recourse to the lead lender or another participating interest holder other than standard representations and warranties and ongoing contractual
servicing and administration obligations; and
(4) No party has the right to pledge or exchange the
entire ﬁnancial asset unless all participating interest holders agree to do so.
Thus, under ASC Topic 860, so-called “last-in, ﬁrstout” (LIFO) participations in which all principal cash
ﬂows collected on the loan are paid ﬁrst to the party
acquiring the participation do not meet the deﬁnition
of a participating interest. Similarly, so-called “ﬁrst-in,
ﬁrst-out” (FIFO) participations in which all principal
cash ﬂows collected on the loan are paid ﬁrst to the
lead lender do not meet the deﬁnition of a participating interest. As a result, neither LIFO nor FIFO participations transferred on or after the beginning of an
institution’s ﬁrst annual reporting period that begins
after November 15, 2009 (i.e., January 1, 2010, for an
institution with a calendar year ﬁscal year) will qualify
for sale accounting and instead must be reported as
secured borrowings.
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The participating interest deﬁnition also applies to
transfers of government-guaranteed portions of loans,
such as those guaranteed by the Small Business
Administration (SBA). In this regard, if an institution
transfers the guaranteed portion of an SBA loan at a
premium, the “seller” is obligated by the SBA to refund
the premium to the “purchaser” if the loan is repaid
within 90 days of the transfer. This premium refund
obligation is a form of recourse, which means that the
transferred guaranteed portion of the loan does not
meet the deﬁnition of a “participating interest” for the
90-day period that the premium refund obligation
exists. As a result, the transfer must be accounted for as
a secured borrowing during this period. After the
90-day period, assuming the transferred guaranteed
portion and the retained unguaranteed portion of the
SBA loan now meet the deﬁnition of a “participating
interest,” the transfer of the guaranteed portion can be
accounted for as a sale if all of the conditions for sale
accounting are met. In contrast, if the guaranteed portion of the SBA loan is transferred at par in a so-called
“par sale” in which the “seller” agrees to pass interest
through to the “purchaser” at less than the contractual
interest rate and the spread between the contractual
rate and the pass-through interest rate signiﬁcantly
exceeds an amount that would fairly compensate a substitute servicer, the excess spread is viewed as an
interest-only strip. The existence of this interest-only
strip results in a disproportionate sharing of the cash
ﬂows on the entire SBA loan, which means that the
transferred guaranteed portion and the retained
unguaranteed portion of the SBA loan do not meet the
deﬁnition of a “participating interest,” which precludes sale accounting. Instead, the transfer of the
guaranteed portion must be accounted for as a secured
borrowing.

Accounting for a Transfer of a Participating Interest
That Qualiﬁes as a Sale
Upon the completion of a transfer of a participating
interest that satisﬁes all three of the conditions to be
accounted for as a sale, the participating institution(s) (the transferee(s)) shall recognize the participating interest(s) obtained, other assets obtained, and any
liabilities incurred and initially measure them at fair
value. The originating lender (the transferor) must:
(1) Allocate the previous carrying amount of the
entire ﬁnancial asset between the participating

interest(s) sold and the participating interest that
it continues to hold based on their relative fair
values at the date of the transfer.
(2) Derecognize the participating interest(s) sold.
(3) Recognize and initially measure at fair value servicing assets, servicing liabilities, and any other
assets obtained and liabilities incurred in the sale.
(4) Recognize in earnings any gain or loss on the sale
(as reﬂected in net due from/due to accounts).
(5) Report any participating interest(s) that continue
to be held by the originating lender as the difference between the previous carrying amount of the
entire ﬁnancial asset and the amount
derecognized.

Additional Considerations Pertaining to
Participating Interests
When evaluating whether the transfer of a participating interest in an entire ﬁnancial asset satisﬁes the conditions for sale accounting under ASC Topic 860, 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 to sell or pledge the
participating interest that shall not be unreasonably
withheld, or a prohibition on the participating institution’s sale of the participating interest 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 participating interest. However, if the
participation agreement constrains the participating
institution from pledging or exchanging its participating interest, the originating lender presumptively
receives more than a trivial beneﬁt, has not relinquished control over the participating interest, and
should account for the transfer of the participating
interest as a secured borrowing.
A loan participation agreement may give the originating lender the contractual right to repurchase a participating interest at any time. In this situation, the right to
repurchase is effectively a call option on a speciﬁc participating interest, i.e., a participating interest that is
not readily obtainable in the marketplace. Regardless
of whether this option is freestanding or attached, it

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either constrains the participating institution from
pledging or exchanging its participating interest or
results in the originating lender maintaining effective
control over the participating interest. As a consequence, the contractual right to repurchase precludes
sale accounting and the transfer of the participating
interest should be accounted for as a secured borrowing, not as a sale.
In addition, under a loan participation agreement, the
originating lender may give the participating institution the right to resell the participating interest, but
reserves the right to call the participating interest at any
time from whoever holds it and can enforce that right
by discontinuing the ﬂow of interest to the holder of
the participating interest at the call date. In this situation, the originating lender has maintained effective
control over the participating interest and the transfer
of the participating interest should be accounted for as
a secured borrowing, not as a sale.
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 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 the appropriate item in Schedule P, Other Borrowed
Money.

Reporting Transfers of Loan Participations That Do
Not Qualify for Sale Accounting
If a transfer of a portion of an entire ﬁnancial asset
does not meet the deﬁnition of a participating interest,

or if a transfer of a participating interest does not meet
all of the conditions for sale accounting, the transfer
must be reported as a secured borrowing with pledge of
collateral. In these situations, because the transferred
loan participation does not qualify for sale accounting,
the originating lender must continue to report the
transferred participation (as well as the retained portion of the loan) as a loan on the balance sheet (Schedule RAL), normally in item 1.e, “Loans and leases held
for investment and held for sale,” and in the appropriate loan category in Schedule C, part I, Loans and
Leases. The originating lender should report the transferred loan participation as a secured borrowing on the
balance sheet in Schedule RAL, item 4.c, “Other borrowed money,” and in the appropriate item or items in
Schedule P, Other Borrowed Money. As a consequence, if the branch or agency that is the originating
lender chooses to maintain an allowance for loan
losses, the transferred loan participation should be
included in the originating lender’s loans and leases for
purposes of determining the appropriate level for the
lender’s allowance.
An institution that acquires a nonqualifying loan participation (or a qualifying participating interest in a
transfer that does not does not meet all of the conditions for sale accounting) should normally report the
loan participation or participating interest in item 1.e,
“Loans and leases held for investment and held for
sale,” on the balance sheet (Schedule RAL) and in the
loan category appropriate to the under-lying loan, e.g.,
as a “commercial and industrial loan” in item 4 or as a
“loan secured by real estate” in item 1, in Schedule C,
part I, Loans and Leases.

Financial Assets Subject to Prepayment
Financial assets such as interest-only strips receivable,
other beneﬁcial interests, loans, debt securities, and
other receivables, but excluding ﬁnancial instruments
that must be accounted for as derivatives, that can contractually be prepaid or otherwise settled in such a way
that the holder of the ﬁnancial asset would not recover
substantially all of its recorded investment do not
qualify to be accounted for at amortized cost. After
their initial recording on the balance sheet, ﬁnancial
assets of this type must be subsequently measured at
fair value like available-for-sale securities or trading
securities.
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Glossary

Traveler’s Letter of Credit

U.S. Territories and Possessions

See “letter of credit.”

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

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 ASC Topic
740, Income Taxes (formerly FASB Statement No. 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.
(1) 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.”
(2) 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.”
(3) Branch or agency pays taxes on a cash basis by
charging parent’s demand deposit account:
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 “whenissued” or “when-as-and-if-issued” are, by their nature,
conditional, i.e., their completion is contingent upon
the issuance of the securities. The accounting for contracts for the purchase or sale of when-issued securities
or other securities that do not yet exist is addressed in
ASC Topic 815, Derivatives and Hedging (formerly
FASB Statement No. 133, “Accounting for Derivative
Instruments and Hedging Activities,” as amended by
FASB Statement No. 149). Such contracts are excluded
from the requirements of ASC Topic 815 as a regularway security trade only if:
(1) There is no other way to purchase or sell that
security;
(2) Delivery of that security and settlement will occur
within the shortest period possible for that type of
security; and
(3) It is probable at inception and throughout the
term of the individual contract that the contract

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Glossary

will not settle net and will result in physical delivery of a security when it is issued.
A contract for the purchase or sale of when-issued
securities may qualify for the regular-way security
trade exclusion even though the contract permits net
settlement or a market mechanism to facilitate net
settlement of the contract exists (as described in ASC
Topic 815). An institution should document the basis
for concluding that it is probable that the contract will
not settle net and will result in physical delivery.
If a when-issued securities contract does not meet the
three criteria above, it should be accounted for as a
derivative at fair value on the balance sheet (Schedule RAL) and reported as a forward contract in Schedule L, item 9.b, or Schedule M, Part V, item 9.b. Such
contracts should be reported on a gross basis on the
balance sheet unless the criteria for netting in ASC
Subtopic 210-20, Balance Sheet—Offsetting (formerly
FASB Interpretation No. 39, “Offsetting of Amounts
Related to Certain Contracts”), are met. (See the Glossary entry for “offsetting” for further information.)
If a when-issued securities contract qualiﬁes for the
regular-way security trade exclusion, it is not
accounted for as a derivative. If the institution
accounts for these contracts on a trade-date basis, it
should recognize the acquisition or disposition of the
when-issued securities on its balance sheet (Schedule RAL) at the inception of the contract. If the insti-

tution accounts for these contracts on a settlementdate basis, contracts for the purchase of when-issued
securities should be reported as “All other off-balance
sheet contingent liabilities” in Schedule L, item 7, or in
Schedule M, Part V, item 7, and contracts for the sale
of when-issued securities should be reported as “All
other off-balance sheet contingent claims” in Schedule L, item 8, or in Schedule M, Part V, item 8, subject
to the existing reporting thresholds for these 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.) 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 is paid. If physical delivery is taken on
settlement date and settlement date accounting is used,
the securities purchased by the institution shall be
reported on the balance sheet as held-to-maturity securities in Schedule RAL, Memorandum items 1 and 2;
available-for-sale securities in Schedule RAL, Memorandum items 3 and 4; or trading assets in Schedule RAL, item 1.f, as appropriate.

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

District

Address and Telephone Number

District

Address and Telephone Number

Boston

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

Chicago

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

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

St. Louis

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

Philadelphia

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

Minneapolis

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

Cleveland

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

Kansas City

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

Richmond

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

Dallas

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

Atlanta

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

San Francisco

International Reports Section
Statistics Department
Federal Reserve Bank of San Francisco
101 Market Street
San Francisco, California 94105
(415) 974-3120

AP-1
FFIEC 002

September 2008

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